New York iCasino gets a push
Bill to legalize iCasino hits the NY Senate, 10bet’s regulatory problems, Arena Racing boss wades into UK affordability debate +More
Good morning. On today’s agenda:
A bill for iCasino has been introduced in the New York Senate.
10bet hit with a UK regulatory action over AML and RG process failures.
UK racetrack boss makes the case against affordability measures.
The Rincon tribe cuts its ties with the California gaming authorities.
A judge savages an Aussie regulator over Crown prosecution delay.
Hope is a dangerous thing for a woman like me to have.
New York iCasino hope
A New York Senate bill offering a 30.5% tax rate on iCasino is introduced – but there is skepticism over its chances.
The billion-dollar question: Sen. Joe Addabbo’s bill S4856 would see iCasino introduced in New York with a tax rate of 30.5% and could raise up to $1bn in taxes and licensing fees. However, with iCasino failing to feature in Gov. Kathy Hochul’s recent budget, its chances of success appear to be slim.
The bill as proposed would allow all New York sports-betting, casino, tribal and racetrack licensees to offer iCasino in return for a $2m license fee or $10m if ‘renting’ a skin. A competitive bidding process for three more licensees would also be opened up.
The bill’s language also includes:
10-year term.
Live dealer must be union jobs and in-state.
Prohibition on licensing entities that conduct iGaming in illegal markets.
Licenses awarded immediately with a go-live 120 days after regs are published.
$11m responsible gaming fund.
It’s the hope that kills you: As C+M wrote last week, for iCasino to pass muster in New York, it would need a triple play of support from Addabbo, Assemblyman Gary Pretlow and Hochul. This bill doesn't, on the surface, appear to achieve that.
Still, Howard Glaser, global head of government affairs at Light & Wonder, told LegalSportsReport that raising tax revenue from iCasino would be “more palatable” than the other tax increase proposed in the new budget.
On LinkedIn, Glaser suggested that the live-dealer provisions in the bill would generate up to 2,000 unionized jobs.
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BREAKING: 10bet’s process failures
Blue Star Planet will pay £620,000 to responsible gambling charities after a UK Gambling Commission investigation reveals social responsibility and anti-money laundering failures.
Planet Earth is blue, and there’s nothing I can do: In a regulatory settlement, the company behind 10bet was found to have insufficient AML controls and processes and deficiencies in its RG policies.
Among the failures, the Commission said Blue Planet did not employ dedicated compliance staff to monitor safer gambling alerts overnight, with customers who reached safer gambling triggers only manually reviewed the following day.
It also identified a failure to implement high-velocity risk alerts that permitted some customers to spend at high velocity without interactions happening in real time.
UK affordability debate
The latest figure to wade into the ongoing debate around affordability measures in the UK is the CEO of the second-largest racecourse owner.
Not me guv: Arena Racing boss Martin Cruddace told The Times late last week that horserace betting was accountable for only a “fraction of a fraction” of problem gambling in the UK. With the problem gambling rate “generally accepted” to be at around 0.3%, he suggested the percentage for anyone betting on horseracing was “considerably less” than that figure.
He warned about leakage to the black market if punters are asked for too detailed documentation.
“There are any number of black-market sites and I worry that what might be a trickle will become a flood,” he argued.
Rincon cuts ties
The Rincon Band of Luiseño Indians exerts sovereign rights and says its only oversight should come from the NIGC.
You have no power here: The Rincon Band of Luiseño Indians has decided to cut ties with California gaming regulators, saying from now on, in addition to the Rincon Gaming Commission, the only external regulation (and payments by the tribe) will be the National Indian Gaming Commission (NIGC).
Longtime Rincon Chairman Bo Mazzetti told GGB News, “What we’ve done is exert our sovereign jurisdiction as was originally intended by federal IGRA (Indian Gaming Regulatory Act) that authorized Indian gaming.”
“It was always the intent for tribes to run their own casino business, but when they passed IGRA, they said, ‘You need to reach an agreement with your state’. That became the compact.”
Zooming out: California’s gaming tribes have long been critical of state regulators, but this is not a California problem. Tribal relations with state governments are deteriorating across the country following the expiry of the original tribal gambling compacts, with flare-ups in Florida, Oklahoma and New York for various reasons we won’t get into today.
The rapid expansion of OSB has increased these tensions, as tribes find themselves in the no-win position of yielding tribal sovereignty and becoming commercial operators or sitting on the sidelines.
Chips are down
And then there were 5: With the introduction of SB 1656 by Illinois State Sen. Christina Castro, Illinois is the fifth state with a 2023 bill to legalize online casinos-poker. That’s the good news. The bad news is passage seems unlikely in all five jurisdictions:
Kentucky: Online poker
Indiana: Online poker and casino
Maryland: Online poker and casino, through a ballot referendum
New Hampshire: Online poker and casino
New York: Online poker and casino (see above).
Indiana was the best candidate, but as reported in a previous C+M newsletter, its foray into online gambling has hit a series of snags. The other states are longshots, with Maryland’s referendum approach having the best chance.
Beat the Clock
The pandemic has done for another beloved casino, this time in the UK’s second city.
With tear-dimmed eye, they say goodbye: Clockfair has placed Birmingham’s Broadway Casino into administration, with Matt Ingram and Elizabeth Welch of restructuring specialists Kroll appointed on February 1.
Broadway stopped trading near the end of 2022 and, despite a fast-tracked bid for a sale by the owners, no suitors rode in to save the day.
“The casino was forced to close its doors during the Covid-19 pandemic, in accordance with government guidelines, which had an immediate impact on its finances,” said Kroll, which initially advised on the failed sale.
“Customer footfall at the casino did not return to pre-pandemic levels impacting on its working capital and ability to pay its debts,” the firm added.
About 100 jobs are at risk from the closure of the venue, which opened in 2005 as a private member’s club following a £2.5m Art Dec-inspired renovation of disused hospital buildings.
Crown affair
Judge savages Aussie regulator over Crown prosecution delay.
Not tonight, Josephine: A furious federal judge has questioned whether Australia’s financial crime regulator is fit to prosecute the nation’s casinos after noting it took less time to negotiate peace in Europe following Napoleon’s downfall.
Slow burn: Last March, Australian Transaction Reports and Analysis Centre (AUSTRAC) filed a civil claim against Crown Resorts, alleging that A$69bn ($48bn) was laundered through the country’s largest casino operator over a five-year period. A year on, Justice Michael Lee is fed up with waiting.
Justice Lee told the court on Monday that the negotiated settlement to conclude the Napoleonic wars was agreed faster and that AUSTRAC’s lawyers needed to pull their fingers out.
“The Congress of Vienna took nine months to talk about the future of Europe, you’ve had 12 months to talk about admissions,” Justice Lee said.
“I’m not going to give any more time for there to be chit-chat between solicitors. We’re going to get the matter on.”
In excess: Justice Lee was incredulous about AUSTRAC agreeing to give Crown until May to settle on agreed facts and admissions, and to prepare a defense.
“I just find it astounding. Why on earth would a regulator agree to a timetable like that?” Justice Lee said.
“It’s already meandered for a year. I just want to know whether the regulator in this case is serious about running the case or not?”
Lee ordered Crown to file a brief response to AUSTRAC’s allegations by February 27, while the next case management hearing is scheduled for April 28.
Touch too much: AUSTRAC’s case alleges Crown breached anti-money laundering laws “innumerable times” and said senior managers had “wholly inadequate oversight” of its compliance of junkets and high-roller rooms.
It alleges from March 2016, Crown failed to assess the risk of 60 “high-risk” whales who bet “in excess of A$70bn” and lost A$1.1bn.
Crown’s barrister Kane Loxley said it was “very likely that Crown will be admitting to non-compliance”, but there was a dispute over aspects of how Crown’s AML program was administered.
Analysts expect the punishment to be in the hundreds of millions of Australian dollars.
Crown was bought out by Blackstone last year for A$6.3bn after the case was made public, ending James Packer’s rein of the casino group.
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Crypto regulation
In this week’s episode of ‘guess who’s regulating crypto’, our special guest is … the entire G20.
Sound of da (world) police: Efforts to regulate crypto are in various stages of completion across the planet, overseen by an array of watchdogs, and that may be a problem. Indian finance minister Nirmala Sitharaman called for “a globally coordinated approach on the regulation of crypto assets” during a recent meeting with International Monetary Fund managing director Kristalina Georgieva.
Sitharaman said India is holding “detailed discussions” with other G20 members about forming a collective standard operating procedure (SOP) to regulate crypto assets.
“Whether it’s mining or whether it’s the asset or whether it’s the transaction, we recognize that it is very, completely almost, driven by technology,” Sitharaman said.
“A standalone country’s effort in controlling or regulating it is not going to be effective.”
“There is an evolving consensus and that’s why in the G20, we are raising this issue and having detailed discussions with the members so that a standard operating protocol [SOP] emerges after the discussions.”
We’re going to be friends: Along with India, the G20 comprises famously co-operative states such as Argentina, China, France, Indonesia, Italy, Mexico, Russia, Saudi Arabia, South Africa, Turkey and the US.
The European Union, with its own crypto regulatory framework soon to apply to all 27 of its states, is also a full G20 member.
As is the UK, which also has incoming legislation intended to tame the wilder parts of the crypto universe, position itself as a global leader… and undercut rival jurisdictions.
Answer to no one: Barriers to a global framework are significant. Beyond existing hostilities and competition between the states themselves, the borderless features of crypto and the “homeless” nature of many of the assets plays into existing weaknesses around cross-border cooperation, experts say.
“The speed of action, approaches adopted, services and products covered and even the definitions and terminology used remain heavily fragmented,” said PwC digital asset regulation manager Laura Talvitie.
Businesses that offer multiple functions and products, like an exchange, may find their risk profiles and conflicts of interest unmanageable when subject to a global framework.
“The global asset class, which has seemingly grown up overnight, is more and more interconnected with the traditional financial ecosystem, with an increasing impact on financial stability,” Talvitie said. “The risks are heightened by the pace of innovation and lack of focus on risk management.”
European notebook
The Malta Gaming Authority has canceled BetDino’s license having found that it failed to comply with its licensing obligations, including payments to the MGA “in a timely manner”. Separately, the MGA has also issued a notice to two unnamed companies, which it said are operating on the island without an appropriate license.
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