News In Brief: April 11-April 15, 2022

April 14, 2022
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U.S. regulators step in to block a metaverse NFT casino, Buenos Aires Province to allow debit card gambling and Macau draft puts further pressure on junkets.

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U.S. Securities Regulators Halt Virtual Casino Selling NFTs

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Securities regulators in Texas and Alabama on Wednesday (April 13) ordered an online casino developer to stop selling non-fungible tokens (NFTs), alleging the firm was offering unregistered securities.

Cyprus-based Sand Vegas Casino Club and co-founders Martin Schwarzberger and Finn Ruben Warnke allegedly offered 11,111 NFTs to fundraise to develop casinos in the metaverse.

They also falsely told potential buyers the tokens were not securities, the Texas State Securities Board said in a statement.

Sand Vegas Casino Club officials were unavailable for comment Wednesday.

Sand Vegas Casino assured buyers of its Gambler and Gambler NFTs they would share in the profits, that were estimated to be $81,000 annually, the regulator said.

“The metaverse provides brands with new commercial opportunities, and many investors are now considering the latest high-tech products,” said Joe Rotunda, enforcement director. “However, bad actors are now leveraging interest in these opportunities and products.”

The Alabama Securities Commission also issued an emergency cease and desist order on Wednesday, while the Kentucky Department of Financial Institutions assisted with the case.

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Nebraska Passes New Casino Development Rules

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The Nebraska legislature on Wednesday (April 13) signed off on a measure that would impose restrictions on new racinos beyond those already approved by voters in 2020, sending the bill to Republican Governor Pete Rickets for his signature.

Legislative Bill 876 was approved by lawmakers by a 38-3 vote. The measure requires the Nebraska Racing and Gaming Commission to hold off approving any new racetracks and casinos until a market conditions study is completed.

It allows casino projects to move forward in the six Nebraska counties that already have licensed racetracks. Five of the state’s existing tracks are moving forward with their casino plans as a proposed casino in Hastings was voted down by the City Council in March.

The commission would approve or deny licenses based on its report, which would be due by January 1, 2025.

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Buenos Aires To Permit Cashless Gaming Via Debit Cards

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The gambling authority of Buenos Aires Province has reversed a 2016 ban on the use of credit or debit cards in land-based casinos or bingo halls.

Resolution 447-2022, which was published on Friday (April 8), expressly requires implementation of electronic systems to enable debit card and Posnet transactions. Debit cards linked to social assistance programs will remain prohibited, however. ATMs have been banned in bingo halls and other gambling venues since 2007.

The resolution signed by the president of gambling and lottery authority IPLyC said electronic payments would help to prevent tax evasion and money laundering, while “allowing for more effective controls contributing to the prevention of pathological gambling.”

Argentina’s most populous province hosts 47 upscale bingo halls with slot machines as well as 11 casinos. Online gaming was launched earlier this year through a handful of licensed operators, including bet365 and Betsson.

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Macau To Pass New Junket Legislation

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The Macau government has introduced a second gaming reform bill that imposes restrictions on junkets and operators, additional to those in a draft revision of the casino control law.

The Casino Business Operations System for Games of Fortune bill transforms certain existing junket regulations into law, while confirming that junkets may do business with only one casino concessionaire.

The draft limits junket and management company operations to a single concessionaire and enhances corporate supervisory duties.

Novel material in the bill includes minimum registered capital for junkets of 10m patacas ($1.24m), and that at least 50 percent of registered capital must be controlled by Macau residents.

Although concessionaires will still be able to host more than one junket, the government for the first time will impose annually updated caps for the number of junkets per concessionaire.

The bill also criminalises the practice of investing cash or other assets with junkets for the purpose of receiving interest payments.

An explanatory statement covering the bill notes the government is preparing to revisit older legislation covering gaming credit and illegal gaming in the months to come.

Draft revision of the overall casino control law remains in committee.

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Entain Brands Launch In Ontario

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Entain has joined rival operators and its own joint venture BetMGM in Ontario’s regulated online gambling market after launching its bwin and Party brands in the province on Tuesday (April 12).

The company was registered with the Alcohol and Gaming Commission of Ontario a few days before market launch on April 4 but was not one of the 13 operators that went live on day one.

The launch of bwin, PartyPoker and PartyCasino, which have long been active in Canada’s grey market, seems to be part of a multilayered approach to Ontario on the part of the London-listed operator.

In addition to expanding its BetMGM U.S. joint venture with MGM Resorts into Canada, Entain in January acquired the parent company of prominent Canadian sportsbook brand Sports Interaction, which is licensed in Kahnawake.

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Six Sentenced To Prison After Colombia Betting Bust

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A Colombian judge has sentenced a group of six individuals, led by a Russian citizen, to prison for attempted fraud and money laundering through online sports-betting platforms in the country.

Russian Sergei Vagin and his collaborators established accounts in the names of Colombians and then received money from Europe to deposit in them. The group moved approximately US$80,000 through the accounts over a two-year period, according to a statement from Colombia’s attorney general’s office.

Prosecutors said the deposited money was used to place “fraudulent bets” on different global sporting events and the group was able to report a profit margin of 115 to 220 percent.

Citing intercepted audio recordings, local media outlet Semana reported that some 73 Colombians were paid a commission to set up accounts in their names and all transactions were in small amounts, in order to skirt “strict rules established by Coljuegos,” the national gambling authority.

The news magazine said Vagin is connected to Russian criminal groups and the scheme was exposed by an undercover agent in the Colombian federal police before it expanded to Mexico.

Online betting has been regulated in Colombia since 2016 and 17 operators are licensed in the country. None have been named in connection with the case.

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Virginia Governor Takes Action On Gambling Enforcement Bills

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Governor Glenn Youngkin signed one bill into law late on Monday (April 11) to tighten Virginia’s laws related to illegal and unregulated gaming, but recommended minor amendments to another before creating a new state gambling enforcement watchdog.

The Republican governor, who took office in January, enacted Senate Bill 530 to clarify that a civil penalty of $25,000 can be applied to any person who either knowingly hosts an illegal gambling device on their premises, or “manufactures for sale, sells, or distributes an illegal gaming device, knowing that such device is intended to be operated in the Commonwealth” in violation of Virginia’s gambling laws.

At the same time, Youngkin sent House Bill 766 back to the General Assembly with suggested amendments.

As approved by lawmakers, HB 766 would establish an Illegal Gaming Enforcement Coordinator with the Virginia state police department. The coordinator will be responsible for managing a tip line for suspected illegal gambling and also act as a liaison between state, local and federal law enforcement.

Youngkin’s amendment proposes that the title of that role be changed to Gaming Enforcement Coordinator and that the remit not be exclusively restricted to illegal gambling.

Virginia lawmakers two years ago passed a bill to ban unregulated gaming devices purporting to offer games of skill and then reaffirmed that prohibition during the 2021 session of legislature. However, the ban is being challenged in court.

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Virginia Is Not For Bettors

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Governor Glenn Youngkin signed legislation late on Monday (April 11) to ban online sportsbooks from paraphrasing Virginia’s official state motto, “Virginia is for lovers”, by using the slogan “Virginia is for bettors” in their advertising.

Senate Bill 96, sponsored by Senate Minority Leader Tommy Norment, initially proposed to ban any use of the word Virginia in sports-betting advertising, before it was narrowed in scope in committee.

The measure was the only bill directly related to sports betting to be enacted in the 2022 legislative session as other proposals to permit bets on Virginia college teams and limit tax deductions for bonuses both failed to score approval.

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Everi Partners With Mississippi Casino For Crypto Payment Options

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Everi Payments, a subsidiary of Las Vegas-based Everi Holdings, has partnered with the Scarlet Pearl Casino in Mississippi to allow casino patrons to convert digital currency into cash, according to an announcement on Tuesday (April 12).

“Providing new, alternative ways to fund a patron’s casino experience is crucial in the age of digital currency,” said Darren Simmons, Everi’s executive vice president and fintech business leader.

Digital currencies, such as Bitcoin or Ethereum, have grown in popularity in recent years but are still unregulated currencies leading the gaming industry to hold off widespread adoption.

So far, only Wyoming has legalized the use of cryptocurrencies to wager on sports, while a few casinos in Las Vegas host third-party exchange kiosks, similar to an ATM, allowing patrons to convert digital currency to cash or vice versa.

Resorts World Las Vegas and Gemini formed a partnership last year to explore allowing patrons to use a crypto wallet throughout the resort, but Nevada regulators have yet to approve gambling using digital currencies.

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Philadelphia To Reinstate Casino Mask Mandate

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Beginning Monday (April 18), masks will be required again at Philadelphia casinos as new coronavirus cases increase.

City health officials reported 142 new daily cases earlier this week, moving Philadelphia into the second tier of its COVID-19 response system which calls for a mask mandate.

The new mandate means masks will be required at the two casinos located in Philadelphia: Live! Casino Philadelphia and Rivers Casino Philadelphia. However, proof of vaccination is not required to enter either casino.

“By implementing the mask mandate sooner rather than later, the Health Department hopes to keep the number of cases from skyrocketing, like we saw in December and January from the omicron variant,” the department said in a statement.

Doug Harbach, a spokesman with the Pennsylvania Gaming Control Board, said the mask mandate is a Philadelphia city decision and not by the state.

“There is no planned state-wide mask mandate at casinos,” Harbach said in an email.

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Kenyan Treasury Proposes Gambling Ad Tax

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Kenya’s National Treasury and Planning Ministry plans to plunder gambling and alcohol advertising for new tax revenue in its budget proposal for the 2022-23 financial year.

Ukur Yatani, the ministry’s cabinet secretary, said he wants “to introduce an excise duty of 15 percent on fees charged by all television stations, print media, billboards and radio stations for advertisements” of alcoholic beverages, betting and gaming products.

“Gambling, gaming and alcohol addiction has become prevalent in our society. These habits are extremely addictive and can result in a variety of harmful repercussions, especially to the youth,” Yatani said in the official budget statement presented to parliament on April 7.

Yatani has long pledged to tax the gambling industry heavily and has always supported a controversial excise duty tax on betting stakes that was partly responsible for the exit of former market leader SportPesa and fellow operator Betin.

The budget also proposes transforming the Kenya Revenue Authority, which is responsible for collecting taxes, into the Kenya Revenue Services.

Kenya’s economy recovered strongly in 2021, according to the Treasury, following the easing of COVID-19 restrictions.

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Star Entertainment Inquiry Questions Integrity Of Top Legal Officer

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The New South Wales (NSW) state government’s regulatory review into casino operator The Star Entertainment Group has taken another ugly turn, with the review's counsel suggesting Star’s top legal officer concealed information from the inquiry.

Chief legal and risk officer Paula Martin, who on Tuesday (April 12) appeared to tear up and struggled to give evidence, was confronted several times over the truthfulness and competence of her testimony relating to covert gambling transactions.

Counsel assisting Naomi Sharp said NAB, Star Entertainment’s partner bank, had become suspicious about high-volume China UnionPay cash card transactions for hotel accommodation, and had reminded Star’s legal team by email that the cards could not be used for gambling.

But in her testimony, Martin denied the bank had “placed [Martin] on notice” that possibly improper use of UnionPay cards to purchase gaming chips was taking place, and denied that the casino was concealing what Sharp called a “scam”.

Martin's denials then prompted Sharp to question her integrity.

“The evidence you are giving now is not a candid and frank account of your knowledge to this review, is it?”

“No, that’s not right,” Martin replied.

The hearings continue this week with lower level Star officers, before proceeding on April 26 with testimony from CFO Harry Theodore, former CEO Matt Bekier — who resigned over the review’s revelations — chairman John O’Neill and five Star directors.

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Telangana State Signals Regulation Of Online Gaming

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The Indian state of Telangana is pursuing a draft law that regulates online skill games with stakes, a Telangana official said, potentially reversing the state’s hard line on online gaming.

The law would form a board of eminent persons, including present and retired government officials, industry professionals and retired judges to determine which games would fall under the definition of skill gaming, according to Jayesh Ranjan, chief secretary of the state government’s departments of Industries & Commerce and Information Technology.

Telangana officials are unable to counter underground gaming and technology and instead will seek to moderate harm through regulation, Ranjan told Indian gaming media outlet G2G on Friday (April 8).

However, he warned that a failure to improve the gaming environment might see a return to hardline policy.

Telangana banned all online gambling with stakes in 2017 and attempted to dilute the impact of Supreme Court rulings in favour of skill gaming.

These actions made Telangana one of the first states to update gaming laws by ramping up punishments for customers, including prison terms, as litigants and legal experts elsewhere began a push for liberalised markets.

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U.S. regulators step in to block a metaverse NFT casino, Buenos Aires Province to allow debit card gambling and Macau draft puts further pressure on junkets.

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