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News In Brief: January 10-January 14, 2022

January 14, 2022
Gambling fees rise in Belarus, a Virginia bill would make bonuses taxable and Star Entertainment faces a growing regulator investigation.

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Gaming Taxes Increased in Belarus

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Belarus has adopted a new tax code to increase rates across a huge variety of sectors, including gambling.

Under the new rules, the fixed monthly tax fees on casino tables, slot machines, sports betting and tote cash desks have been raised by 10 percent.

According to the code, the monthly tax on each gaming table will be 7,854 Belarus rubles ($3,070).

From the start of this year, for each gaming machine an operator will need to pay 264 rubles ($103) per month. The new tax rate for each tote cash desk is 2,475 rubles ($967) and for each sportsbook cask desk is now 1,650 rubles ($645).

The new tax code also has provisions to regulate the taxation of the so-called personal “unproven“ income, including profits from gambling, which if not declared properly are taxed with the highest rate of income tax — 20 percent.

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Virginia Bills Target Tax Deductions, College Betting Ban

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Two further bills have been filed in the Virginia General Assembly to tweak the state’s 2020 sports-betting law.

House Bill 1103 by Democratic Delegate Mark Sickles would prevent online sports-betting operators from deducting bonuses and promotional credits from taxable revenue after 12 months of operation. Operators would also no longer be able to carry forward losses from one month to offset taxes owed in others.

Through November, Virginia sportsbooks generated just $18m in taxes on $254.4m in gross revenue, according to Virginia Lottery data.

Sickles was the primary author of Virginia’s original legislation to authorize online sports betting through more than a dozen operators and a successful bill last year that ensured licenses for forthcoming land-based casinos in the state and clarified the status of Olympics betting.

A separate bill also filed on Monday by Delegate Schuyler VanValkenburg would allow Virginians to bet on the University of Virginia and other in-state colleges. The 2020 law allows college betting but not for games involving Virginian schools.

Last week, Senate Minority Leader Tommy Norment introduced a third bill that would prohibit sportsbook operators from using “Virginia” or “the Commonwealth” in their advertising.

The Virginia Lottery has so far issued 13 operator licenses for online sports betting, with ten companies live. Three final applications are currently under review and licenses should be awarded in the first half of the year, Gina Smith, the lottery’s director of gaming compliance, said at a board meeting on Wednesday.

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Ohio Tie-Up For Tipico

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Tipico has gained market-access for Ohio through a partnership with Major League Soccer’s Columbus Crew.

The partnership, which will also see Tipico leverage a series of marketing and sponsorship opportunities, is the first between an Ohio sports team and a sportsbook operator since sweeping legislation was signed into law last month.

Ohio’s sports-betting law empowers the state’s gaming commission to issue up to 25 mobile licenses, with the state’s 11 land-based casinos and ten major sports teams and facilities receiving preferential treatment.

“The mid-west will play an important role as we continue our multi-state expansion in 2022, and we could not have asked for a better partner to help us introduce the Tipico brand and our proprietary technology to sports bettors in Ohio and beyond,” Adrian Vella, Tipico U.S. CEO, said in a statement.

Malta-based Tipico is currently live in New Jersey and Colorado and has market-access deals in Indiana and Iowa, according to VIXIO GamblingCompliance’s U.S. Sports Betting Partnership Tracker. It is also the official sports-betting partner of USA Today publisher Gannett.

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Seneca Nation, New York Negotiating New Gaming Compact

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Matthew Pagels, president of the Seneca Nation, confirmed the tribe have agreed to negotiations with the state of New York on a new state-tribal gaming compact, ending a long-standing dispute regarding revenue share payments.

As part of the agreement announced late on Wednesday, Pagels said the tribe would receive upwards of $40m in fees and cost savings over the remaining life of the current compact, which expires in December 2023.

“For four years we have vigorously raised many concerns in multiple legal challenges,” Pagles said in a five-minute video message posted on social media.

“We believe it is in the best interest of the Seneca Nation to address these important concerns through the negotiation of a compact that will provide clarity on our obligations and equally as important the obligations New York state has to the Seneca Nation.”

Pagles said negotiations on a new compact are set to begin in the next 60 days.

“We have less than two years to get there,” he said. “Now is the time to move it forward.”

The fiscal dispute began in March 2017, when the tribe announced they had met the terms of the 2002 compact requiring revenue sharing payments until the end of 2016. Between 2002 and 2016, New York received more than $1.4bn in Seneca casino revenue.

The compact was automatically extended in 2016 for another seven years. Seneca officials argued the compact lacked any language specifying that the tribe were obligated to make any payments after the original 14 years of the deal.

An arbitration panel ordered the tribe in December 2017 to pay $225m in slot machine revenue to the state.

The tribe had been unsuccessful twice in appealing the decision and in September asked a federal judge in Buffalo to delay ordering the payments until the National Indian Gaming Commission concluded whether they would violate the Indian Gaming Regulatory Act (IGRA).

“I am pleased to have reached an agreement for the resumption of payments on terms that serve both the state and the [tribe] and that benefit Western New York communities,” Governor Kathy Hochul, a Democrat, said in a statement.

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Colombia's BetPlay Nets NBA Partnership

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The National Basketball Association (NBA) has announced BetPlay as its exclusive official sports-betting partner in Colombia. The deal will allow the NBA and BetPlay to provide different gaming experiences, products and content for NBA fans in Colombia, where BetPlay is understood to be the number one online betting operator.

Owned by local gaming company Corredor Empresarial, BetPlay will use the NBA’s official league data, statistics and league branding across its sports wagering platform in Colombia. As part of the partnership, BetPlay and the NBA will also promote responsible wagering measures and work on protecting the integrity of NBA games.

BetPlay joins a growing list of official sports-betting partners of the NBA that includes DraftKings and FanDuel in the U.S., Tabcorp in Australia, FDJ in France, Codere in Mexico and Supermatch in Uruguay.

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AUSTRAC Expands Probe Into Star Entertainment

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Australia’s financial transactions watchdog AUSTRAC has notified casino operator The Star Entertainment Group that it has expanded its probe into the company’s alleged non-compliance with anti-money laundering and counter-terrorism financing (AML/CTF) obligations.

AUSTRAC has “expanded the scope of its investigation” of the company “to other entities within The Star group”, Star Entertainment said in a filing to the Australian Securities Exchange (ASX) on Friday.

The statement did not indicate which entities are newly under investigation.

“AUSTRAC has advised that it has not made a decision regarding the appropriate regulatory response that it may apply to The Star, including whether or not enforcement action will be taken,” it said.

“AUSTRAC has advised that it will request information and documents from The Star as part of its investigation.”

Star Entertainment told the ASX in June 2021 that AUSTRAC identified “potential serious non-compliance” with federal AML/CTF legislation and rules, including in relation to customer due diligence and “adopting and maintaining an AML/CTF Program”.

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NSW Transitioning To Standalone Casino Regulation

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The New South Wales (NSW) state casino regulator has announced structural changes ahead of a planned shift to standalone regulation of casinos, including appointment changes and tighter communication with other agencies.

The Independent Liquor & Gaming Authority (ILGA) said in a statement on Friday that the “practical interim arrangements” will improve “management of existing and emerging risks in the current casino regulatory environment”, particularly money laundering and other financial crime.

“We need improved capacity now and that’s what these interim arrangements will provide for,” ILGA chairperson Philip Crawford said. The arrangements come into force in February.

Crawford will move from part-time to full-time work as part of the changes, which include appointment of an AML expert to the ILGA board, a memorandum of understanding with financial transactions watchdog AUSTRAC, and more resources for the regulator's secretariat.

“ILGA will use the new arrangements to further enhance its ability to identify and address organised crime in casinos and to expand its cooperation with the ACIC [Australian Criminal Intelligence Commission], AUSTRAC and the NSW Police Force,” Crawford said.

As with Victoria state, the pending NSW casino regulator will no longer be involved in liquor regulation, the result in both cases of fallout from lengthy inquiries into misconduct by Crown Resorts.

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Tight Timeline For Indiana iGaming Bills

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Two separate bills to regulate online gaming were filed in the Indiana House of Representatives on Monday, meeting a deadline to introduce legislation for the General Assembly’s 2022 session.

House Bill 1337 sponsored by Republican state Representative Alan Morrison would enable Indiana’s incumbent casinos and racinos to obtain licenses to offer interactive casino and poker games through a maximum of three skins each. Licenses for casinos will cost $500,000 upfront, while skin operators would be required to pay $100,000. Interactive gaming revenue would be taxed at a headline rate of 18 percent.

The bill includes other gaming provisions related to land-based casino tax revenue and granting House and Senate leaders authority to appoint members of the Indiana Gaming Commission.

House Bill 1356, introduced by Representatives Doug Gutwein and Ethan Manning, is a standalone online gaming bill that appears to be virtually identical to Morrison’s proposal.

Both measures have been referred to the House Committee on Public Policy.

Last year, Morrison and Republican state Senator Jon Ford introduced twin bills proposing to regulate online casino gaming, but neither even received a committee hearing.

Still, Indiana is arguably the U.S. internet gaming industry’s top legislative target for 2022 and is the state most likely to pass legislation this year, according to VIXIO GamblingCompliance forecasts published in December.

Only six U.S. states currently permit online casino gaming, compared to more than 20 that have legalized online sports betting within the past three and a half years.

Chief legislative obstacles to overcome in Indiana will include the lingering effects of a campaign finance scandal involving one prominent former Indiana gaming executive whose company benefited from a casino bill passed in 2019.

State researchers last year also raised potential concerns that internet gaming could cannibalize tax revenues derived from land-based casinos, while another significant challenge is the abbreviated General Assembly session this election year.

An internet gaming bill will have to pass the House by January 31, with lawmakers scheduled to adjourn on March 14.

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Oregon Lottery Confirms Switch From Scoreboard To DraftKings

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The Oregon Lottery confirmed Wednesday that DraftKings will become the state’s exclusive sportsbook operator as it replaces the lottery’s own Scoreboard app that launched in October 2019 using the SBTech platform that has since been acquired by the Boston-based company.

The transition will begin on Tuesday (January 18), although bettors will still have access to transaction histories, account information and the withdraw function for six months after DraftKings launches in Oregon. Additionally, all open wagers made in the Scoreboard app will remain active until settled.

The lottery had an existing contract with SBTech to operate its mobile wagering app, and DraftKings acquired SBTech in 2020.

Oregon is the second state where DraftKings will have exclusivity to offer sports betting. It has operated as the exclusive official sportsbook of the New Hampshire Lottery since December 2019 after it agreed to share 51 percent of revenues with the state.

Financial terms of the Oregon Lottery agreement, which has been in the works for several months, have not yet been disclosed.

The Scoreboard app generated just $30.4m in revenue on handle of $331.6m in 2021, significantly less than was reported in the largest U.S. market of New Jersey for any month during the year.

“We’re excited about the improved experience for our players, including the ability to make same game parlay bets,” said Barry Pack, director of the Oregon Lottery. “We see benefits for the lottery too, as the shift to DraftKings means fewer third-party service providers and a simpler financial structure for player accounts.”

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U.S. Integrity, Learfield Partner On Betting Fraud Venture

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U.S. Integrity and Learfield have formed a new joint venture — BetDetect — that will focus on ensuring the integrity of college sports contests, the companies announced on Wednesday.

BetDetect will provide collegiate athletic departments with monitoring, education and advisory services as opportunities around online sports betting in college continues to increase.

Fans already spend more than $11bn wagering on their favorite Power Five conferences alone, according to U.S. Integrity.

Learfield, a media and technology company, offers its services to 50 Power Five schools. The Power Five encompasses 65 schools in the ACC, Big Ten, Big 12, PAC-12, SEC, plus Notre Dame.

Currently, only Colorado, Louisiana State University and Maryland have reached sponsorship deals with sportsbook operators.

Matthew Holt, CEO and co-founder of U.S. Integrity, said schools want to avoid matching-fixing and other potential nefarious behavior that could damage the reputation of athletic programs. The SEC, Pac-12 and Big 12 are already clients of the integrity monitoring firm.

According to the deal, Learfield will become the exclusive channel for U.S. Integrity’s services across college sports, while U.S. Integrity’s deals with clients not represented by Learfield will remain in place.

“We know from experience that a lot can go wrong if care and attention isn’t paid to issues of compliance and integrity,” Holt said.

Holt said BetDetect provides real-time anomaly detection tools aimed at identifying suspicious wagering activity so that schools can navigate nuanced issues stemming from regulated sports betting.

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Uganda Extends National Lottery Application Deadline

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Uganda’s National Lotteries and Gaming Regulatory Board (NLGRB) has extended applications to operate its new National Lottery from January 14 to January 31, 2022.

The NLGRB is looking for an operator to run the National Lottery on behalf of the government of Uganda, in partnership with and under the supervision of the NLGRB.

An application for a licence to conduct the National Lottery requires among other things a fee of UGX50m (€12,400) for foreigners and Nationals UGX20m for Ugandan nationals.

Applicants must also already successfully run operations that yield an annual turnover of at least UGX100bn.

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Ireland's 'Must-Win' Lottery Plan Rejected

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Carol Boate, the regulator of the Irish National Lottery, has rejected an initial application for a “must-win” draw.

The Irish lottery jackpot has rolled over an unprecedented 62 times, with the top prize not won since June.

Changes have been called for in the Irish parliament and in response to growing pressure, operator Premier Lotteries Ireland said it would ask for approval to run a draw that would award the €19m top prize to whichever players matched the most numbers.

But that petition has been knocked back by the regulator, who says she wants more “tests and assurances”, according to a report in the Irish Times.

The report indicated that Premier Lotteries was preparing to provide Boate with additional information.

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Puerto Rico To Expand Slot Machine Market

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The Gaming Commission of Puerto Rico is seeking to expand the island’s newly regulated market for non-casino slot machines to the legally permitted maximum of 45,000 machines.

The commission submitted an analysis to lawmakers this month suggesting that more than 65,000 slot machines are currently in operation but only 23,000 are regulated, according to a report in Noticel.

A 2018 law sought to subject grey-market machines to regulation with an initial cap of 25,000 legal machines. Regulators are able to increase the number to 35,000 after one year and then to 45,000 a year later, but only if studies suggest that the market is not saturated and that route-operated machines are not negatively affecting hotel-casinos.

Authorization of 45,000 machines will increase government revenues and the removal of illegal machines will increase demand for regulated operators, officials said.

The Puerto Rico Gaming Commission last year won a legal challenge against its authority to regulate the convenience gambling devices and remove those offered by unlicensed operators.

Last week, the commission published a notice of new draft regulations to govern the licensing and oversight of slot-route operations. A virtual public hearing on the proposed rules, to replace an earlier set adopted in May 2020, will be held on February 7.

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New Jersey Senate Passes Sports-Betting Tax Bill

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The New Jersey state Senate voted 38-1 on Monday to accept Governor Phil Murphy’s amendments on a bill to enable sportsbooks to deduct free-bets and promotions from taxable revenues.

The state legislature passed a bill last summer permitting deductions of all sports-betting promotions above an annual threshold of $8m for retail and $12m for online sportsbooks.

However, Murphy partially vetoed the bill in November, recommending instead that the deductions apply exclusively to in-person retail sports wagers placed at racetracks and Atlantic City casinos.

The New Jersey Assembly unanimously accepted the governor’s recommendation a few days before Christmas.

Neighboring Pennsylvania, along with Colorado, Virginia, Arizona, Michigan and several other states, all allow online sports-betting operators to deduct free bets from taxable revenue, although the House Speaker in Colorado has indicated the legislature could revisit the deduction this year.

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Virginia Supreme Court Denies Hearing On Skill Games Ban

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The Virginia Supreme Court has denied a request from the state to reverse a circuit court’s temporary injunction allowing the operation of slots-like, skill-based gaming machines at gas stations and convenience stores state-wide.

The ruling last year of Greensville Circuit Court Judge Louis Lerner temporarily ended enforcement of the state’s ban on skill-based games that became effective on July 1, 2021. The Supreme Court’s decision on Monday means the injunction remains in effect until a scheduled May 18 hearing in Greensville Circuit Court.

The Virginia General Assembly voted in 2020 to ban the machines from July 2020 until Northam insisted upon a 12-month reprieve to raise money through monthly fees for a coronavirus relief fund.

Last year, former NASCAR driver Hermie Sadler, who operates a truck stop, filed suit against the governor, the state attorney general’s office and the Virginia Alcoholic Beverage Control Authority. Sadler argued that the ban was unconstitutional and has adversely impact small businesses.

Sadler said Tuesday he was pleased with the Virginia Supreme Court’s decision to allow the temporary injunction to continue.

“Convenience stores, truck stops and restaurants throughout Virginia can now breathe a sigh of relief that they will not be deprived of an important source of revenue for their small businesses during these trying economic times,” Sadler said in a statement.

Sadler urged the Virginia legislature to consider the issue during its 2022 session that begins on Wednesday.

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Playtech To Guide NorthStar In Ontario Online Market

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Playtech will provide its platform and online casino, poker and bingo services to Canadian start-up NorthStar Gaming for the launch of competitive online gambling in Ontario and potentially other provinces in the future.

NorthStar Gaming was formed last year and plans to promote a new online sportsbook and casino offering through a media partnership with Toronto Star owner TorStar Corporation.

NorthStar said the agreement would see it become the “exclusive Canadian partner in the media and publishing sector with Playtech.”

More than two-dozen operators from Europe and North America are understood to have applied for a registration to operate online gambling in Ontario, with the market expected to go live early this year.

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Polish Finance Ministry Analyses Replacing Revenue Tax With GGR

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Poland’s Ministry of Finance is currently analysing the possibility of replacing the country’s existing 12 percent revenue tax on betting with a gross gaming revenue (GGR) tax.

The ministry continues to “analyse the existing regulations in the field of gambling with regards to compliance with the provisions of the [gambling] law by entities [active in this market] which also constitutes a reaction to the needs of this market”, said deputy finance minister Jan Sarnowski.

“One of the fields in which such analytical work is carried out is the tax on bookmaking within the context of a potential change of the tax base from the current sum of paid bets to a difference between the paid bets and paid out winnings,” he said in a reply to a request for information by a Polish lawmaker.

Sarnowski said that “in this second scenario, the tax base would be the gross revenue of an operator”.

The ministry’s current analytical activities include “a comparative study with the solutions that are implemented in other European countries”, he said.

“Given the complex character of these analyses, they have not been completed yet,” Sarnowski said, adding that the ministry has not developed any draft legislation.

There have been repeated calls for a switch to GGR tax over the past few months from the Polish gambling industry and beyond.

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Bill Would Ban Virginia's Name In Sports Betting, Casino Ads

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Virginia Senate Republican Leader Tommy Norment, who voted in favor of legalizing sports betting almost two years ago, now wants to ban casinos, sports-betting operators and their affiliates from using the words “Virginia” or “the Commonwealth” in their advertisements.

Norment pre-filed Senate Bill 96 last week that would allow regulators to fine companies up to $50,000 per violation. The one-page bill was referred to the Senate Committee on General Laws and Technology and will be formally introduced on Wednesday when the General Assembly convenes for its 2022 legislative session.

Sports betting was legalized in April 2020, before being launched in Virginia on January 21, 2021. Currently, there are 13 online sports-betting operators who have either been granted full approval or temporary approval by the Virginia Lottery.

An overabundance of sports-betting advertising has led to gaming regulators in New Jersey, Colorado and other states to urge the industry to find a balance between competition and over-saturation or risk a legislative backlash.

But Norment is the first lawmaker to propose banning the use of a state’s name from any gaming advertising.

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Lone Bidder For Chile's Largest Casino

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A subsidiary of incumbent operator Dreams has submitted the lone offer for a concession to operate a casino in Chile’s Mostazal region, home to the Monticello casino, the country’s largest.

Chile’s national casino gaming superintendence (SCJ) announced on Friday that incumbent operator San Francisco Investment S.A. was the only bidder to step forward for a bid process that was delayed late last year due to a legal challenge.

The concession for the Monticello casino’s region just south of Santiago is one of a dozen that will expire next year. In total, 14 bids have been submitted for the 12 expiring licences, the SCJ said.

Whether the likes of Dreams should be required to renew their concessions at all has been a point of controversy, with several incumbent operators having argued that the terms of Chile’s 2005 casino expansion law oblige the SCJ to renew the licences for a second 15-year term provided conditions are met.

Formerly partnered with South Africa’s Sun International, Dreams and chief Chilean casino rival Enjoy reached a preliminary agreement to merge last October.

Combined, the pair would operate 15 casinos in Chile pending the renewal of their current concessions, along with properties in Uruguay, Argentina, Panama and Peru.

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Gambling fees rise in Belarus, a Virginia bill would make bonuses taxable and Star Entertainment faces a growing regulator investigation.

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