NFL’s gambling hypocrisy lambasted
NFL comes in for gambling policy criticism, Ontario sanctions, Netherlands self-exclusion, GLI roundtable +More
Good morning. On today’s agenda:
Professional sports has a gambling problem.
Ontario regulator sanctions trio of operators.
Netherlands expands its self-exclusion regime.
The recent GLI regulator roundtable hears about AI.
Ex-NFL boss facing seven years for crypto shadow bank scam.
Gambling troubles
The NFL’s changing attitude towards gambling comes in for criticism.
Happenstance: On April 19, the NFL, alongside the other professional sports leagues and several media outlets announced the formation of the Coalition for Responsible Sports Betting Advertising. On April 21, the NFL suspended five players for violating its gambling policy.
Three of the suspensions were for betting on NFL games. Two of the suspensions had nothing to do with improper bets, but rather where they were placed, at a team facility. The former is a clear no-no, the latter is a frivolous and wholly unnecessary rule.
“The rules restricting players from betting on their own league make sense,” Jamie Salsburg, founder of Dyve Agency told C+M. “Beyond that, it looks rather hypocritical.”
Or as one Twitter user put it when it was revealed one of the suspensions was for betting on non-NFL games at the team’s practice facility, “What was he supposed to do? Walk to the FanDuel Sports Lounge at Ford Field??”
Gambling the new PEDs: The question is, are these players (plus Calvin Ridley) the outliers, or is sports betting among professional athletes rampant and these are the players that got caught? The smart money is on the latter.
Mixed messages: One of the smartest takes on the whole affair was put forth by Ethan Strauss, of the House of Strauss Substack (paywall). Per Strauss:
“Whether it was the NFL, NBA or MLB, the league message to players used to be, ‘Gambling is bad and you’re bad if you do it.’ Sports gambling was the land of vice, a place of temptation where one loses his soul.”
“Today, the message is, ‘Gambling is great and you’re bad if you do it’. Sure you can articulate how a league will promote large-scale betting while also emphasizing how employees within teams shouldn’t make such bets. You can, but good luck.”
Cake and eat it too: Strauss hearkened back to Adam Silver’s op-ed in the New York Times, where the new NBA Commissioner stated, “I believe that sports betting should be brought out of the underground and into the sunlight where it can be appropriately monitored and regulated.”
“There’s something to that perspective,” Strauss wrote. “But there’s a difference between allowing a regulation of vice for the sake of transparency vs. actively encouraging its growth.”
“The NFL is trying to thread the needle on a storyline about sports betting which becomes increasingly disjointed and difficult to believe day by day,” Salsburg said.
“Their partners flood fans with advertisements and offers to place bets highlighting how engaging it can be, while suspending their players who take them up on the offer.”
Tip of the iceberg: This is not going to be a one-time ordeal. These incidents will continue and at some point, the league won’t be able to say, “no inside information was used,” at which point it will be a scandal.
Unlike betting scandals past (Tim Donaghy, Pete Rose, Operation Slap Shot, or the Black Sox) the league won’t be able to claim the moral high ground.
As the proverb goes, if you lie down with dogs, you get up with fleas.
** SPONSOR’S MESSAGE** BettingJobs is the global leading recruitment solutions provider to the iGaming, Sports Betting and Lotteries sectors. Boasting a 20-year track record supporting the iGaming industry, and with a team of experts and world class knowledge, it’s no surprise BettingJobs is experiencing rapid growth with outstanding results. Does your company have plans to expand teams to cope with strong growth and demand?
Contact BettingJobs.com today where their dedicated team members will help you find exactly what you are looking for.
Ontario sanctions
Ontario’s Registrar of the Alcohol and Gaming Commission (AGCO) has sanctioned three operators for allegedly offering games it had not approved.
You never called: LeoVegas Gaming, Bunchberry and Mobile Incorporated are accused of breaching the Canadian province’s rules on uncertified games.
Mobile Incorporated was handed a CA$30,000 ($22,081) penalty, while LeoVegas and Bunchberry must pay $25,000 ($18,400) and $15,000 ($11,000) respectively.
The trio have a right to appeal.
“A critical feature of our regulatory framework requires operators to only offer games that are from registered gaming suppliers and have been certified by an AGCO-registered independent testing laboratory to meet the highest standards of game integrity,” said Tom Mungham, AGCO chief executive officer.
Fines notebook
Entain has been fined A$13,320 (US$8,800) after the Australian Communications and Media Authority (ACMA) found two subsidiaries had accepted in-play bets. Subsidiaries Ladbrokes and Neds accepted 59 and 19 bets on a LIV Golf tournament in Bangkok in October 2022.
Dutch self-exclusion
The Netherlands gambling regulator has added an eight-day reflection period to the end of its self-exclusion register.
Looking in the mirror: The Centraal Register Uitsluiting Kansspelen will now allow players to set a longer period than the previous minimum six-month limit.
It applies to arcades, casinos and online games of chance.
Terminology has also been updated to become more explicit, with self-exclusion now defined as a “gambling stop” rather than a “play break”.
More than 38,000 people are currently using the system in the Netherlands, officials said.
GLI regulator roundtable
Now AI is even capable of writing passable Drake songs, the debate around its uses and abuses in the world of gambling is heating up.
Mob-handed: AI was the hot topic for more than 400 state and provincial gambling regulators gathered in Las Vegas last week at the annual GLI regulator roundtable, billed as the largest gathering of US regulators ever seen by GLI boss James Maida.
Since November when OpenAI’s Chat GPT and GPT-4 splashed across the world’s media the apps have become some of the most rapidly adopted of all time, used for everything from LinkedIn posts to bedtime stories.
But GLI’s keynote speaker and respected futurologist Scott Klososky had alarming news for the regulators, most of whom are still getting to grips with online sports-betting apps.
“Cyber security is so crude now and AI will change cyber security,” he said.
“If you can create an avatar with human characteristics, massive AI-driven cyberattacks will be used to compromise competitors in the market.”
Precision call: Klososky conceded the term ‘AI’ itself is as imprecise as the term ‘sports’ when it comes to describing the huge range of activities it covers. But he told regulators to watch out for:
AI-driven finances.
AI-driven criminal detection.
AI-driven identity control as a starting point.
Bring me solutions: The responsible gambling implications of AI are huge too, according to Klososky. But he offered a note of reassurance that for every malign AI-driven technology, there would be an AI-led solution.
AI has the capability to increase the velocity of play and encourage betting on a more customized selection of games for longer.
But there will also be a countervailing technology that increases the speed of detection and intervention when loss chasing or problematic play occurs.
In a separate panel, Mike Reaves, the head of worldwide solutions architecture for real-money gaming at Amazon Web Services, asked: “If you do this people are going to play longer, but is that a good thing? How much do you want to optimize personal behavior? There have to be guardrails on this.”
According to Klososky, at a minimum, regulators will need to:
Insist each of their operators has an acceptable AI use policy.
Confirm each operator has an AI ethics policy.
Ensure that licensed entities hold insurance policies to protect themselves from lawsuits arising from bias that can creep into AI-supported and often cloud-based systems.
Horsin’ around: Looking ahead further than the next five years, Klososky said massively powerful quantum computing, another idea that has “been around a while”, also had the potential to transform gaming and betting
Most strikingly, though, he said ‘highly technologically evolved players’ that combine artificial and human intelligence would be transformative of online and land-based gambling.
Dubbed human Centaurs these highly adept systems are already transforming the world of competitive chess.
Silvergate/FTX lawsuits
A judge has combined three investor lawsuits against doomed lender Silvergate Bank involving the bankrupt crypto exchange FTX.
Stand together: On April 19, United States District Judge Jacqueline Scott Corley of the Northern District of California ruled that the three lawsuits would be consolidated.
Each accuses Silvergate of aiding investor fraud by FTX.
The three cases, brought against Silvergate by four former investors, remain separate from other federal cases against FTX and its founder Sam Bankman-Fried but will be combined by mutual agreement of the litigants.
“The Silvergate cases involve common questions of law and fact, as they name common defendants, arise from the same alleged course of conduct, and assert overlapping causes of action, such that the Silvergate cases are appropriate for consolidation,” said the order.
At your side: Silvergate is alleged to have processed illicit transfers of FTX customer funds to the exchange’s sister trading firm Alameda Research, amongst other accusations.
Silvergate disclosed its plans to “voluntarily liquidate” assets and shut down operations in early March following a bank run.
The bank landed a class-action suit in January for securities law violations.
FTX filed for bankruptcy in November last year and its collapse and its demise led to liquidity problems for Silvergate as the crypto market tanked.
Ex-NFLer’s crypto scam
A former American football player and owner faces seven years in jail for running a crypto ‘shadow bank” that stole hundreds of millions of dollars from a crypto exchange and laundered cash for Colombian drug cartels.
Fowl play: US prosecutors want Reggie Fowler, who turned out for the Arizona Wranglers and later part-owned the Minnesota Vikings, put away for a stretch in the sprawling case of unlicensed Panamanian Crypto Capital Corp.
Fowler, an alleged boss of Crypto Capital, pleaded guilty to charges of bank fraud, wire fraud and conspiracy last April, around two years after rejecting a plea deal.
Court documents show prosecutors demanding seven years of jail time along with an order of forfeiture upward of $740m.
“Reginald Fowler has committed serious crimes. Only a significant period of incarceration, of at least 84 months’ imprisonment, could reflect that seriousness, promote respect for the law, and afford adequate deterrence,” court papers said.
The court has also been asked to issue an order of restitution amounting to $53m to the Alliance of American Football, which they say was “a victim of Fowler’s wire fraud”.
Earlier this month, New York’s state attorney filed a request to alter Fowler’s bail to stop him from gambling, after he was found wagering hundreds of thousands of dollars in an Arizona casino.
Red flag on the play: During the ‘crypto winter’ of 2017 when the market for Bitcoin, Ethereum and other first-generation crypto-assets collapsed, banking became difficult for cryptocurrency businesses. Spotting an opportunity, Crypto Capital was found to have aided Bitfinex and other exchanges BitMEX, Kraken and the now defunct QuadrigaCX by offering payment services.
Bitfinex partnered with Crypto Capital after failing to secure legitimate banking partners, but soon lost $850m after it emerged Crypto Capital was falsifying documentation and embezzling the cash.
The exchange used its sister company Tether’s reserve to pay back the missing funds, and was fined by federal agencies for attempting to cover up the mess.
Unsportsmanlike conduct: The accusations against Fowler include claims he opened around 60 US business banking accounts intended for real estate investing, but were instead a front for Crypto Capital’s illegal operations.
His assets were frozen in 2019 following his arrest, and he later pled guilty to bank fraud, wire fraud, and operating an unlicensed money-transmitting business.
He was also charged with defrauding people associated with a professional sports league by trying to buy a stake in the league using illegally obtained funds.
It is understood the timing and details matched up with Fowler’s interest in the Alliance of American Football, an upstart rival to the NFL that shut down in April 2019 after just eight weeks.
A year later, his lawyer quit after not being paid.
Sentencing has been delayed multiple times and is now scheduled for May 17.
Meddlin with Medellín: Crypto Capital founder Ivan Manuel Molina Lee was arrested in Greece and extradited to Poland in 2019 on allegations that the business was laundering billions for Colombian drug cartels.
The Polish Ministry seized bank accounts linked to Crypto Capital and Molina Lee, according to several financial documents as part of an anti-money laundering sting.
Another Crypto Capital defendant, Ravid Yosef, has been indicted in the Southern District of New York and is currently on the run.
** SPONSOR’S MESSAGE ** Department of Trust's mission is to turn affordability, AML, EDD and safer gambling checks from being a challenge which erodes trust, consumes resources and complicates operations into a value-add which enhances your relationship with your customers and supports your business. That's why we're proud to have such strong support from players and operators alike. Visit: www.dotrust.co.uk/
LatAm notebook
Peru: Online gaming and sports-betting legislation has been approved unanimously by a key committee in the Peruvian Congress.
Career paths
Nevada Gaming Commission: The former CEO of the Venetian and Palazzo resorts, George Markantonis, has been appointed to the NGC, taking over from outgoing commissioner Steven Cohen.
What we’re reading
Using crypto for crime is not a bug – it’s a feature.
An +More Media publication.
For sponsorship inquiries email scott@andmore.media.