News In Brief: June 13-June 17, 2022

June 17, 2022
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Worldpay has been fined in Colorado, Uruguay still wants potentially online-linked casino bids and Australia launches casino crime hunt.

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Worldpay Fined Over Colorado Licensing Lapse

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The Colorado Limited Gaming Control Commission approved a $130,000 settlement on Thursday (June 16) with Worldpay Gaming Solutions after the company continued to process payments for various online sportsbook operators despite allowing its state vendor license to expire.

According to the settlement, Worldpay processed some 174,477 transactions for operators between its license expiring on April 2, 2022 and suspending its services in Colorado on April 14, following notification by the Colorado Division of Gaming to its legal counsel.

The license expiration apparently came after notices for renewal were previously sent to named executives who were no longer with the company. Worldpay obtained a new Colorado vendor minor license on April 21.

The $130,000 amount represented a fine of $10,000 for each of the 13 days Worldpay processed transactions without a valid license. Under the terms of settlement, Worldpay has agreed to pay $65,000 immediately and hold the remainder in abeyance for a period of two years, with payment due if it breaches any other Colorado regulations. The company must also present a written plan to ensure future licensing compliance.

The $130,000 fine is the third largest of the post-PASPA era of legal U.S. sports betting beyond Nevada, according to VIXIO GamblingCompliance’s Enforcement Tracker. It is Colorado’s second fine related to sports betting since operations began in May 2020, following an April settlement of $65,000 with Carousel Group over geolocation lapses.

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Gaming Regulator Added To Pennsylvania Skill-Games Lawsuit

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The Pennsylvania Gaming Control Board (PGCB) has declined to comment on the agency being added to a lawsuit in state court that claims the gaming regulator and state's Bureau of Liquor Control Enforcement (BLCE) engaged in coordinated harassment of businesses with skill-based, or grey-market, gaming devices.

“We do not comment on active litigation,” PGCB spokesman Doug Harbach said Thursday (June 16).

Pace-O-Matic amended its 270-page lawsuit last week in Commonwealth Court in Harrisburg to include the PGCB and is seeking to permanently block the BLCE and PGCB from taking enforcement action against its machines.

The company claims that the regulators have gone after the skill games at the “urging, behest, and direct direction of big casino interests.”

“This lawsuit makes it clear that the casino industry is in control of (the) PGCB,” said Mike Barley, a Pace-O-Matic spokesman. “Entities meant to be regulated by PGCB are instead directing PGCB’s actions.”

Slot machines in Pennsylvania are regulated by the PGCB and taxed at 54 percent. According to the state police and Pennsylvania Lottery, skill games are illegal, but Pace-O-Matic disagrees citing a 2014 state court ruling that it claims deemed their specific machines, known as Pennsylvania Skill Games, legal.

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Uruguay Calls For New Online-Linked Casino Bids

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On Monday (June 13), the President of Uruguay, Luis Lacalle Pou, and the minister of tourism, Remo Monzeglio, called anew for bids for a proposed casino hotel complex in Rocha.

The first round of bids proved unproductive, as all three proposals were unsuccessful. The first two were deemed not up to standard and the third did not make it past presenting a “pre-feasability” project.

The project is of particular note considering that, in November 2021, the government introduced legislation to the national parliament that would allow public and private casinos to offer online casino games. The winning bid, should the legislation pass, would presumably be able to operate online as well.

Rocha is a popular vacation destination for Argentines, Brazilians and even wealthy Americans. It is just north of the Punta del Este, famously known as the Hamptons of South America, which comes to life every December as tourists pour in for Christmas beach festivities.

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LatAm Casino Merger Probed

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The investigation into the Chilean merger between Enjoy SA and Dreams SA has been extended by 90 business days by the Chilean National Economic Prosecutor’s Office (FNE).

The merger was first announced in mid-January, but the FNE concluded after its initial “Phase 1” investigation that it could present a threat to competition. The investigation began on May 3 of this year.

The FNE wrote in its press release that the merger could provide “the merged entity with the ability and incentives to reduce the quality of certain competitive variables in gaming services … it could substantially reduce competition”.

If successful, the merged company would be the largest casino operator in Chile, controlling 15 of the 26 existing casinos. It would also have 12 more casinos in its portfolio in Argentina, Colombia, Panama, Peru and Uruguay.

Under the proposed plan, Dreams would retain 64 percent of shares, while Enjoy would retain the other 36 percent.

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AUSTRAC Launches Australia-Wide Casino Crime Probe

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Australia’s financial transactions watchdog AUSTRAC has launched “Operation Kitten” nationally to investigate crime in casinos, the Sydney Morning Herald reported on Friday (June 17).

The Herald reported on the operation as part of a story alleging that Star Entertainment Group employees helped a gangster-linked high-roller banned from casinos in Sydney and Melbourne visit Star’s casino on Queensland state’s Gold Coast.

The allegations appear to have emerged too late to be heard by the New South Wales state gambling regulator’s probe into Star, which is currently hearing rebuttal submissions from counsel for individual Star staff and recently resigned staff.

However, the allegations and the AUSTRAC operation have now emerged as the Queensland government begins its own investigation into Star’s suitability for a casino licence.

The Herald reported that AUSTRAC and Queensland police are moving to “remedy historical police inaction” on casino crime, and that police have recently discovered a “Treasury Group” of suspected “Asian money launderers” who have targeted Brisbane’s Treasury casino.

The report said unnamed police sources have criticised the state regulator, the Office of Liquor and Gaming Regulation, for its culpability in not properly monitoring Star Entertainment, including the delay in a public inquiry.

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Ohio Begins Accepting Sports-Betting License Applications

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Matthew Schuler, executive director of the Ohio Casino Control Commission (OCCC), said the window officially opened Wednesday (June 15) for the commission to start accepting applications for licensure for a majority of the state’s new sports-betting industry.

“In order to be eligible to commence sports gaming on the universal start date (of January 1, 2023) applications must be submitted by July 15,” Schuler told the commission.

The first round of applications will be submitted by gaming companies looking to be licensed to offer retail, mobile or lottery sports betting. Management service providers for both retail and first-designated mobile license and suppliers can submit their applications, Schuler said.

The second application window in Ohio opens on July 15 and closes August 15. During this time period is when mobile operators that are offered second license by a casino or sports franchise can submit a license application. Any lottery retailers in Ohio wanting to participate can allow apply during that period.

In an effort to be transparent, Schuler said, each Friday during this month-long period, the commission will post on its website the names of the applicants.

Schuler told commissioners they should plan to attend additional meetings from September through November so they can begin certifying independent testing labs and embarking on the process of licensing the various types of sports-betting licenses.

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Australian Regulator Blocks 'Major' Poker Website

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Australia’s national online gambling regulator has ordered internet service providers to block the website thepokies.net, one of the biggest scalps for the regulator since blocking orders commenced in late 2019.

The Australian Communications and Media Authority (ACMA) said in a statement on Thursday (June 16) that the “major illegal gambling website” attracts 30,000 Australia-based customers a month, citing Similarweb data.

“We have received more complaints about thepokies.net this year than any other illegal gambling website, and it is clearly doing a lot of harm to the Australian community,” ACMA chair Nerida O’Loughlin said.

The latest tranche of block orders includes another eight websites, including the offensively named “Abo Casino”, whose landing page features the colours of the Australian Aboriginal flag and the image of a Pacific Islander native with face paint and tattoos.

The other blocked sites are Azure Hand, Betroom, 777Bay, Space Lilly, Jet Casino, Katsu Bet and Winz. They join another 160 illegal services that have withdrawn from the Australian market since 2017, the statement said.

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Final Draft Of Macau Casino Law Raises Taxes

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Macau’s final draft of its updated casino concession law has added a surprise tax hike, banned direct cross-shareholdings between operators and offered an escape route for under-threat satellite casinos.

Legislative Assembly president Chan Chak Mo said on Wednesday (June 15) that lawmakers will vote on the bill as early as next Tuesday.

The most contentious of the changes is a combined 1 percent tax hike for two non-gaming levies, a change that promises to eat into operator EBITDA by several times that differential. The total tax burden rises from 39 percent to 40 percent.

A tax sweetener via a maximum 5 percent tax deduction for non-Chinese and non-Taiwanese patrons appears to be poor compensation, however, given the notoriously low volume of foreign gamblers in Macau, vague guidelines and likely costs in calculating customer spend.

Direct cross-shareholdings between concessionaires will be banned, but indirect ownership remains possible, according to the draft.

Satellite casinos have also been given a reprieve, with restrictions on property usage lifted but revenue share agreements with concessionaires prohibited after three years.

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Paddy Power Chastised Over 'Indispensable' Gambling Ad

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Flutter Entertainment’s Paddy Power has been rebuked for running a TV commercial that was deemed to be violating UK standards that bar advertising that suggests gambling is indispensable or takes precedence over family and friends.

A March commercial featured a young man playing a slots game on his phone when his partner’s mother brings him a drink.

His partner asked, “Do you think I will end up looking like my Mum?” to which the man absentmindedly responds, “I hope so”, before realising he had made an inappropriate remark.

The Advertising Standards Authority (ASA) said that although the ad was light-hearted, “most viewers would understand that the young man behaved in a way which was not appropriate at a family event because he was distracted by gambling”.

Further, a tag line, “you’ll always get another chance with Paddy Power games”, coupled with “no matter how badly you stuff it up”, was “likely to encourage repetitive or frequent participation in gambling” the ASA said in a ruling released today (June 15).

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DraftKings Partners With BetBlocker To Promote Safer Play Technology

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DraftKings announced a new partnership Tuesday (June 14) with UK-based charity BetBlocker, which will see the gaming company promote the charity’s safer play technology.

BetBlocker provides free software that allows users to set restrictions on their gaming activities across all their devices. The software will apply to any gaming sites, whether regulated or not, worldwide.

Consumers can set personalized parameters, including restriction lengths ranging from days to years, as well as using the calendar blocking functionality to restrict play on specific days of the week.

“BetBlocker’s contributions to safer play are commendable and DraftKings is pleased to team up with this enterprising and disruptive not-for-profit that is advancing responsible gaming in a comprehensive and consumer friendly way,” said Chrissy Thurmond, DraftKings’ senior director of responsible gaming.

DraftKings is expected to make the technology available to customers in the U.S. and Canada.

“BetBlocker is thrilled to have the support of … DraftKings to extend our software outside the U.K. and Europe to players in the United States and Canada,” Pedro Romero, chief of safer gambling partnerships with BetBlocker, said in a statement.

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Mexico Uses National Lottery To Sell Public Assets

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At the behest of President Andrés Manuel López Obrador, Mexico is auctioning off state assets through the national lottery.

The President has termed the initiative his “Great Special Draw” and announced last Thursday (June 9) that its latest edition will occur on June 28 with a house raffle.

The property is in one of Mexico City’s most expensive neighbourhoods, Jardines del Pedregal, and is worth 20m Mexican pesos, or nearly $4.4m.

In an unexpected twist, Mexican outlet El Heraldo has reported that the home advertised is the former property of the notorious leader of the Juárez Cartel, Amado Carrillo Fuentes.

“All this is to support people, it is to win and to help others. And we are going to intensify this campaign, because there are many abandoned public goods in different states, assets without maintenance go to waste,” said the President.

Some 3m tickets have already been sold for the raffle on June 28.

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Puerto Rico Approves Slots

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Puerto Rico’s Tourism Commission has approved legislation that introduces slot machine controls.

According to the legislation, existing slot machines will be legalised, with a maximum of 25,000 allowed in the first year. Ten thousand a year can follow after that, to be capped at a maximum total of 45,000 slot machines in the country.

The total profits of the slot machines cannot exceed 50 percent of the total revenue of the establishment that they are housed in, a move meant to prevent illegal lottery kiosks with no other business purpose.

Illegal slot machines are still a rampant problem. Two weeks ago, an official appealed to the gaming commission to seize 80,000 slot machines that he says are in operation in the country.

José Aponte Hernández, the former president of the Puerto Rican House of Representatives, echoed these sentiments last month when he filed a resolution asking for a broad investigation into Puerto Rico’s gambling industry.

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Entain Buys Return To Dutch Market With BetCity Purchase

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Entain, parent of the Ladbrokes and bwin brands, said it has agreed to acquire BetEnt, one of the first group of Dutch online gambling licensees when the market opened last October.

The London-listed Entain would acquire the company, which trades under the name BetCity, from Sports Entertainment Media, for an initial €300m (£257m) and up to €550m in deferred compensation based on EBITDA performance, the company said today (June 14).

Amsterdam-based BetCity had about a 20 percent share of the Dutch online gambling market in the fourth quarter, Entain said.

“This acquisition will create a strong market operator with significant growth opportunities,” Entain said.

Entain does not expect to get a Dutch licence for its bwin and Party brands until toward the end of this year, as the Netherlands Gambling Authority has requested more material, the company said.

The deal is expected to close in the second half of this year, Entain said.

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Former Penn Interactive Employee Faces Insider Trading Charges

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The U.S. Securities and Exchange Commission has charged David Roda, a former software engineer at Penn National Gaming’s subsidiary Penn Interactive Ventures, with insider trading in connection with Penn’s $2bn acquisition of Toronto-based Score Media and Gaming.

The SEC’s complaint, filed Monday (June 13) in federal district court in Philadelphia, alleges that, while employed at Penn Interactive, Roda was given confidential information about Penn’s interest in acquiring Score Media and told not to trade on that information.

Roda purchased 500 out-of-the-money call options on Score Media in the weeks and days leading up to the announcement of the acquisition.

Additionally, the SEC charged Andrew Larkin, who was tipped off by Roda and bought 375 Score Media shares. The SEC alleges following the merger announcement, Roda and Larkin sold their holding for “unlawful profits” of $560,762 and $5,602, respectively.

Both Roda and Larkin reached settlements with the SEC that are subject to court approval.

In a parallel action, the U.S. attorney’s office for the Eastern District of Pennsylvania on Monday announced criminal charges against Roda.

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India Warns Against Online Gaming Ads

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India’s Ministry of Information and Broadcasting has warned traditional and digital media to stop running advertisements for online gaming products.

Citing the ministry’s own online gaming ad guidelines from December 2020, Monday’s (June 13) advisory instructed newspapers, private satellite stations and digital media news outlets to “refrain from publishing advertisements of online betting platforms” and “not to display such advertisements in India or target such advertisements toward the Indian audience”.

The advisory did not distinguish between those states where online gaming in some form is legal and those that ban such gaming outright.

The warning follows Friday’s release of central government guidelines prohibiting “surrogate” (indirect) advertising of online gaming products and platforms, a common promotional method for illegal gambling interests.

The central government is warming to some form of regionally endorsed, but centrally operated, regulatory mechanism covering online skill gaming, and has convened meetings on promoting gaming infrastructure as a growth industry in certain states.

However, the crackdown on illegal advertising may also reflect growing unease in state jurisdictions such as Tamil Nadu, where a major political and public backlash against online skill games with stakes is brewing following a state High Court decision that favoured the gaming industry.

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Queensland To Hold Suitability Review For Star Entertainment

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The Queensland state government has announced an independent review into the suitability of The Star Entertainment Group to run casinos in Brisbane and the Gold Coast.

The announcement is a big blow for the Australian listco, whose ongoing suitability review in New South Wales (NSW) state has triggered resignations of board members and senior management over misconduct and poor compliance.

Attorney general Shannon Fentiman said in a statement on Tuesday (June 14) that the review will be in addition to an eight-month investigation into Star by the state Office of Liquor and Gaming Regulation, in collaboration with state police and national transactions watchdog AUSTRAC.

The state's Cabinet has yet to determine the terms of reference.

Queensland appeared reluctant to call its own high-powered review into the company even as NSW’s reviews into Star and Crown Resorts, along with Royal Commission probes in Victoria and Western Australia states into Crown, wreaked havoc on the industry’s reputation.

The impact of the NSW regulator’s probe appears to have forced the hand of the government, which is also preparing updated gambling and anti-money laundering legislation.

The “government takes the allegations of money laundering and integrity issues very seriously”, Fentiman said.

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Vermont Establishes Sports-Betting Study Committee

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Among the millions of dollars set aside in Senate Bill 11 for workforce training programs, scholarships and other economic development investments as part of Vermont's 2022-23 state budget is a provision creating a committee to examine the possibility of legalizing sports betting.

Republican Governor Phil Scott signed the legislation last week.

The nine-member committee will include the attorney general, commissioner of liquor and lottery, commissioner of taxes, secretary of state, secretary of commerce and community development, and two current members of each of the House and Senate.

The committee will consider the sports-betting study commissioned by the Office of Legislative Council and the Joint Fiscal Office. According to state estimates, Vermont could generate from $640,000 to $4.8m in the first year from taxes on sports betting, and $1.3m to $10,3m in the second year depending on the regulatory model.

“Given the widespread participation in sports betting, the General Assembly finds that careful examination of whether and how best to regulate sports betting in Vermont and protect Vermonters involved in sports betting is necessary,” the bill reads.

The committee must first meet no later than September 1.

Members are allowed to meet no more than four times and must submit a written report to the House Committee on General, Housing, and Military Affairs and the Senate Committee on Economic Development, Housing and General Affairs by December 15.

The committee will not exist after December 30, according to the budget bill.

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Everton Faces Backlash Over New Gambling Sponsor

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England's Everton Football Club is suffering a major backlash after it announced a new club-record, multi-year partnership with a casino and sports-betting platform.

The deal will see the Premier League side display Stake.com on the front of its shirt from July 1 in what the club says is the “highest value” deal in its 144-year history.

Additionally, the Stake.com brand will appear on screens and media backdrops at Goodison Park, the team's stadium, and its training ground Finch Farm, as well as on the club’s digital platforms.

The deal comes ahead of the release of the UK Gambling Act review white paper in the coming weeks, with many gambling reform campaigners pushing for a complete ban on football shirt sponsorships, including Premier League clubs.

The Big Step, a campaign to end gambling advertising and sponsorship in football, said on social media that “gambling sponsorship is unpopular, unhealthy, and on its way out of football. So for Everton to announce this partnership now is massively tone deaf”.

Professor Denise Barrett-Baxendale, chief executive at Everton, said just two years ago that in an ideal world the club would not have a gambling sponsor on its shirt.

However, Barrett-Baxendale has now expressed gratitude to Stake.com for choosing Everton as a long-term partner.

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PointsBet Rejects News Corp Takeover Offer

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Australian online gaming listco PointsBet Holdings has rejected a takeover offer for its Australian arm from a gaming venture led by the Murdoch-owned media giant News Corp, the Sydney Morning Herald reported on Monday (June 13).

The as-yet unbranded consortium, which formed in April and includes online gaming heavyweight Matthew Tripp and US-based online gaming fund Tekkorp, offered PointsBet between A$220m and A$300m (US$155m-US$211m) two weeks ago, it said.

But the PointsBet board turned down the offer, the newspaper said, citing unnamed wagering industry sources.

PointsBet shares on the Australian Securities Exchange have fallen 25 percent since May 30, around the time of the consortium offer, although it was not immediately clear if the rejection fuelled the decline.

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Worldpay has been fined in Colorado, Uruguay still wants potentially online-linked casino bids and Australia launches casino crime hunt.

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