News In Brief: March 20-March 24, 2023

March 24, 2023
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Progress made on California's cardroom moratorium bill and new efforts to ban online gambling in regions of India.

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California Cardroom Moratorium Passes Assembly

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A bill to reinstate a moratorium on cardroom expansion in California was overwhelmingly passed Thursday (March 23) by the State Assembly.

Assembly Bill 341, introduced by Democratic Assemblyman James Ramos, passed by a 68-1 vote, and would reinstate the cardroom moratorium that expired on January 1, 2023.

The bill now heads to the state's Senate for consideration.

The moratorium was established by the Gambling Control Act of 1997 and included provisions sponsored by the cardroom industry that prohibited California from issuing new cardroom licenses or allowing existing cardrooms to add gaming tables in order to manage the expansion of gaming in the state.

The new measure would allow licensed cardrooms that operate 20 or fewer tables to add up to ten new tables over the length of the new 20-year moratorium.

It would allow cardroom operators the option to add up to two gaming tables in the first year after the law takes effect and up to two more tables every four years thereafter, ensuring continued growth without expansion, the law says.

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Tamil Nadu, Puducherry Push For Online Gaming Ban

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Ahead of Supreme Court deliberations on the legality of online gaming, an Indian state and Union Territory are sticking with plans to ban all online gaming with stakes.

Furious over the Madras High Court’s 2021 voiding of its ban on online gaming, Tamil Nadu state’s unicameral legislature on Thursday (March 23) unanimously passed a follow-up bill that had been blocked and returned to lawmakers by the state’s governor.

The passage of the resubmitted bill may be deadlocked, as it still requires support from Governor R.N. Ravi, whose refusal to give assent to the previous version outraged lawmakers and social groups campaigning against online gaming.

Meanwhile, the neighbouring Union Territory of Puducherry has announced the drafting of a bill to ban online gaming after months of warnings, and will issue a gaming ban ordinance if the bill is obstructed, a leading minister said.

Information technology and law minister K. Lakshminarayanan told the Puducherry Legislative Assembly on Thursday that a bill banning online gaming has been drafted and will be submitted to the central government for approval.

That submission poses something of a dilemma to the central government, which supports local government decisions on gaming law, but is preparing its own voluntary national framework for online gaming regulation.

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Bavarian Court Rules Against Betting Shop Minimum Distances

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The Bavarian Administrative Court has found that Lower Bavaria’s requirement of a minimum distance of 250 metres between betting shops and schools is likely to violate European Union law.

The March 21 ruling upheld the complaint of a betting shop in Passau, the court said in a press release.

The government had barred the betting shop from operating within 65 metres of a secondary school, using a law with the purpose of seeking to protect minors and gamblers from excessive betting.

But the administrative court found that the law was likely to violate European rules allowing freedom of services, as there was no similar prohibition for gaming arcades, even though there is a similar risk associated with gaming machines as sports betting, according to the release.

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Pennsylvania Levies $60,000 In Fines Over iGaming Violations

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The Pennsylvania Gaming Control Board (PGCB) on Wednesday (March 22) approved consent agreements with three internet gaming operators over compliance failures

Mountainview Thoroughbred Racing Association, operator of Hollywood Casino at Penn National Race Course, was fined $45,000 for allowing five customers who were enrolled in the PGCB’s self-exclusion program to wager on its Barstool Sportsbook app.

According to state regulations, licensees “must refuse wagers from and deny gaming privileges and benefits to an individual who has placed themselves on the iGaming Self-Exclusion List.”

Alex Hvizda, director of compliance at Penn Entertainment, said all five individuals had chosen to use the temporary suspension option in the app, and subsequently signed up for self-exclusion, but a bug in the system removed the locks when the temporary suspension ran out.

He assured regulators that all the accounts have since been locked.

Downs Racing, operator of Mohegan Pennsylvania casino, and its igaming partner Unibet Interactive, were jointly ordered to pay $7,500 for failure to suspend an interactive account for a customer who requested a 90-day “cool off” period.

In this instance, the individual requested a 90-day “cool off” period but the request went unacknowledged by the operator and the individual continued substantial gaming activity for 21 more days, according to the PGCB.

Evolution US, holder of an iGaming Manufacturer License, was fined $7,500 for an unlicensed employee dealing several games of blackjack in its gaming studio for live dealer interactive gaming.

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Missouri Sports-Betting Bill Moves To Senate

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The Missouri House of Representatives Wednesday (March 22) overwhelmingly approved Republican Representative Dan Houx’s bill legalizing retail and mobile sports betting by a vote of 118-35.

The bill now heads to the Senate.

House Bill 556 legalizes online and retail sports betting with a 10 percent tax on adjusted gross gaming revenue. Houx’s proposal also allows Missouri casinos to partner with up to three sports-betting operators, while professional franchises can partner with one operator.

Attempts by House Democrats to raise the tax rate and reduce deductions on promotions failed.

But the bill is still likely to run into some opposition in the Senate. Republican Denny Hoskins has stressed that any bill legalizing sports betting should also include language regulating video lottery terminals (VLTs) found in gas stations and convenience stores.

Hoskins estimates VLTs would generate $250m in tax revenue. Senate Bill 1, a fifth measure sponsored by Hoskins to legalize VLTs, was defeated in late February by a 10-2 vote in the Senate Appropriation Committee.

“It’s my hope we will have opportunities to revisit VLTs as the session continues,” Hoskins told VIXIO GamblingCompliance following the defeat of his VLT bill.

In a statement, the Missouri Gaming Association Wednesday urged senators to keep issues unrelated to sports betting from being added to the bill.

“These unrelated issues have brought sports betting legislation down in the past and would likely do so again,” the association said.

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Tennessee Postpones Action On Data Mandate Proposal

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The Tennessee House Finance, Ways and Means Subcommittee on Wednesday (March 22) delayed consideration of a bill that would remove the state’s mandate for sports-betting operators to use official league data.

House Bill 1362 would also pivot to a 1.85 percent tax on handle from the current 20 percent tax on gross sports wagering revenue. A companion measure, Senate Bill 475, would replace the 20 percent tax with a tax of 2 percent on handle.

The subcommittee decided HB 1362 should be “placed behind the budget” during Wednesday’s meeting, which means that the finance committees hold the legislation until the appropriations bill passes.

SB 475 is scheduled for a hearing Tuesday (March 28) by the Senate Finance, Ways, and Means Committee.

Another difference between the House and Senate bills is a proposal in HB 1362 for a staggered licensing fee structure to replace the current system that requires operators to pay a flat fee of $750,000 every year.

Under HB 1362, as amended, operators would still pay $750,000 as an initial fee but only pay the same amount annually if they receive more than $500m in annual handle. Operators would pay a $500,000 annual fee if recording handle of $100m to $500m, and $250,000 if less than $100m.

Tennessee lawmakers are scheduled to be in session until May 4.

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Bloomberry Quits Two Philippines Casino Projects

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Bloomberry Resorts, operator of Manila integrated resort Solaire, has formally pulled the plug on investing in struggling integrated resort (IRs) developments in Cebu and Clark Freeport linked to tycoon Dennis Uy.

Bloomberry said in a Philippine Securities and Exchange Commission (SEC) filing on Wednesday (March 22) that it “decided to terminate the Term Sheet” with subsidiaries of Uy’s company Udenna.

One of the subsidiaries, PH Resorts Group Holdings (PHR), said in its own SEC filing that both parties will now “pursue their own plans”.

“This development gives PHR the opportunity to reenter into discussions with other parties that were previously put into [sic] the backburner due to the contemplated investment by Bloomberry,” PHR president Raymundo Escalona said.

Udenna’s proposal at Clark, the second of the two, had benefitted from Uy’s links to former Philippine President Roberto Duterte.

Bloomberry’s withdrawal leaves the future of the proposals in doubt, with construction of the Emerald Bay property on Mactan island, near Cebu, incomplete.

It also taints an industry narrative of national IR expansion amid a sterling recovery from the pandemic for the Philippine land-based sector.

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Brazil Poll Shows Citizens Believe Sports-Betting Results Are Manipulated

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Market and political research firm Instituto Paraná Pesquisas surveyed 2,010 people (1,055 women and 955 men) from around Brazil last week between March 15 and 18.

The survey found that 14.5 percent of Brazilians participate in sports betting.

Broken down by gender, 68.5 percent of men and 50.7 percent of women think results are in some way manipulated.

Some 13.7 percent of evangelical Christians surveyed answered that they participate in sports betting, a group that has politically condemned legalisation.

Sixty-four percent of all gamblers answered yes, they believed that a degree of manipulation was involved in the results “to favour a specific group”.

When it came to unemployment, 16.5 percent — two points above average — of men answered that they gambled online, compared with just 10.8 percent of unemployed women.

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Chile’s Online Gambling Fight Continues In Economy Commission

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Chile’s Economy Commission heard testimony defending online gambling operators against land-based casinos on Tuesday (March 21), as it pertains to the online gambling bill.

Javier Couso, a constitutional lawyer and professor, gave his opinion at the request of Carlos Baeza, the lawyer for multiple online platforms that operate in Chile’s grey market.

Couso pointed out that he believes online gambling to be constitutional. Land-based casinos have argued that it would be unequal under the law to subject online operators to anything but the same strict qualifications casinos have to meet.

Couso said that was incorrect and that as a fundamentally different institution, online gambling can have different requirements.

The commission also had the opportunity to question the Corporation from Responsible Gaming, which is made up of the state lottery Polla Chilena de Beneficencia, the Chilean Association of Casino Games and the Group of Gamblers in Therapy.

Finally, representatives from horseracing, including a jockey and a veterinarian, submitted more than 100 pages of documentation of their place in the industry and the laws that pertain to them.

The commission adjourned until further hearings the following week and without any firm conclusions.

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Norway Officials Warn Over Influencer Ads

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The Norwegian Gambling Authority (NGA) has warned that influencer marketing of offshore online gambling is still pervasive, despite pressure to end the practice.

Efforts by agencies in Norway to shut down advertising for operators that offer gambling to Norwegian players on the basis of offshore EU licences have borne fruit, says the regulator.

The regulator warned that although social media influencers and sports celebrities with the most reach have largely stopped gambling advertising, “we also see some who are teetering on the edge of breaking the law”, said NGA chief executive Henrik Nordal.

Around 40-50 social media accounts have been warned to stop offshore gambling ads in recent months, said the NGA.

Streaming on Twitch is also seen as a threat.

“This streaming may be easy money for the influencers, but it can have major and serious consequences for vulnerable young people,” said Nordal.

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Oklahoma House Approves Sports-Betting Bill

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Oklahoma lawmakers have advanced further than ever before in efforts to legalize sports wagering, with the state’s House of Representatives approving a bill on Tuesday (March 21) to authorize sports betting via amended compacts with Indian tribes.

The House voted 66-26 to pass House Bill 1027, which would add both in-person and mobile sports betting as a “covered game” permissible under tribal gaming compacts.

In 2022, a similar bill was passed out of committee but never received a vote on the House floor.

There is still some way to go before legal sports wagering becomes a reality in Oklahoma, however.

HB 1027 still must be approved by the Senate and again in a second vote on the House floor, before then being signed into law by Republican Governor Kevin Stitt.

At that point, tribes could negotiate compact amendments with the governor, with whom they have clashed repeatedly in recent years, to operate sports wagering.

State representative Ken Luttrell, sponsor of the bill, told fellow House members that “Oklahomans are traveling across state lines to participate in sports betting, and we’re losing those dollars.”

Participating tribes would pay the state a share of 4 to 6 percent of sports betting revenue, according to HB 1027.

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Star Entertainment Pleads Guilty To UnionPay Offences

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Australian casino operator The Star Entertainment Group has pleaded guilty to seven counts of facilitating China UnionPay credit card use by customers at its two properties in Queensland state.

The Queensland government said in a press statement on Monday (March 20) that Star Entertainment allowed the purchase of gambling chips with a credit card between June 2017 and the end of 2018 and again from March to April 2022.

The admitted breach of the Casino Control Act 1982 is the latest fallout from the Gotterson inquiry, whose report in October found the company’s behaviour to be “inconsistent” with the law, paving the way for a government-appointed special manager to take over Star operations.

Monday’s plea follows the inquiry’s finding that Star permitted Chinese gamblers to use the UnionPay card to mask gambling expenses as hospitality payments.

Sentencing for Star Entertainment is scheduled for June 2.

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Sweden Issues First Supplier Licences

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Sweden has handed out its first three supplier licences, ahead of the July 1 deadline for all suppliers in the market to be registered with the regulator.

International suppliers SYNOT and Skill On Net are now listed as supplier licence-holders on the website of the Swedish Gambling Authority, along with a company called Programutvecklarna i Norrköping AB.

“The decision to introduce licensing requirements for game software was made by the Riksdag at the end of November last year. The purpose of introducing the requirement is to increase channelling and thereby discourage illegal gambling,” said the regulator in a press release.

“Unlicensed game operators must not be able to use suppliers who manufacture, provide, install and/or change game software for game operators who have a licence in Sweden.”

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Connecticut Committee Scraps Proposed Inducement Ban

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A Connecticut legislative committee has removed language from a bill that would have prohibited sports betting and online casino operators from offering bonuses in the state.

The initial draft of Senate Bill 971 included several provisions related to online gaming, including one that would have prohibited operators from offering or advertising a financial enticement to participate in either activity.

In addition, the bill would have required people using a credit card or debit card to fund an account to be the sole account holder of that card.

Both provisions were stripped from a substitute bill that was approved by the Joint Committee on Public Safety and Security Thursday.

An inducement ban has yet to be enacted in any United States jurisdiction that uses a competitive sports-betting model, but neighboring Ontario features a similar ban that prohibits offering inducement in any type of public advertising, including television advertising, social media, or billboards.

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Brazilian Football Teams May Lose Gambling Sponsors

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Brazilian football teams and their gambling sponsors are growing concerned about the reported plan to ban advertising partnerships with gambling operators if the company does not have a local licence.

According to reports by Portuguese language outlet BNLdata, lower league teams with local sponsors are concerned that their sponsorships may become illegal if they do not pay up the sizeable R$30m (US$5.6m) required for a five-year sports-betting licence.

Fifty-one teams from Brazil’s A, B and C leagues have a sponsorship with 23 online betting platforms. Of those 23, BNLdata cited unexplained market estimates that calculated that only 13 of the gambling firms could afford the licence.

Udo Seckelmann, a gaming lawyer at Bichara e Motta in Brazil, said succinctly: “If they have the financial capacity to obtain a licence in Brazil, they will. Otherwise, they will have to drop the advertising.”

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Vermont Seeks To Develop Sports-Betting Advertising Plan

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A bill to legalize sports betting in Vermont could be considered by the House Committee on Appropriations as early as this week, the measure’s third and final committee stop before potentially being sent to the House floor for full consideration.

House Bill 127, authored by Representative Matthew Birong, a Democrat, was approved on Wednesday (March 15) by a 10-2 vote in the House Committee on Ways and Means.

Prior to approval, the committee amended the bill to require the state's Department of Liquor and Lottery to include a provision in each operator’s contract that caps the amount the department and the licensee can spend on sports-betting advertisements in the state.

Sports-betting operators would also be prohibited from using sports-betting advertisements, logos, trademarks or brands on products that are sold in Vermont and intended primarily for persons under 21 years of age.

The department and its operators would also be required to cooperatively develop an advertising plan, which would include strategies to limit unwanted advertising and advertising aimed at persons under 21 years of age.

The bill would allow the Vermont Lottery to procure somewhere between one and six operators to offer mobile sports wagering on its behalf.

According to the five pages of amendments, the annual operator fee would be $550,000 for one operator, $275,000 each for two operators, while for three operators the license fee is $200,000 each, $162,500 each for four operators, $140,000 each for five operators, and for six operators $125,000 per company.

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Bill Introduced In U.S. Congress To Eliminate Handle Tax

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Representative Dina Titus, a Democrat from Nevada, is co-sponsoring a bipartisan bill to repeal the federal excise tax applied to most forms of legal sports betting in the U.S.

Titus and Republican Representative Guy Reschenthaler of Pennsylvania introduced the bill on Friday (March 17) to eliminate the 0.25 percent excise tax levied on wagers placed at retail and mobile sportsbooks, unless conducted by a state lottery.

“With the explosive growth of sports betting across the country, it’s time to finally repeal the handle tax, which penalizes legal gaming operators and punishes sportsbooks for creating jobs,” Titus said in a statement.

Business must also pay an annual $50 tax on each employee working in sportsbooks.

Total gross revenue from U.S. sports betting in 2022 was $7.5bn, according to VIXIO GamblingCompliance research.

“Unfortunately, outdated tax codes and burdensome regulations penalize legal operators and incentivize illegal activity,” Reschenthaler said.

Reschenthaler and Titus, who co-chair the Congressional Gaming Caucus, first introduced this legislation in the 117th Congress, which began on January 3, 2021, and ended on January 3, 2023.

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Progress made on California's cardroom moratorium bill and new efforts to ban online gambling in regions of India.

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