News In Brief: May 2-May 6, 2022

May 6, 2022
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DraftKings finishes its $1.5bn acquisition, former tribal gaming leader found guilty of bribery and new Brazilian lottery details released.

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DraftKings Completes Golden Nugget Online Buyout

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DraftKings has completed a $1.56bn buyout of Tilman Fertitta’s Golden Nugget Online Gaming, the company said Thursday (May 5).

DraftKings expects to rebrand sportsbook locations at Fertitta Entertainment-owned Golden Nugget properties into DraftKings sportsbooks. The deal does not include brick-and-mortar Golden Nugget casinos, which continue to be owned by Fertitta.

“Acquiring Golden Nugget Online Gaming gives us synergies across our business,” said Jason Robins, chairman and CEO of DraftKings. “We anticipate that this acquisition will provide meaningful revenue uplift by utilizing our data-driven marketing capabilities and a dual brand iGaming strategy.”

DraftKings expects savings of $300m from the acquisition and will undertake a multi-brand approach to iGaming and sports betting. Thomas Winter will transfer to general manager of North American iGaming from his previous role of president of Golden Nugget Online Gaming.

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Former Mashpee Tribal Chairman Convicted In Bribery Case

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Cedric Cromwell, the former chairman of the Mashpee Wampanoag Tribe, was convicted Thursday (May 5) of bribery and extortion charges related to a planned $1bn casino project in Massachusetts, a spokeswoman for the U.S. Attorney’s office in Boston said.

Cromwell was found not guilty by a federal jury in Boston on some counts, including one count of extortion and a county of bribery conspiracy. He was found guilty of soliciting bribes from RGB Architects in Providence, Rhode Island, and extortion.

“I think we are all disappointed in Cedric,” Mashpee Wampanoag chairman Brian Weeden said in a statement.

“We’re disappointed that he abused the trust we placed in him as an elected official of our tribal nation. We’re disappointed that he represents an unfortunate chapter in our history and that it has detracted from the great work we are doing socially, culturally, and politically to support our people.”

David DeQuattro, Cromwell’s co-defendant and the owner of RGB Architects, was also convicted of bribery and cleared of other charges, the Associated Press reported.

Cromwell and DeQuattro will be sentenced at a later date.

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California Tribes Launch New Ads Against Out-Of-State Measure

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The political action committee (PAC) Californians for Tribal Sovereignty and Safe Gaming, representing 33 tribes, has launched a new series of television and digital ads to defeat a proposed ballot initiative funded by major sports-betting operators.

The Californians for Solutions to Homelessness and Mental Health Support Act would permit mobile betting throughout the most populous state in the U.S. through partnerships between commercial sportsbook operators and California Indian tribes.

Proponents, including FanDuel and DraftKings, turned in 1.6m signatures on Tuesday (May 3), well above the 997,139 signatures needed to be placed on the November 8, 2022, ballot.

One of the ads, “Lottery”, has a narrator describing the loopholes in the online sports-betting initiative: “FanDuel and DraftKings, two out-of-state corporations making big promises to Californians. What’s the Real Match behind their ballot measure for online sports betting?"

The narrator warns that “90 percent of profits go to out-of-state corporations … permanently. Only 8 and a half cents (of every dollar) are left for the homeless.”

As of Thursday (May 5), the PAC has raised more than $35m, with the San Manuel Band of Mission Indians contributing $25.03m and the Rincon Band of Luiseno Mission Indians donating $10m.

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Another Brazilian Lottery Detailed

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Last week the state government of Paraná in Brazil issued Decree 10.843/2022, which set out the terms for the operation of the newly minted Paraná State Lottery (Lotepar). It establishes that the Parana government may manage the lottery or it can contract it out to another party.

The payout of Lotepar will be higher than the national lottery on at least two fronts: numerical prediction bets and sports prediction bets, and is expected to launch in the latter half of the year.

The government will keep 5 percent of the gross of fixed-odds bets and 12 percent on all others. The revenue will go towards public housing and public security.

With this decree, Paraná joins Rio de Janeiro, Minas Gerais, Ceará, Espírito Santo, Paraíba and Maranhão as states with their own lotteries. The Brazilian Supreme Court decided that it could not be a federal monopoly in 2020.

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ComeOn Loses Swedish Fine Appeals

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A group of gambling companies owned by ComeOn have lost their appeals against fines from the Swedish Gambling Authority.

Cases against Casinostugan, ComeOn Sweden, Hajper and Snabbare — all subsidiaries of Malta-headquartered ComeOn — have been rejected by the Swedish Administrative Court.

The court ruled only that the fine against Hajper should be dropped from SEK50m (€4.8m) to SEK40m (€3.8m). The four brands were initially fined the equivalent of €17.5m.

The court agreed with the regulator’s findings that the companies had provided bonuses to players in violation of Sweden’s strict promotion rules and had offered deals to players showing signs of gambling harm.

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Ohio Sets Licensing Deadlines For Sports Betting

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Ohio casinos and their online partners and suppliers must submit license applications for sports wagering within a one-month window that closes July 15 to be assured of going live before a universal launch date for the market that will be set for no later than January 1, 2023.

Final application forms will be available on June 1 and license applications will be accepted starting June 15, the Ohio Casino Control Commission (OCCC) said on Wednesday (May 4).

Any second-skin online operators partnered with a casino or Ohio sports team will be able to apply from July 15 and must submit applications by August 15, the same deadline applicable to so-called Type-C retail locations seeking to host kiosks offering limited sports wagering.

A law enacted in December permits sportsbooks at casinos, major sports arenas and other venues, with casinos, racinos and sports teams each able to deploy two mobile sportsbook skins, subject to certain criteria. At least three companies must also be licensed to operate networks of kiosks in bars, veterans halls and other retail locations.

In addition to licensing, the OCCC is in the process of adopting implementing regulations for the sports-betting market.

Also on Wednesday, the regulator said it had submitted a fifth and final batch of draft regulations for formal consultation before Ohio’s Common Sense Initiative.

The proposed rules cover various operational matters for sports wagering, as well as the criteria by which the OCCC may license additional operators for mobile and retail sports wagering.

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Accel Entertainment's Nevada Expansion Tentatively Approved

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The Nevada Gaming Control Board (NGCB) approved a two-year limited license for slot-route operator Accel Entertainment on Wednesday (May 4) despite concerns about the company’s compliance record and a pending $5m fine in Illinois.

The Nevada Gaming Commission will consider final approval of the board’s recommendation on May 19.

Accel is buying slot-route operator Century Casinos in a $160m deal. Based in Las Vegas, Century operates some 8,500 gaming machines in more than 900 licensed locations in Montana and Nevada.

NGCB chairman Brin Gibson warned Accel executives that he did not “want to be in a position of filing complaints” and added that “Century is solid company; the questions are about you.”

Gibson, along with board members Philip Katsaros and Brittnie Watkins, spent 90 minutes discussing various matters with Accel executives.

The $5m fine proposed by the Illinois Gaming Board (IGB) relates to an agreement Accel reached with DraftKings in September 2020 to recruit players for the company’s Illinois sportsbook.

The IGB contends the deal violated Illinois’ prohibition on slot-route operators offering incentives to bars or taverns to host their gaming terminals.

The NGCB eventually voted unanimously to approve the two-year limited license.

Gibson said the license would allow regulators to review Accel in a “new light” when hopefully the Illinois complaint had reached a conclusion. “At two years, your license is gone, and you need to reapply,” the chairman said.

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KSA Investigating Two Licensees, Warns Others For AML Failings

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The Netherlands Gambling Authority (KSA) has warned all Dutch licence holders and said it will investigate two unnamed operators for failing to sufficiently comply with the Money Laundering and Terrorist Financing (Prevention) Act.

The warning follows an investigation by the KSA and data obtained by the country’s Financial Intelligence Unit, which revealed online gambling providers do not report all transactions they should to the FIU.

The research conducted by the KSA also found online operators are only checking players’ source of income when receiving deposits of more than €2,500.

However, the KSA said €2,500 is equal to a net monthly average salary, meaning operators should conduct research into the source of funds without players depositing such large sums, to prevent crime and protect vulnerable customers.

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PlayOJO Ordered To Stop Running UK 'Hot and Cold' Ads

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PlayOJO has been ordered to stop running advertisements which improperly suggested that games that were deemed “hot” or “cold” could influence future gambling success.

The UK’s Advertising Standards Authority (ASA) ordered PlayOJO, part of Cyprus-based Skill on Net, to stop running ads which promised to “REVEAL GAMES ON WINNING STREAKS WITH OUR NEW ‘HOT OR COLD’ FEATURE”.

The ASA, however, dismissed a related complaint that one of PlayOJO’s ads that featured a tarot reader sneaking a peek at the “hot or cold” feature violated its code which says gambling ads “must not exploit cultural beliefs or traditions about gambling or luck”.

Skill on Net said its feature let players know which games had not paid out for a while, using algorithms updated every five minutes.

The company argued that its adverts did not suggest which trend was more likely to win.

A set of terms and conditions which stated that the “hot and cold” feature was no indicator of future success had been inadvertently omitted from an early version of the ad, but ran on subsequent versions, Skill on Net said.

But the ASA said that elements of the ad, such as references to “choose your destiny” and suggesting that players would be “in the driver’s seat”, overrode the implications of the terms and conditions.

It ruled that the ads could “encourage gambling that was socially irresponsible or could lead to financial, social or emotional harm”.

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Everi Enters Historical Horseracing Market Acquiring Intuicode

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Everi Holdings announced on Tuesday (May 3) the acquisition of Intuicode Gaming Corporation, a privately owned game developer and engineering firm focused on historical horseracing (HHR) games.

The acquisition costs include an initial payment of $12.5m, with two additional payments based on future revenue due on each of the first and second anniversaries of the deal closing in 2023 and 2024.

Total consideration is expected to be between $22m and $27m. Everi expects to fund the acquisition from existing cash on hand and future cash flow.

Intuicode Gaming, which is based north of Boca Raton, Florida, generated more than $10m in revenue last year from the sale of HHR machines and recurring participation revenue from game theme replacement.

Barry Jonas, an analyst at Truist Securities, said the acquisition is inexpensive and in line with Everi’s recent approach to mergers and acquisitions, namely small deals to extend product offerings or geographies with likely synergies moving to the company’s larger platform.

Jonas cited Everi’s deal for Atlas Gaming in January and a private partnership with Exacta Systems as two other deals in the niche HHR space.

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Washington State Launches Self-Exclusion Program

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Almost two years to the day after Democratic Governor Jay Inslee signed a bill ensuring resources were available for those with a gambling problem, Washington state gaming has launched a self-exclusion program.

The Washington State Gambling Commission (WSGC) released a single form online where a person with a gambling problem can voluntarily exclude themselves from all non-tribal casinos in the state.

Tribal casinos may also participate in the self-exclusion program.

“Self-exclusion provides positive effects for people with gambling disorders,” WSGC vice chair Julia Patterson said in a statement. “It can help reduce gambling frequency and financial problems, thereby increasing their quality of life.”

The program follows the passage of House Bill 1302 in 2019. Those involved in the program include the WSGC, the Washington State Lottery Commission, and the Washington Horse Racing Commission.

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Louisiana Senate Approves Sports-Betting Bills

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The Louisiana Senate voted on Thursday (April 28) to pass a pair of bills to tweak the state’s sports-betting regulatory regime that was established last year.

Senate Bill 290 clarifies that online wagering skins are legally obliged to participate in Louisiana’s state-wide self-exclusion program and limits Louisiana casinos to claiming a maximum deduction of $5m in promotional credits from their taxable revenue per year, regardless of how many sportsbook skins are operating under their license.

Meanwhile, Senate Bill 272 will enable casinos to partner with off-track betting operators to offer pari-mutuel wagering on horse races in their sportsbooks, subject to approval by the Louisiana State Racing Commission and Louisiana Gaming Control Board and various conditions.

Both bills now must be approved by the Louisiana House before lawmakers adjourn on June 6. The House has already passed one sports-betting-related bill this year to enable the funds in a sports-betting account to be declared abandoned after a period of three years with no activity.

Retail sports betting was launched in Louisiana casinos last October, with mobile sports wagering going live in eligible parishes in January. Sports betting will also be permitted in bars and restaurants via kiosks operated by the Louisiana Lottery Corporation.

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Change In Venue Granted In Washington Sports-Betting Lawsuit

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A high-profile lawsuit claiming Washington state officials unlawfully granted Native American casinos monopolies on certain types of gaming, including sports betting, will be transferred out of the nation’s capital.

A U.S. District Court judge for the District of Columbia ruled on Thursday (April 28) the case filed by Maverick Gaming in January will move from the court in D.C. to the Western District of Washington.

Maverick, which owns 19 of 44 licensed cardrooms in Washington state, alleges in its lawsuit that the Indian Gaming Regulatory Act of 1988 (IGRA) is being applied inappropriately to give tribes a monopoly on games not allowed at racetracks or cardrooms.

Sports betting, craps and roulette are operated exclusively by tribes per Washington state law.

Eric Persson, owner of Maverick, has unsuccessfully lobbied state lawmakers for more than two years to expand sports betting beyond tribal casinos. Persson was unavailable for comment on Friday (April 29).

“We are confident that the federal courts here will reject this blatant and destructive legal attack on tribal self-reliance,” Washington Indian Gaming Association executive director Rebecca George said in a statement.

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VICI Properties Closes MGM Growth Properties Acquisition

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VICI Properties has closed its $17.2bn acquisition of MGM Growth Properties (MGP), as the real estate investment trust also raised $5bn in senior unsecured notes, the company announced Friday (April 29).

The all-stock transaction, announced in August, creates the largest casino landlord on the Las Vegas Strip, with VICI owning the real estate associated with The Venetian, Palazzo, MGM Grand, Mirage and Mandalay Bay, among others.

With the close of the deal, there are now just two publicly traded REITs in the U.S., VICI and Gaming and Leisure Properties.

“The addition of the MGP portfolio, together with the recent closing of our Venetian acquisition, elevates VICI to the top ranks of American 4-wall REITs, making VICI a top-5 REIT by EBITDA and a top-10 REIT by enterprise value,” CEO Edward Pitoniak said in a statement.

The $5bn raised by VICI allowed the company to redeem a majority of the MGP operating partnership units held by MGM Resorts International for $43 per unit, or approximately $4.4bn in cash, while acquiring 100 percent of the outstanding class A shares of MGP in a stock-for-stock transaction.

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Northern Ireland Completes First Stage Of Gambling Law Reform

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Northern Ireland’s Betting, Gaming, Lotteries and Amusements (Amendment) Bill received royal assent on April 26, meaning it has now become a law.

The long-awaited change to the country’s gambling laws is only the first part of a two-stage approach to reforming the country’s gambling legislation, with the second piece of legislation expected to tackle online gambling more directly.

The new rules allow for pricier lottery tickets and create new offences designed to prevent underage use of gaming machines.

The government also now has the ability to impose a statutory levy on gambling operators and issue a code of practice.

Gambling contracts are also now considered enforceable under the law, while betting shops and bingo clubs will also, for the first time, be allowed to open on Sundays.

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Dutch Ministry To Examine Cross-Operator Deposit Limits

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The Dutch minister for legal protection will investigate whether a legal maximum should be added to self-declared gambling deposit limits, and whether a single cross-operator deposit limit is feasible, the minister said.

One concern is that too-strict deposit limits could lead to “avoidance behaviour” such as gamblers playing with several operators at once or gambling at unlicensed websites, said minister Franc Weerwind in a recent letter to parliament.

Some operators have already voluntarily limited playing time to eight hours per day and €400 per month for young people, the minister said.

So far, 18 online gambling licences have been issued, with 30 under review, the minister said. Only about a third of those that apply have so far been successful, he said.

Currently, the Netherlands Gambling Authority (KSA) only reveals names of applicants when they succeed in obtaining a licence.

More than 10,000 so far have registered for CRUKS, the nationwide self-exclusion service, Weerwind said.

“Good steps” have been taken toward the goal of channelling players toward legal sites, but he said he had concerns about whether vulnerable players were being protected.

Separately, two Dutch parliamentarians inquired whether the KSA should be asked to reveal the names of applicants for licences when they apply, so “citizens and authorities” can offer comments on the companies.

They also asked for the minister’s opinion on “hefty” welcome bonuses given to players and how the requirement that no one under the age of 24 should get a bonus is being enforced.

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French Ombudsman Warning Over Terms and Conditions

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France’s gambling ombudsman has told operators they should do a better job of making welcome bonuses clear to customers, as it reported a 57 percent increase in referrals.

In data reported via gambling regulator ANJ, Médiateur des Jeux said it had received 1,739 requests in 2021, a rise of more than 50 percent over the previous year.

Of those, 55 percent were admissible, with most complaints rejected simply because punters are supposed to writing to the operator directly to complain first.

The mediation agency told operators they should be clearer on welcome offers, do a faster job of processing customer complaints and be more precise in the descriptions of specific bets.

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DraftKings finishes its $1.5bn acquisition, former tribal gaming leader found guilty of bribery and new Brazilian lottery details released.

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