New York regulator under fire
Rotten Apple, Ontario moves, Ontario’s new rules, Ecuadorian ban, Regtech focus – ArdentSky +More
Good morning. On today’s agenda:
NYSGC faces “toxic” environment allegations.
Ontario lays down new rules on athlete endorsements.
President of Ecuador signs bill banning sports-betting advertising.
New regular feature Regtech focus looks at ArdentSky.
Rotten apple
Allegations of racial discrimination and workplace bullying shine a spotlight on the dysfunctional state regulator.
With a taste of a poison paradise: The New York State Gaming Commission has been accused of being a “toxic” work environment, with current and former employees alleging sexual harassment, racial discrimination, age discrimination, bullying and political favoritism, per a write-up in the Times Union.
NYSGC chairman Brian O’Dwyer denied the claims.
“I believe commission employees hold themselves to the highest standards,” he wrote in an email obtained by the Times Union.
“As a labor/human rights lawyer for over 50 years, I take very seriously the well-being of my colleagues at the Gaming Commission.”
Where there’s smoke: Despite O’Dwyer’s insistence, public records show the NYSGC is embroiled in several active lawsuits and has received 41 complaints (reaching settlements in 10 cases) in the past five years. That is a stark number considering the agency has just several hundred employees.
The issues date back more than five years ago, as Lisa Lee, the inspector general for the NYSGC, issued a report in 2018 (obtained by the Times Union in 2022) that found employees “gambled on the job, engaged in workplace sexual harassment and made ‘suspect’ communications to horse-racing participants while officiating events”.
A litany: Current accusations reported by the Times Union included:
A Ku Klux Klan poster hanging on a wall at NYSGC headquarters for weeks.
During work, a co-worker sent text messages about white supremacist groups and made offensive comments about other workers.
Many specific instances of racial epithets and sexual harassment are also described in the article.
Employees described the NYSGC as “the most toxic organization in the state”, “a nightmare”, “dysfunctional” and “hostile”.
Is red tape to blame? Ken Girardin, the director of research at the Empire Center, said the lack of action might stem from systems and rules for disciplining employees’ bad behavior under collective bargaining agreements.
“The difficulty in disciplining employees means that management often chooses not to pursue that costly and uncertain option,” Girardin said.
Noting that when workers and supervisors are in the same union, he added it may reduce “the union’s likelihood of sticking up for an employee in situations which would pit them against their union brothers and sisters”.
However, in the case of the NYSGC, its track record of complaints and settlements indicates a systemic problem.
US notebook
Kentucky: Registration with online sports-betting operators is now open to Kentuckians with mobile betting to launch on September 28. Mobile service providers approved by the Kentucky Horse Racing Commission include bet365, BetMGM, Caesars Entertainment, Circa Sports, DraftKings, Fanatics, FanDuel and Penn Interactive.
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Ontario’s new rules
Industry figures say the regulator should be mindful of over-regulation as it lays down new rules on the use of athletes in the marketing of gambling products.
The update announced by the Alcohol and Gaming Commission of Ontario that will see new restrictions imposed on the use of celebrities who might appeal to underage consumers prompted a warning about heavy-handed regulation from industry figures.
Suggesting there “is such a thing as over-regulation”, Kris Abbott, country manager for Kaizen Gaming, said while Ontario hasn’t reached that level yet, “I do think it’s something to be cognizant of as we go down the road”.
“We already have heavy restrictions on affiliates and inducements which, in my opinion, contributed to an overloading of television advertising to begin with as traditional iGaming marketing channels were hamstrung,” he added.
The new guidelines are due to come into force at the end of February next year. They have been brought in after the regulator said it had “identified advertising and marketing approaches” that use athletes and celebrities with an appeal to minors “as a potential harm to those under the legal gaming age”.
It added it was “taking this step to reduce the risk”.
The amended standards prohibit operators from using athletes, whether active or retired, celebrities, role models, social media influencers, entertainers, cartoon figures and “symbols” that “would likely be expected to appeal to minors”.
The only exception is the use of athletes or celebrities for the exclusive purpose of advocating responsible gambling practices.
Abbot suggested this was “a good policy and compromise”.
Influen-za: Nic Sulsky, chief commercial officer for PointsBet Canada, added that while the company was not at all disappointed in the new rules, “all we ask for is a level-playing field” with clear rules “so we can properly develop and execute an effective marketing strategy”.
Still, Abbot suggested there was “plenty of murky water” in deciding who a social media influencer appeals to. “It becomes very ambiguous, very quickly,” he added.
Sulsky noted the AGCO has said it will “provide more clarity on the standards of what constitutes an influencer in short order”.
“I will wait to comment further until we have a better understanding,” he added.
Ecuadorian ban
The president of Ecuador signs a ban on sports-betting advertising.
Time to quito: Guillermo Lasso, president of Ecuador, has approved a bill that bans the advertising of sports betting in the country, provoking protests from the Ecuadorian football league LigaPro, which has expressed its strong opposition to the measure.
The measure took effect on August 23. It states that “deceptive advertising, as well as any kind of advertising or propaganda for child pornography, cigarettes, controlled substances and any kind of betting or sports prediction system are prohibited”.
It is expected that bookmakers operating in Ecuador will file lawsuits against the bill – presented in May – that seeks to introduce a new tax on sports betting in Ecuador.
Ball of confusion: The LigaPro referred to the measure via social media as a “worrying trend on the part of the current government regarding the sports industry”. Although official figures are not available, sports-betting sponsorships of clubs constitute a significant part of their revenues and budgets throughout the year.
The advertising ban is almost certain to have a negative effect on the finances of football clubs and the league as a whole.
In fact, LigaPro is called LigaPro Bet593 due to the sponsorship from the local bookmaker, whose advertising is broadcast across all media.
For more on the news from Ecuador, see this week’s edition of LosIngresos+Mas.
Forest fire
EPL side criticized for shirt sponsorship with betting firm.
Construction time again: Nottingham Forest have caught some flak after announcing a shirt sponsorship deal with Chinese betting operator Kaiyun Sports whose UK-facing site remains under construction.
The deal was immediately criticized on social media by sports commercial partnerships expert Steven Gould from Juvo20 Sport & Entertainment who noted on LinkedIn that the official release from Forest failed to mention the words betting or gambling.
Noting the fan fury provoked by rumored betting shirt sponsorships at Aston Villa and Chelsea, Gould suggested Forest had instead “gone with ‘leading digital sports platform’” to describe Kaiyun.
“Wool successfully pulled over everyone's eyes, I'm sure,” he added.
The man who wasn’t there: Confusingly, the Daily Mail noted the official release includes a quote from Kaiyun Sports chief marketing officer Byrne Howard. As the paper previously revealed, no professional or personal profile appears to exist for such an individual.
Star struck
The Australian casino operator has implemented the majority of the Bell review recommendations, as CEO says the company is “determined to earn back trust”.
Star Entertainment is progressing on the remaining eight recommendations from the Bell Review in New South Wales after completing 22 of the 30, according to a government report. Late last year, the review found Star unsuitable to hold a license to operate its Sydney property.
Talking after the release this week of its FY23 results, CEO Robbie Cooke said remediation was the company's “number one priority”.
He said the company had “commenced the uplift” in its risk management and AML capability and was “starting to embed greater accountability and more robust governance”.
“As a team we are determined to earn back the trust and confidence of our community including our regulators, governments, shareholders, employees and guests,” he added.
Regtech focus – ArdentSky
C+M speaks to Elliot Blatt, founder at the biggest gambling regtech firm you’ve likely never heard of.
Who are you? ArdentSky isn’t the first name that crops up when it comes to regulatory compliance in the area of gambling, but it has a footprint which belies its under-the radar status. The company was formed in the late 2000s by a team of regulatory compliance professionals working in the health and safety space.
Led by Blatt, ArdentSky has developed the go-to automated compliance suite for help with license applications.
“Fast forward 15 years and it has become the industry standard for gaming licensing automation and is relied upon by most of the biggest names in gaming,” he says.
Timed perfection: With the rise of online sports betting and iCasino in the US, Blatt says it has become “imperative” for operators to have the kind of automated system that ArdentSky provides at their disposal.
“When we first arrived on the scene, the standard operating procedure for the vast majority of the leading gaming enterprises was to hire new compliance team members as the company grew and the compliance challenges expanded,” he notes.
“Compliance was viewed as a ‘cost’ center and there was a strong aversion to spending anything other than on the salaries for staff.”
But following the launch of the ArdentSky Compliance Suite in 2009 “more and more gaming enterprises saw the efficiencies our system could provide,” he adds.
“There began to be a shift from resistance to a slow embrace of automated compliance software.”
Sea change: As with many other sectors, attitudes to the deployment of technology by the biggest operators have understandably been evolving. Blatt says it became obvious how central the ArdentSky product had become to some people’s daily work when they left their post to join another firm.
As licensing professionals who used our system moved from company to company on their career path, many told their new employers they simply couldn’t do their job as well without reliance on ArdentSky,” he says.
“We began to see new job postings include experience of ArdentSky as a prerequisite for hiring.
That only exploded further with the advent of state-by-state OSB and iCasino.
“If getting to market as quickly as possible is a competitive advantage, then submitting and getting approval of personal and corporate licenses is critical.”
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European notebook
Denmark: The gambling regulator Spillemyndigheden has blocked a further 49 unlicensed gambling websites targeting the Danish market, including Stake.com. Spillemyndigheden director Anders Dorph said the move, which adds to the list of 276 previously blocked sites, is part of the regulator’s push to “optimize” its efforts against illegal gambling.
As part of this effort, Spillemyndigheden will now update its blocking list twice a year, Dorph said.
Meanwhile, Spillemyndigheden has also fined an unnamed Twitch streamer €1,341 for advertising unlicensed gambling providers.
The Netherlands: The regulated online market brought a windfall of nearly €300m to the Dutch treasury since inception in October 2021, according to recently released government figures. In 2022, the Dutch tax office collected an estimated €0.9bn in gambling taxes, up from €0.6bn in 2019.
Sports integrity notebook
Europa Conference: Two matches in the first round of UEFA Europa Conference League qualifying have been referred to European soccer’s governing body because of suspicious betting activity, according to The Athletic.
One was Armenian side Alashkert’s second-leg 6-1 win over Arsenal Tivat of Montenegro, which put them through 7-2 on aggregate.
The other was Latvian team RFS’s 4-1 win over Makedonija GP from North Macedonia, another second-leg tie, which put them through 5-1 on aggregate.
UEFA said it would not comment on an ongoing investigation.
What we’re reading
English Premier League vows to crack down further on illegal streaming.
Twitch rival Kick is dividing streamers.
Events
After the White Paper: Reputation Matters returns on October 26, this time to the Barbican in London, where representatives from Entain, Playtech, Gamban, Regulus Partners and many others will convene to discuss the next steps for the sector following the publication earlier this year of the UK government’s Gambling Act Review.
Sponsored by UK law firm Wiggin, the event consists of an afternoon of panels, fireside chats and keynotes.
Tickets can be purchased for the event via the Reputation Matters 2023 Eventbrite page.
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