🎯 #1 topic
Sweepstakes dominates the conversation at G2E
Industry is divided over what to do about sweepstakes.
Circa’s Stevens calls for more action on sports-betting sweeps.
In +More: Caesars’ iCasino pessimism, Cali tribal optimism.
UK regulator readies its black market analysis.
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Ragin’ full on
Sweeping the nation: The inexorable rise of sweepstakes has captured the attention of the US gambling industry, but risks damaging consumer trust in the legal market, leading figures warned during a packed panel at the G2E in Las Vegas.
The topic has dominated conversation at G2E, with camera bulbs flashing inside the standing-room-only session on sweeps where robust arguments from both sides were made.
For some, like Michigan Gaming Control Board criminal investigations manager John Lessnau, the matter is simple and “when boiled down it is 100% right to say sweepstakes are gambling.”
Michigan has issued multiple cease-and-desist letters to sweepstakes operators, accusing them of promoting illegal gambling, and Lessnau said the state’s statutes had given the regulator firm ground to make its cases.
It’s behind you! Light and Wonder’s top lobbyist and legislative counsel Howard Glaser put on a pantomime for the crowd in demonstrating how a sweepstake game can blur the lines with real money and digital token gambling.
“Every regulator who has looked at it has seen that it is gambling, and under the laws of the state, it’s unregulated, unlicensed, untaxed and illegal,” Glaser said.
“No regulator who has looked at it has found otherwise… They are very uniform in saying ‘if you pay money for a chance to win money, that is gambling’.”
Glaser said the lack of regulation meant oversight gaps across responsible gaming responsibilities and in regard to financial transactions.
Fake news: “The statement that unlicensed activity is inherently bad or dishonest is fake news,” argued Michelle Cohen, partner at Ifrah in Washington DC.
“On the social gaming side, 90% of people never pay anything, they’re playing for fun,” she said. “You want to shut these games down when so many people are having fun for free.”
In response, Glaser said he expected more regulatory enforcement, and that pushing matters of compliance onto other parties in the chain was not the answer.
“We can debate all day long about how to get people to comply with a standard that does not exist for them, but the fact is they have been found to be illegal gambling,” he said. “Payment processors and funders should look at the risk.”
Clash with reality: In August, the AGA called on regulators and state attorneys to investigate operators of sweepstake casino models with a dual-currency system.
The AGA questioned whether companies are in compliance with respective state laws, pushing legislators to close “loopholes in sweepstake regulations to offer online real money gambling.”
According to the AGA, sweepstake models undermine gaming regulation and are designed to exploit ambiguity in state gambling laws and regulatory frameworks.
Regulators in Michigan, Connecticut and Delaware have been actively forcing unlicensed sweepstakes operators out of their states, while litigation has also occurred in Washington, Kentucky and Delaware.
The ‘Whack-a-mole’ nature of enforcement is a symptom of a lack of the legislative tools to address the issue, said Michael Pollock, Spectrum’s senior policy advisor and former MD.
“I think sweepstakes runs a risk that we could lose the trust of the public as well as investors,” he said.
“The reality is unless there is an expansion of standards, and which places the burden on the applicants to demonstrate good character, honesty and integrity, you are at risk of losing that.”
Good to be king: At stake is not just oodles of cash, said Matt Kaufman, MD of digital and interactive gaming at Eilers & Krejcik Gaming, projecting $11bn in sweepstakes player purchases in the coming year, but the chance to rule a new segment of the industry.
He compared the phenomenon to daily fantasy sports (DFS), where the big name Vegas casinos were slow to adapt.
“When DFS came online, real money actors kicked and screamed about the legality and a lot of the same arguments were made,” Kaufman said.
“Who is winning? It’s DraftKings, FanDuel, and it’s something of a travesty from the regulated space that it isn’t a Ceasars, Wynn, Sands, etc.”
“They squandered that activity, missed the boat, allowed the new entrants to come in, grab the market share, dominate and move into other spaces.”
Red flag: However, Pollock said he was “concerned” operators that have been flagged for breaching the law will get licenses and “damage the reputation” of the legal sector.
“Once you have violated the rules, that should be it forever,” he said. “If you operated an illegal casino in a state, and they legalized casinos, you didn't get a license. You didn't meet the standards for a license. Those same rules should apply to sweepstakes.”
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Loop back
Loop me in: Sweepstakes sportsbooks have exploited a “loophole” in the law, said Derek Stevens, the founder and CEO of Circa Resorts & Casinos, during Wednesday’s keynote session.
“These are sportsbooks – Fliff, Novig – they are sportsbooks working through a loophole in sweepstakes law,” he claimed
“I want to hand it to them that they found a loophole, but it is not realistic that this is sustainable.”
Clueless: He went on to suggest the states, whether it was their attorney generals or the legislatures, “don’t have a clue about how big this is,” he added. “It has just exploded.”
He noted that California and Texas were “going to have to do something” about regulated gaming to counter the rise of sweepstakes sports betting and other fantasy sports sites.
“That would change the size and scale of the sports-betting industry considerably,” he said.
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Going back to Cali: James Siva, chair of the California Nations Indian Gaming Association, said the California tribes had restarted discussions internally about the potential to push for a sports-betting ballot measure, with 2028 as the likeliest date.
Speaking at G2E he said 2026 remained a possibility but the later date was more probable.
He added that the tribes were “already looking down the road” at the potential for iCasino.
Not seeing the upside: After meeting with management this week at G2E, the team at Deutsche Bank reported that Caesars was “not optimistic” about any of the various iCasino initiatives across a slew of states legalizing in 2025.
New York: A bill aimed at further bolstering the responsible gambling messaging within all gambling ads has been signed into law by Gov. Kathy Hochul. The new regs mean all ads must include warnings about potential harmful and addictive effects of gambling.
Holland Casino’s oldest venue, in Zandvoort, is to close because it is no longer profitable, the state-owned operator said.
France’s gambling regulator, L’Autorité Nationale des Jeux, has launched a campaign warning punters against the “dangers” of iCasino, which is outlawed in the country.
The Isle of Man Gambling Supervision Commission has imposed a £140,000 penalty on licensee CyberHorizon after an investigation found breaches of AML and counter-terrorism financing regulations.
EveryMatrix has joined the Mexican Association for Permit Holders, Operators and Suppliers of the Entertainment and Gambling Industry, a national organization that represents the interests of the gaming and entertainment space in Mexico.
Head of Monetization – Cyprus
Responsible Gaming Manager – Malta
Junior Compliance Assistant – LatAm
Black market estimates
Tin hats at the ready: The UK Gambling Commission will explain how it calculates the size of the black market in the coming weeks, according to chief executive Andrew Rhodes.
The regulator’s use of statistics has been a contentious subject over the last 18 months, particularly in the area of player harm.
A recent survey commissioned by lobbyists at the Betting and Gaming Council estimated more than $3bn is staked illegally in the UK each year.
Reason to believe: Industry groups argue that stringent regulation is forcing punters to underground bookies. However, during a panel at the Global Gaming Expo event in Las Vegas, Rhodes pushed back.
“I don’t believe that having an illegal market is a reason not to have strong controls on the legitimate market. I don’t think that is a justifiable defense,” he said.
Asked if he thought the number was that high, Rhodes refused to be drawn and said “it’s hard to measure something where people are hiding”.
“Later this month we will be publishing our own research methodology, and we will be saying how we measure the size of the market,” he said.
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VASP sting
Threatening behavior: Illegal online casino operators are diversifying business lines to include cyber-enabled fraud and crypto-based money laundering services, according to a new United Nations report.
The snappily titled Transnational Organized Crime and the Convergence of Cyber-Enabled Fraud, Underground Banking, and Technological Innovation: A Shifting Threat Landscape, is the second in a series of ongoing threat analyses produced by the UN Office on Drugs and Crime.
It found underregulated online gambling platforms, along with often unauthorized virtual asset service providers (VASPs), are being used by major organized crime groups “to move, launder and integrate billions in criminal proceeds into the financial system without accountability.”
Extensive evidence shows organized crime influence within casino compounds, special economic zones and border areas to conceal illicit activities, the report said.
Paraguay delay
A rethink: The Senate of Paraguay is reported to have postponed the review to change its existing gaming laws.
The new measures were endorsed by senators Sergio Rojas and Dionisio Amarilla, who put forward plans to establish a new legislative framework to regulate gaming.
The senators claimed the current regulatory and legislative structure was obsolete and could not handle online gambling disputes or help authorities combat black-market gambling.
Postponement is believed to be over concerns about whether the country will move to end existing monopoly arrangements.
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Events calendar
The Thai Entertainment Complex Summit will be held at Bangkok Marriott Hotel The Surawongse from December 2-4, 2024 and will bring together government officials and top executives from the property, hospitality and entertainment sectors to discuss the future of Thailand as a global entertainment hub.
Oct 7-10: G2E, Las Vegas
Nov 5: Gaming in Germany, Berlin
Dec 2-4: Thai Entertainment Complex Summit, Bangkok
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