Lies, damn lies and UK Gambling Commission statistics
UK stats controversy, Germany’s black market argument, UK tax warning, Malta bill +More
UK Gambling Commission under fire for ‘experimental’ PG data set.
German regulator hits back at questions around black market rise.
Betting and Gaming Council issues UK tax warning.
Malta not bending on Bill 55.
Tell me why, why d'you have to lie.
Stats controversy
The latest ‘experimental’ survey on problem gambling sets the industry up for failure.
Liar, liar: The UK Gambling Commission has been accused of ignoring concerns raised about the methodology of its self-admitted “experimental” survey of problem gambling rates and going ahead with publishing headline rate that, some have claimed, shows an explosion of problematic behavior.
The Gambling Survey of Great Britain (GSGB) published last week showed a problem gambling rate at 2.5%, with 1 in 40 of the population being classified as being at “high risk”.
The Commission explicitly said the data could not be compared with rates of problem gambling from previous telephone surveys (0.2%) and the NHS Health Survey result of 0.25% – which is the current Official Statistics.
Push-pull: The Commission has said it hopes its new ‘push-to-web’ survey will replace the NHS Health Survey. In a blog accompanying the data release, head of statistics at the Commission Helen Bryce said it needed to “establish a new baseline” for tracking gambling behavior.
“It is never easy changing the way we do things, but it is important to ensure our official statistics remain relevant as well as robust,” she wrote.
However, analysts from gambling research firm Regulus Partners have criticized the Commission for seeking to replace the respected Health Survey data with “insufficient regard for reliability” of the findings from the GSGB. The firm’s analysis highlights three areas of concern:
From the start, there have been “legitimate and evidence-based concerns” – acknowledged by the Commission – that the GSGB will produce overestimates of the population prevalence of problem gambling.
They added that results published to-date by the Gambling Commission vindicate these concerns with “clear evidence of selection bias in both the Pilot Survey and the Experimental Stage”.
Third, they suggested the Commission has become increasingly hostile to criticism of the GSGB “regardless of its validity”.
“Its unshakeable confidence in the reliability of the GSGB in the face of contradictory evidence and legitimate concerns may indicate a lack of scientific rigor and impartiality.” Dan Waugh, Regulus Partners
Drawing board: Similarly critical of the new survey was Melanie Ellis, partner at Northridge, who took to LinkedIn last week to point out that the new experimental data would be used “as we speak to inform gambling policy”.
“I can't say which figure is right and which is wrong,” she added.
“But either the recent discourse has been based on a huge underestimate of the scale of the problem, or the GC's new methodology is fundamentally flawed.”
Rather than calling this the ‘final step in the experimental stage of the project’, Ellis said the Commission should be “going back to the drawing board and seeking to find out whether it can have confidence in the new survey approach, before taking it forward”.
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+More
Expanding, man: New Yorkers are in favor of expanded online gambling, according to a poll undertaken by Parkside Group on behalf of the Sports Betting Alliance. The survey results published by Politico showed 51% in favor of iCasino being regulated vs. 40% against. The poll also found 53% support for iLottery to be allowed.
The California Attorney General’s Office is preparing a formal opinion regarding the legality of daily fantasy sports in their entirety under state law, according to Vixio GamblingCompliance.
The effort by Missouri’s professional sports teams to get a ballot measure on OSB has moved forward after the state’s secretary of state signed off on the final language. The sponsors now have to choose one of eight versions to put before the voters and begin collecting the necessary 170k signatures.
Bet365 has exited the Hungarian market as of late last week. According to local media, the move comes after changes to the Hungarian licensing regime made earlier this year.
Timor-Leste – more commonly known as East Timor – has created a Virtual Gaming Association, with the aim of developing the country’s infrastructure in order to become an offshore online gambling hub.
The Swedish National Audit Office is reported to be investigating the effectiveness of the gambling regulator Spelinspektionen. The move comes amid worries that unlicensed activity continues at high levels, with a report last week from the former monopoly operator ATG suggesting the channelization rate has decreased to ~80% from the authorities’ target of 90%.
Career paths
The Brazilian Football Confederation (CBF) has appointed Eduardo Gussem as its integrity officer. Gussem was previously attorney-general of Rio de Janeiro.
What we’re reading
DouYu come quietly: Chinese police have arrested the founder of Tencent-backed game-streaming site DouYu on suspicion of operating a casino, according to the FT.
ICYMI
Earnings+More reported yesterday on the news that Entain will pay a “disgorgement of profits” amounting to £585m as part of its deferred prosecution agreement with the UK’s tax authorities after admitting charges related to the Bribery Act over its previous activities in Turkey.
Upcoming
The Brazilian Senate will vote on the sports-betting bill tomorrow, Wednesday, at which point the proposals go back to the lower house before heading to the desk of President Lula.
Black market row
Schwarz und weiß: The German regulator has hit back at complaints from the gambling industry that its collection methods with regards to the data on the size of the black market is deficient, after a report conducted on behalf of the German Sports Betting Association (DSWV) suggested the illegal market is growing at an “alarming” rate.
Glücksspiel said it “firmly rejects” criticism that its approach to collecting illegal gambling data is “based on a static model that does not take market changes into account”.
The authority said it recognizes the collection of data on illegal gambling is fraught with complexities given the nature of the market.
“All collected data is estimative, capturing a snapshot of the market at a specific time,” it added.
Glücksspiel was responding to the DSWV survey conducted by Leipzig University that claimed illegal activity now accounted for over half of all gambling in Germany. The report suggested activity had been boosted by the introduction of the new German State Treaty in the summer of 2021.
The German regulator said it stands by its own estimate that the black market accounts for ~€300m-€500m or 2%-4% of the total German gambling market.
The DSWV renewed its call for reform to the Treaty. It said it needs to see an acceleration of the licensing process, increased competitiveness and enforcement of ad bans for illegal operators, among other measures.
Tax worries
Greek to me: The UK’s Betting and Gaming Council has warned the government’s proposed rationalization of the taxes applicable to online activity could be a “Trojan Horse” that would see taxes rise.
The document accompanying Chancellor Jeremy Hunt’s Autumn Statement last week said the government would look to consult on proposals to bring remote gambling into a single tax.
The three taxes involved have rates ranging from 15% to 21% and the industry fears any leveling up will automatically migrate to the higher level.
Squeezing ’til the pips squeak: The BGC said the tax threat comes as industry revenues are “already being stretched” by aspects of the government’s White Paper proposals, including around affordability checks and the new statutory levy to fund research, education and treatment of gambling harms.
“There are genuine fears that any so-called simplification of the current tax structure will be nothing more than a Trojan Horse to further raise taxes on businesses,” said Micahel Dugher, CEO.
Dugher went on to say, “what’s worse, the Treasury didn’t bother to consult or even inform DCMS”.
“It seems they are high on tax but low on joining-up government.”
Analysts at Peel Hunt said gambling duties are a “muddle”. “Different duty rates apply to different products as a result of fairly ancient history,” the team added. But while they suggested that “in principle” a simplification was to be welcomed, they added it was a “widely held view” that higher gaming duty leads to more offshore betting.
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Maltese legislation
Won’t be turned around: Malta is doubling down on its stance that locally licensed operators will be protected from overseas legal challenges. Updates to Maltese gambling legislation, known as Gaming Bill 55, have angered operators across Europe and led to accusations the offshore hub has undermined the rule of law.
In a bilateral meeting with Austrian Chancellor Karl Nehammer on Monday, Malta’s Prime Minister Robert Abela said claims by Germany, the Netherlands and Austria had no weight as he backed the amendment.
During a press conference in Vienna, Abela said Malta’s top priority in the gambling sector is to maintain the integrity and strength of its jurisdiction.
The prime minister said the amendment aimed to protect gaming companies from procedures that did not adhere to the principles of the free European market.
However, he added it does not exempt operators from legal action where the case is strong.
Strong arm of the law: Last summer, a Maltese judge refused to enforce a garnishee order from Austria against a Malta-based gaming company, citing the legal amendment passed by the Maltese parliament earlier in the year.
The judge’s ruling also asserted the supremacy of Malta’s Constitution over European Union law, sparking a backlash from several member states.
In response to accusations of fast-tracking legal changes, Abela said operators licensed in Malta would continue to be protected from legal challenges without a substantive basis.
He insisted the amendments aimed to safeguard gaming companies specifically from procedures that violate the principles of a free market.
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