Stop the steal – CFTC bans political bets
No future for US election betting, Alabama bills die, SE Asia crime gangs warning +More
Futures exchange refuses to be cast in the role of ‘election cop’.
In +More: India IPL warning.
Alabama’s gambling bills run out of road.
Chinese-origin criminal gangs’ SE Asian scam compound claims.
If you don't like who's in there, vote 'em out.
Get out the vote
The policeman is there to preserve disorder: The Commodity Futures Trading Commission in the US has moved to ban event contracts tied to political outcomes as it seeks to avoid putting the futures exchange “in the role of an election cop” ahead of what is likely to be a fraught election in November.
A binary outcome: The CFTC said on Friday last week, May 10, it would crack down on so-called event contracts that allowed for binary options on real-world events. In a statement accompanying the ruling, chair of the CFTC Rostin Behnam said the exchange had acted after it had seen an “exponential rise” of event contracts since 2021.
He said the new rules would “support responsible and efficient market innovation by helping registered entities and new applicants to make informed decisions with respect to product design.”
Two prediction operators – Kalshi and PredictIt – have both sued the CFTC over its efforts to prevent the use of event contracts.
Specifically, the new rules more clearly define gaming as an area not suitable for event contracts. Included within the gaming definition are:
The outcome of a political contest.
The outcome of an awards contest.
The outcome of a game in which one or more athletes compete.
Or an occurrence or non-occurrence in connection with such a contest or game.
No futures for you: Behnam said such event betting was “contrary to the public interest.” Such contracts “not only fail to serve the economic purpose of the futures markets,” he added. “They are illegal in several states and could potentially and impermissibly preempt state responsibilities for overseeing federal elections.”
“Contracts involving political events ultimately commoditize and degrade the integrity of the uniquely American experience of participating in the democratic electoral process.”
“Allowing these contracts would push the CFTC, a financial market regulator, into a position far beyond its congressional mandate and expertise.”
“To be blunt, such contracts would put the CFTC in the role of an election cop,” Behnam said. He pointed out that political control contracts on CFTC-regulated exchanges would “push the CFTC far beyond” its expertise or jurisdiction.
Further, it would “potentially place the CFTC in the position of monitoring such markets for fraud and manipulation in elections themselves.”
Beg to differ: However, in a dissenting opinion CFTC commissioner Summer Mersinger suggested the proposed rules were too sweeping and, among other failures, “fails to do the hard work” of analyzing the unique nature of event contracts, which he suggested are different in kind from traditional derivatives contracts more familiar to the agency.
“My dissent should not be taken as an indication that I am a fan of all event contracts,” Mersinger added.
Hate you more: But he continued that it was “hard not to conclude” that the proposal’s “significant overreach is motivated more by a seemingly visceral antipathy to event contracts than by reasoned analysis.”
Mersinger also specifically railed against the scaremongering about the CFTC becoming an election cop. While the futures body does have anti-fraud and anti-manipulation enforcement authority with respect to futures contracts, he said that does not mean the CFTC regulates the securities markets. “The SEC does all that,” he pointed out.
Less Than 110 Days To Comply
Frictionless affordability checks are required from 30 August 2024. No time to waste – email michael@dotrust.co.uk and join other leading operators including Rank and Lottoland on the leading dedicated platform for financial assessment.
+More
Say it louder: Top UK player harm charity GambleAware has said messaging over gambling risks is not cutting through with the public. Researchers have recommended replacing current industry marketing slogans with three new health warnings that are more memorable.
GambleAware bosses also said some operators are not using player protection logos correctly and are failing to provide adequate support.
Yeah it’s the subtle things: India is warning social media influencers against promoting online betting and gambling platforms as the country hosts one of the most popular sporting events in the calendar.
With the Indian Premier League (IPL) cricket tournament underway, ministers from the consumer affairs and broadcasting departments believe the country’s ban on betting and gaming is being subverted by offshore operators.
More than 350m people have tuned in to the start of the IPL, which is worth more than $11bn, and regulators in India said covert and substitute ads promoting unlawful betting and gambling by influencers have been identified.
Government figures said legal action and other enforcement measures would follow should firms continue to skirt the embargo.
Saddle sore: Ireland’s proposed Gambling Regulation Bill will make the broadcasting of racing in the country “unviable,” according to a top industry TV station. The proposals include a ban on gambling advertising between 5.30am and 9pm, which has enraged dedicated channels Racing TV and Sky Sports Racing.
The pair have said their services would not be able to continue as the legislation does not contain any carve out for such channels, even though they are paywalled and have age restrictions.
Racing TV parent company the Racecourse Media Group (RMG) has said increased contributions from bookmakers are unlikely to replace the funds eliminated by an advertising ban.
Parliamentarians green lit the bill, which has progressed to the final stage of the legislative process.
Game, set, match: Argentinian tennis player Eduardo Agustin Torre has been banned for five years for 35 breaches of the sport’s corruption code.The sanction was linked to a match-fixing syndicate in Belgium in which the gang leader, Grigor Sargsyan, was jailed for five years.
Netherlands regulator Kansspelautoriteit has said Sarah Eternal, operator of the CasinoSky brand, will be fined €280k a week until it obtains approval to serve the country or exits entirely.
Columbian regulators on Friday stepped in to torpedo an event planned by operator 1win and its affiliate arm 1win Partners at a Medellín restaurant. Coljuegos said in a statement on Saturday that 1win didn’t have a license to run the event, which was scheduled to promote the affiliate and had been tipped to feature influencers and marketing professionals.
Alabama bills run out of road
The sun just seemed to drop: Alabama senators killed two bills that would have let residents vote on legalizing gambling in the state for the first time. After months of semi-optimistic back and forth, the legislative session ended without an agreement on whether to permit a state lottery, sports betting and new casinos, despite initial promise.
In the end, the gambling bill fell one vote short, but state senators wouldn’t budge and the topic didn’t appear on the agenda during the final day of the legislature.
Supporters of the bill believed the designated casinos would help eliminate some illegal gambling and that its failure will play into the hands of the black market.
I thought there had to be a better way: State Rep. Phillip Ensler backed the bill and believes expansion will happen eventually. “Again, it can lead to more problems because it’s not regulated but then also we’re missing out on a lot from not having a clear, defined system in place,” Ensler said.
“We were so close but yet so far,” added Alabama Senate minority leader Bobby Singleton.
Gov. Kay Ivey has said she won’t call a special session to address expanded gaming, apologizing to residents for lawmakers’ failure to agree on the measures.
“Gambling, if it comes up we’ll deal with it again,” Ivey said. “My interest in that bill was to give the people the chance to vote and I’m sorry they didn’t get that chance.”
GuardDog, powered by Underdog, is a pioneering investment fund dedicated to fostering innovation in responsible gaming.
GuardDog supports and accelerates early-stage startups focused on building new and creative solutions to address problem gaming and further responsible gaming.
Ready to be one of the underdogs of responsible gaming?
Visit to apply: https://underdogfantasy.com/guarddog
Zimpler investigation
Zimples: Sweden’s Financial Supervisory Authority has announced an investigation into Swedish payments company Zimpler alleging it has been facilitating offshore gambling. It added that the gaming industry is “considered to run a high risk of being used for money laundering and terrorist financing, which places special demands on those who are exposed to it.”
Last year, the Swedish Gambling Authority issued Zimpler with SEK25m ($2.3m) fine for allegedly permitted payments to unlicensed operators that target Sweden.
The payments company is appealing the enforcement action.
The online gambling scammers bilking $64bn
Scamalot: Chinese-origin criminal gangs have built industrial scam compounds with money laundered via online gambling sites, aided and abetted by corrupt South Asian ruling elite figures, a damning new report by a US peacekeeping agency has found.
The $64bn question: Researchers from the United States Institute of Peace (USIP), an independent branch of Congress, said “the power, reach and influence of these criminal networks” has become a threat to global security since 2021.
“The scamming operations proliferating in the region today have their roots in a regional network of loosely regulated casinos and online gambling” that began in the 1990s and accelerated in the 2000s, the 70-page report stated.
Chinese nationals are the primary target of overseas gambling businesses due to a complete ban in the mainland, where the annual market for gaming is estimated at $40bn to $80bn, researchers said.
“These organizations target millions of victims around the world with illegal and unregulated online gambling and sophisticated scamming operations,” the report said. “As of the end of 2023, a conservative estimate of the annual value of funds stolen worldwide by these syndicates approached $64bn.”
In January, a report by UN vice investigators detailed a nexus of casinos, junkets and cryptocurrencies fuelling transnational organized crime across much of Asia and beyond.
I’ll ruin everything you are: A range of forces have led this “malign activity” to spread and, propelled by advances in digital technology, reach beyond the region to target a global audience, the report said.
The fallout from Covid-19, lax government regulation, weak law enforcement across Southeast Asia and the “co-option of the state apparatus by gambling-related criminal interests” across particular countries were highlighted.
Gangs have used their power and influence to develop a web of scam compounds within the region, centered primarily in Myanmar, Cambodia and Laos, with most other countries in the area used to wash cash, traffic labor and whitewash criminal activity, researchers found.
In Cambodia, the return on cyber scamming is estimated to exceed $12.5bn annually, half the country’s formal GDP, with many compounds “owned by local elites.”
Everything is in the pawn shop: The criminal networks’ methods have evolved over the past decade as they have sought to launder deposits made to online gambling accounts from China, researchers discovered.
Industrial-scale laundering stretches from the region to financial hubs such as Singapore, Hong Kong and Dubai, where criminal groups exploit vulnerabilities in financial systems and invest heavily in cutting-edge financial technologies that are not well understood by law enforcement.
“Investigative reporting has also exposed many examples of how laundered funds move into real estate across the globe, including in the United Kingdom and other parts of Europe, in Canada and in the United States,” the report said.
It’s complicated: Researchers said China’s gangs maintain a close alliance with the police targeting online gambling, fraud and money laundering, making any international attempt to tackle the problem complex.
The USIP called for an internationally coordinated data sharing approach that would include government sources, media, business, gambling firms and financial institutions.
Calendar
May 28-30: IAGA, Washington DC
June 6: Gaming in Holland
Spot the customers you shouldn't be dealing with and keep the others playing:
Regardless of the white paper, you’ve got to do AML checks.
Understand your players financial situation with simple, effective Armalytix AML checks.
Enhanced financial risk checks are coming. Use the same technology to create specific checks for these.
Set the risk levels to your business needs.
Increase conversion, keep customers and meet regulations.
Straightforward. Get in touch.
An +More Media publication.
For sponsorship inquiries email scott@andmore.media.
