News In Brief: August 7-August 11, 2023

August 11, 2023
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Kentucky Horse Racing Commission confirms license applications from seven of the state’s racetracks to open land-based sportsbooks when retail wagering launches next month.

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Kentucky Identifies Retail, Mobile Sports-Betting Applicant

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The Kentucky Horse Racing Commission (KHRC) confirmed Thursday (August 10) it has received license applications from seven of the state’s licensed racetracks to be able to open land-based sportsbooks when retail wagering launches next month.

Retail sports betting will launch in Kentucky on September 7 and on September 28 for mobile applications.

The racetracks are Churchill Downs, Louisville; Cumberland Run, coming soon to Corbin; Ellis Park, Henderson; Oak Grove Gaming and Racing, Oak Grove; The Red Mile, Lexington; Sandy’s Gaming and Racing, coming soon to Ashland; and Turfway Park, Florence.

Racetracks licensed for sports betting may open retail wagering at their satellite locations.

Mobile service providers that have applied for a license to operate in Kentucky include bet365, BetMGM, Caesars Entertainment, Circa Sports, DraftKings, FanDuel and Penn Sports Interactive.

Applications are being reviewed by KHRC staff and will be voted on at a commission meeting on August 22.

“The KHRC is excited to open sports wagering and is working efficiently to meet the necessary deadlines,” said Jonathan Rabinowitz, KHRC chairman. “This is a careful process dedicated to wagering integrity and protecting bettors in the state of Kentucky.”

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German Regulator Plans Gambling Advertising Study

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Germany’s Joint Gaming Authority of the Federal States (GGL) is planning a Europe-wide tender for a study of gambling advertising and potential conflicts between gambling addiction prevention efforts and the desire to channel players into licensed gambling sites.

The research project is part of a review of Germany’s interstate gambling treaty and how its provisions could affect efforts to supply a balance between channeling gamblers to legal sites and advertising’s potential impact on vulnerable people.

The study will consider TV and social media, as well as the overall impact of gambling advertising and measures such as player bonuses.

Tender documents are available from Thursday (August 10) and the offer period closes on September 14, the GGL said.

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Virginia Fines Digital Gaming For Responsible Gambling Violations

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The Virginia Lottery has entered into a $20,000 settlement agreement with Digital Gaming Corporation for distributing marketing materials to six individuals on the state’s self-exclusion list.

Digital Gaming also notified gaming regulators in May 2023 that it had sent marketing materials to another 94 individuals who either were on the company’s internal self-exclusion list or in a “cooling off” period.

Separately, in June 2023, Digital notified the lottery that its trading partner, a wholly-owned subsidiary of the same parent company Super Group, was not properly registered with the lottery as a sports betting vendor and had been performing the functions of a vendor.

A registered sports-betting vendor provides marketing services for licensed operators in Virginia.

Digital has taken corrective measures to ensure future compliance with the Sports Betting Law and its related regulations, according to the settlement agreement signed Tuesday (August 8) by Kelly Gee, executive director of the Virginia Lottery.

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Light & Wonder Acquires Outstanding SciPlay Shares

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Light & Wonder announced Tuesday (August 8) that it had entered into a definitive agreement to acquire the remaining 17 percent equity interest in SciPlay that it does not currently own.

Under the terms of the deal, Light & Wonder will acquire the outstanding stock for $22.95 per share in an all-cash transaction.

The transaction has been approved by the Light & Wonder board of directors. Light & Wonder first submitted a proposal to acquire the stock in May.

The companies expect the transaction to close during the fourth quarter of 2023, subject to customary closing conditions.

Light & Wonder on Tuesday also posted $731m in second-quarter revenue, compared with $610m for the same period a year ago. Net income was $5m, a substantial turnaround from the $150m loss in the second quarter of 2022.

Gaming revenue increased 21 percent compared with the prior year period to $471m, primarily due to continued momentum in gaming machine sales. SciPlay achieved record revenue of $190m, a 19 percent increase compared with the prior-year period, driven by the core social casino business.

Internet gaming revenue reached another record quarterly revenue of $70m, a 17 percent increase from the prior-year period, primarily driven by continued growth in the U.S. market.

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Massachusetts Reviewing Daily Fantasy Sports Offerings

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The Massachusetts Gaming Commission (MGC) will evaluate daily fantasy sports (DFS) offerings in the state as operators are under increased scrutiny in other jurisdictions over the games they offer.

Todd Grossman, MGC interim executive director, told the five-member commission Tuesday (August 8) that there has been a lot of activity surrounding the boundaries of sports wagering relative to DFS and whether there is some overlap between the two.

“That is to say, whether there are certain activities that are offered by DFS operators that may be considered sports wagering activity,” Grossman said. “That’s been addressed in a number of jurisdictions now and has been discussed publicly.”

Grossman assured the commission that he was aware of the issue and was in the process of reviewing it. He did not provide any details on what the review might entail but cautioned the MGC that it is an issue they may have to address directly at some point.

DraftKings, FanDuel, PrizePicks and Underdog Sports are licensed to offer DFS in Massachusetts.

Grossman’s comments were in reference to specific types of player-pro parlays against the house, not against other traditional DFS contests. PrizePicks and Underdog Sports both offer these player-prop parlays, which were recently determined by Wyoming gaming regulators to be sports betting, not fantasy sports.

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Brazil's Match-Fixing CPI May Get An Extension

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Julio Arcoverde, the president of Brazil’s parliamentary investigation (CPI) into match-fixing, has asked for a 60-day extension.

The CPI was due to conclude at the end of September, but if the request is granted it will continue on until November 28.

A possible extension is of particular relevance to sports-betting regulation, as certain legislators are pushing to remove the urgency classification from the sports-betting bill, insisting that the CPI must conclude before they can begin work.

Arthur Lira, who is the president of the Chamber of Deputies, will be the person who grants or denies the request.

Lira is known to not be in favour of the sports-betting provisional measure, preferring to let it expire so that he can push through the sports-betting urgency bill instead.

The urgency sports-betting bill currently has 45 days to be debated by each chamber of Congress. If that classification were removed, which currently seems unlikely, the timeline of the debate would be indefinite.

The match-fixing CPI began in May on the heels of a scandal that was uncovered by the police in the state of Goiás, which has had a domino effect that has rocked football in Brazil.

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Caesars Fined In New Jersey For Underage Gaming

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Caesars Atlantic City, which is operated by Caesars Entertainment, has been fined $35,000 for violating the state’s underage gaming policy, according to the New Jersey Division of Gaming Enforcement (DGE).

The casino was fined after the DGE found that on seven occasions, the casino allowed ten underage individuals to engage in wagering.

The three-page order did not offer any specific details about the ten incidents beyond which both Caesars and the DGE have found sufficient legal and factual support for the recommended fine.

The order was signed by DGE Director David Rebuck on July 25 and included within the “Actions of the Director” release dated July 16 to July 31, 2023.

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U.S. Senators Oppose Election Gambling Proposal

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Oregon Senator Jeff Merkley and five of his Democratic colleagues have sent a letter to the Commodity Futures Trading Commission (CFTC) urging Chairman Rostin Behnam to reject a proposal that could allow for legal gambling on U.S. elections and their outcomes.

Joining Merkley in opposing the proposal was Senators Sheldon Whitehouse of Rhode Island, Edward J. Markey, and Elizabeth Warren, both from Massachusetts, Chris Van Hollen of Maryland, and Dianne Feinstein of California.

Kalshi, a private predictions company, notified the CFTC in June that it wants to allow people to wager on election outcomes. Kalshi is a regulated exchange where consumers can trade on the outcome of real-world events, according to the company’s website.

In a letter dated August 2, the lawmakers expressed their concern that election gambling would harm election integrity.

“There is no doubt that the mass commodification of our democratic process would raise widespread concerns about the integrity of our electoral process,” the lawmakers wrote. “Such an outcome is in clear conflict with the public interest and would undermine confidence in our political process.”

“We urge the CFTC to deny Kalshi’s proposal.”

The CFTC announced on June 23 that it has commenced a review of contracts self-certified by Kalshi on which political party will be in control of each chamber of the U.S. Congress. The commission has 90 days to decide with respect to the contracts.

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Bill Hochul Resigns, New York Governor Set For Compact Talks

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New York Governor Kathy Hochul’s husband, Bill, has decided to leave Delaware North after seven years, effective August 15, the company confirmed Monday (August 7).

Bill Hochul, Delaware North’s senior vice president and general counsel, will be replaced by Tim McEvoy, currently deputy general counsel, while Rylan Rawlins will take over as deputy general counsel.

Up until now, Hochul’s position with Delaware North, which is based in Buffalo, New York, had presented a conflict for his wife who had to recuse herself from gaming compact negotiations with the Seneca Nation of Indians, which is a regional gaming competitor.

The current gaming compact was signed in 2002 and expires on December 9, 2023. The tribe currently operates three casinos in Niagara Falls, Salamanca, and Buffalo.

“Seven years is a long time post your other career when you could have retired after 30 years, so it’s time to spend more time with my husband,” the governor told reporters Thursday (August 3).

Bloomberg News reported Governor Hochul telling reporters in Albany that “any recusals will be eliminated when his job is gone.”

Bill Hochul served as the U.S. attorney for New York’s Western District before joining Delaware North. His departure is part of a “long-planned succession process,” Frank Mendicino, executive vice president and chief administrative officer at Delaware North, said in a statement.

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Aristocrat Confirms Cyber Incident

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Gaming technology giant Aristocrat released a statement on Friday (August 4) confirming it had suffered a cybersecurity incident around June 1, which saw a hacker exploit a newly-identified vulnerability in third-party software used by the company.

The company identified the vulnerability in the MOVEit software, which allowed the hacker to extract data from a company server, including personal information belonging to Aristocrat employees.

“Aristocrat is aware of reports that the criminals have now published extracts of the stolen data online,” the company said.

Based in Sydney, Australia, Aristocrat said it has taken comprehensive steps since becoming aware of the incident, including immediately containing the incident and remedying the MOVEit software vulnerability, while also notifying relevant law enforcement as well as required gaming and other regulatory authorities.

The company also confirmed it was working with the support of independent experts to determine what data was exfiltrated. It has also been advising all Aristocrat employees globally and offering complimentary credit monitoring and identity theft protection services.

Aristocrat said it “expects low business impact with the execution of an appropriate risk management and mitigation plan.”

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Queensland Court Fines Star Entertainment Over Credit, Marketing

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Australian casino operator The Star Entertainment Group has been fined A$140,000 ($92,000) by a Queensland state local court for allowing chip purchases by credit card and sending promotional materials to excluded individuals.

The Brisbane Magistrates Court on Wednesday (August 2) ruled the offences at Star’s Brisbane and Gold Coast casinos did not reflect “systemic problems with the casino or flagrant breaches” of state gambling legislation.

However, despite the offences being voluntarily reported and the company’s guilty plea, and despite the court acknowledging human error, Magistrate Shane Elliott fined Star for seven credit card offences and four instances of illegal marketing in 2017, 2018 and 2022.

The fine was well below the maximum A$1m penalty for the combined offences and the court did not record a conviction, the Brisbane Times reported.

The fine amounts to a mere scratch for the company compared with recent and pending penalties, with the New South Wales and Queensland state governments each fining Star A$100m, while national money laundering watchdog AUSTRAC has sued Star over offences that could result in a fine of hundreds of millions of dollars.

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Kentucky Horse Racing Commission confirms license applications from seven of the state’s racetracks to open land-based sportsbooks when retail wagering launches next month.

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