A visit from the Feds
Rep. Paul Tonko puts betting ads on the Congress agenda, Ohio rethinks tax, GREF express black market concern, UK affordability worries, enter Britcoin +More
Good morning. On today’s agenda:
Congress gets a sight of a bill that aims to ban all betting advertising.
Tax rises are on the agenda in Ohio – already.
GREF on the grift – European regulators are increasingly concerned about black market operators.
Meanwhile, a new survey suggests affordability checks in the UK are driving punters offshore.
Enter Britcoin: A state-backed digital pound is likely within the next decade, suggest the UK authorities.
All the Federales say, they could have had him any day.
A Federal spanner
The news of a bill in Congress that sets out to ban all forms of sports-betting advertising creates a splash.
Fed up: A new federal bill dubbed the ‘Betting on our Future Act’ would, in the words of its sponsor, Rep. Paul Tonko, make it “unlawful to advertise a sportsbook on any medium of electronic communication subject to jurisdiction of the Federal Communications Commission, such as TV, radio or the internet.”
The FCC has very little control over the internet but has sought to include parts of it under its oversight umbrella in recent years – most notably, around Section 230.
Tonko’s bill would seemingly provide the FCC with a legislative mandate, although that would likely face a legal challenge on First Amendment grounds.
The bill is unlikely to pass as is, but it could:
Get a hearing where a congressional committee pulls at strings to see what unravels.
Open the door to scaled-down but perhaps more comprehensive federal oversight.
Not the first time: Senators Orrin Hatch and Chuck Schumer put forth legislation in 2018 that would have seen the federal government’s hand firmly inside the sports-betting cookie jar. The Hatch-Schumer bill:
Set minimum standards for state laws, including requiring states to send proposals to the federal government for approval.
Sought to establish a sports-betting clearinghouse to track bets and a Gambling Research Advisory Committee.
Had random goodies such as a Bad Actor clause on operators active in the US post-2006 (UIGEA).
The AGA issued a statement arguing that such a ban would benefit illegal operators by reducing awareness of legal operators.
The AGA statement also alluded to free-speech implications as well as negative impacts on the credibility of state and tribal gaming authorities.
A deeper analysis of the Betting on our Future Act can be found here: Coming Soon: Federal Oversight Of Online Betting.
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Uh-on Ohio
Ohio’s sports-betting industry still has that new car smell, but Ohio Gov. Mike DeWine is already wondering if the state purchased a lemon. Several sports-betting tweaks are buried deep within DeWine’s mammoth 2024-2025 fiscal year budget:
A 10% tax increase on sports-betting operators.
A prohibition on the terms ‘free’ or ‘risk-free’ in promotions.
A ban on bettors “who threaten violence or harm against persons who are involved in sporting events, where the threat is related to sports gaming”.
Not a fan: DeWine was critical of the industry in the days following its January 1 launch.
“The companies that have been doing the massive advertising need to be aware that they are being looked at very closely by the governor and the Casino Control Commission,” DeWine cautioned.
“We believe that, at least on several occasions, they have already crossed the line. My message to them is this will not be tolerated in the state of Ohio.”
The governor’s budget is not the final say on the matter. Any sports-betting changes – notably, doubling the tax rate – would need legislative approval.
North American notebook
Georgia on my mind: A bipartisan group of 20 legislators have introduced a bill to legalize sports betting, according to the Atlanta Journal-Constitution. The bill would legalize sports betting without requiring an amendment to the constitution, a maneuver that might make approval more likely.
GREF on the grift
European regulators are increasingly concerned about black market operators and have promised to pool enforcement resources to tackle the problem.
We’re not gonna take it: The Gaming Regulators European Forum (GREF), a group of 42 gambling monitors from across the continent, has issued a declaration outlining its concerns and intent to step up action.
Recent research from PwC revealed the number of UK punters using offshore sites has more than doubled in two years, from 220,000 to 460,000.
In areas such as France and Norway, more than 50% of gambling revenue goes to black market sites.
While acknowledging each jurisdiction has a different legal view of what constitutes the black market, GREF said it expects to conduct more coordinated international enforcement.
Social media sweepstakes: The forum is particularly concerned about the rise of illegal lotteries and other unlicensed operators on Facebook, Instagram, TikTok and similar.
“We expect that this common action will enable a constructive dialogue with online platforms, including social media platforms,” the GREF said.
Gone racing
Driven: A Racing TV survey undertaken on behalf of the Racecourse Media Group suggested fears among the betting public over “obtrusive” affordability checks could drive a section of punters to bet offshore. The survey of ~3.5k respondents found that 80% would not like to see mandatory limits imposed by bookmakers and that 15% said either they or one of their acquaintances bet with an unregulated online bookmaker.
Affordability checks are to blame, according to the survey, which found that 50% of those surveyed who had been asked to provide personal information in order to continue betting had refused to do so.
Meanwhile, 92% of respondents said they would consider using a different bookmaker if no personal information was required.
Clear and present danger: Martin Stephenson, CEO of Racecourse Media Group, said the survey results represented “clear evidence” that the black market is “real and substantial”. He added that it suggested affordability checks are “having the effect of moving a significant number of affected punters out of the UK-regulated environment and so exposing them to potential harm”.
“This must be a pyrrhic victory and the opposite to what affordability checks set out to achieve.”
Enter Britcoin
A state-backed digital pound is likely within the next decade, UK authorities say.
Sterling effort: The Bank of England and the Treasury are consulting on a central bank digital currency (CBDC) and staffing up a taskforce to oversee delivery of the new form of sterling “within five to seven years”. Cryptoassets are unbacked by any reserve and their values can fluctuate wildly, but the digital pound would always keep its value in cash, as issued by the Bank.
One model contemplated is a public–private payment platform, under which the BoE would provide a core ledger that would record and process payments.
The private sector would then be the payment interface providers handling the interaction with end-users and providing additional payments functionality through overlay services.
Several other economies are in various stages of developing CBDCs, including India, Pakistan, the Bahamas, Nigeria and the United Arab Emirates, while the US, China and the Eurozone are also considering proposals.
Give me the future: Last year, Macau announced a bill to recognise digital currency as legal tender, and experts believe CBDCs have major implications for the gambling industry.
Reliance on third-party payment intermediaries and cryptocurrency exchanges using non-legal tender would drop.
Authorities would have more oversight of transactions, potentially reducing fraud risks.
Cash maintenance and time costs may be significantly reduced by eliminating chips and banknotes.
Fix you
Sports-betting monitoring specialists Starlizard Integrity Services (SIS) says suspicious patterns rose in 2022, with youth matches a particular area of worry.
Torments my heart: A total of 144 football matches in 2022 were assessed as suspicious by SIS, a small increase on the 2021 total of 140. The largest rise came in Asia, where 46 suspicious matches (32%) were identified, up from 31 matches (22%) in 2021 and 13 matches (9%) in 2020.
Europe’s numbers stayed relatively stable.
More than 37,000 games were analyzed across the year.
Investigators said all matches identified would warrant further investigation.
The kids aren’t alright: The number of youth matches considered dodgy rose to 10 in 2022, after just a single instance the previous year.
“The concerning rise in matches identified in Asia is one that all stakeholders should note and it is particularly troubling to see a significant increase in the number of suspicious youth matches,” said Affy Sheikh, head of SIS.
Fine time
The Dutch gambling regulator dished out fines topping €25m in the latter half of 2022, with that number expected to rise as the jurisdiction considers tighter controls.
No nonsense: Seven operators were sanctioned, with more heading to the courts, said Netherlands Gambling Authority (KSA) chair René Jansen in a recent industry speech. Three of the fined operators were named as Shark77, Equinox Dynamic and Domiseda & Partners, however the other four remain anonymous.
At the time, Shark77 argued that it was operating in line with its Malta Gaming Authority license, but the KSA said this was not compliant with Dutch law.
The fines were imposed for offering online games of chance on the Dutch market without a license, Jansen said, and were handed out after warnings were repeatedly ignored.
Making it worse: Under Dutch law, penalties can be imposed on the basis of the calculated turnover and can rise given the severity of other flubs, such as failure to apply age checks. In almost all cases there were “aggravating circumstances”, such as:
Pre-filled ‘Dutch’ information like ‘+31’ at the entry screen for telephone numbers.
Autoplay buttons meaning a game cannot be interrupted, enabling bets to be much higher.
Unreasonable terms and conditions.
Prohibited payment methods such as crypto or the ability to pay anonymously were offered.
Unlawful use of the Gaming Authority logo and/or falsely suggesting that a license was held.
As reported previously in C+M, the Netherlands is considering a near-total ban on ads in the wake of growing consumer protection concerns.
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European notebook
Bet365 has won an appeal in Romania’s highest court against the country’s regulator, potentially opening the way for the company to apply for a license.
UK Gambling Commission CEO Andrew Rhodes dismissed claims that the regulator is pressuring bookmakers to impose intrusive affordability checks, according to the Racing Post.
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