Kicking ass and taking names
Kicking ass and taking names
Michigan revels in self-styled enforcer role
The state regulator promises more cease-and-desist letters.
In +More: Brazilian blocking, AGA’s European tie up.
The UK sector reels under the threat of a doubling of online taxes.
Dutch trade bodies spot a ‘worrying’ trend in black market play.
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The hard ass
Poster child: Michigan is quickly gaining a reputation as the most proactive state when it comes to shutting down what it views as illegal gambling, having sent out 11 cease-and-desist letters so far and with the promise of more to come.
We’ve only just begun: Kurt Steinkamp, chief of staff at the Michigan Gaming Control Board, said during a panel on tackling illegal gambling held at G2E last week that the board was “really just getting started.”
“Cease-and-desist letters are very effective,” he said. “Those actions are having a real impact of converting players from illegal to legal.”
“Two were issued last week but all of the previous nine have taken steps to prevent people within the state of Michigan from registering for accounts and gambling on those sites.”
The latest letters were sent – somewhat controversially in some quarters – to Tel Aviv-based skill gaming operator Papaya Gaming and Costa Rica-based Ace23 and Ace Per Head, which are not operators but agents.
“We have very clear laws in Michigan,” said Steinkamp. “We have the authority to investigate anyone hosting internet games within the state that are not regulated.”
“That can be skill or chance,” he added.
Walk of shame: Michigan’s efforts earned the approval of David Rebuck, the former director at the New Jersey Division of Gaming Enforcement, who said its efforts were putting others, notably his own state, to shame.
“Michigan is doing a much better job than New Jersey,” he claimed. “It’s not just talking about it, it is doing something.”
Evolutionary theory: Steinkamp said its stance with regard to what it considered unlicensed gambling is “evolving” and that, in part, the goal was to garner more publicity for its actions as well as encourage the involvement of federal authorities.
“The more exposure, the better off we will be,” he said. “We are talking to our partners at a federal level, [but] getting the attention of the federal law enforcement agencies is easier said than done.”
“We are very vocal about what we’re doing. Companies in the legitimate sector become aware. The payment processors, for instance, who don’t want any hint of illegal activity.”
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+More
Brazil: Following the recent licensing process that determined which operators could continue to offer OSB and iCasino through to the market opening in January, the Secretariat of Prizes and Betting has ordered 2,040 illegal betting sites to be blocked by national telecoms provider Anatel.
Norsk Tipping is under investigation by the Norwegian Gaming Authority for alleged violations of its responsible gambling regulations. According to local media, the investigation comes after one or more customers were unable to lock themselves out via the company’s app.
Shared goals: The AGA and two of its counterparts in Europe, the European Casino Association and the Betting and Gaming Council in the UK, have announced the signing of a memorandum of understanding that marks the beginning of a collaboration grounded in shared industry values and priorities.
The aim is to address key issues facing the global industry, including illegal gambling, responsible gaming, innovation and security.
The three will create a platform for undertaking joint research projects and bringing each organization’s staff and members together to share expertise.
Hammer blow
Lost: The UK Treasury is reported to be mulling a potential hike in remote gaming duty to 50%, as the Labour administration looks to fill some holes in its budget. According to The Guardian, a source “familiar with” Treasury thinking told the paper the tax jump was “definitely on the map.”
As was noted by Earnings+More yesterday, the news hit Flutter Entertainment share trading in New York late on Friday.
Meanwhile, UK-listed Entain, the home of Ladbrokes and Coral, and Evoke, which has the William Hill and 888 brands, saw their shares tumble on opening by 16% and 14% respectively on Monday before recovering some ground later in the day.
Pushback: The report was the subject of some pushback including from the Betting and Gaming Council, which told the paper that “comparable markets abroad which have imposed draconian regulations and disproportionate tax regimes have seen a spike in illegal black market gambling.”
Harmony: The team at Regulus Partners pointed out the previous government had laid out plans to harmonize gambling taxes, likely at the current level for remote gaming duty of 21%.
This would qualify, the team suggested, as a “tweak.” But the “problem with a tweak in gambling taxes, however, is they generate sums the Treasury would not even notice.”
They also noted that if, as suggested in the report, online taxes doubled, then profits would be wiped out and the cuts in marketing, content and product would directly lead to job losses.
“The rather glib assumption that marketing, content, product fees and even gambling payment processing fees are not job creating becomes a real-world problem,” the team pointed out.
Polluting the argument: The Regulus analysts also hit back at the term “polluter pays” that has been bandied about by the anti-gambling health lobby for some time now, which they said was “deeply questionable, biased and flawed.”
“Reducing the scale and capability of a regulated sector does not reduce ‘pollution’ from a consumer perspective, it increases it by strengthening a genuinely polluting black market – which also does not pay tax,” the team added.
We can take it: The online sector “can almost certainly” pay more in tax, said Regulus, who suggested a rise in remote gaming duty to 25% could raise an additional £300m in taxes. But certainly not £1bn, which they noted is the “usual starting point of Treasury rounding.”
This is still, likely, “worth the bother” but “anything more than a tweak would be damaging and self-defeating.”
While such a tax raid cannot be ruled out – especially given the Labour donor connection – “there are reasons why the Treasury has not been so reckless before and we doubt they will be so reckless this time.”
Hochul backtracks
Dodged: Gov. Kathy Hochul has denied a newspaper report in the New York Post that she would provide unspecified legislative support for Mets owner and hedge fund magnate Steve Cohen’s bid to build a casino near the MLB team’s Citi Field stadium.
“I have had no intention of putting this in my executive budget,” Hochul told reporters in Albany on Thursday.
“There are people, shady people, who are trying to manipulate the process and are willing to put out lies.”
The backing of Hochul would have provided a lifeline for the Cohen plan, which had previously appeared dead in the water after local representative Sen. Jessica Ramos said she wouldn’t support legislation looking to rezone the area near Citi Field for gaming.
Traditional values: Bloomberg reported that any attempt to circumvent the legislature, by effectively granting Cohen the right to use the parkland for the casino project, would break a longstanding state government tradition of deferring to local officials on land-use issues.
That would be an “inappropriate use of the budget process,” Bloomberg quoted state Senate Finance Committee chair Liz Krueger as saying.
Different gravy: However, in an editorial, the Post said it was noteworthy that Hochul was “not saying she won’t help Cohen out, just that it won’t be during budget negotiations.”
“This sort of hedging is important when you want the gravy train to keep rolling,” the paper wrote.
The Post went on to rail against the whole downstate casino licensing process. “It’s designed to maximize the legal palm-greasing, as industry giants all jockey for position to nab one of the coveted three licenses up for grabs,” it said.
“It invites corruption,” the editorial continued. “This kind of process is New York politics at its slimiest.”
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Orange is the new black
Channel hopping: A report from data specialists H2 commissioned by the Dutch regulator KSA has suggested that the channelization rate in the Netherlands has fallen to ~87%, prompting the country’s trade bodies to call for greater monitoring of the black market.
The H2 data was released with the KSA’s Market Scan report, which showed GGR for 2023 rising 21% YoY to €4bn.
The report said the growth came largely from the iCasino sector.
The trend is not your friend: The Netherlands Online Gambling Association (NOGA) and the Licensed Dutch Online Gambling Providers (VNLOK) said the data from the KSA displayed an “important trend” with more money flowing to illegal operators, albeit through fewer active players.
“A smaller group of players collectively spends more money at illegal casinos,” the two trade bodies argued.
“This may indicate that players who spend more money switch to the unregulated illegal offer.”
Taking advantage: Helma Lodders, chair of VNLOK, and Eric Konings, interim director of NOGA, said: “It is worrying that players who choose the illegal offer spend more money there. This raises the question of whether it is sufficient to properly protect the most vulnerable groups of players, such as minors, young adults or problem players.”
“We know that illegal gambling sites are particularly attractive to these groups. And recent research showed that minors can play with illegal providers without many problems.”
“These groups are now in danger of disappearing from statistics, while they deserve extra protection.”
The two bodies called for strengthened monitoring of the illegal sector.
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Events calendar
Event highlight: GGL co-chair Ronald Benter will be the headline speaker at the 2024 Gaming in Germany Conference on Tuesday, November 5, 2024, at the five-star Hotel Adlon Kempinski in Berlin. In addition to the main stage program, the event will feature several highly practical breakout sessions on topics such as KYC, AML, limit increase and marketing compliance.
Oct 21-24: World Lottery Summit, Paris
Oct 21-24: IAGR/IMGL joint conference, Rome
Nov 5: Gaming in Germany, Berlin
Dec 2-4: Thai Entertainment Complex Summit, Bangkok
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