Untenable
Evolution’s ‘strategic choice’ over unregulated market exposure
Analysts question whether Evolution can continue with a foot in both camps.
In +More: Ex-Philippines mayor linked to illegal POGOs charged.
Nebraska to debate sports betting – again.
Accountancy watchdog investigates KPMG’s audit of Entain’s accounts.
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Can’t continue
In the dock: As the UK Gambling Commission continued to put the heat on UK-licensed suppliers over games and software being used by UK-facing black market sites, an analyst note has suggested Evolution – which is currently under a licensing review by the Commission – does have a case to answer.
Waking up: The Commission issued a warning notice yesterday, January 20, saying it has “become aware” of casino games supplied by licensed operators appearing on unlicensed websites available to UK consumers illegally.
It added that it was “therefore imperative” the Commission and the industry worked together to take “all possible steps” to mitigate risk to UK consumers.
Pointedly, it said B2B suppliers “including live games, live casinos and slots” providers should review their practices.
The notice added that the Commission has found instances of third-party resellers distributing games supplied by operators to the illegal market, “often in breach of their contractual obligations.”
“Commission licensees may have been negligent in allowing them to do so and, in the process, place their own licence at risk,” the warning added.
Control freak: Separately, analysts at Redburn Atlantic said in a note last week the main charges from a Josimar article that argued Evolution had “visibility and likely control over who connects to its game servers, irrespective of the number of aggregators in its supply chain” were correct.
Utilizing research from Infoblox Threat Intel, the Redburn team suggested Evolution’s API “again would appear to imply that Evolution retains control (and presumably knowledge) over who accesses its live dealer streams – even if disintermediated via several layers of aggregators.”
Referring to the UKGC license review, the analysts went on to say it could be a “game-chnager.” Recall, Evolution admitted in late December it was undergoing a license review by the Commission.
The Stockholm-based company said the review might have a range of outcomes, up to and including either a license suspension or a revocation of its license to operate.
Commission CEO Andrew Rhodes made his first public comments on the Evolution review during a podcast last week.
“I don’t understand why anyone in the licensed industry would want to be in business with someone that is supporting illegal competition,” he told an International Association of Gaming Advisors webinar.
I see you: Redburn noted Evolution’s stated response to the license review – namely that it was IP-blocking play from unlicensed sites – “appears to corroborate” that Evolution is “ultimately in control of who connects to its game servers and from where.”
The Commission has “clearly made the point” that it cares little about how long or short Evolution’s supply chain relationships are.
“The value of multi-layered B2B aggregator supplier relationships is diminished now that regulators are beginning to look straight through them,” the team added.
A lot to play for: The Redburn team pointed out Evolution’s exposure to unregulated markets, particularly in Asia, remains “high.” In the first nine months of last year, unregulated revenue contributed 61% of the total of €1.53bn or €933m.
The team added that Asia has become the single-most important driver of Evolution’s growth.
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+More
Let’s Guo crazy: A former Philippines mayor, Alice Guo, has copped 26 counts of money laundering and espionage charges following links to an illegal offshore gaming operation (POGO).
Guo was arrested in Indonesia in September, having fled following allegations she part-owned and funded Lucky South 99, an illegal hub in the Tarlac province where she was elected.
She is also accused of being a Chinese spy and using dirty money from Chinese gangs to fund Lucky South 99.
The illegal operation was raided twice last year, with hundreds of Filipino and foreign workers freed after having been kidnapped and forced to work under threat of torture.
Guo has become the face of a transnational crime scandal in the region.
Call me: Flutter-owned Sportsbet is facing a class-action lawsuit from gamblers in Australia who want millions for losing money via an in-play feature that may have broken the law. The app offered a ‘Fast Code’ feature, allowing punters to wager in-play without having to call up.
Australia’s Interactive Gambling Act, enacted 24 years ago, outlaws bets on events that have already begun unless they are placed via phone.
The lawsuit claims Sportsbet lied over the legality of the Fast Code service, and should return all bets placed.
The hot seat: The Isle of Man Gambling Supervision Commission has appointed Mark Rutherford as its new CEO. He has served as deputy CEO since 2013.
Affiliate marketing compliance provider Rightlander has acquired Mitigatr, a fellow affiliate compliance firm specializing in regulatory monitoring for the iGaming and affiliate industries.
The company posted on LinkedIn that the “strategic move strengthens our international presence and enhances our ability to deliver cutting-edge compliance solutions to an expanding client base.”
Nebraska again
Insanity Clouse: A Nebraska senator has introduced legislation to bring online sports betting to the state, five months after the last attempt died.
Republican Stanley Clouse lodged legislative bill 421, which would allow each of the state’s six commercial casinos to launch one online sportsbook skin.
It could be their own, or via a third-party operator such as DraftKings or FanDuel.
Racetrack casinos wanting to host online wagers would pay a one-time licensing fee of $5m over five years. Annual renewals would cost $50,000.
Sportsbooks would be taxed 20% of their gross revenue.
School daze: Also included are proposals to scrub the state’s current ban on college game wagering, opening punters to the Nebraska Cornhuskers, Creighton Bluejays and other universities.
The state could rake in $32m a year from a mature market, according to the Nebraska Legislative Fiscal Office.
Sound and fury
The Nebraska bill was one of a flurry as the US legislative season kicked into gear.
Texas: A bill to amend the state constitution via voter referendum for the legalization of land-based gaming and sports betting in the state was introduced by state senator Carol Alvarado.
SJR 16 is similar to a bill Alvarado filed in 2023 and would permit the development of seven casino resorts in the state if approved by both the legislature and voters.
Any interested casino developers for Houston would be required to pay a $2.5m fee and invest at least $2bn in the development. GGR would be taxed at 15% and a Texas Gaming Commission would be created.
In Massachusetts, state senator John Keenan introduced SD 1657, which would end in-play sports betting and more than double the tax rate to 51%.
The proposals also include stricter advertising regulations, putting a ban on betting ads during sporting events.
The bill also makes mention of affordability checks, with betting limits in place to $1,000 a day or $10,000 a month.
Also in Massachusetts, a bill to ban wagering on political elections and outcomes has been filed by state senator Jacob Oliveira.
In Mississippi a bill to legalize online sports betting has been introduced by state representative Cedric Burnett. The bill, which has been referred to the house gaming committee, sets the tax rate at 8% on GGR. Online betting licenses would be tied to retail casinos.
Indiana: A bill has been filed that would ban sports wagering licensees from accepting bets on the outcome of political elections. The same bill would also ban all sports wagering advertising in Indiana.
A second bill to regulate iCasino has been filed in Maryland. State senator Ron Watson has refiled last year's HB 1319 as Senate Bill 340, and it is scheduled for a hearing on January 29 before the Senate Budget and Taxation Committee.
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Reopening old wounds
By the books: The UK’s accountancy watchdog has ordered an investigation into KPMG’s audit of Entain’s 2022 accounts in light of the subsequent HMRC probe, which concluded with the operator paying £615m in fines and costs.
The Financial Reporting Council announced on Monday that it had commenced an investigation in relation to the audit conducted by KPMG of the consolidated financial statements of Entain for the year ended December 31, 2022.
It said the decision was made at a meeting of the FRC’s Conduct Committee on November 21, 2024.
The investigation will be conducted by the FRC’s Enforcement Division under the Audit Enforcement Procedure.
Talking Turkey: The HMRC investigation, which ended with a deferred prosecution agreement, followed a years-long probe into allegations of bribery between 2011 and 2017 at Entain’s former Turkish unit.
This new investigation is therefore looking into the accounts after the period pertaining to the bribery allegations themselves and before Entain first told the market it was expecting a £585m settlement.
Events calendar
Jan 20-21: World Regulatory Forum, Barcelona
Feb 26: Regulatory and compliance track, SBC Summit, Rio de Janeiro
Mar 10-13: Regulating the Game, Sydney
Mar 12-13: Next: NYC 25, RG Hub, New York
May 8-9: Leaders in Compliance Conference, Frankfurt
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