News In Brief: February 27-March 3, 2023

March 3, 2023
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A Kentucky bill would outlaw skill games currently running as grey-market machines.

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Kentucky House Committee Approves Bill Banning Grey-Market Machines

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The House Licensing, Occupations, and Administrative Regulations Committee voted 13-7 Thursday (March 2) to approve a bill that clarifies what types of gaming are legal under Kentucky law.

House Bill 594, authored by Republican Representative Killian Timoney, explicitly states that skill-based games, also known as grey-market machines, found in convenience stores state-wide are illegal.

Timoney’s bill carves out exceptions for charitable gaming, esports competitions and skill-based contests. Coin-operated amusement machines and carnival games would not be banned under his bill.

Pari-mutuel wagering and historic horseracing machines would remain legal as well.

“[This bill] defines the things that are gambling and gambling devices and exempts those that are not,” Timoney told the committee.

Republican Representative Kim Banta said she preferred grey-market machines becoming legal and regulated instead of banned in Kentucky.

‘I would like to see it regulated, passed and done,” Banta said before voting “no.”

The bill is now before the full House of Representatives for their consideration.

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Dutch Ad Code Extended

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The Dutch self-regulatory advertising code, shared by the members of trade groups NOGA and VNLOK, is to be extended.

The agreement had been set to expire on March 1, 2023; however, the timeline has been pushed out until June 1.

The change is largely due to the expected impending ban on “non-targeted” advertising, expected to be introduced by the government this summer.

The trade groups said that the ad code would be updated to reflect the change in law, once details are published.

A consultation and independent evaluation of the code’s first 18 months, since it was adopted in December 2021, will also take place, the groups said.

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Massachusetts Discusses Third-Party Affiliate Deals

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The Massachusetts Gaming Commission (MGC) continued its discussion on Wednesday (March 1) about amending its current regulation that prohibit sports-betting operator deals with third-party marketing affiliates, but no official vote was taken.

According to the MGC’s sports wagering vendors regulation, which are fully in effect, no revenue sharing or cost-per-acquisition (CPA) deals are allowed.

During the MGC’s discussion, commissioners seemed to agreed to allow temporary waivers for CPA deals and potentially revenue share agreements through April 14, while new industry safeguards are considered.

“No matter what we do, advertising is going to happen,” said commissioner Jordan Maynard. “Google will take the money. The best thing we can do is fill that [advertising] with folks we have vetted.”

Commissioner Eileen O'Brien urged her colleagues to consider licensing each third-party affiliate, including a licensing fee, and potentially capping the number of affiliate deals an operator can have in Massachusetts.

The MGC is expected to vote on amending the regulation on Thursday (March 2). O'Brien said the original intent of the prohibition was to prevent the oversaturation of sports-betting advertisements in Massachusetts and protect the state’s vulnerable populations, including problem gamblers.

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Slots Gaming Mogul Takes 10 Percent Of Star Entertainment

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Retired Australian pubs mogul Bruce Mathieson has purchased a nearly 10 percent stake in The Star Entertainment Group, triggering speculation of a power play amid financial and regulatory strife at the casino operator.

Mathieson acquired 9.97 percent of lagging Star Entertainment stock in a surprise move on Monday (February 27), just below the 10 percent threshold requiring regulatory approval, according to Australian Securities Exchange (ASX) filings.

Mathieson retired as director of Endeavour Group, a pub, hotel and liquor giant with the nation's largest slot machine inventory, in 2022. He remains Endeavour’s largest shareholder.

Mathieson’s son, Bruce Joseph Mathieson, is a director of Endeavour and was included in the ASX filings as a purchaser of Star shares together with his father and a family company.

US financial giant JPMorgan Chase also emerged as a substantial shareholder of Star on Monday, reporting ownership of 5.46 percent of stock.

Another US financial and banking giant, State Street Corp, reported a Star trade on February 24 that lifted its holding from 7.47 percent to 10.09 percent, breaching the regulatory threshold.

A second trade on the same day brought the State Street holding back to 7.13 percent. It was not immediately clear if the 10 percent limit triggered the second trade or why the limit had been breached.

A Star Entertainment spokesperson was contacted for comment on Thursday (March 2).

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Supreme Court Backs Swiss Blocklisting

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Switzerland’s casino gambling regulator the ESBK has had its right to block unlicensed online gambling operators ratified by the country’s Federal Supreme Court.

The regulator announced on Tuesday (February 28) that its 1,053-strong blocklist had been backed by the court, following which the ESBK said it was “intensifying its commitment to combating illegal gambling”.

The ESBK said it works with co-gambling regulator Gespa to maintain the blocklist.

Four operators listed on the blocklist had lodged complaints with the ESBK about their presence on the register. These disputes were initially dismissed by the Federal Administrative Court and then on appeal in the recent Supreme Court rulings.

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UK Study Suggests Problem Gambling Suicide Link

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A new academic study suggests that an increase in severity of problem gambling presents a risk of attempted suicide in young people.

The survey interviewed people aged between 16 and 24 in England, Scotland and Wales between June and August 2019 and then again between July and October 2020.

The study, funded by Wellcome Trust, is being published in the March issue of The Lancet.

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Operators Must Report Suicides Under Planned UK Rules

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A new UK Gambling Commission consultation is asking for input on plans to require operators to inform the regulator when they discover that any of their customers have died via suicide.

The three-part consultation, which closes on May 23, also lays out plans to extend the GAMSTOP self-exclusion service to all UK licence-holders that accept bets via telephone and email.

It also details proposed amendments that would keep gambling regulations in line with Payment Services Regulations.

The commission said it does not expect the three issues to be affected by the forthcoming white paper on reforms to the 2005 Gambling Act.

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West Virginia Looks To Regulate Certain Sports-Betting Content

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An amended bill directing West Virginia gaming regulators to establish standards for sports-betting content produced for operators by their influencers or affiliates passed the House of Delegates by a 92-5 vote on Monday (February 27).

House Bill 3232, sponsored by Republican Delegate Clay Riley, would also require the West Virginia Lottery Commission to accredit independent evaluators to audit that content.

A similar bill has been introduced in Maryland.

Riley’s bill refers to experts or influences as “touts” and “handicappers,” and requires an audit to the “completeness, existence, accuracy, valuation, presentation, and occurrence” of the content being offered.

In a fiscal note, the West Virginia Lottery, which regulates the state’s gaming industry, made it clear it is unable to project what impact the proposal may have on costs and revenues to the state.

Riley does allow the lottery commission to impose fines for violations of the rules, and at its discretion “may implement an independent evaluation fee to be paid by management service providers.” The lottery commission would also have six months to contract with accredited independent evaluators.

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Bally’s Shutters Monkey Knife Fight

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Monkey Knife Fight, which was acquired by Bally’s Corp. for $90m a little over two years ago, announced Tuesday (February 28) that the daily fantasy sports (DFS) site has closed for good after five years.

Founded in 2018 by Bill Asher, Monkey Knife Fight was the third-largest daily fantasy sports operators in North America behind FanDuel and DraftKings.

The DFS site was legal in 37 states at the time of Bally’s purchase in January 2021, which the company said at the time complemented its media partnership with Sinclair Broadcast Group.

Bally’s CEO Robeson Reeves did not discuss Monkey Knife Fight during a fourth-quarter earnings call with analysts on February 23.

In the fourth quarter of 2022, Bally’s recorded a non-cash impairment charge of $390.7m, primarily related to the Bet.Works and Monkey Knife Fight acquisitions.

In a statement, Monkey Knife Fight said it was “with a heavy heart, we regretfully announce that Monkey Knife Fight has shut down permanently as of today, February 28, 2023.”

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Minnesota Tribe Triumphs In Dispute Over Electronic Pull Tabs

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The Minnesota Gambling Control Board lacks authority to approve electronic pull-tab charitable gambling games where they include an open-all feature, the state’s Court of Appeals ruled on Monday (February 27).

Siding with the Shakopee Mdewakanton Sioux Community, a panel of three appellate judges found that the board’s policy since at least March 2019 of potentially allowing the feature to speed up the play of the electronic games was an “unpromulgated rule … and cannot be used for agency action.”

The Minnesota legislature approved electronic pull-tab games in bars and other locations through a 2012 law to fund a new Minnesota Vikings football stadium.

The Shakopee tribe, which owns and operates the Mystic Lake casino near Minneapolis, filed suit before the court of appeals last year after an initial challenge was denied by an administrative law judge.

In its 21-page ruling, judges agreed that the 2012 statute was ambiguous and could reasonably require “that a player take an affirmative action to open each ticket and to open each line, row, or column on each ticket—i.e., it precludes open-all functionality.”

Because of that ambiguity, the Gambling Control Board cannot claim a so-called “plain language” exception to state requirements to formally promulgate interpretive rules.

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Brazil Adds Payment Blocking Bill Amid Rumours Betting Decree Is Imminent

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Brazilian conservative senator Magno Malta has proposed a bill that would block online payments to grey-market gambling sites.

This marks the second time that the staunchly anti-gambling senator has proposed such a measure — back in 2008 he helped author a bill that would ban payments connected to online so-called vice activities, including child pornography and gambling.

The second iteration, filed on Thursday (February 23) in the form of Bill 626/2023, would supposedly work by prohibiting payment companies from authorising the transactions related to online gaming and the purchase of pornography.

Magno Malta’s second attempt comes on the heels of frenzied whispers in the country’s media that Brazil is in the midst of negotiating details of the sports-betting decree.

According to one outlet, Folha de Sao Paolo, the Ministry of Finance has already sent the text to the Office of the President for signature. Conversely, over the weekend, CNN Brazil reported that the Institutional Relations Secretariat team is still editing the text and that it will be sent to the Ministry of Sports in a few days.

There has been no public official confirmation of the status of the sports-betting decree, other than that it is, as it has been for four years, in process.

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Mohegan Boosts Korean Casino Project By $140m

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US casino operator Mohegan Tribal Gaming Authority has said it committed 185bn won ($140m) to complete the Mohegan Inspire Entertainment Resort on Yeongjong Island in the South Korean city of Incheon.

Mohegan executed an equity commitment letter on February 16 that guarantees about 155bn won ($117m) in funding “as needed” before September 30 to complete the delayed project, it said in a statement on Thursday (February 23).

The company will contribute an additional 30bn won “if necessary” to “certain development costs or pre-opening expenses” and contingency funds.

Mohegan also agreed with its facility agent and warrant holders to amend Inspire’s development plan so that project cost increases can be met.

The funding boost is good news for the Korean land-based casino sector amid a gradual recovery from the double blow of pandemic impacts and Chinese government pressure on the regional gaming industry.

The resort’s casino will be for foreign customers only. The integrated resort consortium secured a licence in early 2016, with Mohegan Sun’s group being the last-standing candidate in the government’s poorly received bidding process.

Despite numerous obstacles, the project stayed on track with the assistance of underwriting from conglomerate Hanwha Corporation on the eve of the outbreak of the coronavirus pandemic.

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Wyoming Governor Signs Bill Clarifying Sports-Betting Law

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Wyoming Republican Governor Mark Gordon has signed a bill to tweak the state’s sports betting 2021 state law authorizing online-only sports betting.

The amendments, which are effective immediately, now expressly require vendor licenses for server hosts and sports integrity monitoring services, as well as for certain key personnel of both operators and suppliers.

The bill also amends language related to the deduction of promotions and bonuses from taxable revenue and limits the ability of sports-betting operators to carry over monthly losses to offset taxes.

According to a fiscal note, the licensing changes are expected to generate $140,000 in revenue in the fiscal year 2024.

The Wyoming Gaming Commission also anticipates “no fiscal impact” from the limits to online sports wagering loss carryover, and views the amendment as a “precautionary measure to avoid catastrophic mistakes made by operators that would result in negative balances.”

Gordon signed House Bill 181 without comment on Tuesday (February 21), according to the commission.

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Washington Tribe Cheers Maverick Case Dismissal

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Charlene Nelson, chair of the Shoalwater Bay Tribe, has called a federal court’s decision to dismiss Maverick Gaming’s lawsuit challenging the exclusivity of tribes to offer sports betting in Washington state a “complete vindication.”

Maverick CEO Eric Persson, who is a member of the Shoalwater Bay Tribe, said the company will appeal the court’s decision.

Nelson said Maverick has been attempting to undermine the sovereign rights of Indian tribes not just in Washington, but nationally as well. She added that “Washington tribes are the true target of the suit.”

In September, the tribe’s motion to intervene in the case was granted by U.S. District Court Judge David Estudillo even though they were not named in the lawsuit due to their sovereign immunity.

“As we said at the time of our legal filing, it pained us to have to legally oppose a member of our tribe, but Maverick’s case, if successful, would have irreparably harmed historically marginalized tribal communities, and would have run counter to the will of the legislature and the general public,” Nelson said in a statement.

Rebecca George, executive director of the Washington Indian Gaming Association, called Maverick’s lawsuit a “direct attack on the federal Indian Gaming Regulatory Act.”

“It is also a strong ratification of the collaborative and productive relationship that Washington’s tribes have developed with state and federal officials to create a safe, limited and well-regulated system of gaming in Washington state.”

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PointsBet Pulls Massachusetts Digital Application

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PointsBet has withdrawn its sports-betting license application in Massachusetts after choosing to focus its efforts on other U.S. states and Ontario, the company confirmed Friday (February 24) in an email to VIXIO GamblingCompliance.

The decision was first announced on Thursday during a Massachusetts Gaming Commission (MGC) meeting.

PointsBet applied in late 2022 for one of seven standalone mobile sports-betting licenses, and was approved to apply for a temporary license. The withdrawal from the market means that two standalone licenses are available.

“We would like to thank the Massachusetts Gaming Commission for their consideration of our application, conducting extensive hearings, and deeming PointsBet suitable for licensure ahead of the launch of legalized sports wagering in the Commonwealth of Massachusetts,” the company said in a statement.

PointsBet is the second operator to withdraw a digital application in Massachusetts. In January, bet365 withdrew its application for a “tethered” license after being tied to Raynham Park, a former racetrack that transformed itself into an off-track betting site.

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A Kentucky bill would outlaw skill games currently running as grey-market machines.

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