On Broadway: London Clubs snaps up Brum casino
London Clubs swoops for Clockfair property, Binance troubles, German black market, UK gambling data needed +More
Good morning. On today’s agenda:
London Clubs pounces on Clockfair’s Birmingham casino.
Kentucky finally makes illegal gaming machines move.
Binance troubles amplify as Skrill shuts door to UK.
German regulator plays down black market threat claims.
UK gambling wonks: we need data.
Come with me to the Bull Ring Shopping Centre.
London Clubs’ casino swoop
London Clubs has gobbled up the Broadway Casino in Birmingham after the venue fell into administration.
Saves the day: Sources at Metropolitan Gaming confirmed to C+M a deal had been done and “an announcement and more details will follow in due course”. Birmingham City Council said the license transfer was approved and complete as of March 2, and the public register will be updated shortly.
Offer they couldn’t refuse: West Midlands operator Clockfair had been failing to offload the casino for months, engaging the eventual administrators Kroll to broker an initial sale.
Clubs, trading as Metropolitan Gaming, swooped in weeks after the February insolvency, “and likely got it for a song”, said a betting industry consultant.
“If the White Paper gives land-based casinos what they want in terms of machine entitlements, the value of licenses will rise significantly,” the source added.
Recall, the Broadway Casino was among a raft of UK regional casinos that have hit financial troubles recently. Genting recently shuttered its Nottingham’s casino, one of five recent closures including properties in Margate, Torquay, Southport and Bristol.
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Kentucky crackdown
Industry notches up a win in the fight against illegal machines.
A touch of gray: Kentucky is attempting to crack down on illegal gambling in the state. Gov. Andy Beshear signed HB 594, which prohibits unregulated gambling machines, into law last week.
The machines, called ‘skill games’ by proponents and ‘gray machines’ by opponents, resemble slot machines but also possess a skill component. These machines are commonly found in bars, restaurants, convenience stores and gas stations.
The AGA has made eliminating “gray machines” a top priority. “Not only do these machines harm communities, but they also pose an existential threat to our industry,” AGA president and CEO Bill Miller said.
On the other side are the gray machine suppliers and the small businesses where the machines are placed.
The DFS argument: Not unlike how the daily fantasy sports industry sprang into being, the machines use favorable laws to argue they are not illegal machines because of the skill component.
How a state determines what is and isn’t gambling can take two forms. It can expressly list legal and illegal activities and/or judge them on their skill level.
How states classify gambling falls into three buckets:
Dominant Factor – If skill plays a significant role in the outcome of the activity. Under this classification, games where a skilled player wins more often would not be considered gambling.
Material Element – If chance plays a meaningful role in the activity, it’s considered gambling. Under this classification, even skill games are gambling if chance plays a meaningful role in the outcome.
Any Chance – Games are prohibited if any amount of chance is involved in the game.
That’s just your opinion, man: States that use the ‘any chance’ test to determine gambling are not good candidates for skill games. States that use the dominant and material tests are, like the machines, a gray area. After all, who is to say what is a meaningful role?
That is why states like Kentucky are specifically addressing these machines and expressly making them legal (historical horse racing) or illegal (gray machines).
US notebook
New York: Sen. Joe Addabbo finally gave up on his efforts to get iCasino included in Gov. Kathy Hocul’s budget. The effort was finally doomed when the bill was omitted from the House and Senate budget proposals.
Texas: Proposed legislative bills will be put before the House State Affairs Committee tomorrow, Wednesday. HJR 155 would authorize casino gaming and sports betting at destination resorts and authorize tribal state compacts related to gaming. Enabling legislation would be heard at the same time.
Meanwhile, HB 1942 would legalize mobile-only sports betting through professional sports organizations and racetracks, taxing revenue at 10%.
Vermont: A bill to legalize sports betting could be considered by the House Committee on Appropriations this week. It would be the final committee stop before being sent to the House floor for full consideration.
Georgia: Hopes are still alive after sports-betting legislation was attached to an unrelated bill in the Senate. Similar legislation previously failed in both chambers just a fortnight back.
Federal: Representative Dina Titus, a Democrat from Nevada, is co-sponsoring a bipartisan bill to repeal the 0.25% federal excise tax applied to most forms of legal sports betting in the US.
Binance troubles amplify
Gambling wallet provider Skrill has seen enough and ended its partnership with the world’s largest crypto exchange.
It’s not you, it’s us: Binance told customers it will suspend sterling deposits and withdrawals via card and Faster Payments from May 22, after being forced into the move by the Paysafe subsidiary.
“We have concluded that the UK regulatory environment in relation to crypto is too challenging to offer this service at this time and so this is a prudent decision on our part taken in an abundance of caution,” a Skrill spokesperson said.
Last year, Paysafe made several crypto-specific hires and partnered with Binance on a new crypto payment provider, Bifinity, which initially targeted the UK and Latin American markets.
In 2021, the Financial Conduct Authority (FCA) attempted to boot Binance out of the UK, refusing to authorize the firm’s activities.
In 2022, Binance regained access via Paysafe, prompting the FCA to wag its finger but note it could do little to intervene until empowered by further regulation.
Well, maybe it is you: Embroiled in controversy and subject to multiple federal probes, Binance recently stopped dollar bank transfers in the wake of the FTX collapse. Note: the freeze applied to Binance, not Binance.US, which are definitely, absolutely separate companies (according to Binance).
The US Justice Department has been investigating the Cayman Islands-headquartered exchange since 2021 over suspected money laundering and sanctions violations.
The Securities and Exchange Commission is also examining Binance’s stablecoin, while other enforcement bodies are lining up cases (hello IRS).
Letter from America: The Binance and Binance.US claim to be “separate entities” has caught the eye of multiple US senators, including Elizabeth Warren, who wrote to the firm demanding balance sheet information and other disclosures about its activities.
The Binance executives’ response, detailing the firm’s “commitment to compliance”, was criticized by lawmakers for omitting the actual information they had sought.
The exchange did cough to having “compliance gaps for many years” and said it wants to settle with regulators.
German black market
Black market operations are not the danger they are made out to be, so says the German gambling regulator.
The GGL said claims illegal online operators have taken a chunk out of Germany’s legal market, causing revenues to drop 13% in a World Cup year, are wide of the mark.
“We cannot identify any crowding out of legal offers by illegal offers,” said GGL board member Benjamin Schwanke in a statement to C+M.
The regulator said its own market analysis proved the channeling rate is “well over 95%”, with less than 5% of bets from Germany going to black market operators.
Lobbyists at the German Sports Betting Association (DSWV) reported gaming stakes falling to €8.2bn last year from the post-Covid recovery of €9.4bn in 2021.
“These findings do not correspond to our own,” said Schwanke.
Million reasons: Germany’s weak showing in the World Cup, the tournament itself being held in a controversial location and the critical attitude of players to Qatar’s human rights positions will all have had an impact on punter behavior, the regulator said.
The DSWV’s calls for a rollback on ad bans and other restrictions was expected, but “the numbers speak a different language”, Schwanke said.
“The regulation has no economic impact.”
“The level of sales at legal betting providers in 2022 will be at the level of previous years,” Schwanke said. “2021 is to be assessed as a special effect. The new rules are made to protect players. That should also be in the interest of betting providers.”
The regulator is holding ongoing discussions with operators and other stakeholders regarding potential tweaks to law around sports betting and advertising, he added.
UK wonks seek data
The UK’s Department for Culture, Media and Sport (DCMS) has quietly pushed out a consultation asking for more data on gambling harm and the impact of regulation.
Pay you back with interest: A new research paper concerning short-term policy-making states that DCMS gambling officials want stronger evidence of the “key drivers and behavioral patterns behind harmful gambling”.
Online operators were singled out for attention, as the government aims to deploy digital analytics to secure the kind of “granular data” necessary to improve regulation.
“At present, the government, regulators and academia have limited access to this level of data,” DCMS researchers said, calling for “primary data collection from gambling users and operators and effective technical collaboration”.
Not what it looks like: The department’s aim for “a strong evidence base that shows how much DCMS sectors are worth socially and economically” may be undermined by the renewed focus on harm and responsibility, noted Dan Waugh of Regulus Partners.
“At least the DCMS does include a question on benefits. whereas the Gambling Commission considers that studying benefits would be ‘politically awkward’,” he said.
Is anybody listening? Other experts believe the document backs up recent ministerial statements on where regulation is heading post-White Paper, and a sign the government may be warming to industry suggestions.
“The real positive is the provision of information on the contribution the sector makes to the economy,” said an industry lawyer with knowledge of prior lobbying.
“It appears to be a dig at inconclusive evidence by academics and others.”
“Fingers crossed the Secretary of State has read the criticisms of the Public Health England report and taken them on board, but more importantly acknowledges the economic value of the sector to UK plc.”
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Asia notebook
SPAC fight: The Japanese company behind the Okada Manila casino, Universal Entertainment, has denied accusations made by Jason Ader’s 26 Capital SPAC and is seeking to call off the proposed reverse takeover.
According to GGRAsia, court documents filed in Delaware allege 26 Capital has conducted a “concerted and increasingly erratic campaign” to pursue closing the merger “at all costs in pursuit of a windfall”.
Sports integrity notebook
King hell: Mark King has been suspended with immediate effect from the World Snooker Tour while an investigation is carried out into reports of irregular betting patterns. The BBC reported that the WPBSA is looking into reports around King's 4-0 defeat by Joe Perry at February's Welsh Open.
European notebook
Sweden: Spelinspektionen has issued its first three gaming supplier licences to Skill On Net, Synot Games and Norrköping, ahead of the introduction of the requirement for all suppliers to be licensed that comes into force on July 1.
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