North Carolina sets the rules

NC regs, Peruvian regs, UK black market, UK treatment funding, Sky Bet ASA fine +More

Compliance+More

Oct 19, 2023

Good morning. On today’s agenda:

Has North Carolina laid a trap for fantasy sports?
Peru sets the terms for the regulation of sports betting and iCasino.
The UK regulator claims to have halved black market traffic.
Meanwhile, the UK government lays out its funding treatment levy plans.
Sky Bet in ASA hot water over Gary Neville tweet.
BettingJobs’ Jobsboard features compliance manager and ML reporting officer roles.

You had me at hello.

NC regs

The North Carolina State Lottery Commission has unveiled its first round of proposed sports-betting rules.

Building blocks: The proposed rules were unanimously approved by the North Carolina Sports Betting Committee during its first ever meeting on Tuesday. Gaming compliance and sports betting deputy executive director Sterl Carpenter called the first batch of rules a “preliminary portion” and “foundational.”

“This includes definitions, incorporation of industry standards, license and application rules, and rules regarding the written designation agreements for operators.”
Carpenter said the goal was to keep the state on track to meet its mid-June launch mandate.

Stepping stones: The rules are not official. The NCSBC will meet again on October 27 for a public comment session. The online/written public comment phase is open until November 1.

A second batch of rules is expected next month, with a similar public comment phase to follow.

You don’t half pick’em: Nestled within the largely vanilla rules was a section on daily fantasy sports. Two rules appear aimed at Pick’em style contests, which have come under fire in several other states:

(a) based on proposition wagering or contests that involve, result in or have the effect of mimicking proposition wagering or other forms of sports wagering;
(b) in which an Individual chooses, directly or indirectly, whether individuals or a single real-world team will surpass an identified statistical achievement, such as points scored.

To repeat, the rules have not been officially adopted. This is a somewhat unusual step in the rulemaking process, but seemingly within the North Carolina Lottery’s authority.

Longtime lobbyist Steve Brubaker noted: “The legislatures in many states punted legislative authority to state agencies and have allowed them unusually broad rule writing ability on sports betting.”
“Generally an agency can’t write a rule that does not have basis in underlying law.”
After looking at the North Carolina administrative procedure act, Brubaker said: “The NC Lottery is exempt from legislative oversight in rule making, so I think pick’ems are toast there.”

Rest assured: The Coalition for Fantasy Sports, a group funded by a trio of operators, released a statement on the North Carolina rules saying they received assurances from the legislature that their contests would continue to fall under the fantasy sports umbrella.

"We are confident that the Lottery Commission will reach common sense rules that reflect the letter and spirit of that bill.”
"We look forward to participating as stakeholders in the rulemaking process, just as we worked alongside with legislators this past session to protect the fantasy sports that North Carolinians have played for years."

Florida update

No Casinos: Florida-based anti-gambling lobbying group No Casinos has submitted an amicus curae brief in the Florida Supreme Court sports-betting case. It argues Gov. Ron DeSantis’ approval of the Seminole compact with Florida violated “the text, spirit and public policy” of the Florida Constitution.

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Peru regulations

The Peruvian authorities have published regulations to ensure the safety of bettors, responsible gaming and the formalization of online gambling.

Health and safety: The Peruvian Ministry of Foreign Trade and Tourism (Mincetur) has published its new regulations for sports betting and online gambling, which the government hopes will guarantee the safety of bettors and promote responsible gaming.

The regulation will come into effect on February 9, 2024, with operators given a month from that date to apply for a license.
Those who do not register during this period will not be able to continue operating and may face the possibility of receiving a minimum penalty of $195,000, criminal prosecution and disqualification from engaging in the activity.
A special gaming tax of 12% of net profits will begin to apply to remote sports betting and online gambling from April 2024.
All payment methods are accepted except for cryptocurrencies, and players can choose how to collect their winnings, including deposits in their own name in the financial system.

Eyes on the prize: Minister Juan Carlos Mathews stated this regulation will allow the collection of ~$42m annually, which will be invested in the reactivation of tourism, tourism infrastructure projects and the promotion of sports and mental health programs. He added that this tax will "in no way" affect the prizes paid out.

The regulation creates mechanisms to protect players from potential fraud or scams, establishes online access controls to protect minors and individuals affected by gambling, and allows for the combating of money laundering by prohibiting anonymous betting.
Additionally, bets can only be placed on sporting events that are part of formal national or international sports associations, federations or leagues.

Peru has become the third LatAm country to regulate the online gaming industry, following Colombia and Argentina, according to the minister.

UK enforcement

The UK gambling regulator says it has nearly halved the traffic to the largest illegal sites after working with banks, payment providers and search engines as part of an enforcement blitz.

I’m a different person: Speaking at a recent International Association of Gambling Regulators (IAGR) event, Gambling Commission chief executive Andrew Rhodes said, although channelization is high, the regulator is concerned about shape-shifting elements of the black market.

Access to four of the top 10 illegal domains has been restricted via geo blocking, Rhodes said, adding there has been a 46% drop in traffic to the largest black market sites.
The regulator has blocked 17 sites from Google and is working with Mastercard on payment blocking.
Rhodes said he feels the black market isn’t a significant problem in the UK, where channelization is an estimated 96.7%.
However, he said the regulator is consulting with operators and sister organizations in other jurisdictions to close down avenues where criminal sites can dodge takedowns.
“You know as well as I do that so called ‘phoenixing’ of illegal sites, whereby a new but related website is created after you take down the original, is a problem and it remains so in Great Britain,” Rhodes said. “What may have worked one quarter may need refining the next.”

Get busy: Over the last year, the Commission has increased enforcement activity by more than 500%, Rhodes said, having used the extra funding it has been given by the government to tackle illegal lotteries on Facebook and influencers using social media to promote unlicensed gambling.

Player harm breaches remain the Commission’s busiest enforcement focus, however, Rhodes said.
The regulator has concluded the largest cases in its history over the last year, breaking its own settlement record twice with a £19m penalty for William Hill and £17m fine for Entain, both of which had player safety failings.
“Ultimately all the action we have taken in recent years has been for breaches of the operator’s own policy, things which are clearly short of existing standards and in all cases for things operators have not wished to defend,” Rhodes said
He told other regulators in attendance that while the UK operators had “very advanced systems for identifying and addressing risk” that it would be worth their while “testing whether those well-developed systems are being used in your markets, where you see the same operators we do”.

closeup photography of gold-colored ornament

RET consultation

The UK government has opened a consultation on one of the more controversial aspects of its reform agenda: a new mandatory levy for research, education and treatment (RET) for gambling harms.

Price you gotta pay: The government estimates the tax on operators will rake in around £100m a year, and it will be mandatory, replacing the current voluntary system. Online operators would have a 1% fee on gross gambling yield, while shops and casinos would pay around 0.4%.

The consultation is open until December 14.
“All gambling operators will be required to pay their fair share,” said culture secretary Lucy Frazer.
“The introduction of this levy will strengthen the safety net and help deliver our long-term plan to help build stronger communities while allowing millions of people to continue to gamble safely.”

No choice: One significant change should the levy enter force is the industry will no longer have input on how RET money is spent.

The funds will go directly to the UK’s national health authority to address harm issues and a government research arm that will inform policy.

Mountain criticism: Kirsty Caldwell from Betsmart Consulting said on LinkedIn that while she welcomed the news of the NHS directly benefiting from the new levy, she was concerned about the wording that appeared to shut the gambling industry out of having “any say” over how the money is spent.

“Gambling operators are in a unique position and want to be part of the solution,” she said.
“Sat on mountains of vital activity data which could, and should, be used to help inform any prevention strategy; cutting the industry out of the conversation completely simply cannot result in the best outcome for the consumer.”

GamCare numbers

GamCare said in its annual report published earlier this week that it had seen calls to its National Gambling Helpline rise to record levels in the year to March. The total of 44,049 was a 4.7% increase on the year before.

The report said 9,009 people attended structured treatment sessions or EBIs (Extended Brief Interventions), with 38,456 treatment sessions undertaken in total.
The majority of those in treatment reported as White (86%), while 7% reported as Asian and Asian British, a slight increase on the previous year.

ASA censures Sky Bet

Not right back: Sky Bet has been censured by the UK’s Advertising Standards Authority over a promoted tweet featuring Sky Sports football analyst Gary Nevile, which the body said was likely to have a strong appeal to children.

It is the latest instance of a betting company being found to have broken the rules with its use of social media.
The promoted tweet was posted in February 2023 and contained an embedded video clip from The Overlap football podcast.
The video showed Gary Neville discussing which team might win the Premier League.
The Sky Bet logo appeared intermittently throughout the video while the text at the end said ‘brought to you by Sky Bet’.

Adult content: The company said it “firmly believed” Gary Neville did not hold strong appeal to under-18s and the content in question was “distinctly adult in tone and did not feature any content of a childish nature”.

It cited previous ASA rulings where more recently retired footballers who had moved into punditry had been judged not to be of strong appeal to under-18s.
Sky Bet was referring to the recent ASA ruling over William Hill’s use of pundit and ex-Wales international Robbie Savage in a promoted tweet.
In that instance, the ASA accepted William Hill’s defense that it had carried out a “thorough analysis” of personalities who feature in its advertising and the ad had been specifically created for an older audience.

In finding against Sky Bet, the ASA found Neville had a combined social media following of 135,000 people who were under-18. Although this was a small proportion of his social media followers, the ASA considered it was a “significant number in absolute terms”.

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European notebook

The Netherlands: The gambling regulator has ordered Betonline.ag operator Blue High House to stop offering gambling services to Dutch consumers and is threatening daily fines of up to €43k if it does not comply immediately.

The KSA said its investigators found they were able to create a player account, make a deposit and place bets, with Blue High House not taking any technical steps to prevent this from occurring.

Integrity notebook

The International Betting Integrity Association reported there were 50 suspicious betting alerts in Q3, the same number as in Q2. Football and tennis accounted for more than half of the total with the rest coming from table tennis, darts and esports.