News In Brief: June 20-June 24, 2022

June 24, 2022
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The lawyer who wrote a damning Wire Act opinion that nearly sunk the US online gambling market has appeared as a witness in hearings in the 2020 Trump election debacle.

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Federal Official Almost Banned Internet Gambling But Defied Trump

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The man who almost abolished internet gambling in 2018 told a congressional committee on Thursday (June 23) he surprised President Trump by threatening to resign when the defeated president tried to overturn the presidential election of 2020.

“The president turned to me and said, ‘Steve, you wouldn’t leave, would you?’” said Steven Engel, who was the head of the Office of Legal Counsel (OLC) at the U.S. Department of Justice.

“I said Mr. President, I’ve been with you through four attorneys general and two acting attorneys general, but I couldn’t be part of this.”

As the assistant attorney general in charge of the OLC, Engel wrote a “slip opinion” on November 2, 2018, declaring the U.S. Wire Act of 1961 prohibits not only the interstate transmission of sports bets online but also internet casino and lottery games.

U.S. District Judge Paul Barbadoro of New Hampshire overturned Engel’s opinion on June 3, 2019, and the U.S. 1st Circuit Court of Appeals in Boston affirmed Barbadoro’s decision on January 20, 2020.

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West Virginia Considers Joining Interstate Poker Compact

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West Virginia Lottery officials are exploring joining a multistate agreement that would allow online poker sites to share player pools with four other states.

Michael Morton, special policy counsel for the Nevada Gaming Control Board (NGCB), confirmed Wednesday (June 22) that lottery officials were given a copy of the Multi-State Internet Gaming Agreement (MSIGA), which is one of the steps in applying to become a member.

“We have not heard back from them yet,” Morton told VIXIO GamblingCompliance. Currently, Nevada gaming regulators are the manager of the MSIGA.

Delaware and Nevada launched the MSIGA in 2014 , with New Jersey joining in May 2018, and Michigan joining the agreement last month. Online poker is also legal in Pennsylvania and Connecticut.

Currently, the agreement allows in-state online poker players to compete with players in three other states.

West Virginia Lottery officials, who oversee gambling in the Mountain state, were unavailable for comment on Wednesday. Morton said Connecticut officials have not contacted MSIGA.

Whether Pennsylvania joins the poker agreement is a matter that must be moved forward by Democratic Governor Tom Wolfe’s office as it involves a contract with another state. Wolfe has expressed interest in joining MSIGA, but Morton said the governor’s office has not reached out to the association.

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Virginia Governor Signs Budget, Richmond Casino Vote Ban

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Republican Governor Glenn Youngkin on Tuesday (June 21) hosted a ceremonial signing of the state budget, which included an amendment blocking Richmond from holding a second referendum on a casino proposal this year.

The Richmond City Council in January approved plans to have a second casino referendum in November to establish a casino in Virginia’s capital city.

The resolution adopted on January 24 re-selected Urban One as Richmond’s casino development partner, nominated the same site as last year for the project, and ratified a community host agreement for the $565m facility.

Richmond voters in November 2021 rejected the casino proposal by a narrow margin.

According to the amendment, should city officials proceed with the referendum and the measure passes, the Virginia Lottery would be barred from issuing Richmond a casino license. The city is eligible to hold a local referendum again in November 2023, according to the fiscal year 2023-2024 state budget.

The state budget, which has not been delivered to the governor, goes into effect July 1 and is the first spending plan Youngkin will sign during his four-year term as governor.

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Macau’s Legislature Passes Updated Casino Law

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Macau’s Legislative Assembly has finalised and passed wide-ranging amendments to the Gaming Law (Law 16/2001) ahead of a tender for the next era of casino concessions.

The 51-page bill passed on Tuesday (June 21) with the support of all but one of the 32 lawmakers, with the holdout objecting to 11th-hour tax sweeteners for operators who attract non-Chinese visitation.

The final version of the bill, which is awaiting gazette publication before coming into force, is substantially unchanged from last week’s version that inserted a surprise 1 percent tax hike for casino operators, as well as easing conditions for satellite casino operators and toughening cross-ownership rules.

All other headline reforms are largely unchanged from January, when lawmakers tabled the document for committee review.

Those reforms include a maximum of six concessions of ten years’ duration, gaming station inventory caps, responsible gaming and corporate social responsibility benchmarks, tighter control of junkets and more onerous fiscal and localisation criteria for directors and senior management.

The passage of the bill coincides with Macau’s worst coronavirus outbreak since the beginning of the pandemic, shutting down most non-gaming commerce and triggering mass testing of the public.

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Blackstone-Acquired Crown Resorts To Open Sydney Casino

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Crown Resorts' Sydney casino, mothballed since the end of 2020, is set to launch after the New South Wales (NSW) state gambling regulator gave the company the green light.

The Independent Liquor & Gaming Authority (ILGA) on Wednesday (June 22) said it will continue to closely monitor the operation for suitability purposes for up to two years.

However, Crown management have shown “significant progress” in complying with anti-money laundering and other compliance measures and after “a complete clean-out of the board and senior executive[s]”, ILGA chairperson Philip Crawford said in a statement.

Following the Bergin Inquiry and “under [ILGA’s] supervision, Crown has rebuilt its gaming model from the ground up, which has meant deep structural change around governance, anti-money laundering measures and corporate culture”, he said.

US-based Blackstone Group, which targeted Crown for a takeover soon after the Bergin Inquiry concluded, has passed all regulatory and legal hurdles and will have full control over its now privatised operations in Sydney, Melbourne and Perth from June 24.

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NSW Lifts Wagering Point Of Consumption Tax

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The New South Wales (NSW) state government has raised its online gambling point of consumption (POC) tax for corporate bookmakers from 10 to 15 percent, delighting rival and retail monopoly Tabcorp Holdings.

The NSW government said on Tuesday (June 21) that the increase will start on July 1, the beginning of the next financial year.

Tabcorp, which demerged from its lotteries arm at the beginning of this month, said the move is a “further positive step toward industry reform”.

“Tabcorp will receive transition payments over an 18 month period from the commencement of these changes to ensure it is ‘no worse off’ relative to its current tax obligations as a result of the changes,” it said in a statement.

The payments will allow Tabcorp to retain some A$16m ($11m) in EBITDA in Australia’s largest state market, it said, while placing new pressure on the bottom lines of online operators.

The change follows notification two weeks ago of a 5 percentage point increase in Queensland state’s POC tax to 20 percent, the nation’s highest.

That increment annoyed Responsible Wagering Australia, the corporate bookmaker lobby, which complained that industry had not been consulted.

Media reports say Tabcorp is hoping the government of Victoria state, the second-largest market, will raise its POC tax from 10 percent.

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Kindred Abandons German Aspirations

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Kindred Group has confirmed it will withdraw its sportsbook and virtual slots licence applications in Germany and cease all operations in the German market as of July 1.

“The application procedures, as well as the terms and restrictions in specific product offerings, means that the overall conditions are not sustainable and competitive against the unlicensed offering,” Kindred told VIXIO GamblingCompliance.

Kindred said it has been applying for a sportsbook licence in Germany for more than two years during which its strategic focus has been elsewhere, such as the North American market.

It does not expect the decision to have an impact on its financial position and said it could reconsider in the future.

Separately, at the start of June 2022, Kindred Group was granted a gambling licence by the Netherlands Gambling Authority (KSA) and has already launched its Unibet.nl site.

Kindred was among at least 30 operators hoping to join the Dutch online gambling market after numerous cooling-off periods ended in April, as it was deemed to be targeting Dutch consumers before new legislation came into force.

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Rank Group Lowers Profit Expectations

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UK-based Rank Group saw its shares take a hit after it lowered its underlying operating profit expectations due to the recent performance in Grosvenor venues and continued inflationary cost pressures.

In a trading update on Monday morning (June 20), Rank Group said it now expects operating profit to be approximately £40m for the year ending June 30, 2022, lower than its previous estimate of between £47m and £55m.

Following the update, Rank’s share price fell from 99.2 to as low as 81.1 on Monday (June 20).

In a separate trading update in April, Rank warned that it was seeing fewer people visit its UK venues.

Despite the company saying it had seen an improvement since April, its performance has still been considerably weaker than expected.

This is “principally due to a slower than expected return of higher spending overseas customers to our London casinos, continued softness in visitor numbers across the UK and a lower-than-average casino win margin in the quarter to date”, Rank said.

The UK’s annual inflation rate was most recently estimated in May to be 9 percent but many analysts predict that figure will reach double digits this year.

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Malaysian PM Affirms Legislative Review For Online Gambling

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A new impetus for updating gambling legislation and possible regulation of online gambling has emerged in Malaysia, with the Prime Minister naming online gaming as the leading example of out-of-date laws.

Prime Minister Ismail Sabri Yaakob said on Friday (June 17) that his department’s legal affairs division will review 147 “irrelevant or somewhat backward” laws rendered obsolete or unenforceable by digital technology.

"Digital technology is rapidly evolving,” he told a university event in Kuala Lumpur in comments translated by The Star newspaper. “In this context, existing laws are irrelevant or somewhat backward.”

"The Common Gaming Houses Act 1953, for example, only involved the enforcement of gambling activities in physical premises, and not online," he said.

The nation’s police chief backed the comments, telling The Star that police support review of outdated laws.

“As gambling is being conducted online, it is hard for the police to produce solid evidence and take action against those responsible for the offence,” Inspector-General of Police Acryl Sani Abdullah Sani said.

A senior Malaysia Cabinet minister said in May 2020 that the government was considering regulation of online gambling.

But there has been scant progress despite the deputy home affairs minister in November affirming an eventual review of gaming legislation.

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KSA Investigating Slot Machine Halls

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The Netherlands Gambling Authority (KSA) is investigating access to slot machine halls after it received reports that “dozens” of self-excluded players were able to gain access to the venues in recent months.

There are no controls preventing players from entering some of these slot machine halls or checks to see if a player is in the country’s self-exclusion register (Cruks), according to the reports.

“Failure to check players or ignore a Cruks registration is very serious; these players registered in Cruks precisely because they have problems with gambling and are no longer in control,” the KSA said.

The regulator warned that if the investigations confirm these reports, then it will impose sanctions.

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Veikkaus Offers Professional Bettors Increased Loss Limit

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Finnish state-owned gambling monopoly Veikkaus is introducing an increased loss limit for professional bettors.

To be applicable for the exemption, players must meet several criteria, including being able to prove their gambling has been profitable during the previous three years and their turnover from betting games must exceed €500,000.

When applying for an exemption procedure, the player can request a maximum loss limit of between €15,001 and €500,000.

Veikkaus' customers have a mandatory annual loss limit of €15,000 for all gambling activity, which came into force this year.

Juha-Matti Mäkilä, Veikkaus' director of betting, said the exemption procedure will give professional betting customers “the opportunity to bet on Veikkaus' domestic offering” and that the “most interesting betting sites are those that involve both professional bettors and customers who play with lower stakes”.

If the exemption procedure is granted, the players' increased limit is valid until the end of the calendar year.

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The lawyer who wrote a damning Wire Act opinion that nearly sunk the US online gambling market has appeared as a witness in hearings in the 2020 Trump election debacle.

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