Coroner criticizes Betfair over suicide
Ashton inquest verdict, Dutch ad ban, ASA Ladbrokes verdict, White Paper perspectives – UK land-based casino +More
Good morning. On today’s agenda:
Coroner says Betfair “failed to intervene or interact meaningfully” with gambling addict.
Dutch ad ban enters into force.
ASA upholds complaint about Ladbrokes’ Jake Paul tweet.
New Jersey renews online gaming; Ohio raises taxes.
Inquest verdict
A coroner cites gambling disorder as a contributory factor following the suicide of a gambling addict, in what is believed to be the first case of such a disorder being recorded in an inquest.
Lack of meaningful intervention: Leicester resident Luke Ashton, 40, died in April 2021 after amassing huge debts betting online and chasing his losses. Coroner Ivan Cartwright criticized Betfair owner Flutter for not intervening when Ashton’s gambling activity spiked and concluded gambling disorder was a cause of Ashton’s death.
An inquest at Leicester Town Hall heard Ashton had been betting more than 100 times a day in the run up to his death, including early in the morning and late at night when his wife was asleep.
Cartwright will be making a Prevention of Future Deaths report, which will include his concerns about a “lack of meaningful interaction or intervention” by Flutter.
The court heard he placed 1,229 bets in March 2021 and on one day of that month alone he deposited £2,500.
Ashton was assessed as a low-risk gambler by Betfair, despite the significant increase in both frequency and stake amounts in the 10 weeks before his death.
Missed opportunities: Ashton died during the Covid-19 pandemic, in which he had been furloughed, and when the government and Gambling Commission had issued statements and guidance to gambling companies, including Betfair, about the increased risks of gambling-related harm.
“The operator did not intervene or interact with Mr Ashton in any meaningful way,” said Cartwright. “Betfair could have done more in the relevant period and should have done more in what I find was a crucial period between late January and April 2021.
“Opportunities were missed that could possibly have changed the outcome for Luke.”
Automated failure: Betfair told the inquest it used a computer algorithm to monitor customer betting and had categorized Ashton as “low-risk”. It said the algorithm did not detect anomalous betting activity that would trigger human intervention, instead, he was sent eight automated and generic ‘awareness’ emails by the company.
Economic and gambling expert Professor David Forrest said Betfair should have taken “stronger action based on the evolution” of Ashton’s betting, including a possible account closure.
However, during the period in which his activity increased, Betfair rewarded Ashton with an increased free bet and a promotion that incentivised further gambling.
Tragic case: In a statement after the inquest, Ian Brown, chief executive of Flutter UKI, apologized to the Ashton family and reiterated its “sincere condolences”.
“Over the past three years we have made significant changes to our controls, including mandatory deposit limits for customers who return to our sites after a period of self-exclusion,” Brown said.
“We hold ourselves to the absolute highest standards in the industry and we will, of course, incorporate additional learnings from this tragic case into our systems and processes.”
The findings raise wider issues for the gambling industry and the way it is regulated, said Dan Webster, a solicitor at Leigh Day, who represented Ashton’s widow.
“They present an important opportunity for lesson learning and come at a significant time following the recent publication of the government’s plans for reform of gambling regulation,” Webster said.
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Dutch ad ban
A wide-ranging untargeted ban on gambling advertising, which forbids promotion across television, print and radio, entered into force in the Netherlands on Saturday (July 1).
Dancing in the dark: Operators will also no longer be allowed to promote their wares in public spaces such as cinemas, cafes and bus shelters, in what is the first phase of a much wider blackout that may eventually see sports sponsorships ended from 2025.
Firms can still advertise via some digital platforms, including social media, but there are tough limitations in place.
The gaming regulator Kansspelautoriteit (KSA) issued a statement warning operators to fully comply with the new rules or face enforcement action.
It has previously indicated fines may not be immediately imposed as it assesses the initial period.
There are no clear signs of operators challenging the ban, said Justin Franssen, partner and leader of the gaming & gambling practice at Netherlands law firm Kalff Katz & Franssen, but a small number have decided to pause affiliate marketing as they consider next steps.
“Details remain still unclear but further guidance from the government may be expected in due course,” Franssen told C+M. “The regulator stated clearly it does not intend to vigorously enforce for the time being and the Minister of Justice and Security supports dialogue between the regulator and license holders.”
What’s my age again: Lawyers told C+M that operators are still struggling to fully understand the requirements around advertising online and how to meet age limitations.
The license holder must demonstrate that at least 95% of the target audience of the advertisement is 24 years of age or older, according to the new rules.
“Even if the license holder outsources activities to third parties, such as affiliate marketing, the advertisement must meet these conditions,” regulators have advised.
Franssen said Google Analytics has become the “weapon of choice” as best possible technique to comply with the 95% rule, as the search engine tool was also mentioned in the explanatory note to the Decree.
Some licensees have argued that Google Analytics cannot break out ages of users but determines age percentages based on extrapolation from a limited group of visitors whose age is known.
As a result, some license holders have paused or discontinued the use of affiliates.
ASA’s Ladbrokes ruling
A promoted tweet for Ladbrokes posted after the boxing bout between Jake Paul and Tommy Fury has been found in breach of codes around a strong appeal to under-18s.
Jake Paul’s significant online footprint among under-18s and his previous appearance in a children’s TV series meant a social media ad from Ladbrokes was “irresponsible” and breached the advertising standards code.
The promoted tweet was sent out after Fury beat Paul in February this year.
The ASA noted that while boxing is seen as an adult-oriented sport, Paul has a large following of under-18s on YouTube, TikTok and Instagram.
The CAP guidance states that a sportsman who was particularly well known for their social media profile could be considered as having a strong appeal to children.
Joseph Masini, legal and regulatory counsel at White Hat Gaming, pointed out in a personal capacity on LinkedIn that the ruling provides a “very interesting companion” to last month’s decision relating to bet365’s tweet featuring Chris Eubank Jr.
In the latter instance, the ASA said the company didn’t breach the CAP code and found that Eubank’s following of under-18s on social media was much more limited.
“When read together, the very different outcomes serve to further shed light on the multifaceted nature of ‘inherent appeal’ and what marketers should consider when featuring sportspersons in their campaigns,” Masini said.
“Social media following was crucial in both instances,” he added.
Same but different: Masini said the parallels between both cases were obvious “but so are the distinctions”. The components around the inherent appeal of any figure to under-18s involves an assessment of audience demographics, cultural relevance, overall fame and notoriety as well as recent exposure.
Sarah MacDonald, partner at Wiggin, said when it comes to ‘strong appeal’ it is clear there are some “red flags”:
“The presence of an individual’s TikTok following; and a more than insignificant proportion (probably ~5%) of that individual’s relevant social media account following being in the under-25 demographic”.
Matched betting notebook
Matched point: The ASA has also issued new guidance on matched betting following a case involving an inappropriately targeted promotion aimed at students. The new advisory makes the point that, while the ASA acknowledges that matched betting services are not gambling in themselves, they obviously involved instructions on how to bet.
The new guidance suggests advertisers avoid the term ‘risk-free’ and shouldn’t exaggerate the implied financial benefits or imply financial security.
New Jersey renewal
New Jersey’s renewal of online gambling should be a non-story, but the legislature’s decision to shorten the renewal term to five years changed that – and signals a looming battle between the state and its operators.
Your membership is up for renewal: When New Jersey legalized online gambling in 2013, it included a provision that required the legislature to reauthorize online gambling after 10 years. Given the success of New Jersey online casinos, including helping their Atlantic City parent casinos weather the Covid storm, reauthorization was never in doubt.
And then a funny thing happened. It started with the legislature dragging its feet on what was expected to be a slam-dunk vote, taking until the end of June to pass the measure despite a looming November deadline.
When it finally took up the matter, things went even more sideways. First, the reauthorization term was shortened to two years. Following significant pushback, the legislature upped it to five years.
There was no explanation for the initial change to two years, nor was there a reason for changing it to five years.
But why? The consensus is the legislature might use online gambling expansion as a bargaining chip to increase the tax rate on one or more forms of gambling. New Jersey is considered a model industry, but its tax rates are on the low side:
Land-based casino gambling: 8%
Retail sports betting: 8.5%
Mobile sports betting: 13%
Online casino and poker: 15%
Comps: New Jersey’s neighbors impose much stiffer taxes on their online gambling operators. New York’s mobile sports-betting tax rate is 51%. Pennsylvania taxes sportsbooks at 36%, online slots at 54% and online table games at 16%.
So the million-dollar question is this: is the New Jersey legislature about to start asking the gambling industry for more money?
Promises kept?
Ohio is the second state (Tennessee being the other) to alter its sports-betting tax rate in 2023.
On your hike: The FY 2024-25 budget passed by the Ohio legislature included a US legal sports-betting first, increasing the tax rate imposed on sports-betting operators. Unlike Tennessee, which shifted from taxing GGR to handle (likely resulting in a small increase in tax revenue to the state), Ohio’s tax adjustment is far more significant.
The new rate of 20% is double the original 10% rate.
The increase comes just seven months into the market’s existence.
In his budget proposal released in February, Gov. Mike DeWine proposed the rate increase – a month after the industry’s January 1, 2023 launch.
Despite several months to lobby against the increase, the industry could not prevent the rate hike.
Lawmakers opposed to the increase could potentially overturn the tax rate hike in the future. An article in Legal Sports Report suggested that Rep. Bill Seitz has said the legislature will take another look at the tax rate in a future gaming study commission in Ohio. That was part of the agreement for the House to accept the increase in a budget conference committee, he said.
The lawmakers are reported to “fully expect” the commission to return with proposals that say the tax “shouldn’t be 20%”.
Peruvian regulation
In LosIngresos+Mas this week, the top story regards the new Peruvian legislation and suggests the government is hoping to raise $44m annually from the new online regulations. The new regulations are due to be published later this month with implementation expected by the end of the year.
Also in this week’s issue, the revenue-raising potential for Brazil’s OSB plans is discussed.
Sign up to LosIngresos+Mas here.
White paper perspectives
The team at CMS has run the rule over the proposals for the UK’s land-based sector.
Want, settle for, get: The government has taken a “noticeably different approach” to the land-based sector in the recent Gambling Act Review White Paper, according to the team at CMS.
“Whilst it largely seeks to tighten regulations relevant to the online space, with respect to land-based gambling its primary aims are to ‘reset’ the existing regulatory regime and level the playing field with the remote sector,” the betting and gaming team suggested.
The team added that the government’s key focus appeared to be to “do away with restrictions no longer seen as necessary” in light of the advances made by online gaming.
The government also acknowledged the headwinds that the non-remote sector has suffered in recent years, including channel shift, the pandemic and the energy crisis.
I am the one in five: The biggest win for the casino sector is the realignment of the machines allowances and the new provisions to widen the number of casinos that permit sports betting. The rationalization proposed would bring to an end the distinction between 1968 Act casinos and 2005 Act casinos with a proposal to introduce a ratio of five machines per one table game for all properties.
“The Government has opted to give the same machine allowances between the two rather than merging the regimes,” said CMS.
“This does feel like somewhat of a missed opportunity, given the Government’s drive to modernize regulation more generally throughout the White Paper,” they added.
CMS noted that while the government is also proposing for 1968 Act casinos to be allowed sports betting, it remains the case that none of the 2005 Act casinos have opted to offer sports betting to date.
Indeed, as CMS pointed out, of the 16 possible 2005 Act casinos, only seven are in use.
The White Paper proposals suggest the government is keen to see the unused licenses allocated.
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Swedish notebook
In harness: Swedish racing monopoly AB Trav och Galopp has managed to have a SEK6m ($548k) fine for money laundering overturned in court, after successfully arguing the breaches were too insignificant for a financial penalty.
Swedish gambling regulator Spelinspektionen issued the penalty in November 2022 after an investigation between January 2019 and December 2021 found that ATG didn’t proactively minimize money laundering risks in eight out of 13 identified customers.
ATG appealed the punishment and argued that the violations were not serious and systematic, and the Swedish Administrative Court in Linköping agreed.
The court said the failings “did not entail a clearly increased risk of the business being used, for example, for money laundering”.
It added that, while there were “shortcomings”, none were “serious as to warrant a warning and a penalty fee” and threw out the fine.
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