News In Brief: October 25-October 29, 2021

October 29, 2021
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Sweden's gambling restrictions set to end for now, the Seminole Tribe ties up pre-launch sports-betting deals and Crown Resorts settles its costly China law suit.

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Sweden Set To End COVID-19 Limits

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The Swedish government has given the clearest indication yet that its temporary COVID-19 measures will come to an end in November.

Having already been extended twice, operators were fearful that the end of restrictions such as a SEK5,000 deposit limit and a SEK100 cap on bonuses would be pushed back again, or even that the rules would become permanent.

In an update on its website on Thursday, the government stated that the restrictions will come to an end on November 14.

However, it also issued an assignment to the Swedish Gambling Authority to assess the restrictions and follow up with recommendations on new, permanent, consumer protection measures.

The regulator has until March 22 to evaluate the COVID-19 measures and until October 31, 2023 to conduct a broader evaluation of the changing gambling market in Sweden.

“Turnover in the gaming market has increased and online gaming has probably benefited from changed consumption patterns since the reregulation.


“There is a risk that this has led to a long-term behavioral change with increased gambling. This is a development that should be followed up to see if there is a need for further measures,” said minister Ardalan Shekarabi.

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Seminole Tribe Announces Florida Sports-Betting Partnerships

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One week away from a crucial federal court hearing on the legality of off-reservation sports wagering in Florida, the Seminole Tribe announced on Thursday partnerships with several pari-mutuels in preparation for the beginning of legal sports betting under its new gaming compact.

The Seminole Tribe agreed to sports-betting partnerships with the Palm Beach Kennel Club, Hialeah Park Casino, Ocala Gainesville Poker and Ocala Breeder’s Sales Company, Tampa Bay Downs and TGT Poker and Racebook.

As permitted under the compact, the five pari-mutuel facilities will market the Seminole Tribe's Hard Rock sportsbook brand and receive 60 percent of net win from bets placed by players at their own locations.

Additional marketing agreements with Florida pari-mutuels are expected to be announced soon, the tribe said.

These deals are contingent on the launch of sports betting beyond Seminole tribal casinos via servers located on tribal land. Two separate lawsuits filed by West Flagler Associates and Magic Casino and a coalition of anti-gambling interests are both scheduled to be heard on November 5 in federal court in Washington, D.C.

The landmark compact incentivizes the tribe to partner with Florida's commercial gambling interests to market its sportsbook, with the tribe paying a lower proportion of revenue to the state on revenue earned via pari-mutuel partners.

“As was promised when it was signed, this historic compact is expanding economic opportunity, tourism, and recreation in Florida,” Republican Governor Ron DeSantis said in a statement.

“Not only will this compact bring a guaranteed $2.5bn in revenue over the next five years, but it also brings together Florida pari-mutuel businesses from across the state in a creative partnership with the Seminole Tribe providing increased access to safe transparent sports betting in Florida,” DeSantis said.

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California Settles $3.5m Illegal Gambling Lawsuit

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A company that provided software to sweepstakes cafes throughout California will pay $3.5m and permanently stop its operations in the state under a court settlement announced on Thursday.

These cafes operate as mini-casinos, offering interactive gambling-themed games on computer gambling devices, according to California attorney general Rob Bonta.

Pong Game Studios Corp. agreed to settle a lawsuit that alleged it violated California laws on unfair competition and false advertising, Bonta said. A Solano County Superior Court judge approved the nine-page agreement.

“Under the guise of lawful sweepstakes, Pong knowingly used casino-style games to prey upon vulnerable Californians,” Bonta said. “Today’s judgement puts a halt to these unlawful activities.”

An email to the Ontario, Canada-based company seeking comment was not immediately returned. Pong makes video lottery and other game terminals along with casino-style games for mobile phones.

Under California law, the gambling software offered on these sweepstakes systems constitute unlawful slot machines or gambling devices. Despite a ruling by the California Supreme Court in 2015 expressly declaring that the use of sweepstakes gambling systems was unlawful, Pong continued its unlawful gambling operations, according to the attorney general.

The company was sued by the state attorney general’s office, along with the Los Angeles city attorney’s office and district attorney’s offices in nine counties.

“Our work to combat this broad problem continues,” said Los Angeles City attorney Mike Feuer. “Just this month my office filed criminal charges against the operators of an alleged illegal casino in Hollywood.”

According to the settlement, Pong is barred in California from designing, manufacturing, providing or using any unlawful gambling device, software or computer system. Bonta warned Pong may be held liable for as much as $15m if the company fails to comply with the settlement terms.

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Crown Resorts Settles China Class Action For $94m

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Australian casino operator Crown Resorts has settled a shareholder class action for A$125m ($94m) over stock losses resulting from the arrest of its employees in China, including costs and interest in the four-year case.

Crown said in a statement on Friday that the terms of the settlement include no admission of liability, but the deal remains subject to higher court approval.

It added that a “significant portion” of the settlement is likely to be recovered from insurers.

The announcement coincides with Tuesday’s release of the Victoria state Royal Commission into Crown’s casino operations in Melbourne.

Commissioner Ray Finkelstein found that Crown “did nothing to protect their staff” in China despite being warned by Chinese officials that a crackdown on their illegal promotion of casino gambling was looming.

The scathing report has paved the way for the government to impose an unprecedented degree of oversight at the company, including two years of probation under a state-appointed “special manager” who can instruct and overrule the Crown board.

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Lithuanian Regulator Says Court Ruling Hurts Player Protection

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Lithuania’s Gambling Control Authority is calling a court ruling overturning one of its fines a “threat to the protection of gamblers”.

The authority’s decision to fine UAB Tete-a-Tete Casino, or Cbet, €15,000 for not explaining to a gambler why the player’s wagers were limited was overturned by the Vilnius Regional Administrative Court on Tuesday, the regulator said.

The court agreed with the company’s argument that the risk factors and mechanisms that led it to limit the gambler’s spending were a trade secret, and may not necessarily be linked to its policies or conditions, according to the authority.

"According to the court decision, gambling organizers can impose any kind of restrictions on gamblers and not to disclose the reasons for the decisions made by the company, basing their decisions on the protection of trade secrets,” said Virginijus Daukšys, director of the gambling authority.

“These circumstances would complicate the enforcement of the protection of gamblers' rights, may create opportunities for abuse by gambling organizers and allow gambling organizers to carry out their activities only in accordance with the rules known to them,” he said.

The authority said the ruling could be appealed to the Supreme Administrative Court of Lithuania and it is planning to do so.

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Scientific Games Sells Lottery Business For $6.05bn

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Scientific Games said on Wednesday that private equity firm Brookfield Business Partners will buy its global lottery business, SG Lottery, for $6.05bn.

Brookfield Business Partners is an affiliate of the Canadian-based Brookfield Asset Management. The deal for $5.8bn in cash and an earn-out of up to $225m based on certain EBITDA targets in 2022 and 2023 is expected to close in the second quarter of 2022.

“This transaction is transformative in accelerating the delivery of our stated strategy to optimize our portfolio, aggressively de-lever our balance sheet and position us to invest in future growth,” Barry Cottle, president and CEO of Scientific Games, said in a statement.

Cottle said he was confident the sale “maximizes value and certainty while minimizing complexity and execution risk”. He added that the deal would position both Scientific Games and SG Lottery for continued success.

In June, Scientific Games announced its plans to sell SG Lottery and its OpenBet sports wagering division as part of efforts to reduce debt of more than $9bn and streamline the company's strategy to focus on the land-based, online and social casino gaming markets.

At that time, Scientific Games said the deals could be through initial public offerings, a merger with a special purpose acquisition company, or a sale or combination with another company.

OpenBet was sold in September for $1.2bn in cash and stock to Endeavor Group Holdings, owner of IMG Arena.

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Former Sportsbook BetEasy Fined In Northern Territory

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Flutter-controlled Australian corporate bookmaker BetEasy has been fined A$53,720 ($40,300) in the Northern Territory for breaching responsible gambling and other licence conditions, and has been referred to the national financial transactions watchdog.

BetEasy, which was folded into rival Sportsbet after parent companies Flutter and The Stars Group merged in late 2020, was fined by the Northern Territory Racing Commission on October 18 over a customer dispute despite the case being settled on confidential terms.

The commission report said that a self-excluded customer lost almost A$720,000 in 2019 after a BetEasy affiliate arranged for the customer to use an account set up in the name of his partner.

The dispute was settled immediately prior to a scheduled hearing in April 2021, but the commission chose to investigate the matter despite the company no longer having an operational licence.

It found BetEasy committed “extremely serious” breaches of the territory’s Responsible Gambling Code on multiple occasions, warranting the maximum fine, and breached terms involving third party use of gambling accounts.

The report added that BetEasy “may have breached” measures designed to combat money laundering, and referred the company’s “account opening and customer identification practices” to the federal transactions regulator AUSTRAC for further investigation.

The commission said the case will inform government amendments to the Racing and Betting Act 1983, including possible strengthening of responsible gambling measures and data security, and “explicitly and unconditionally assigning responsibility for affiliates to the relevant licensee, regardless of the actual contractual arrangements between the parties”.

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Take Bets Or Face Punishment, Warns ANJ

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France’s gambling regulator, ANJ, has warned its licensees over reports that winning players are finding it increasingly difficult to place bets.

Operators in France are not allowed to restrict players unless there is a “legitimate reason”, which would include responsible gambling, money laundering or taking a bet that, if paid out, would put the bookmaker at risk of collapse.

“Operators who persist in such practices of limiting wagering without justifying a legitimate reason are exposed to the initiation of proceedings before the sanctions commission of the National Gaming Authority,” said the regulator.

ANJ said that 17 percent of complaints to the regulator were about the refusal of operators to take bets and that the number of these complaints was rising sharply.

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Paraguay Pursues Ban On Slot-Route Operations

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Paraguay’s Congress has passed a bill to prohibit the operation of slot machines outside licensed casinos or dedicated slot halls.

The bill was passed late last week by the Chamber of Deputies, having been approved by the Senate in July.

Under the new legislation, Paraguayan municipalities would retain authority to license venues offering “electronic games of chance” and gain new powers to prohibit machines in other locations such as grocery stores, restaurants, barber shops and internet cafes.

Although the bill’s stated purpose is to protect minors from being able to access gambling, it also represents an effort by lawmakers to nullify a controversial 2020 resolution of national gaming authority Conajzar that granted one company exclusive rights to operate a network gaming machines in non-gaming retail locations across Paraguay.

That contract between Conajzar and the company iCrop S.A. has been the subject of a series of recent congressional hearings.

As the lower house made amendments to the bill before approving it last week, the measure will now have to go back to the Senate before being sent to President Mario Abdo Benitez to sign into law or veto.

Alongside slot halls regulated by municipalities, Paraguay’s gambling market includes several land-based and affiliated online casinos regulated by Conajzar, as well as the Aposta.la online sports-betting platform that was granted an exclusive national licence by Conajzar in early 2018.

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Sweden's gambling restrictions set to end for now, the Seminole Tribe ties up pre-launch sports-betting deals and Crown Resorts settles its costly China law suit.

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