BGC calls out sports bodies on sponsorships
BGC parliamentary committee appearance, Star Sports fine, California’s cardrooms debate, Ladbrokes ASA slap +More
Good morning. On today’s agenda:
The BGC speaks in front of a UK parliamentary committee.
Star Sports to pay £594k fine for UK ALM failures.
House-banked games remain a contentious issue in California.
Ladbrokes has received its second ASA warning this month.
Crown Resorts in Australia is to pay a record A$450m penalty.
Why do we never get an answer when we're knocking at the door?
UK select committee hearing
Industry representatives faced some hostile questioning in parliament on Tuesday.
Dug a pony: Betting and Gaming Council CEO Michael Dugher was among the gambling industry body representatives in front of the the DCMS select committee earlier this week where he faced questions on the industry’s response to the government’s recent Gambling Act Review White Paper.
Turn back time: The issue of gambling advertising was raised by a number of committee members with Labour’s Rupa Huq suggesting that “a lot of people think we are going the wrong way and a lot of people want to turn the clock back to pre-2005”.
Wes Himes, the BGCs director of standards, made a stout defense of the right to advertise. “Banning advertising would be a gift to the black market,” he said.
“Advertising is a privilege of licensing. There would be no greater leveling up for the black market were UK operators not allowed to advertise.”
Do more: Referring to the EPL’s decision to voluntarily ban sponsorships of shirt fronts by gambling operators and wider public concerns over gambling sponsorships in football, Dugher indicated that the BGC had made representations to the government to do more in this area.
He added that the ball was now in the court of the sports bodies if more voluntary moves were to be seen.
“My appeal to them is to get on with that and treat this as a priority.”
Recall, the English Premier League will embark upon a voluntary ban on front-of-shirt sponsorships by gambling companies as of the end of the 2025/26 season.
However, ahead of the ban numerous gambling sponsorships have been announced in the EPL, including deals between Fulham and SBOTOP and Aston Villa and BK8.
But a rumored deal between Chelsea and Stake has been nixed after a Supporter’s Trust protest.
Addiction questions: Further questioning ranged across the introduction of financial risk checks, stake limits, the new statutory levy and the ombudsman. But Dugher also found himself faced with questions over the recent coroner’s verdict regarding the death of Luke Ashton and the part played by Betfair’s betting exchange product.
“It’s important that these products are properly regulated and there is a system in place should any individuals get into trouble,” Dugher said.
Himes noted that betting exchanges were “in the middle of the pack” when it came to the levels of addiction as measured by the UK Gambling Commission.
“It is speculative to say a product is addictive by nature,” he added.
Recall, the BGC was attacked earlier this week for its use of statistics in its claims around black market gambling, charges that the trade body refuted on social media.
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Star fine
Star Sports is the latest UK operator to reach a regulatory settlement with the UK Gambling Commission for AML and responsible gambling failures.
Star turn: Star Racing – trading as Star Sports – is to pay a £594k fine after it was found to have ineffective AML policies, procedures and controls alongside social responsibility failures. The company has received an official warning and has had conditions added to its license.
The failings occurred between March 2020 and May 2021 during the UK’s pandemic lockdown periods.
California cardroom rumble
House-banked games remain as contentious an issue as ever in California.
The never-ending story: California’s commercial cardrooms and tribal casinos have been locked in a longstanding and often heated dispute over so-called player-banked games in cardrooms – that dispute is too complex to discuss in detail here, but the backstory can be found here.
The nuts and bolts of it are:
Cardrooms have offered traditionally house-banked games such as blackjack as player-banked games through a rotating deal.
A controversial 2007 memo from former California gambling enforcement head Robert Lytle stated players only had to be offered the deal; they didn’t have to accept it.
Cardrooms used third-party proposition players (TPPs) when a player declined the deal.
Lytle left his regulatory position and went to work for a cardroom as a consultant days after issuing the memo.
He was later stripped of his gambling licenses and cardroom ownership after it was alleged he was transferring confidential information about investigations to his clients.
Loggerheads: Over the years, tribes have thrown the kitchen sink to thwart cardrooms from offering player-banked games. Nothing has been successful.
There have been lawsuits.
Appeals to the public and misconduct accusations in the 2007 memo that allowed player-banked games referenced above.
There was an appeal to regulators that led to a review.
Even the failed sports-betting initiative backed by California tribes in 2022 contained language allowing anyone in California to sue a cardroom for offering “illegal” games.
A new effort: The tribes are now taking a different approach.
SB 549, would grant tribes a one-time exception to sue cardrooms for violating tribal gaming exclusivity in California courts.
Because of tribal sovereignty, the courts have ruled that tribes lack standing to sue.
In opposition to SB 549, cardrooms pointed out they aren’t permitted to countersue.
Per Play USA, the cardrooms believe the “state was setting a bad precedent by waiving its sovereign immunity to being sued by tribes”.
SB 549 still has a long way to go, but pass or fail the issue of player-banked games is far from settled.
ASA rulings
Ladbrokes has received its second warning of the month over tweets that the ASA says broke age-limit advertising rules.
Like a boss: Across January and February 2023, the firm ran a Twitter campaign featuring five well-known Premier League managers: Eddie Howe, David Moyes, Frank Lampard, Brendan Rodgers and Gary O’Neil.
The Advertising Standards Authority (ASA) said the names were all too active and current within soccer to not appeal to youngsters using social media.
Ladbrokes contested on the basis one tweet was purely “editorial” and intended to celebrate Eddie Howe’s achievements as Newcastle manager, but conceded the second tweet concerning potentially sacked managers had been too commercial.
It was told not to run the ads again in any form, given the appearance of current Premier League managers is likely to have significant appeal for children.
Last week, the ASA said a Ladbrokes’ tweet centering on a bout between Jake Paul and Tommy Fury was “irresponsible” and breached its codes with regard to appealing to young people.
Follow you anywhere: Experts said even a modest social media following carries no weight if the individual is actively playing or managing in the Premier League, given the profile of the competition.
“It started from the position that managers of top clubs were of high risk of being of strong appeal,” said betting and gaming expert Melanie Ellis, partner at Northridge Law.
Eddie Howe has little or no social media presence, but the fact he is managing currently swayed enforcement officials, Ellis said.
“Despite recent rulings indicating that social media following would be key to determining an individual’s likely appeal to under-18s, in this case the lack of any following did not override the initial assessment,” Ellis said.
Walk away: Separately, the ASA told Jumpman Gaming the use of a pop-up tab with ‘Hey! Come Back!’ when consumers exit its Lights Camera Bingo website was “irresponsible”.
Jumpman argued the separate browser tab notice was only to alert a customer that the website had not been closed.
The ASA agreed with the complainant and said it could encourage harmful gambling, however.
It ordered the firm not to reproduce the ad in any form.
Lawyers said the use of pop-ups in such a manner would be viewed as an exploitative call to action prompting further gambling.
Crown penalty
After coughing to “significant and egregious” money laundering failings, Crown Resorts will pay a record A$450m penalty in installments after telling Australian officials it can’t afford the lump sum.
Let you down: Judges have signed off on the third-largest fine in Australian corporate history, and the largest ever levied on a gambling operator in the country, following a lawsuit into significant egregious crimes the casino operator failed to stop.
Crown admitted failing to properly track and report suspicious transactions at its Melbourne and Perth casinos, which were being used by criminal syndicates, drug dealers and terrorists to wash cash.
From March 2016 to March 2022, Crown failed to properly monitor about 550 high-risk customers, and the federal court heard money from illegal junkets was often handed over in suitcases or paper bags.
Justice Michael Lee officially signed off on the penalty on Tuesday after a two-day hearing in which lawyers for the financial regulator and Crown gave final thoughts.
Lee called Crown’s conduct “systemic, longstanding and egregious”, and said corruption had permeated the organization.
Pay me my money down: Under the two-year installment plan, Crown will pay A$125m within 28 days, A$125m within a year, and A$200m within two years.
It will be required to provide its audited statements for the 2023 and 2024 financial years, and if its position improves will be ordered to make faster payments.
The casino operator was also ordered to pay the A$3m legal costs of the Australian financial services watchdog which prosecuted the case.
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European notebook
Sweden: A MP from the ruling Social Democrats Jonas Andersson has called on the government to take steps to divest from the the elements of monopoly operator Svenska Spel that compete against commercially owned rivals including sports betting and iCasino.
Andersson has reminded finance minister Elisabeth Svantesson that their party was in favor of such a divestment before last year’s election.
Betfair: The Flutter-owned business has been found to have breached AML rules by the Danish regulator. Betfair has three months to rectify its procedures.
Tipster: The Malta Gaming Authority appears to have hammered the last nail into the coffin of the German sports-betting operator by suspending its license. The move comes after the company had its German license suspended in the wake of police raids at the company’s offices in April.
Asia notebook
India: A maximum tax of 28% will be levied on the value of bets in online gaming, casinos and horseracing betting after a decision by the Goods and Services Tax Council. Online gaming companies will now be required to pay a 28% tax on the entire amount collected from players.
The new rule will apply to its skill-based real-money games.
In casinos, the 28% tax will apply to the value of chips a person buys before playing.
Reuters noted that Delta Corp – which owns casinos in Goa and Sikkim as well as online rummy and poker sites – saw its share dive 23% on the news.
Philippines: A regional court has ordered the arrest of Kazuo Okada and associates for siphoning money from Okada Manila during their forceful takeover of the integrated casino resort last year, according to a statement seen by Inside Asia Gaming.
Sports integrity notebook
U.S. Integrity and North America’s professional dart tour Championship Darts Corporation have announced a comprehensive integrity partnership, to span 2023 and into 2024. U.S. Integrity will provide integrity monitoring services via its proprietary dashboard to CDC, which will encompass data intelligence and fraud prevention.
The Football Association has charged Nottingham Forest’s Harry Toffolo for breaching its betting rules 375 times between 2014 and 2017. The defender was then at Norwich City, but spent time on loan at Swindon, Rotherham, Peterborough and Scunthorpe during this period. Toffolo has until July 19 to respond to the charge.
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