Emirati gamble: UAE sets out regulator plans
New UAE authority, In Touch license suspension, UK advertising, Curaçao licensing, Tabcorp fine, Token Word +More
Good morning. On today’s agenda:
The UAE takes a big step towards regulating gambling.
Kicked into touch: Sagi-owned UK operator has its license suspended.
Curaçao gives details of its new licensing regime.
Tabcorp cops an A$1m penalty for not playing ball with regulators.
The Token Word looks at Stake’s $41m hack, Prime Trust’s spending spree and Grayscale’s court victory.
Deserted dunes welcome weary feet.
New authority
Jim Murren is the surprise choice for the chair of UAE’s new gambling authority,
Murren of Arabia: The new body being set up by the United Arab Emirates will be chaired by ex-MGM Resorts CEO Jim Murren as the desert kingdom sets itself on the path towards regulated gambling.
State media in the UAE said the General Commercial Gaming Regulatory Authority is being set up to introduce a “world-leading regulatory framework” for a national lottery and commercial gaming.
Taking up the role of CEO for the new authority is Kevin Mullally, former head of government affairs at GLI.
The UAE statement said the GCGRA will “coordinate regulatory activities, manage licensing nationally and facilitate unlocking the economic potential of commercial gaming responsibly”.
The establishment of the GCGRA would be a significant step in the direction of allowing gambling, which under Shariah law is otherwise banned.
A game: The potential for the UAE to open up to gambling has been pre-figured by Wynn Resorts, which has previously spoken about a potential $3.9bn integrated resort at Al Marjan Island in the emirate of Ras Al Khaimah in which it will have 40% ownership.
During Wynn’s recent Q2 earnings call, CEO Craig Billings said the UAE represented “the most exciting new market opening in decades, and we will bring our A game to this development”.
Billings also noted at the time that Wynn was pinning its hopes on Ras Al Khaimah because it was issuing licenses independently of the rest of the UAE.
“While there may be conversations in other emirates about legalization or legalization at the federal level, I expect that we will have our license for Ras Al Khaimah actually imminently,” he told analysts.
Bloomberg noted back in May that other casino operators are thought to have held informal discussions with UAE authorities about gambling.
An unnamed source at a gaming equipment supplier told Bloomberg that some were scouting for hotels to locate casinos.
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License suspension
The UK Gambling Commission loses patience with In Touch.
Kicked into touch: The UK Gambling Commission has suspended the license of In Touch with immediate effect after finding that the company “may be unsuitable to carry on [its] licensed activities”. The company operates 11 sites including slotfactory.com, mfortune.co.uk, drslot.co.uk and jammymonkey.com.
The Commission added: “It is suspected the operator failed to follow license conditions related to money laundering, fair and transparent terms and practices, and reporting key events.”
The Commission added that it has “made it clear” to In Touch that during the course of the suspension it expects the company to “focus on treating consumers fairly and keeping them fully informed of any developments which impact them”.
It added that the suspension does not prevent the operator from allowing consumers to access their accounts and withdrawing funds.
Touch and go: The Skywind-owned In Touch has plenty of previous with the Commission, having racked up £12m of fines from three separate regulatory actions. The last came in January when the company paid a penalty of £6.1m after an investigation once again revealed AML and social responsibility failings.
Previous run-ins with the Commission came in 2019 when it was fined £2.2m and in March 2021 when it was hit with a £3.4m sanction.
In Touch was bought by the Teddy Sagi-owned Skywind in June 2022 for an undisclosed sum.
Self-regulating update
Tighten up: The Betting and Gaming Council, the trade body for UK gambling operators, has announced a strengthening of its advertising codes designed to prevent under-18s seeing gambling marketing messages.
The Seventh Industry Code for Socially Responsible Advertising, which ensures 20% of TV and radio advertising is devoted to safer gambling messaging, will apply to digital media advertising too.
BGC said its members have already taken major steps to ensure only those legally allowed to bet see online marketing for regulated betting and gaming products.
Curaçao licensing
Curaçao authorities officially launch online gambling application process.
The details of the application window for licenses in the offshore hub of Curaçao have been published by the country’s Ministry of Finance, with applicants invited to apply either for their own licenses or to continue as sub-licensees.
The application window for the former opens on November 15.
In a LinkedIn posting, lawyers from law firm Ramparts noted there were still “some uncertainties” including the new gambling law and regulations that will supersede the existing regime. “Many material changes are expected, but these have not been published yet as the law is still being reviewed by parliament,” the team added.
“Until then, the existing ‘light touch’ gambling laws and regulations will apply.”
The team noted that it is also unclear how long a registered sub-licensee can continue operating under another's license.
“However, it is clear that existing Curaçao operators will need to do something in the next few months to legalize their standing, as many suppliers will want evidence of their intentions.”
Designated driver: All applicants must be Curaçao-registered companies while key persons are defined as the “person responsible for the daily management of the operations and the compliance officer”.
Ramparts noted that it is not mentioned if these need to be based in Curaçao, but it is likely that one of them or another designated person will need to be.
Tabcorp slammed
Tabcorp cops an A$1m ($638k) penalty for not playing ball with regulators after it suffered a system meltdown in 2020.
You got yourself a load of trouble now: The largest fine ever dished out by the Victorian Gambling and Casino Control Commission (VGCCC) was handed to the Australian gaming operator for a string of poor conduct offenses.
“The scale of the fine… reflects Tabcorp’s repeated failure to comply with Commission directions,” the VGCCC said in a statement.
Tabcorp’s wagering and betting systems (WBS) went down on November 7, 2020 and were out for approximately 36 hours, in contravention of the state’s licensing agreement that the WBS has to be “continuously available”.
The operator “failed to voluntarily provide adequate information about the outage to the regulator”, the VGCCC added.
Something in the way: Tabcorp’s conduct over the course of the investigation fell short of expectations, the Commission said, adding that it had obstructed the regulator’s ability to understand the cause of a major outage.
The VGCCC said it had “no confidence that [the outage] would not recur”.
Tabcorp didn’t comply with continuity and disaster recovery arrangements or notification guidance, and it only submitted a compliant report four months after the deadline.
“We will not tolerate licensees that are not forthcoming and cooperative when the Commission investigates,” said VGCCC chair Fran Thorn. “We will not tolerate attempts to frustrate our investigations.”
The Token Word
Stake.com suffers a hack, Prime Trust’s reckless spending spree and Grayscale scores a court victory.
Stake hack: The crypto-dominated gambling operator moved to suspend all deposits and withdrawals after a token heist saw $41.3m of assets stolen from its Ethereum and Binance Smartchain wallets.
Stake went on X to say it was “investigating” and would “get the wallets up as soon as they’re completely re-secured”.
It added that “all other wallets” remained fully operational.
It subsequently posted that “all services have resumed” and that “deposits and withdrawals are processing instantly for all currencies”.
Quoted by Bitcoin.com, CEO and founder Ed Craven said that Stake “keeps a small portion of its crypto reserves in hot wallets at any given moment for these very reasons”. All affected wallets should be operational shortly.
Prime cut: The parent company of soon-to-be-bust crypto custodian Prime Trust lost about $8m in client and treasury funds in the TerraUSD stablecoin crash as part of a reckless spending spree.
In an August 24 bankruptcy filing, Prime Core Technologies reported that “under prior management” the firm had blown $6m in client funds and $2m in treasury funds by investing in Terra shortly before it collapsed in May 2022. Prime Core said the stablecoin investment, along with poor spending decisions in October and November 2022, led to its downfall.
The company even managed to lock itself out of its own Ethereum wallet and lose around $45m of customer cash in the process.
“Although crypto winter was not the precipitous event leading to the receivership and these Chapter 11 cases, the company felt the ripple effect caused by crypto winter, which resulted in depressed revenues,” said the filing.
By the time it filed for Chapter 11, it had roughly $100m to $500m in liabilities and 25,000 to 50,000 creditors.
A study in Terra: The collapse of Terra is considered one of the triggers of the major crypto market crash that followed. Multiple firms went under or filed for bankruptcy that year, including FTX, BlockFi, Celsius Network and Voyager Digital.
Terraform Labs founder Do Kwon is currently serving a four-month prison sentence in Montenegro for using false travel documents, and could face prosecution in the US and South Korea in the future.
Grayscale ETF not dead: A US court has opened the door for major crypto asset manager Grayscale to offer a spot Bitcoin exchange traded fund (ETF). The United States Court of Appeals for the District of Columbia Circuit granted the firm’s petition for review against the Securities and Exchanges Commission (SEC), sending the price of the most popular digital asset soaring.
Grayscale owns approximately 3.4% of all mined bitcoins, worth around $30bn, and had hoped to list the ETF on part of the New York Stock Exchange.
The SEC had shot down the proposed product on regulatory grounds relating to security and consumer protection.
However, the court said the SEC had acted in an “arbitrary and capricious” manner by approving similar products, which were futures based, while denying Greyscale’s application without a reasonable explanation.
The SEC has just over a month to decide whether it will go with the decision, or take it up the chain to a federal appeal court in Washington, DC, or go straight to the Supreme Court.
“The Grayscale case could serve as a reminder of the importance of regulators to work to properly understand blockchain and crypto-assets, and move away from past narratives of ‘fraud and scams’, which increasingly are shown to be inaccurate,” said Michael Bacina of Piper Alderman.
Token notebook
The London Stock Exchange has drawn up plans for a new digital markets business, claiming it will make it the first major exchange to offer trading of financial assets using blockchain technology, according to the FT.
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US notebook
Florida: The Seminole tribe has responded to the latest challenge by Havenick family-owned West Flagler Associates to the gaming compact providing for the operation of OSB.
The Seminole appeal highlighted to the US Circuit Court of Appeals for the DC Circuit that a three judge panel of the court unanimously sided with the Department of the Interior’s approval of the compact.
Meanwhile, the Department of the Interior’s own appeal said West Flagler Associates’ petition is premised on an erroneous assertion that the compact unilaterally legalizes the placement of bets on sports and the state regime for regulating them.
European notebook
Malta: Pressure is mounting on Malta to ditch Bill 55 as Dutch gaming lawyers joined the chorus calling on the hub to drop its controversial bid to shield operators from overseas litigation. Malta drew up legislation to prevent its courts from recognising enforcement action from other national authorities against businesses licensed by the Malta Gaming Authority.
Regulators in Germany and Austria have led the charge against Bill 55, and have asked Brussels to intervene and refuse to ratify the law.
Now experts in the Netherlands have added their voices, with Loonstein Advocaten lawyer Benzi Loonstein writing to the Dutch Minister for Legal Protections Franc Weerwind,
The Netherlands: The gambling regulator has ordered Maltese-licensed NetX Betting to stop targeting Dutch punters or receive a €75,000 fine. NetX Betting sites pferdewetten.de and betbird.com websites were visited by around 90,000 Netherlands accounts between January 2022 and March 2023, Kansspelautoriteit found.
Ireland: Horseracing in Ireland faces dire outcomes if the government enacts significant restrictions on betting advertising, according to Racecourse Media Group CEO Martin Stevenson. Speaking to The Irish Times, Stevenson said an advertising ban would likely mean that it isn’t viable to continue broadcasting in Ireland.
Payments notebook
Kenyan mobile money giant Safaricom has launched its famed M-Pesa mobile money service in Ethiopia after securing a payment instrument issuer license.
Final frontier: The service, originally launched in 2007, currently has a customer base of over 51m people across seven nations on the African continent, with Ethiopia identified as a major market given it only recently opened to private telecoms firms.
M-Pesa was part-funded by the UK Department for International Development, in partnership with Vodafone, upon its creation 16 years ago.
Safaricom is betting the country’s 120m people, one of Africa’s youngest demographics, will provide fast growth; however, analysts cautioned major investments will be required, which will put pressure on the firm to deliver quickly.
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