News In Brief: April 18-April 22, 2022

April 22, 2022
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Colorado pondering correct tax rates, Nevada regulator confirms investigation into Resorts World executive, Ontario clarifies bonus rule

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Colorado Considers Gaming Taxes, Signs Off On Sports-Betting Fine

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The Colorado Limited Gaming Control Commission (LGCC) heard testimony on Thursday (April 21) from state agencies that receive some of their revenues from gaming taxes, as the regulatory body considers what tax rate to set for next year.

Marek Superka, vice chancellor for finance and administration with the Community College System, and Patrick Eidman, chief preservation officer with History Colorado, explained how important gaming taxes are to their annual budgets.

Eidman said History Colorado has been able to invest $388m in gaming taxes distributed to the State Historical Fund to preserve sites and projects state-wide.

Tax rates are set annually by the commission and may raise or lower rates so long as they do not exceed 40 percent. Currently, tax rates vary from 0.25 percent on adjusted gross proceeds of up to $2m, to 20 percent for $13m and over.

The commission decided to continue the hearing until next month. They have until July 1, the start of the 2022-2023 fiscal year, to set tax rates.

In addition to taxes, the LGCC unanimously approved a stipulation agreement between the state and Carousel Group, the operator of Maximbet, for a computer error that allowed gamblers from outside the state to place online sports wagers.

As VIXIO reported on Wednesday (April 20), the company agreed to pay an $80,000 fine. The commission also approved the temporary reissuing for two years of Carousel Group’s internet operator license.

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Ontario Regulator Updates Regulations On Bonuses

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The Alcohol and Gaming Commission of Ontario (AGCO) released updated guidance on Thursday (April 21) regarding the Registrar’s Standards for Internet Gaming.

Specifically, the regulator included additional clarity around a rule that governs inducements, bonuses and credits.

Under Standard 2.05, public advertising of inducements, bonuses and credits is strictly prohibited. Targeted advertising and algorithm-based ads are also illegal.

According to the updated guidance, this standard applies whether inducements are advertised directly or indirectly, the AGCO said.

Indirect inducement advertising includes, but is not limited to, the display of promotional codes and/or general references that invite individuals or the public to learn more about the inducements on the gaming site.

Once customers visit an operator’s gaming website, or app, inducement, bonuses and credit offers may be displayed. The rule also provides that inducement, bonuses and credit offers may also be provided through direct marketing to individuals that have first consented on the website to receive them.

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Nevada Opens Investigation Into Resorts World Executive

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The Nevada Gaming Control Board (NGCB) confirmed that is investigating allegations raised by a gambler against Resorts World Las Vegas President Scott Sibella.

The allegations include that Sibella lied about their relationship during a recent regulatory hearing and that a restaurant at the casino is partially owned by a convicted felon.

“We are looking into the allegations; however, we are not in a position to comment further at this time,” Kristi Marusich, the deputy chief of the NGCB’s enforcement division, told VIXIO GamblingCompliance.

The allegations involve Sibella and the alleged ownership of a restaurant inside Resorts World Las Vegas by David Stroj, a convicted money launderer and illegal bookmaker.

The charges were first reported by the Nevada Independent, and the resort denied any ownership in the restaurant by Stroj, who is being investigated by the U.S. Probation Office for violating the terms of his supervised release after serving 18 months in federal prison.

The Independent reported Stroj gambled in Las Vegas without permission from his probation officer. It is unclear if the NGCB investigation will lead to a formal complaint against Resorts World and Sibella.

At the time of writing, Resort World officials have not returned messages.

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UK Gambling Youth Project To Get GambleAware Funds

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GambleAware is to deliver a new round of funding to its expanding school education program after a review of its effectiveness in Scotland found it had improved young people’s understanding of the risks of gambling.

The industry-funded charity said it was adding £2.5m to its Gambling Education Hubs and rolling them out across the UK.

The project creates toolkits, training and peer-based theatre performances to educate school children on the risks created by gambling and the support services available to those suffering harm.

GambleAware said use of the new funding would be driven by charity GamCare, which has partnered with YGAM, ARA, Aquarius, Beacon, Breakeven and Neca in England and Adferiad Recovery in Wales.

A study of the project’s work in Scotland by IFF Research found it had reached over 15,800 young people and resulted in “increased awareness of the consequences of gambling and confidence in asking for support”.

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U.S. Gaming CEOs Maintain Positive Outlook

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Those who run gaming companies in the United States are optimistic about the industry’s continued growth and recovery after a record year in 2021, according to an American Gaming Association report released Wednesday (April 20).

In total, 67 percent of survey respondents rate the current business situation as “good”, compared with six months ago when that figure was 54 percent, and none of the respondents rated it as “poor.”

Meanwhile, the survey found 40 percent of CEOs expect the industry’s business climate to improve over the next two quarters compared to 13 percent that expect conditions to worsen.

“Gaming industry executives are signaling confidence in our continued recovery that is in line with record-setting consumer demand for gaming,” said Bill Miller, AGA’s president and CEO. “I’m optimistic that 2022 will see the return of a true sense of normalcy for gaming.”

While those surveyed were generally positive about the industry’s outlook, supply chain issues (75 percent), inflationary and interest rate concerns (67 percent) and labor shortages (54 percent) were the top concerns that could impact future growth.

The coronavirus and demand for meetings and events are not longer among the top concerns for industry chief executives, the survey found.

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Reformist Association Launched in Finland

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Last week saw the creation of the Finnish Gambling Association, which has a stated mission to “facilitate discussion in order to develop the existing gambling system in Finland to reflect the industry developments and the requirement of high-level consumer protection”.

Its founding chair is consultant and former Veikkaus executive Jari Vähänen, who, despite his past as an employee of Finland’s monopoly gambling operator, has been a vocal proponent of reforming the country’s gambling sector.

“In Finland, the source of information regarding the gambling regime has [usually been] Veikkaus, which certainly has the necessary know-how. On the other hand, first and the foremost the company always strives to promote its own interests. The Finnish Gambling Association aims to fill this gap and share diverse and neutral information from the various perspectives of gambling,” said Vähänen

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Colorado Gaming Regulators Fine Carousel Group $80,000

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Carousel Group, operator of Maximbet, has agreed to pay a fine of $80,000 to Colorado gaming regulators to settle a complaint that geolocation problems led to bets being placed from out of state, according to the state Division of Gaming.

The fine must be approved by the Colorado Limited Gaming Control Commission on Thursday (April 21).

Commission spokeswoman Suzanne Karrer confirmed Tuesday (April 19) that this was the first fine issued against an operator since sports betting was legalized in 2019.

Regulators confirmed in the agreement reached with Carousel Group that the company self-reported on December 23, 2021, that a computer system error led to at least one case and potentially four others of bets being places outside of Colorado.

The company also found that 29 patrons from their list of clients who had deposited funds into their account and were geolocated had placed wagers but had never been geolocated. After studying their IP addresses, it was determined 25 patrons had been in Colorado.

According to Carousel Group, the four remaining patrons could not be ruled out as placing bets from outside Colorado. Those clients were in: Hickory, North Carolina; Pittsburgh, Pennsylvania; Bronx, New York; and Portsmouth, New Hampshire.

“We hold regulatory compliance as a top priority in the company,” Carousel Group CEO Daniel Graetzer wrote in a letter to regulators dated April 11. “As a result, the Carousel Group has … voluntarily undertaken an audit of out Colorado operations and controls.”

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Missouri Sports Betting Bill Heads To Senate Floor

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A sports betting bill advanced to the full Senate Tuesday (April 19), but lawmakers plan to amend the proposal before it is brought to the Senate floor.

The Missouri Senate Appropriations Committee voted 8-1 to advance House Bill 2502 but lawmakers expect to increase the tax rate from 8 percent and include more problem gambling funding.

“This is still a work in progress,” Senate Appropriations chairman Republican Dan Hegeman said during Tuesday’s committee hearing.

The proposal is backed by a coalition that includes all of Missouri’s major professional sports teams, several major national sports-betting operators and five of the state’s six casino operators.

The bill would allow three online skins for each of the state’s 13 casinos, although operators that own multiple properties in Missouri would be capped at six total skins.

Each of the six professional sports teams would also receive a single online wagering skin.

The lone holdout to the plan, Boyd Gaming, has argued against the inclusion of a requirement for operators to use official league data to settle in-play wagers.

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Poland To Overhaul Blacklist Management

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The Polish Ministry of Finance has released draft regulations that designate the Customs and Tax Office in Opole as the new entity responsible for maintaining Poland’s blacklist of illegal gambling websites and blocking access to blacklisted domains.

The development indicates the ministry is not planning to follow suggestions pitched by local gambling industry association Play Legally. The group had proposed establishing a new regulator tasked with maintaining the blacklist, similar to the authorities set up in the UK and Malta.

In an accompanying document justifying the draft regulation, the ministry says that appointing “the head of the Customs and Tax Office in Opole to perform this above-mentioned role is part of the efforts to ensure an efficient and effective performance of the tasks to combat the black market within online gambling”.

The office is already responsible for “monitoring the internet, identifying violations of the gambling law and securing proof for the purpose of entries” to the blacklist, the document said.

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Pace-O-Matic Seeks Regulation Of Games In Kentucky

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Lawmakers in Kentucky were unable to approve a measure banning so-called skill-based games, or grey-market machines, before adjourning for the year, giving Pace-O-Matic and other game manufacturers time to lobby for regulations.

Pace-O-Matic spokesman Michael Barley on Monday (April 18) thanked lawmakers for holding up an amended version of House Bill 608, saying they understood that skill games “provide a critical revenue source” during a time when small businesses are facing “record inflation, worker shortages, and supply chain interruptions.”

“We look forward to working with the Kentucky General Assembly and other state and local officials over the next nine months to develop an appropriate framework for formal regulation and additional taxation in the next legislative session,” Barley told VIXIO GamblingCompliance in an email.

Republican Representative Killian Timoney, who authored the grey-market ban bill, was unavailable for comment on Monday. The Kentucky legislature is scheduled to return to Frankfort in January for the 2023 session, which by law may not last more than 30 legislative days.

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Support Grows For California Sports Betting Ballot Initiative

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With the November 8 election less than seven months away, supporters of the only sports betting initiative to qualify for the California ballot announced Monday (April 18) their measure had gained additional support from tribes, public safety groups and faith leaders.

Known as the Tribal Sports Wagering Act, it would allow retail wagering at tribal casinos and racetracks. It would permit casino to offer roulette and craps, while private citizens would be enabled to launch civil enforcement actions against illegal gambling violations not pursued by the state attorney general.

“Our support of the Tribal Sports Wagering Act is consistent with our long-standing support for disenfranchised communities to become self-sufficient,” said Rick L. Callender, president of the California Hawaii State Conference of the NAACP.

Callender and David Leonhardi, president of the Deputy Sheriff’s Association of San Diego County, both expressed their opposition to a campaign by DraftKings, FanDuel and other gaming companies to get an initiative on the ballot to allow for mobile wagering state-wide.

“Online and mobile gambling are especially attractive to youth, and the Corporate Online Gambling Proposition lacks critical safeguards to prevent underage gambling, exposing our kids to increased risks of addiction and problem gambling,” Leonhardi said in a statement.

Supporters of the mobile sports betting initiative are required to gather 997,139 signatures, or 8 percent of the total votes cast for the governor in the November 2018 general election, to become eligible for the November ballot. The deadline to turn in signatures to the secretary of state’s office is July 11.

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Former Indiana Casino Executive Pleads Guilty To Tax Fraud

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Former casino executive John Keeler has pleaded guilty in federal court to one count of filing a false tax return in connection with a scheme to send illegal casino cash into a congressional campaign in 2016, the U.S. Department of Justice announced.

Keeler, 72, entered a plea a few hours before his trial was set to begin on Monday (April 18) in U.S. District in Indianapolis. In exchange for his plea, federal prosecutors agreed to drop Keeler’s four pending felony charges.

According to the Justice Department, Keeler, a former vice president and general counsel for Indianapolis-based New Centaur LLC, paid $41,000 in corporate funds to Maryland-based political consultant Kelly Rogers and told him to funnel $25,000 to a Marion County Republican Party Political Action Committee (PAC).

Keeler claimed the cash as a tax deduction. His plea comes about a week after Darryl Brent Waltz, 48, pleaded guilty to two charges of using sham donors to receive illegal contributions and making false statement to the FBI, according to the Justice Department.

Keeler was indicted in September 2020 on four counts connected to an alleged scheme to use straw donors to illegally funnel about $40,000 in casino money to Waltz’s unsuccessful campaign for the U.S. House of Representatives.

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AGA Urges DOJ To Crack Down On Illegal Gaming

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The American Gaming Association (AGA) asked the U.S. Department of Justice (DOJ) to crack down on illegal, online sportsbooks and casinos and unregulated “grey-market” machines, according to a letter submitted to Attorney General Merrick Garland.

“While the challenge of illegal gaming is not new, the brazen and coordinated manner in which it occurs, both online and in communities, has elevated this problem to a level that requires significant federal attention,” wrote Bill Miller, AGA president and CEO.

Miller urged the Justice Department to crack down on illegal operators and enforce federal regulations to protect consumers.

In his three-page letter, Miller specifically singles out Bovada, BetOnline and MyBookie as companies that “openly violate federal and state laws.”

“These illegal sites also enjoy many competitive advantages that allow them to offer better odds and promotions and ignore any commitment to responsible gaming because they do not pay state and federal taxes or have comparable regulatory compliance costs and obligations.”

Miller urged the DOJ to educate consumers on legal gaming options and the dangers associated with illegal operations, as well as clarifying that “skill-based” machine manufacturers must comply with Johnson Act registration requirements and anti-money laundering standards.

He also asked federal law enforcement to pursue “aggressive enforcement actions” against those entities that do not fully comply with the law.

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Gaming Deals Reached Between Washington State, Tribes

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The Washington State Gambling Commission (WSGC) has approved a tentative agreement with the Nisqually Indian Tribe to amend the tribe’s Class III gaming compact to allow for sports betting at the Red Wind Casino in Olympia.

The amended compact now goes to Governor Jay Inslee, a Democrat, for his signature.

In addition, the WSGC and the Confederated Tribes of the Chehalis Reservation have agreed to amend the tribes’ 30-year-old Class III gaming compact.

Changes to the compact include the addition of sports betting, higher wager limits and extended credit to customers at their Lucky Eagle Casino in Rochester.

“This amendment is an agreement with the Confederated Tribes of the Chehalis Reservation to join other tribes modernizing their gaming operations and adding sports wagering to their casinos", said WSGC chairman Bud Sizemore.

Sizemore said the amendment also means a boost in funding for problem gambling programs, along with charitable and community programs. The WSGC will vote on May 12 as to whether to send the proposed compact amendments to the governor.

Tribal chairman Harry Pickernell Sr. will also have to sign the amendments before they are sent to the U.S. Department of the Interior for final approval.

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Colorado state hears testimonies of the benefits of gaming taxes and Ontario updates the Registrar’s Standards for Internet Gaming.

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