Swept up
Swept up
The AGA issues consumer safety warning over sweepstakes casinos
AGA memo comes as Delaware confirms VGW cease-and-desist letter.
In +More: Brazil window closes with 108 applicants.
Germany gets tough on streamers.
Nebraska sports-betting bill fails to get onto the agenda.
A sweep is as lucky as lucky can be.
A new broom
Read ’em and sweep: The American Gaming Association has ramped up the pressure on what it considers to be illegal sweepstakes operators by issuing a memo suggesting the rise of the product “threatens consumers and undermines gaming regulations.”
Getting away with it: The AGA said the lack of regulatory oversight of sweepstakes casinos “presents many risks for consumers as well as for the integrity and economic benefits of the legal gaming market.”
The memo accused sweepstakes operators of employing “weak, if any” RG protocols, “few, if any” self-exclusion processes and “questionable” age-verification procedures.
The opaque nature of sweepstakes operations presents a “prime opportunity” for illegal activity and “enriching bad actors.”
I come from a land down under: The operator of likely the largest sweepstakes casinos, Australian-based VGW, is already feeling the heat having previously been subject to a cease-and-desist in Michigan alongside rivals Stake.us and Prediction Strike.
This week it emerged the company received another letter last year from the Delaware Division of Gaming Enforcement.
LegalSportsReport quoted an official who confirmed the intervention was made in February 2023.
VGW websites include Chumba Casino and Luckyland Slots. Compliance+More reached out to representatives from VGW but failed to elicit a response.
Stop sign: Recall, Michigan issued its cease-and-desist after a probe undertaken by the Michigan Gaming Control Board found all three were operating within the state without a license.
MGCB executive director Henry Williams said at the time that gambling regulations are “in place for a reason, and illegal gambling operations are not welcome in Michigan.”
If it quacks like a duck: The AGA memo gives a brief overview of how sweepstakes operators skirt the law with offerings of slots, roulette, blackjack and poker, which allow players to either play for free or buy virtual currency, often called sweep coins.
These are single-purpose virtual currency that players exchange for cash or prizes.
While sweepstakes operators claim their casinos don’t require real money, the AGA argues that “functionally, sweepstakes casinos look and play like an online casino.”
Sweepstakes sportsbooks, meanwhile, offer “free-to-play sportsbooks” where players bet on each other’s wager or stake bets directly with each other.
Step on: The AGA urged more regulators to take steps to determine whether sweepstakes operators were in compliance with their respective laws and regulations.
It added that where state laws and regulations are not clear, legislatures should consider enacting legislation to “prevent unlicensed operators from exploiting loopholes in sweepstakes regulations to offer online real-money gambling.”
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+More
Brazil: The initial licensing window closed earlier this week with 108 operators registering their applications with the Secretariat of Prizes and Bets ahead of the market launch on January 1.
The list of names was bolstered with a rush of 40+ applications being received on the final day.
The licensing window remains open for applications but any new registrants will not be able to launch on day one.
Small fish: Australian sportsbook minnow PlayUp, which trades as Draftstars, has been handed a record fine of A$586k ($395k) by a local court in Sydney, which found it to be advertising free bets in contravention of the state prohibition on incentive-based gambling ads.
New Zealand-listed Sky City Entertainment said it will take an A$86m ($58m) impairment charge against the value of its Adelaide casino due to the introduction of further legal and compliance costs.
Japan: The country’s National Police Agency plans to investigate foreign online casino operators targeting Japanese citizens, according to Asia Gaming Brief. Online gambling is illegal in Japan even if the operator is legally licensed in another country.
Coq-off: Regulated betting on cockfighting is not set to return to the Philippines, according to government officials. Senator Joel Villanueva said the practice was far worse than anything done by the recently banned POGOs.
Bird in flight: Meanwhile, the disgraced former ‘POGO Mayor’ Alice Guo, who was linked to illegal Philippines offshore gaming operators, allegedly fled the country last month. Sen. Risa Hontiveros claimed Guo left the Philippines on July 17 to go to Malaysia and Singapore.
Macau: The current CEO Ho Iat Seng does not plan to run for a second term due to health concerns. Seng has served in the role since 2019. Elections for the next CEO are expected to take place on October 13.
The Netherlands gambling regulator has warned the F1 team Sauber it cannot display Stake.com branding for the upcoming Dutch grand prix because the gambling operator is unlicensed in the country.
What we’re reading
Why is DraftKings being sued by the NFL Players Association? In LegalSportsReport.
Senior Legal / Compliance Specialist – Limassol
Director of Integrity & Compliance – São Paulo
Responsible Gaming Manager – Malta
Germany’s streaming move
Vorsprung durch verbot: The German gambling regulator has announced a ban on gambling advertising through live streamers, as it aims to bolster player protection specifically relating to minors and consumers considered high risk.
The Gemeinsamen Glücksspielbehörde der Länder’s (GGL) ruling against both licensed and unlicensed gambling companies comes after the regulator won a case against a streamer fighting a prohibition order following their streaming on crypto-forward platform Stake.com.
Achtung! The Saxony-Anhalt Higher Administrative Court found content created in German is primarily aimed at viewers who access streaming content in Germany.
As such, it has “an advertising effect in Germany that legitimizes the use of German regulatory power.”
It also clarified the upholding of the aforementioned prohibition order satisfies the European legal requirements for justifying restrictions on “fundamental freedoms by compelling reasons of public interest.”
Smoke signals: GGL board member Ronald Benter stated: “The decision has a signaling effect. In the future, the GGL will take even stronger action against streamers based abroad. This is particularly necessary to protect players and minors due to the special dangers inherent in streaming.”
The regulator outlined its perspective on streaming, citing a UKGC study to assert:
Streamer’s emotions are made ‘visible and tangible’ for viewers, so gambling is broadcast on an ‘emotional level’ and ‘perceived as an everyday occurrence.’
36% of 17-18 year-olds and 47% of 11-16 year-olds (per UKGC) were exposed to streaming as the leading form of advertising to influence participation in gambling.
The regulator suggested this entails ‘considerable risk’ when it comes to player protection.
Nebraska bill dies
Cornhusker don’t: A bill to regulate sports betting in Nebraska failed to proceed on Tuesday after a special legislative session adjourned without a formal discussion of the measure. The bill will now have to wait until the new year.
The sports-betting measure had advanced out of the committee stage last week. It would have needed a four-fifths majority in the state Senate before then being put on the ballot in November.
Missouri push
Pony up: DraftKings and FanDuel are reported to have weighed in with over $10m in contributions to the Winning for Education campaign fund as it gears up to promote November’s sports-betting ballot measure.
DraftKings alone added a further $3.5m to the pot after the Missouri Secretary of State’s office certified the signatures in favor of the ballot measure.
A campaign spokesperson said it was “committed to communicating with every Missourian to ensure they understand the critical importance of legalizing sports betting to help fund Missouri classrooms.”
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Calendar
Sep 5: Sports Integrity Summit, São Paulo
Sep 10-13: European Conference on Gambling Studies, Rome
Sep 24-26: SBC Player Protection Summit, Lisbon
Oct 7-10, G2E, Las Vegas
Nov 5: Gaming in Germany, Berlin
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