News In Brief: October 18-October 22, 2021

October 22, 2021
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The UK regulator is moving forward with a project to overhaul its prevalence surveys, uncertainty in California and more Maryland casinos get sports betting go ahead.

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UK Gambling Commission Planning New Prevalence Strategy

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The UK Gambling Commission has selected NatCen Social Research and the University of Glasgow to lead a pilot into new ways the regulator can collect gambling prevalence data.

A trial will run between October 2021 and March 2022 that will “involve stakeholder engagement, cognitive testing and a pilot survey using a new push to web methodology”, the commission said.

The UK regulator has also compiled a survey on the consumer complaints made to the gambling industry.

The research found that complaints fell in 2020 by around 17 percent. Non-payment of winnings, account closures and misleading ads were among the most common areas of dispute.

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Two More Maryland Casinos Get Preliminary Approval For Sports Betting

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Two more land-based casinos have met the qualification requirements for retail sports-betting licenses, the Maryland Lottery and Gaming Control Commission (MLGCC) announced on Thursday.

The applications of Hollywood Casino in Perryville and Ocean Downs Casino in Berlin will now go for final approval by the Maryland Sports Wagering Application Review Commission (SWARC), which is responsible for awarding licenses.

Hollywood and Ocean Downs join Caesars' Horseshoe Casino, Live! Casino & Hotel and MGM National Harbor in awaiting license awards. The MLGCC determined that Horseshoe, Live! and MGM were qualified on October 6 and forwarded their applications to the SWARC.

It is not yet clear when SWARC is going to meet again. The commission postponed an October 14 meeting and has not announced a new meeting date, the gaming commission said.

The five casinos are among the 17 entities that were designated in the state's sports wagering law to conduct retail sports wagering operations, pending review of their qualifications.

“We’ve approved five facilities, and our work is ongoing,” said Maryland Lottery and Gaming director John Martin.

“We’ll continue sending applications to the SWARC so that it can make awards and sports wagering can launch by late fall,” Martin said in a statement. “It’s what the public wants and expects, and we’re doing everything we can to deliver it.”

All five casinos, along with the state’s sixth resort The Rocky Gap Casino, were named in the law to legalize sports betting as potential sites for sportsbooks.

“No one is pushing harder than I am to get sports betting up and running here in Maryland,” said Governor Larry Hogan.

“With Marylanders looking forward to betting on the NFL and March Madness, we now expect the legislature’s Sports Wagering Applicant Review Commission to swiftly approve these licenses,” the Republican governor said.

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California Online Wagering Initiative's Fiscal Impact Uncertain

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California attorney general Rob Bonta has released a fiscal analysis of the ballot initiative sponsored by some of the largest sports-betting operators in the country that would legalize online wagering to fund social programs.

The analysis, which offered few financial details, comes after mayors of four cities endorsed the proposed initiative that supporters say will provide hundreds of millions in funding each year for homelessness and mental health services.

According to the six-page fiscal impact estimate, the proposal would impact expenditures and revenues of both the state and local governments, but the actual impact is uncertain and depends on how the measure is implemented.

“For example, it is unclear whether payments required by existing tribal compacts to local governments would be renegotiated given this proposed expansion of legal gaming,” said the report produced by the Legislative Analyst’s Office (LAO).

The measure’s fiscal impact would also depend on the number of entities licensed to offer online sports wagering, the amount of deductions taken by those entities from their tax payments, and the extent to which members of the public participate in placing bets on games.

Supported by DraftKings, BetMGM, FanDuel, Penn National Gaming/Barstool, WynnBet, Bally’s and Fanatics Betting and Gaming, the ballot initiative would allow only Indian tribes or qualified sportsbook operators partnering with tribal casinos to offer online wagering on professional, college, electronic sports and other events.

The proposal requires tribes and technology businesses to pay a one-time initial license fee of $10m and a renewal fee of $1m every five years. Gaming companies would pay a $100m license fee and a $10m renewal fee every five years.

The measure also imposes a 10 percent tax on revenue after deducting any wagers made with free bets or promotional credit, players’ winnings, and all federal gaming taxes.

Those funds would be deposited into the California Online Sports Betting Trust Fund (COSBTF), and after deducting the state’s regulatory costs, 85 percent would be delegated to creating permanent and interim housing, while the remaining 15 percent will go to tribes not involved in sports betting.

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Legislative Effort Expected To Legalize Sports Betting In Kentucky

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When lawmakers return to Frankfort in early January they can expect a bill to legalize sports betting in Kentucky to be on their agenda, Republican state Senator Damon Thayer confirmed on Thursday.

Thayer said Republican state Representative Adam Koenig told him he plans to offer a sports-betting bill again during the 2022 session that begins on January 4.

Still, he admits it will be a struggle to get the bill through the legislature and onto Democratic Governor Andy Beshear’s desk for his signature.

“All gambling bills are difficult to pass,” Thayer told VIXIO GamblingCompliance. “I’m for it. I want Kentucky to get the revenue that is going to Tennessee and Indiana.”

“I don’t think the world will come to an end if we approve sports betting,” he added.

Koenig has introduced bills to legalize sports betting during the last two legislative sessions, but neither measure was considered by the full House.

Earlier this year, Koenig proposed allowing retail wagering at racetracks and mobile state-wide with sports betting being regulated by the Kentucky Horse Racing Commission. The bill never made it out of committee as lawmakers instead prioritized a bill legalizing historic horseracing machines.

Thayer dismissed those lobbying for lawmakers to consider legalizing both casinos and sports betting.

“It’s a waste of time,” Thayer said. “They don’t know how hard it was to pass historical horseracing.”

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Austrian Trade Group Calls For Online Casino Licensing

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The Austrian Association for Betting and Gambling (OVWG) is “urgently” calling on the Austrian government to develop a licensing model for online casino.

The trade group’s statement follows Bet-at-Home’s decision to pull out of the country’s online casino market after a Supreme Court ruling which endorsed legal claims for reimbursement of player losses.

A flood of lawsuits has been filed seeking refunds for online casino losses, as Austria currently has an online casino monopoly run by Casinos Austria’s win2day unit.

The OVWG said it could not comment on Bet-at-Home’s withdrawal, but it said it is “hardly surprising” that companies have chosen to leave the market.

“The fact that Austria is one of the last countries in the EU to protect a monopoly that violates EU law is worrying,” the group said. “Should other EU member state-licensed operators also decide to leave the market, players will turn to illegal operators from Asia or the Caribbean. These online operators rarely provide any player protection.”

In 2019, 30 EU-licensed providers paid €123m in gambling levy and other investment is being lost in jobs and in support for Austrian sports clubs, the group said.

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Lithuanian Parliament Approves 13 Percent Lottery Tax

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Lithuania’s parliament has approved amendments to the procedure for calculating lotteries and gambling taxes that will abolish the existing flat-rate tax.

Amendments to the Lottery and Gambling Tax Law mean lottery operators will be subject to a base tax rate of 13 percent.

The new law will enter into force on July 1, 2022.

The government backed the changes just a few days ago, with finance minister Gintarė Skaistė commenting that the amendments are needed to implement a wider ambition of creating a clearer and fairer, one-size-fits-all, taxation system.

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NFL, NCPG Roll Out Responsible Gambling Campaign

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The National Football League (NFL) is expanding its partnership with the National Council on Problem Gambling (NCPG) with a multi-year, multimillion-dollar campaign targeted at helping sports bettors wager responsibly.

The key message of the campaign titled “Stick to Your Game Plan. Always Bet Responsibly” will be to encourage gamblers to set a budget, know their limits, only use licensed and regulated sportsbooks, and ask for help if they need it.

“We feel it is critical that the NFL uses the power of our voice to educate and encourage fans who choose to bet to do so in a safe and responsible way,” said Christopher Halpin, NFL executive vice president, chief strategy, and growth officer.

Halpin said the NFL also recognizes that responsible gaming programs are under-resourced, especially as legalization of sports betting spreads nation-wide.

In a statement, the NCPG said the league’s funding will allow the advocacy group to launch a national grant program to fund enhanced services at the state and local levels, including expanding youth-facing programs already in place.

“With this partnership, we are able to exponentially enhance the NCPG’s ability to provide advocacy, awareness, and assistance on problem gambling,” said Keith Whyte, NCPG’s executive director.

Caesars Entertainment, DraftKings and FanDuel, each of whom have commercial partnerships with the NFL, will participate in the new campaign.

The NCPG estimates that 2m U.S. adults meet the criteria for severe gambling problems in a given year. Another 4m to 6m would be considered to have mild or moderate gambling problems.

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New York Consults On Casino Expansion

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The New York State Gaming Commission (NYSGC) on Wednesday released a request for information (RFI) to draw input from interested and affected parties on the potential licensing of up to three casino-resorts in the New York City area.

The state still has three commercial licenses permitted under its constitution that were not included in the 2013 state law that authorized four casino-resorts in Upstate New York.

State gaming regulators are seeking information on the appropriate size and scope of casino developments near New York City, the value of those licenses, and the process that should be used to award them.

According to the NYSGC, the deadline for interested parties to submit their questions is November 10, with RFI responses due by December 10.

Among the questions gaming regulators are asking is whether all three available licenses should be awarded and what factors would limit interest in the market.

New York regulators are also seeking input on appropriate tax rates for table games, slot machines and other gaming activities, as well as the level of any upfront license fees.

The RFI was mandated through April's state budget law that also created a licensing process for mobile sports betting.

MGM Resorts and Genting already operated VLT parlors in the New York City market and both companies have been lobbying to convert their properties into full-fledged casino-resorts. However, rival operators led by Las Vegas Sands have advocated for a competitive licensing process for a New York City resort.

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Cambodia Upgrades Capital Rules For Casinos

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Cambodia has imposed minimum capital requirements on existing and future land-based casinos that threaten to cull smaller operations, despite a tiered 14-year grace period.

Sub-Decree No. 166, signed by Prime Minister Hun Sen on August 26, sets a minimum capital value of 800bn riel ($197m) for integrated resort (IR) casinos and 400bn riel for all other operations, the Phnom Penh Post reported on Wednesday.

Existing casinos will need to meet ascending capital targets in four phases before achieving full compliance at the end of 2034.

Non-IR casinos must report 50bn riel in capital for the first three years of the grace period, followed by 100bn riel for the following three years, then 200bn riel for four years and finally 300bn riel for four years before the full amount is required.

Phnom Penh casino monopoly NagaWorld, one of the world’s pre-pandemic giants in terms of EBITDA, will not be troubled by the requirement.

However, dozens of casinos in Sihanoukville and a swathe of barely regulated border casinos are likely to face difficulties given the dual impacts of the coronavirus pandemic and Chinese government pressure on its citizens to stop gambling overseas.

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Deadline Extended For DraftKings' Offer For Entain

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A “put up or shut up” deadline for DraftKings to make an offer for Entain has been extended to November 16, with the UK online gambling giant seeking details on “value creation” and how an agreement over its BetMGM U.S. joint venture would be resolved.

Entain said it applied to the UK Takeover Board for an extension to a deadline of yesterday (October 18) for the U.S. online gambling company to make an offer or walk away from a potential deal.

DraftKings’ $22.4bn approach is complicated by its BetMGM venture, with MGM Resorts noting that it would need to approve any deal.

On Tuesday, Entain said it wanted to be satisfied on value creation for its shareholders, including any potential synergies from the deal, plus terms for a technology agreement with MGM and BetMGM, as well as governance rights for the combined entity’s stake in BetMGM.

The UK bookmaker said it also wanted assurances on how any potential deal could be delivered, including antitrust and regulatory clearances.

“The board will require a number of matters to be satisfactorily resolved that are fundamental to the structure and value of the proposal,” the company said.

Entain’s board said talks with DraftKings are continuing and it has not yet taken a position on the merits of the proposed deal.

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Schleswig-Holstein Proposes Tax Based On Revenue

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A draft Schleswig-Holstein law would tie tax for online casino games to gross gaming revenue (GGR) rather than stakes, as is the case for online slots, poker and online sports betting.

A bill proposed by the Ministry of the Interior in the German state would set a tax rate of 34 percent for GGR for up to €300,000 per month, 39 percent for €300,000 to €750,000, and 44 percent above €750,000.

The proposed rates contrast with the 5.3 percent levy on stakes for online sports betting and online slot and poker.

The finance ministry said it was so far unable to estimate the receipts the German state might generate through the tax.

“With this regulation we are making a contribution to fair taxation,” said finance minister Monika Heinold. “The digital space is not free from rules. Online casino operators have to contribute to the country's tax revenue just like analogue companies.”

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California Mayors Back Online Sports-Betting Ballot Initiative

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The mayors of four California cities are supporting a ballot initiative to legalize online sports betting that they say will provide hundreds of millions in funding each year for homelessness and mental health services.

Sacramento Mayor Darrell Steinberg, Fresno Mayor Jerry Dyer, Oakland Mayor Libby Schaaf and Long Beach Mayor Robert Garcia on Tuesday announced their support for the ballot measure filed in August by a coalition of leading online sportsbook operators.

“We need to think both creatively and long term to address California’s homelessness crisis,” Dyer said in a statement. “This initiative helps do that by generating hundreds of millions of dollars in badly needed revenue, without raising taxes on residents.”

Supported by DraftKings, BetMGM, FanDuel, Penn National Gaming/Barstool, WynnBet, Bally’s and Fanatics Betting and Gaming, the ballot initiative would allow only Indian tribes or qualified sportsbook operators partnering with tribal casinos to offer online wagering on professional, college, electronic sports and other events.

“If passed, this initiative will help countless Californians in times of crisis,” Steinberg said.

The proposed initiative would use tax revenue from online sports betting to fund permanent shelter and housing for homeless people and expand mental health services.

Under the proposal, 85 percent of revenue would be dedicated to homeless and mental health services, and 15 percent directed toward the Tribal Economic Development Account.

It is one of three sports-betting related ballot measures, with a tribal initiative to permit retail-only wagering, craps and roulette at tribal casinos plus sportsbooks at racetracks already qualified for the November 8, 2022 ballot.

Supporters of the online betting proposal are currently waiting for an official summary from the state attorney general’s office before they can begin collecting signatures.

An alternative, cardroom-backed ballot initiative to permit online and retail sports wagering in California received such a summary on Monday and proponents have a six-month period to collect some 997,139 valid voter signatures in order to qualify for the ballot.

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Connecticut Fully Launches Online Sports Betting, Internet Gaming

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Connecticut Governor Ned Lamont announced the state’s full online sports betting and internet gaming market will be launched on Tuesday (October 19), representing the largest expansion of gaming since the Mohegan and Mashantucket Pequot tribes opened their casinos in the early 1990s.

Lamont said online gambling will launch at 6am to adults 21 and older, following a one-week limited trial. Rush Street Interactive, DraftKings and FanDuel can begin offering mobile wagering on games through their partnerships, while both tribes can offer internet gaming.

The Connecticut Lottery Corporation has partnered with Rush Street Interactive, the Mohegan Tribe is working with FanDuel, and the Mashantucket Pequot has partnered with DraftKings.

“This is an exciting moment for our state and our tribal partners,” Lamont said in a statement. “Connecticut has proven to be a leader when it comes to the gaming economy going back decades, and that legacy will continue with the launch of these new online options for all eligible residents.”

The Connecticut Lottery also will operate 15 retail gambling sites in the state.

“The [Connecticut] PlaySugarHouse platform performed flawlessly during soft launch,” said Rob Simmelkjaer, chairman of the lottery’s board of directors. “Our retail sportsbook launch should be just around the corner, also bringing a convenient experience for in-person players throughout the state.”

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U.S. Supreme Court To Decide If Texas Tribes Can Offer Gaming

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The U.S. Supreme Court on Monday agreed to resolve a long-running legal dispute between the Ysleta del Sur Pueblo and the state of Texas over whether the tribe can offer some forms of gaming on their reservation land.

The justices agreed to take up a request by the Ysleta del Sur Pueblo, now known as the Tiguas, to hear an appeal of the Fifth Circuit Court of Appeals' 2019 decision that found bingo-style games the tribe offered at their Speaking Rock Entertainment Center near El Paso were illegal.

Since 1993, the Tiguas and the Alabama-Coushatta Tribe of Texas have been in litigation over their rights to offer bingo-style games on tribal lands.

At issue is whether a 1987 federal law known as the Restoration Act blocks both tribes from offering gaming. The law re-established a trust relationship between the federal government and the two Indian tribes.

The federal law also included a provision that said: “All gaming activities which are prohibited by the State of Texas are hereby prohibited on the reservation and on lands of the tribe.”

The Restoration Act also has a provision to ensure no civil or criminal action is taken against the state of Texas.

The Tiguas and the Coushatta have argued the state has no jurisdiction to regulate legal and bingo-style games on tribal lands. The tribes received support from the U.S. Department of Justice in a brief filed with the Supreme Court in August.

The Justice Department’s Office of the Solicitor General stated in the brief that lower courts have been wrong in their rulings since the early 1990s that the tribes could not offer gaming, which interfered with the federal Indian Gaming Regulatory Act (IGRA).

In a brief with the Supreme Court on September 3, Texas attorney general Ken Paxton noted that the Tiguas asked their congressman at the time to adopt a law that would bind the tribe to Texas gaming laws and regulations. As a result, according to Paxton, the law federalized the state’s general ban on nearly all forms of gambling, especially casinos.

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Review Of Star Entertainment To Include Public Hearings

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The New South Wales (NSW) state gaming regulator has announced that its scheduled review of The Star Entertainment Group's Star casino in Sydney will include public hearings.

The Independent Liquor & Gaming Authority (ILGA) said in a statement on Tuesday that recently appointed review officer Adam Bell advised the ILGA that the hearings are in the public interest.

"Mr Bell has advised ILGA that he considers it in the public’s interest to hold public hearings on matters including, but not limited to, The Star’s maintenance and administration of systems to counter money laundering and infiltration by organised crime," it said.

The review report is now due on June 30, 2022, with public hearings scheduled for March.

Bell was one of the counsel assisting the Bergin Inquiry into the suitability of Crown Resorts as a casino operator in Sydney.

His relentless interrogation of leading shareholder James Packer and Crown directors, combined with his latest request for public hearings, point to growing vulnerability for Star Entertainment.

Media reports last week alleged the company has enabled criminal conduct and withheld unflattering external reports into compliance failures from the ILGA.

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UK Suspends Licence of BGO Entertainment

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The UK Gambling Commission has suspended the licence of BGO Entertainment for “failing to protect consumers”, as it carries out a review of its operations.

The company may have violated the Gambling Act 2005 and its violations may have included acting “not in accordance with conditions of their licence and that the licensee may be unsuitable to carry on the licensed activities”, the commission said.

The announcement late on Friday followed the online gambling company being penalised last October for failings in social responsibility procedures for players demonstrating signs of problem gambling, violations for which it paid a £2m penalty in lieu of a fine.

The commission did not say whether the suspension is related to the punishment from last year.

At that time, the Gambling Commission said that BGO also had inadequate anti-money laundering (AML) controls between September 2018 and July 2020.

The regulator required the Alderney-based gambling operator to carry out extra social responsibility and AML checks on its top customers.

Violations included poor supervision of a player who had won lottery prizes, but lost £159,000 over three months.

BGO operates bgo.com, powerspins.com, vegasluck.com and chilli.com, the regulator said.

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U.S. Gaming Industry Welcomes Back International Travelers

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The Biden administration will lift coronavirus travel restrictions for fully vaccinated international visitors starting November 8, a decision that is crucial for the ongoing recovery of the nation's gaming industry.

“The AGA has actively called for the safe full reopening of international travel,” Bill Miller, president and CEO of the American Gaming Association (AGA), told VIXIO GamblingCompliance.

The historic restrictions that were put in place shortly after the coronavirus pandemic took hold in the United States barred visitors from most countries from entering the U.S. for almost 21 months.

“Today’s move by the Biden administration to lift travel restrictions is key to our industry’s continued economic recovery,” Miller said. “International travelers are an important consumer base for the gaming industry, especially in Las Vegas where their economic impact totalled $5bn before the pandemic.”

The restrictions kept millions of tourists out of the United States from China, Canada, Brazil and much of Europe. The announcement follows recent news that fully vaccinated land and ferry travelers from Mexico and Canada will be allowed to enter the country next month.

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Okada Manila Operator In Nasdaq Reverse Merger

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The operator of Philippine integrated resort Okada Manila will list on the Nasdaq by way of a reverse triangular merger, Japanese parent company Universal Entertainment Corp said on Friday.

The merger with Miami-based special purpose acquisition company 26 Capital Acquisition Corp values Okada Manila’s operator, Okada Manila International, at $2.5bn, Universal Entertainment said in a statement to Japan's Jasdaq exchange.

26 Capital Acquisition, headed by CEO and former gaming equity analyst Jason Ader, will cede more than 80 percent of company shares and retain two of seven board seats as part of the deal, it said.

After the merger, 26 Capital shares will be delisted and replaced by Okada Manila International’s American Depository Shares and warrants.

However, completion of the merger is not expected to take place until the second half of 2022 and no later than June.

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The UK regulator is moving forward with a project to overhaul its prevalence surveys, uncertainty in California and more Maryland casinos get sports betting go ahead.

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