Entain’s DPA a ‘chilling’ gray market warning
Entain bribery settlement, Brazil postponement, Texas opposition, Australian credit card ban +More
CPS suggests the industry should “reflect” on the meaning of Entain’s DPA.
Breaking: Brazil postpones bill vote until next Tuesday.
Texas governor voices supposition to casino moves.
The Australian Senate gives go ahead to credit card ban.
I might look like Robert Ford, but I feel just like a Jesse James.
Entain bribery settlement
The terms of Entain’s DPA contains a warning about “non-legal” activity.
Keep the peace: The full details of the deferred prosecution agreement between Entain and the Crown Prosecution Service (CPS) published this week appear to indicate the UK authorities no longer believe gray or black market activity is compatible with being a good corporate citizen in the UK.
Let this be a warning; In clauses that send a chilling warning to other operators, the DPA states in a section on corporate compliance that, as part of the agreement, Entain will “exit all gambling markets in which it is currently operating and which markets are not yet subject to gambling regulation” within 12 months of the signing of the DPA.
The markets include Brazil, Mexico, Chile and Peru. Three of those countries are in the process of regulating.
The DPA said Entain “confirms that it is not operating in, or offering gambling services in, any market (other than the regulating markets) where gambling is not currently lawful as a matter of local or EU law”.
The DPA summary judgment pointed out that any trial of Entain would likely lead to the loss of its licenses to operate, including in the US.
Chill factor: Following the news of the DPA, chief crown prosecutor Andrew Penhale sent a message to the rest of the sector. “The wider gaming industry may wish to reflect on the implications of this agreement for their own corporate compliance procedures and, where appropriate, take action to address and report any failings they identify,” he said.
“The CPS will continue to work closely with law enforcement partners in this area, such as HMRC, as well as the industry regulator, the Gambling Commission”.
Colette Kelly and Andrew Cotton, of law firm Irwin Mitchell, said the comments from Penhale will “reverberate across the gambling industry”.
Talking Turkey: In the summary of the judgment, presiding judge Dame Victoria Sharp said Entain was guilty of breaching section 7 of the Bribery Act 2010. Specifically, the judgment went on to say the “alleged bribery offenses occurred primarily in Turkey”.
“During the indictment period, Turkey was a jurisdiction in which gambling was non-legal,” it continued.
“The phrase ‘non-legal’ in this context refers to services that were considered illegal by the Turkish authorities, or designated as illegal by Turkish domestic legislation, but which would not be illegal if offered in England and Wales where the provision of facilities for gambling (i.e. gaming, betting and/or lotteries) is legal if appropriately licensed and complies with the requirements of the Gambling Act 2005 (the 2005 Act).”
Wholesale changes: The judgment also acknowledges the difference between the then-GVC and the current Entain. “There has been a wholesale change of senior management and approach and an acknowledgment by Entain that it was necessary to overhaul its culture and practices,” it said.
The judgment noted that, since November 2020, Entain has exited approximately 160 international markets.
“Of those, approximately 140 were exited where there was no clear path to domestic gambling regulation.”
Best served cold: One legal source suggested: “What will send a chill through the industry is that the terms and conditions of the agreement are fair, reasonable and proportionate.” Analysts at Regulus went further. “The CPS has effectively used Entain’s alleged historical malfeasance under the DPA to call time on dotcom markets,” the team said.
“The CPS has therefore made it very clear that it does not consider any dotcom revenue to be appropriate levels of risk unless there is a clear and near-term pathway to regulation,” they added.
“This escalation of dotcom risk may have significant repercussions for debt providers and the availability of mainstream payment processing.”
A whole new world: Regulus added that others within the industry should be wary of downplaying the read-across to the rest of the sector. “The DPA demonstrates and accelerates a significantly changing world: dotcom risk has become a lot more serious for groups and senior directors of businesses that do not operate entirely in point of consumption markets in entirely compliant ways,” they said.
Paying the price: The DPA for the first time details the nature of the financial penalty. The disgorgement of profits amounts to £120m while the financial penalty is £465m. As previously disclosed, including CPS costs of £10m and a charitable payment of £20m, the total cost to Entain is £615m.
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+More
Brazil: The Brazilian Senate has agreed to once more postpone the vote on the sports-betting bill until next Tuesday, December 12. A number of senators argued the legislation is complex and low attendance due to members returning late from COP 28 in Dubai would hinder the discussion.
California: After another brutal slapdown from the tribes, the group hoping to bring sports wagering to the Sunshine State is back at the table with an amended bid. Eagle1 Acquisitions Corp. has lodged a tweaked Sports Wagering Regulation and Tribal Gaming Protection Act with the state’s attorney general.
In order to win over the most influential party, the updated version gives more sway to tribal leaders, and promises them an estimated 15-20 times more revenue than the $1m annual sum previously proposed.
New York “desperately” needs iCasino, according to the lawmakers who brought online sports betting to the Big Apple, and this time it might just happen. In a joint op-ed for CityAndStateNY.com. New York State Sen. Joe Addabbo and Assemblyman J. Gary Pretlow said New York can ill afford to turn down the potential $1bn a year in tax revenues from iCasino and iLottery.
The pair said they are “optimistic that this session, we can turn it into law”. The bill uses the same framework in place for mobile sports betting, they added.
Maryland: Taking the opposite tack, union leaders in Maryland argued in an op-ed for MarylandMatters.org that the recent report for the state’s Lottery Commission on iCasino was “one-sided and biased”.
“With its myopic focus on the gaming revenue these out-of-state and foreign companies might generate, the report glosses over the massive losses of Maryland jobs that would inevitably accompany iGaming,” wrote leaders Jason Chorpenning and Shane Sterry.
Meanwhile, new polling from WJZ News in Baltimore suggested 75% of Marylanders support iCasino legislation.
The Netherlands gambling regulator is carrying out a fresh wave of inspections at slot machine arcades across the country from mid-December. Kansspelautoriteit is particularly focused on duty of care from operators of land-based establishments containing gaming machines, and will review, among other things, addiction prevention compliance.
This is a call: Finland’s state-owned operator Veikkaus said it made more than 3,300 calls to customers who have shown signs of potential problem gaming as part of a pilot scheme. Veikkaus said around 41% of people contacted via email about an upcoming call over their gambling agreed to speak, and about 11% who answered decided to limit their own gaming within a week of the call.
New South Wales Liquor & Gaming in Australia has begun the third and final stage of a compliance drive to target prohibited gaming signage displayed at venues across the state, with a zero-tolerance approach now in force.
The regulator has taken a range of enforcement action, including ordering two venues to remove newly installed signage that tried to duck the ban by using imagery akin to visuals used on electronic gaming machines. As of December 1, tougher enforcement measures will be taken against non-compliant venues.
Malta is pushing back on Ireland’s new gambling law, arguing it could lead to an increase in black market betting. Valletta used a European Commission technical regulation information system (TRIS) to voice its concerns, stating the proposed legislation, subject to intense scrutiny and heavy lobbying, could prevent certain games being played and force punters towards unregulated modes of betting.
Malta’s government also claimed plans to allow Ireland’s gambling regulator to enforce a gambling window may be disproportionate “without further empirical evidence, research and justification”.
Career paths
Joe Maloney has joined the AGA as senior vice-president of strategic communications, overseeing all comms, research, marketing and public affairs campaigns.
Mavericks move
The coyotes wail: Mark Cuban has been warned his dreams of a Las Vegas-style resort in Texas will face tough opposition from Republican senators in the state. Last week, the billionaire businessman agreed to sell a majority of his Dallas Mavericks NBA franchise to the widow of Sheldon Adelson, founder of the Las Vegas Sands empire.
Cuban has long eyed downtown Dallas for an entertainment complex with a new arena and a casino, and hopes partnering with the Adelson estate may move the needle.
However, it would require approval from the state legislature and voters, which Texas Lieutenant Governor Dan Patrick said is not going to happen.
“My experience and my knowledge is that we aren’t even close to having 15 votes or 16 votes for casinos,” Patrick told CBS News Dallas. “When the [regular] session was over, there was not a cry from voters calling their senators or House members, ‘Gosh, we didn’t pass, I needed this bill’.”
Stop the cavalry: Patrick put the ball back in the court of the interested parties, adding: “Big things don’t happen overnight. You got to get in the trenches and grind it out.” Cordish Cos. CEO David Cordish, whose Live! entertainment districts are spearheading the mixed-use zone push, told the Dallas Business Journal that adding a casino “is absolutely the winning formula” for the state.
Miriam Adelson, majority shareholder of the Sands, sold $2bn of stock to fund the deal, according to a filing with US regulators.
The purchase is expected to close by the end of the year and must be approved by at least three-quarters of the NBA Board of Governors, consisting of the 30 team owners.
Australia card ban
No more credit: The Australia Senate has approved legislation that will prohibit the use of credit cards for online gambling in the country. The ban is set to come into effect within six months.
As was proposed in May, the Interactive Gambling Act 2001 has been amended to also boost the enforcement powers of the Australian Communications and Media Authority.
Around 20% of online deposits are made with credit cards, the government estimates.
The ban is widely supported by various stakeholders, including the Australian Institute of Family Studies and the Alliance for Gambling Reform. Responsible Wagering Australia CEO Kai Cantwell said the organization was pleased to see parliament take decisive action to enforce the ban.
However, he added the RWA was disappointed that lottery and keno were exempted and noted they were also exempt from the national self-exclusion register, BetStop.
“To effectively reduce gambling harm, consumer protection measures must exist across all forms of gambling, otherwise those at risk of harm will just move from one form of gambling to another less regulated type.”
It is thought Bank Identification Numbers (BINs) will be used to identify and bar credit card payments, with proponents pointing out such a system has been deployed in the UK where a similar ban on credit card gambling was introduced.
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