News In Brief: November 14-November 18, 2022

November 18, 2022
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The UK Gambling Commission remains silent on white paper timeline, former Texas governor Rick Perry joins push for sports betting legalisation and a slots operator is fined in Australia.

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No White Paper Update In British Regulator’s Speech

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There is still no update on when the UK Gambling Act review white paper will be published, as the Gambling Commission avoided the topic in its opening remarks at the Institute of Licensing Conference in Stratford-Upon-Avon on Thursday (November 17).

Instead, the regulator called for continued collaboration with local authorities.

Sarah Gardner, Gambling Commission deputy chief executive officer, said the regulator is satisfied with the current 0.3 percent problem gambling rate in Britain, but wants to see it “continuing to decline”.

“One area where we would appreciate your scrutiny on the ground is the application of the so called ‘80/20 rule’ that sets out the proportion of Category C or D gaming machines various gambling premises need to provide for customers to play on, in order to also provide B3 machines that offer larger prizes for larger stakes,” Gardner said.

She explained the regulator is increasingly receiving information that operators are either “misinterpreting the rule or are wilfully looking for ways to get around it”.

Another area for improvement highlighted by Gardener was 84 percent of pubs failing to prevent those under the age of 18 from playing Category C gaming machines in pubs.

Local authorities have the power to licence operators, levy fees and have significant enforcement powers at the local level, while the Gambling Commission has the power at a national level.

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South African Lottery Regulator’s London Office Raided

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South Africa’s Special Investigating Unit (SIU) has searched the offices of the National Lotteries Commission (NLC) in London, England.

The SIU seized documents relating to ongoing investigations into allegations of irregular allocation of funds during its raid on November 16, which it provided updates about on social media.

A raid was launched by the corruption watchdog after receiving a tip-off from a whistleblower that alleged that 40 nonprofit organizations (NGOs) were recruited to apply for grant funding from the NLC.

These NGOs received approximately R14m (€776,508), according to the SIU.

“Upon receiving the money, it was allegedly channelled to a family member of a former NLC board member,” according to the SIU.

In the past, the SIU has said it identified R300m (€17.81m) in misappropriated grants handed out by the NLC intended for public good causes during an investigation.

The SIU raid is the second phase of its investigation that looked into 23 allegations, bringing the total to around 50, relating to the irregular allocation of funds by the NLC to unqualified beneficiaries, undertaken between March and November 2022.

Applications for NLC funding are also suspended until November 30, 2022, according to the regulator’s website.

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KSA Launches Investigation Into Illegal Operators' Affiliates

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The Netherlands’ gambling regulator, the KSA, has launched an investigation into affiliate websites driving traffic to illegal online gambling sites.

The KSA said it came across evidence these rogue affiliates are being paid by illegal online operators in an announcement on November 17.

Affiliates were found using domain names such as casinowithoutcruks and casinowithoutlicense, which the KSA says is “extra bad” as “these affiliates focus on problem players. In addition to offering games of chance without a licence, promoting illegal offerings is also prohibited.”

CRUKS is the country’s national self-exclusion register.

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Former Governor Supports Legal Mobile Sports Betting In Texas

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Former Republican Governor Rick Perry came out Thursday (November 17) in support of legalizing mobile sports betting in Texas and is joining the Texas Sports Betting Alliance as its spokesman.

“Texas is built on the core principle of individual freedom, and we pride ourselves on being an economic powerhouse in the nation,” Perry said in a statement. “Legalizing mobile sports betting in Texas will finally allow the state to protect consumers from illegal, offshore betting sites while keeping money generated from betting in Texas to benefit Texans.”

In this current unregulated environment, Perry said there is no guarantee that bettors will see their payout or that their personal information is safe. If legalized, the Texas Sports Betting Alliance estimate mobile wagering could generate up to $556m every two years as the market matures.

In their joint statement, neither Perry nor the Texas Sports Betting Alliance said if they supported pre-filed Senate Joint Resolution 17 that proposes a constitutional amendment to create the Texas Gaming Commission and legalize a “limited number of destination resorts,” as well as sports betting.

“Given that Texans are already participating in mobile sports betting, legalization would be a win for all involved,” Perry said.

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Apollo $620m Distribution Approved

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The Nevada Gaming Commission granted the private equity owners of The Venetian Las Vegas approval Thursday (November 18) to distribute $620m to investors and hand out bonuses to employees as part of a recapitalization plan.

“This recapitalization plan is supported by The Venetian’s strong financial position and a pending favorable financial transaction,” Sonya Vermeys, a partner at Brownstein Hyatt Farber Schreck, told the commission.

Apollo, through its operating subsidiary Pioneer Topco L.P., acquired the operations of The Venetian, Palazzo and Venetian Expo Center for $2.25bn. Las Vegas Sands provided $1.2bn of seller financing with the private equity firms putting up $1.05bn.

Real estate investment trust VICI Properties paid $4bn for a total of 82 acres of Strip real estate and land housing the $1.8bn MSG Sphere development. VICI also received $250m in annual lease payments from Apollo.

Togliatti, NGC’s chair, raised similar concerns to that of the control board that the distribution might be too soon after the closing of the transaction in February and impact the Venetian resort's ability to withstand an economic downturn.

Vermeys said the gaming industry is vitally important to the state and that approving the application would “send a positive message to the private equity community and encourage continued investment in Nevada.”

“The whole team fully recognizes from a regulatory standpoint it is essential that The Venetian is economically healthy, strong and able to meet current and future expenses,” she added.

“The proposed transaction including the distribution will sustain the continued financial health of The Venetian while also aligning (its) capital structure with the current market.”

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Victoria Prosecutes Major Slots Operator

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The Victoria state gambling regulator will charge leading slot machine operator Australian Leisure and Hospitality Group (ALH) and one of its executive officers over slots lacking pre-commitment technology at 80 percent of its state venues.

ALH allegedly “operated 220 gaming machines for up to five weeks [in late 2021] without YourPlay functionality enabled,” the Victorian Gambling and Casino Control Commission said in a statement on Friday (November 18).

Acting on a tip, commission inspectors determined that 62 of ALH’s 77 venues hosted machines allegedly lacking the compulsory technology, which is optional for players.

The 62 charges brought by the commission amount to a potential maximum fine of nearly A$1.4m ($938,000).

The commission did not name the ALH executive officer who will be individually charged along with the company.

The charges against the once untouchable slots segment are further evidence of a major shift in the regulatory mood in Victoria and Australia more widely.

The Victorian regulator on November 7 slapped a record A$120m fine on the Crown Melbourne casino for “failing its Responsible Service of Gambling obligations”, with additional fines likely to follow ongoing investigations.

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Malta Prime Minister Pledges Support To Gambling Industry He Calls Thriving

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Malta’s online gambling industry is three times the size it was before COVID-19, and its growth is outpacing that of the industry in the rest of Europe, the country’s Prime Minister said.

The online gambling industry in the rest of Europe is about the same size it was before the pandemic, Prime Minister Robert Abela told an audience at SiGMA Europe in Malta Fairs and Convention Centre on Wednesday (November 16).

The online gambling industry accounted for a tenth of the island country’s economic growth so far in 2022, and the Maltese government is committed to support the industry, including a promise to introduce “the right to a basic account for all reputable businesses”, he said.

“The gaming industry is an integral part of the future,” the minister said. “We want to turn risks and challenges into new opportunities. We want to intensify our efforts and bring the gaming ecosystem closer to the centre of our economic decisions.”

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MaximBet Ceases U.S. Sports-Betting Operations

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MaximBet became the latest casualty of the competitive U.S. sports-betting landscape, announcing Wednesday (November 16) that it has ceased operations effective immediately.

The brand, a partnership between lifestyle magazine brand Maxim and online betting operator Carousel Group, informed customers that the company would no longer accept wagers and customers can withdraw funds from the application through December 15.

Remaining balances, the company said, would be refunded via a check sent to the address on the player account. Wagers that remain open after December 15 will be cashed-out at “current fair value market pricing”.

In the notice to customers, the company said, “challenging macroeconomic conditions and an increasingly cost prohibitive marketplace have accelerated this difficult decision.”

“While making great strides in offering customers a completely unique player experience, our ability as an early-stage company to compete in a market where operating costs far exceed revenue, even among the top operators, is not sustainable,” the company said in a statement emailed to VIXIO GamblingCompliance.

“Our priority now, in consultation with state regulators, is to wind down operations and help active customers in Colorado and Indiana withdraw their funds and close their accounts.”

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Virginia Approves License For Portsmouth Casino

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The Virginia Lottery Board unanimously approved the operator license for the Rivers Casino Portsmouth Wednesday (November 16).

It was the second casino operator license to be issued by Virginia regulators, with the first being granted in April to Hard Rock Hotel and Casino in Bristol, which opened a temporary casino in July. The Virginia Lottery reported Tuesday that Hard Rock’s temporary casino generated $14.14m in revenue in October.

Rivers Casino Portsmouth plans to open a temporary facility in January 2023.

Two more casinos are planned for Danville and Norfolk. All four casinos were approved by local ballot measures in November 2020.

“The gaming landscape in Virginia continues to evolve and the lottery board is committed to ensuring that casinos in the Commonwealth are operated responsibly, fairly and with the utmost integrity,” board chairman Ferhan Hamid said.

Under the gaming legislation passed by the Virginia General Assembly in 2020, the lottery also assumed regulatory oversight for sports betting and casino gaming.

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Pennsylvania Tackles Unattended Children At Casinos

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The Pennsylvania Gaming Control Board (PGCB) launched a new campaign on Wednesday (November 16) aimed at preventing children from being left unattended while a parent or relative gambles in a casino.

The “Don’t Gamble with Kids” campaign was approved by the control board after more than 200 incidents this year of minors being left alone in vehicles in casino parking lots or in hotel rooms attached to or near a Pennsylvania casino.

Since the beginning of the year, the PGCB’s Bureau of Casino Compliance has recorded 269 incidents involving 441 minors who were left unattended while one or more of the adults responsible for them chose to gamble. Included in that number are 68 who were six years old or under.

This is compared with 171 incidents involving 279 minors in 2021.

“This has been an issue dating back to the opening of casinos in 2006,” PGCB’s executive director Kevin O’Toole said in a statement. “However, as the number of venues has increased and new types of gaming have been added, more incidents have been reported.”

O’Toole warned the potential consequences of leaving children unattended are a lifetime ban by the casino where the incident took place, placement on the PGCB’s exclusion list, criminal charges filed by law enforcement, and investigations by local child welfare officers.

He added that more important than any liability faced by these adults is the safety of these children.

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Chile's Gambling Bills May Leave Deadlock Soon

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Chile’s Chamber of Deputies has denied the request of the Economic Commission to approve a bill that would forbid the presence of advertising of online gambling at sporting events.

The bill has sat with the Sports Commission since August, when a 30-day delay was requested by finance undersecretary Claudia Sanhueza Riveros and subsequently granted.

For the bill to pass to the Economic Commission, the request would have needed to be unanimously approved by the in the plenary session of the Chamber of Deputies, which it was not.

In the meantime, it is expected that the Economic Commission will have a new president as of next Tuesday (November 22). There is currently a vote of no confidence against its current leader Daniel Manouchehri Lobos, who has sidelined the gambling regulation project, which was first proposed in March.

It is speculated that the new president will be Sofía Cid from the conservative Renovación Nacional party, after whose appointment it is hoped that the gambling project will be addressed.

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Lithuania Once Again Fines Amber Gaming

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Lithuania’s Gambling Supervisory Service has fined UAB Amber Gaming €6,000 for restricting a customer’s betting on its site www.7bet.lt, which is in violation of Article 18 of the Law on Gambling.

According to a regulator press release, Amber Gaming claimed that the player consistently and purposefully bet on lower level competitions, which have a higher rate of match-fixing. However, during the supervisory service’s investigation, no evidence was found of dishonest behaviour on the part of the player, nor could it be proved that the matches the player bet on were in any way a part of a match-fixing scheme, the regulator said.

Amber Gaming was given until November 28 to rectify the situation and was warned about the possible suspension of its licence.

Amber Gaming has been sanctioned multiple times this year. In January, it was hit with a fine of €18,755 for the violation of advertising restrictions and making illegal agreements with foreign citizens. In May, it was again fined €6,789 for illegal advertisement methods on its site, promising more chances to win.

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Codere Commits To Investment In Mexico

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Online gambling giant Codere reported their Q3 results today (November 16), with standout results from Mexico and a slight recovery from Spain.

Their Spanish market net gaming revenue was €14.9m for the third quarter, which is 29 percent about the same period last year. Spanish results at the time last year were affected by the strict reforms introduced by the government.

Mexico, on the other hand, had net gaming revenue of €12.4 this quarter, which was 82 percent higher than the same time period last year. CEO Moshe Edree said: “Given our strong results in Mexico and its significant growth potential, we will continue prioritising investment in this market going forward.”

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EGBA Touts Increased Safer Gaming Communications

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According to the European Gaming and Betting Association's (EGBA) new annual report, members collectively sent 22.5m personalised safer gambling communications in 2021. This represents a 700 percent year increase.

Targeted safer gambling messaging made up 66 percent of all communications sent to customers. A further 15.5 million non-personalised safe-gambling communications were sent. Customers using a safe gambling tool, whether it be obligatory or by choice, increased to 14.9m, representing 50 percent of users.

"Meaningful progress has been made, and it is pleasing to see our members reinforcing their efforts by funding more research, introducing innovative new strategies, and investing in the latest tools and technologies to promote safer gambling. The personal commitment of the CEOs to achieve this progress is vital and shows that our members take our collective sustainability drive seriously," concluded Maarten Haijer, secretary general of the EGBA.

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Ukraine’s Regulator Releases A Review of Complaints

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Ukraine's Commission for the Regulation of Gambling and Lotteries (KRAIL) has published its scheduled review of proposals, statements and complaints.

Since the beginning of the year until November 1, KRAIL had received 320 appeals. Of those, 105 were violation reports and 122 were appeals from individuals.

The remaining 93 appeals for self-exclusion, from players who self-identified as gambling addicts. As of November 1, 171 players have been entered into the registry of players who are not allowed to gamble, the regulator said.

So far this year, KRAIL has sent 155 requests to restrict access from Ukraine to websites without the correct licence. Eighty-five of those were regarding the person or corporation who runs the website, while the remaining 70 pertained to the web hosting servers.

This is in line with the most commonly cited issues within the 320 appeals, namely the illegal organisation of gambling, the application of legislation when organising gambling and violations by gambling organisers.

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Bill Legalizing Casinos, Sports Betting Filed In Texas

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Among the myriad bills already filed by lawmakers in Texas is one that will give voters an opportunity to decide on November 7, 2023, whether to legalize casinos and sports betting in the state.

Senator Carol Alvarado, a Democrat from Houston, pre-filed Senate Joint Resolution 17 that proposes constitutional amendment to create the Texas Gaming Commission and legalize a “limited number of destination resorts,” as well as sports betting.

Alvarado filed the measure on Monday (November 14), which was the first day lawmakers can file a bill to be considered in the 88th legislative session that begins in January and lasts 140 days.

To gain approval in Texas, a constitutional amendment must be approved by two-thirds of lawmakers in the House and Senate before it is placed on the ballot for voter consideration. Voters then must approve the measure by a simple majority.

Alvarado proposes to allow the newly created Texas Gaming Commission to issue not more than four casino licenses located in communities with at least two million residents, and not more than three licenses for casinos at racetracks in areas with two million residents.

She also proposed taxing tax table games at 10 percent, slot machines at 25 percent, while a tax rate on sports betting was not included in the measure.

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Apollo To Sell Its 22 Percent Stake In AGS

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PlayAGS set pricing Tuesday (November 15) for a secondary public offering as Apollo Global Management looks to sell its 22 percent stake in the Las Vegas-based gaming equipment supplier.

The company said the secondary offering was for more than 8.2m shares of common stock. The shares of common stock to be sold represent all of the shares held by Apollo.

PlayAGS did not sell any shares and will not receive any proceeds from the offering. Shares of PlayAGS lost 85 cents, or 13.39 percent, to close Tuesday at $5.50 on the New York Stock Exchange.

News of the sale comes less than a week after PlayAGS reported total revenue of $78.3m for the third quarter, up 16 percent from $61.6m for the same period last year. The company generated $476,000 of net income in the third quarter compared to a net loss of $1.8m in the prior year period.

Apollo has held its investment in PlayAGS since 2013. The private equity firm took AGS public in January 2018 with an initial public offering of $16 a share.

Currently, Daniel Cohen, a partner in the private equity firm, is on the board, and David Sambur, senior partner at Apollo, is chairman of the PlayAGS board of directors.

Barry Jonas, an analyst with Truist Securities, believed Apollo’s ownership, valued at $52m, “has been a lingering investor hang up, and we think its exit … could attract incremental investor interest.” He added that exit is likely more a “function of private equity fund dynamics and materiality that anything fundamental.”

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Brazil's Lotteries Take Steps Forward And Back

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The state of Minas Gerais had a public hearing on November 9 in advance of the public tender for the operation of its state lottery.

Just north of São Paulo, Minas Gerais is the home to more than 20m Brazilians, and the 20-year contract on offer is estimated to be worth BRL5bn ($936m).

The purpose of the hearing was for international and local bidders to submit questions and concerns about the tender.

The next step is for the lottery to answer those questions and publish the public notice, at which time interested operators will have 45 days to formulate proposals.

Meanwhile, in the state of Santa Catarina, home to 7m, the lottery process was suspended last week. The state’s secretary of finance claimed that there was too much interest, which he found suspicious and concerning.

The scramble to launch state lotteries since they were ruled legal by the Supreme Court in October 2020 follows the recent announcement that the federal lotteries had a record-breaking quarter.

The Caixa Econômica Federal, the entity that runs the federal lotteries, said it had the highest revenue this quarter ever, collecting BRL5.6bn ($1bn).

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Meghalaya Repeals Gaming Legislation

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The government of the Indian state of Meghalaya has issued an ordinance that annuls the Meghalaya Regulation of Gaming Act 2021, reversing the legalisation of land-based and online skill and chance gambling.

The state Cabinet passed the ordinance on Wednesday (November 9) after the government said in October that it would repeal the legislation, citing stern opposition from political, civic and religious groups.

The state Legislative Assembly will convene at a later date to formally withdraw the act.

The government’s enthusiasm for gaming as a tourism accelerator led to its legalisation in early 2021.

However, strong advocacy by Cabinet members and promises of new tax revenue failed to dissuade opponents of gaming.

Meghalaya is one of India’s smallest states by population, and gaming operators are preferring to mount legal defences against punitive legislation in large southern states such as Tamil Nadu and Karnataka.

Those governments have appealed to the Supreme Court of India to overturn pro-industry rulings in state high courts.

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The UK Gambling Commission remains silent on white paper timeline, former Texas governor Rick Perry joins push for sports betting legalisation and a slots operator is fined in Australia.

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