NC advances; Kentucky one vote short
North Carolina vote moves to Senate, Kentucky needs one more vote, EPL shirt sponsorship ban +More
Good morning. On today’s agenda:
Sports betting in North Carolina moves one step closer.
Kentucky needs one more vote to pass today, Thursday.
UK: Premier League to introduce partial voluntary sponsorship ban.
Scope creep: broader anti-money laundering laws for EU.
ECJ opens the door to challenges of the Italian sports-betting regime.
U.S. Integrity CEO talks about the company’s deal with UFC.
North Carolina and Kentucky
Optimism over North Carolina Senate vote; Kentucky’s one last push.
Ready for flight: After dealing with eight proposed amendments, the North Carolina House approved the state’s latest effort to legalize mobile sports betting (HB 247) by a 66-45 margin Tuesday afternoon. The bill was approved on third reading on Wednesday afternoon and is on its way to the Senate.
The House margin is an excellent sign. After passing the Senate by a 26-21 margin in 2022, it was narrowly defeated in the House.
If passed, the market would open up on January 8 next year.
Things are looking up, but the Senate will not be a cakewalk.
The biggest concern is a Senate amendment that would not be amenable in the House.
Should it pass that hurdle, then it moves to the desk of Gov. Roy Cooper, who has previously said he would open up on January 8 next year.
Meanwhile, in Kentucky
HB 551 has passed the House and is coming down to the wire in the Senate, with Thursday being the chamber’s last opportunity to pass the bill.
Also standing in its way is a peculiar rule that requires a 60% majority (23 votes) to pass the Senate in odd-number years. According to Legal Sports Report, the affirmative vote tally stood at 20 before the start of the 10-day veto recess.
“I’ve continued to have conversations with members of the Senate throughout the veto recess and I think the votes are there,” the bill’s sponsor, Rep. Michael Meredith, told LSR.
Also whipping votes is the American Gaming Association, which sent a letter to the Kentucky Senate on Wednesday.
With the legislative session set to expire today, local reports indicate an extremely tight vote (eerily reminiscent of last year’s vote in North Carolina):
More from the Bluegrass State: Kentucky’s recently passed prohibition on “skill games” covered in a previous newsletter has a legal challenge. A lawsuit has been filed by several impacted entities calling HB 594 unconstitutional.
Per the lawsuit:
“The types of skill-based games and game devices, including the Game, that are invidiously and discriminatorily banned and made illegal by the amendment are no different in substance and form from the skill-based games and game devices used in e-sport competitions, game devices used in skill-based contests, and coin-operated amusement machines that are excluded from the ban by the Amendment…
“The public interest in the protection of the Kentucky Constitution’s guarantees of free speech, due process, and equal protection, as well as the guarantees against special legislation, the impairment of contracts, and the taking of property without just compensation, and other constitutional rights, is served by the issuance of a preliminary and permanent injunction.”
What we’re reading
The NFL owners have voted to allow betting in stadia on game days as of this season, reports The Athletic.
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Premier League shirt ban
The English Premier League is set to introduce a front-of-shirt ban on gambling sponsorships.
Shirt, sharp, shock: Front-of-shirt sponsorship would be banned but sleeve sponsorships would still be allowed under proposals being considered by the English Premier League. According to The Times, the move will be discussed at a league meeting today, Thursday.
The paper suggested the clubs would support the move in order to avoid government legislation banning gambling advertising completely.
The government has previously indicated it would not include a move against shirt sponsorship if voluntary action is taken by the EPL.
A final vote would be taken in the summer, with a three-year transition period being mooted.
It is not thought the English Football League would be expected to follow suit.
AML and the EU
The days of exemptions for online gambling and sports-betting operators appear numbered.
Mob rules: On Tuesday, politicians from the European Parliament’s economic and justice committees waved through three pieces of draft legislation aimed at closing gaps that allow dirty money to be laundered across the bloc.
Updates to due diligence requirements, the latest text for the sixth Anti-Money Laundering Directive (AMLD) and the establishment of a new regulator for the oversight of anti-money laundering within the Union were approved.
Gambling operators, along with crypto-asset managers, major professional football clubs and other high-risk entities will be obliged to perform deeper due diligence checks.
Restrictions on cash and crypto payments, with a cap of €1,000 ($1,085) on crypto-asset transfers where the customer cannot be identified, were also approved.
The European Anti-Money Laundering Authority is the newest cop on the beat, and will supervise 40 high-risk entities (banks, for the time being) with the power to fine based on turnover.
Sweet harmony: The further harmonizing of the rulebook and supervisory powers could have major consequences for the EU gambling industry. A draft proposal by MEPs last year suggested Brussels replace the AMLD with a single regulation that would apply directly, rather than requiring each state to transpose the rules into domestic law.
“Existing directives have created discrepancies between national legislations and the European Commission intends to uniformize everything throughout the EU,” a Brussels-based lobbyist told C+M.
Careful with that ax (EU keen): Existing rules allow individual member states to exempt “low-risk” providers of gambling services from the onerous AML requirements, as the UK did with bookmakers prior to Brexit.
MEPs want to revoke that power, and place all online gambling operators and sports-betting firms in the same high-risk category as casinos, forcing them to comply with the tougher laws being drawn up.
Brussels policy wonks previously pushed out a little-scrutinized paper that recommended upgrading the risks posed by online gambling and subjecting it to further regulation [P.230].
The updated texts approved this week will appear online in the coming days, a Parliament spokesperson told C+M, with negotiations on the proposals expected to start in April.
Dutch ad ban
A ban on non-targeted advertising for online operators will begin “no later than July 1”, according to the Netherlands’ minister for legal protection.
Curtains close: Franc Weerwind named the date for the blackout of advertising for online gambling, broadcast, print and outdoor ads in response to a Parliamentary question, and said the government is confident it will meet the target.
He also refuted a suggestion that licensed operators should be subject to a “two-strikes-and-out” model regarding advertising violations, citing the need for proportionality and subsidiarity.
“Experience shows that norm-conveying discussions between regulators and licensed operators generally have already the desired effect,” Weerwind said.
He added that licensed operators have no way of checking whether minors are using the accounts of approved customers, and so awareness campaigns to discourage under-age gambling would be more helpful than sanctions.
WPN earns KSA wrath
I thought I told you: The Netherlands gambling regulator has issued a cease-and-desist order against Costa Rican outfit Winning Poker Network (WPN) for targeting Dutch players without a license. The Kansspelautoriteit (KSA) began investigating the operator in September, and said it has failed to make good on a promise to cease operating in the Netherlands following an initial approach.
While mainly aimed at US players, WPN does cater to European customers through its network of sites that include AmericasCardRoom.eu, YaPoker.com, BlackChipPoker.eu, TruePoker.eu and PokerKing.com.
WPN will land further weekly penalty payments of €25,000 for every week that it defies the order, up to a maximum of €75,000, after which the KSA will explore other legal measures.
The KSA has been a highly visible and active enforcer of unlicensed operators treading on Dutch turf, with a string of cases already to its name this year.
Italian legal tussle
The European Court of Justice has opened the door to challenges of the Italian sports-betting licenses regime extension.
Backdoor boogie: Austrian sports-betting operator Ulisse was denied entry to the Italian market and then subject to criminal proceedings for taking wagers through an Italian subsidiary, Newaleabet, which it routed back to Austria.
The Italian government wanted its share of tax from what it deemed an illegal move by Ulisse.
The business argued that the mess that is Italian gambling regulation has created a de facto barrier to entry for operators since 2016.
New licenses have not been made available due to repeated extensions of a previous regime and a delay of the tenders.
The addition of a ban on advertising has also locked out overseas businesses, said Giulio Corragio of law firm DLA Piper, further contributing to the (now potentially unlawful) barriers operators face when looking at Italy.
Play fair now: The ECJ cited the importance of European Union law in ensuring a “level playing field” for businesses operating across member states as it chided Italy for dragging its feet. The court suggested that national authorities cannot impose restrictions that would undermine the bloc’s single-market objectives.
It has kicked the matter back to the Italian courts with a warning to heed EU law on competition and freedom of movement, and to consider speeding up the issuing of new tenders.
“There is a risk that Italian courts might deem both the extension of the Italian betting and gambling licenses and the gambling advertising ban unlawful, forcing the Government to launch a tender for new licenses immediately and to waive the ban on advertising,” Corragio said.
What, me hurry? Last year, the Italian Parliament granted an extension until December 31, 2024, for existing license holders of remote games, bingo halls, VLTs, land-based sports and horserace betting, stating it would eventually launch a new series of tenders.
UFC and sports integrity
U.S. Integrity’s CEO runs through how it came to do a deal with UFC.
Back in the ring: Matthew Holt, CEO at U.S. Integrity, said the UFC was “caught off guard” by the incident in December last year involving fighters Darrick Minner and James Krause, which indirectly led to the Alcohol and Gaming Commission of Ontario (AGCO) suspending betting on the sport entirely.
The ban was subsequently lifted after U.S. Integrity announced in mid-January it had reached deals with the UFC to provide integrity and anti-match-fixing monitoring services.
Straight as an arrow: It adds to a long list of partnerships that U.S. Integrity has signed across the US sports landscape, including the NBA and MLB, which they support alongside other integrity providers such as Sportradar. It has subsequently announced a deal with the Professional Darts Corporation (PDC) aimed at gaining acceptance of betting on the sport across the US.
Don’t bet on it: Holt says UFC came to his company as it looked to update its processes and against a background of fighters having been found to be betting on their own fights.
“The UFC may not have been aware of why that was such an important issue because the fighters were betting on themselves,” he said.
“But it still would change the way they would actually fight because they were fighting to win their bet, not necessarily to look their best or perform their best.”
Still, it took until Ontario made its move for the issue to come to the fore when, as Holt suggested, the authorities believed UFC “didn’t have the appropriate language safeguards and policies and procedures” that would be expected from a league of its size.
“The UFC brought us in because we are a licensed registrant in Ontario, and we were able to negotiate with Ontario and walk them through it all.”
Once this had been completed, UFC was reinstated by Ontario.
“I think the UFC were smart to get in front of it right away, to handle it as quickly as possible. And they did to their credit.”
Integrity notebook
United Lotteries for Integrity in Sports (ULIS), which was formed late last year, has added the British Columbia Lottery Corporation and the Lithuanian regulator to its list of members.
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Newslines
New research from the University of Nevada, Las Vegas International Gaming Institute found that more than 88% of customers exhibited patterns of behavior that were not suggestive of any unsustainable or harmful behavior. The data for the study was provided by Sightline.
Nil points: PointsBet will end its advertising partnership with the University of Colorado after the AGA issued updated marketing and advertising codes that call for a stop to partnerships between sports-betting operators and colleges and universities.
GeoComply is to fund a two-year research project for the International Center for Responsible Gaming (ICRG) into the long-term effectiveness of voluntary self-exclusion programs used by online and land-based gambling operators.
Odds On Compliance has announced that its Playbook offering now includes land-based regulatory information in addition to its vast repository of existing online compliance resources.
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