Ohio nixes Fanatics merch plan

Regulators step in over bonus plan, Entain accused of lobbying dirty tricks, Italian ‘Mafia’ seizures, Dutch growth, Gaming in Spain report +More

Compliance+More

May 23, 2023

Good morning. On today’s agenda:

Fanatics betting bonuses via merch sales is halted by regulators.
Entain is caught up in a lobbying scandal.
Italian court seizes assets linked to Calabrian Mafia.
The number of people gambling in the Netherlands is up.

And who the cap fit, let them wear it.

Ohio says ‘no’

The regulator has stepped in to halt the offering of betting bonuses in exchange for retail purchases.

Empty basket: The Ohio Casino Control Commission told Fanatics to take down a promotion that offered anyone who made an eligible merchandise purchase an equivalent betting bonus after the offer was highlighted on social media.

A spokesperson told LegalSportsReport that Fanatics had complied with a request to cease the promotion.
“The Commission appreciates Fanatics’ attention in this matter,” LSR reported.
The wording of the offer made it clear that purchasers of apparel were eligible for a bonus bet up to the same value and that the offer was only available to Ohio residents.

Getting shirty: The matched merchandise/betting bonus promotion appears to be a central element to Fanatics’ marketing plan. When speaking at SBC North America at the start of May, Fanatics Betting and Gaming CEO Matt King suggested the marketing strategy was to “surprise and delight” its 95m-strong player database by “giving jerseys away”.

“The money we would spend in acquiring customers, we can invest in player rewards,” he said.
He added that Fanatics came with “Amazon-like brand equity”.

Backgrounder: Fanatics recently bought up the US arm of PointsBet to further advance its sports-betting plans. King told the SBC audience it would be building a challenger brand from the ground up and would be making the most from its “second-mover advantage”.

US notebook

About face: The New York State Gaming Commission has revised rules that would have severely limited the ability of affiliates to operate in the online market. The original proposal would have seen CPA deals outlawed as well as revenue-share agreements.

But at a meeting held on Monday, the Commission said that, upon further consideration, the effective banning of all affiliate operations had been unintended.
CPAs will now be allowed, albeit under a watching brief.

Player ban rumors

Mo money, mo bans: ESPN is reporting that the NFL is investigating a “second wave” of player violations related to betting. This follows the move in April to suspend five players after being found guilty of various betting offenses.

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SkillOnNet UK fine

UK operator fined £300k by UK Gambling Commission.

Fine time: The operator behind casino brands PlayOJO, SpinGenie and nearly 50 other sites is the latest company to be fined by the UKGC for breaches in social responsibility and AML.

The company will pay £305,150 to socially responsible causes.
Among the offenses, the Commission found that SkillOnNet had failed to follow appropriate procedures with regard to source of wealth checks, didn’t perform appropriate risk checks and relied on verbal evidence when considering disproportionate spending.
The mistakes occurred between Jan21 and Dec22.

Entain’s lobbying tricks revealed

British politicians have accused Entain of “dishonesty” for funding a campaign to water down the UK’s White Paper on gambling reform while publicly giving it full support.

A message to you, MP: The owner of Ladbrokes Coral and Sportingbet pumped money into a lobbying effort via an organization called the Player’s Panel, which claimed to represent ordinary punters, according to The Guardian. In the days following the White Paper’s publication, Players’ Panel wrote to people who had signed up to receive information and mobilized them to email MPs over the affordability checks proposals, providing template responses.

“The government has decided to limit when and how much you can bet,” said the email. “This is going to significantly impact your ability to bet responsibly.”
One suggested response prompted descriptions of “a massive infringement on my personal freedom” and said the MP could approach the gambling minister Lucy Frazer. “It isn’t fair, it isn’t right and it isn’t British,” another said.
Other templates asked MPs to torpedo specific proposals such as online slot machine limits, tougher affordability checks and restrictions on “free” spins.
The templates billed the White Paper as a “negative step” that would “do more harm than good”, despite Entain’s public stance.

Now hold up playa: Players’ Panel is funded by Entain, but claims the group did not disclose this in the emails were met with anger from politicians.

Carolyn Harris, chair of a cross-party parliamentary group on gambling harm, said the lobbying was “shameful”. “These emails reveal their true colors as they immediately try to undermine the proposals using covert and dishonest tactics,” she said.
Former leader of the Scottish Conservatives, Baroness Ruth Davidson said, while lobbying is perfectly acceptable, “for members of parliament – and members of the public – to be kept in the dark over which well-funded gambling firm is behind lobbying efforts such as template emails is pretty underhand. In fact, it stinks”.
Former Tory leader Iain Duncan Smith said the templates showed a “level of dishonesty”.
“At no stage do these emails point out that it’s a lobbying exercise by a company,” he added. “They’re trying to hide behind constituents rather than coming clean about their own self-interest.”

Nothing to see here: Entain declined to reveal how much of the Players’ Panel funding it provided and whether any of its staff were involved in writing the templates.

It said it is “hugely important that everyday punters have an active say in the consultation process” and “especially those elements of the review that could impact a recreational past-time [sic] that is enjoyed by millions of people across the country”.
“We do not see any contradiction between our welcoming of the review and our encouragement of our customers to make their voices heard in what is an important and necessary debate.”
Entain said many members of the Players’ Panel were unpaid volunteers who did not receive any benefit from the company.

Italian court seizures

An Italian court has frozen around €3m in assets of two men believed to be running a Mafia-assisted illegal online betting operation stretching through the country and into Europe.

Gangsta’s paradise: The unnamed pair from Reggio Calabria, a southern mainland city separated from Sicily by the Strait of Messina, are alleged to be linked to the notorious ’Ndrangheta gang.

The “sophisticated and highly profitable system” illegally collected online bets and funneled them through Malta to avoid paying taxes in Italy.
At the top of the pyramid, the two suspects allegedly acted as managers and promoters of underground gambling points across Tuscany, Lazio and Calabria in Italy, and Malta, Romania, Austria and Spain.
Prosecutors labeled the operation a ‘cascade’ profit system with the organizers at the top and the punters at the bottom.
In return for a cut, the ’Ndrangheta would offer protection and advertising for the suspects’ brands online and in local businesses with which it was affiliated.
Satellite companies in Malta and Austria were being operated remotely from Italy, according to the Reggio Calabria Court.

Stop this thing we started: Under a Prevention Measures order, the court ordered the seizure of four related companies operating in the recreational and real estate sectors, 11 buildings, land and other financial assets amounting to over €3m.

Italian Mafia clans are alleged to have laundered billions of euros of illicit funds through online gaming platforms in Malta between 2015 and 2022, according to a report by a left-wing European Parliament party.
Of the €6.7bn in total assets confiscated across more than 100 investigations, €4bn came from probes into online gaming related to Malta, researchers found.
“The lax controls, the lack of interest in investigating and the close political ties in the country are the reasons why Malta became the Mafia’s El Dorado,” the study concluded.

Dutch market growing

The number of people gambling in the Netherlands is up, new research has found.

All rise: A survey by IPSOS on 2,803 Dutch people extrapolated across the population found 14% had gambled, up from 11% last year.

Young gamblers are growing in number, rising from 21% to 30%, and researchers noted a jump in problem gambling in the same demographic, which was attributed to the parallel rise in players.
Smartphones are the device of choice, with 81% of punters using them primarily, with laptops and tablets a distant second and third.
Websites, over apps, are the most popular ways of placing bets, the survey found, with 85% preferring to use sites.

Can’t you see: The survey revealed that Dutch people are encountering gambling advertising less frequently than in 2022.

It comes as the Netherlands is about to introduce a tough ban on non-targeted gambling advertising from 1 July, which will prohibit selling across television, radio, billboards and in public spaces.
Online and on-demand TV will still broadcast ads.

Gaming in Spain

The regulator defended the move to limit advertising despite criticism that it made the online market less attractive.

Can’t get no satisfaction: The director-general of the Spanish regulator, the DGOJ, Mikel Arana suggested the introduction of the restrictions on some types of gambling advertising introduced late last year was in part a response to a glut of gambling advertising during the pandemic period.

In response to complaints from head of the online gambling organization Jdigital Jorge Hinojosa over why the industry needs to justify its own regulated existence, Arana said “this is why”.
“At the time of Covid, the presence of gambling commercials was terrible,” he added. “It was all the time, all day.”
“The self-regulation didn’t work and that’s why we approved the royal decree (on advertising),” he added.

Lack of appeal: Whether there would be any takers for new licenses is, however, perhaps debatable. Hinojosa suggested the full effects of the new advertising restrictions have yet to be seen. But he added that it was clear it had slowed down online market growth. “It has made the market less appealing,” he added.

Santiago Asensi, partner at his eponymous firm, said “we don’t have people knocking on the door, saying they want to enter Spain”.
“Spain Is not very attractive as a market for newcomers right now.”

When I’m cleaning windows: Asked about the potential for a new licensing window, Arana said “since we are changing the market so much, it seems reasonable to let the market settle down and then we will open to new competitors”. But Arana was criticized by his predecessor.

“Operationally, there is maybe no point in having a licensing window,” said Juan Espinosa Garcia, the former director-general of the DGOJ and now a consultant.
“But a healthy market regime is no good if newcomers cannot opt directly for licenses and are forced to buy licenses from licensees.”
Still, given the current upheavals, he acknowledged that now might not be the time for a “very successful” licensing window, adding it was “not a political priority”.

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Japan casino delays

Delays have plagued the development of Japan’s first casino resort, but Osaka’s newly re-elected governor says any lag won’t derail the project, now slated for 2030.

In five years time: “There would have been a lot of synergy if it could have opened at the same time as the 2025 Osaka, Kansai Expo,” Osaka Gov. Hirofumi Yoshimura told Bloomberg. “But a time lag of five years won’t have much effect on the project itself.”

The sprawling integrated resort on Yumeshima, an artificial island in Osaka Bay, is to be developed by MGM Resorts International and ORIX Corp, costing an estimated $7.9bn.
It is expected to attract up to 20-million guests and $3.9bn in annual revenue, with domestic tourism accounting for up to 70% of that figure in the opening few years.

Don’t stop believin’: Japan’s government initially gave the optimistic date of 2024 for an opening prior to the onset of Covid-19.

In full denial mode given the then-precarious state of the pandemic-blighted Olympics, officials first pushed the date to 2027 and then 2029.
Now, MGM CEO William Hornbuckle has said construction is likely to begin late this year or early in 2024, with the facility set to open for business in the first half of 2030.
A second resort, penciled for Nagasaki, remains in development hell with no sign of approval from the Japanese government.

Australia notebook

Ban it: A bill has been introduced in the Australian parliament that would introduce a complete ban on all gambling advertising. The bill’s proponent Zoe Daniel told parliament the bill would “place an outright ban on gambling advertising on our screens; including broadcast television, pay TV and their respective streaming services, and on radio”.

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