Putting the California sports-betting dream to bed
California setback, UK National Lottery, Italian police seizure, the Token Word +More
Hopes for sports betting in California dwindle.
In +More: WynnBet’s Massachusetts exit, Georgia progress.
Allwyn takes over the UK National Lottery amid revenue fears.
Maltese business funds frozen in mafia probe.
Token Word: Chinese laundering and a Stake investigation.
These LA phonies and their bullshit bands.
California setback
California sports betting is officially dead for 2024.
End of the clown show: Supporters of a foolhardy attempt to legalize sports betting in California have withdrawn the initiative from the ballot. That means California will remain a non-sports-betting state this year and likely for years going forward.
One of the key backers of the initiative, Kasey Thompson, told PlayUSA they made the decision to pull the initiative because it “was supposed to be for the tribes but is only causing division.”
The effort: The plan, per Thompson and his partner Reeve Collins, was to cleanse offshore sportsbooks via a firm called Eagle 1 Acquisition Company, which could then be sold to California tribes and transitioned into above-the-board sportsbooks in the California market.
“We’re going to take those illegal assets that operate in California today, companies that are worth billions,” Thompson told the news site.
“And they’re going to be owned, with no bad actors, completely cleared, all the technology, front and back, handed to these tribes with ownership papers, lock, stock and barrel. This will clean up the entire illegal black market that plagues the state.”
Doomed from the start: Setting aside the absurdity of the idea, the first mistake was introducing the effort without tribal support, something the backers felt would evolve over time. Despite their experience creating Pala Interactive with the Pala Band of Mission Indians, Thompson and Collins either never learned or forgot how to speak ‘tribe’.
As Pechanga.net publisher Victor Rocha put it during an appearance on the World Series of Politics podcast: “Listen when you talk to a native American, you need to wait for the talking stick,” Rocha said. “Then you can talk to them.”
Category errors: Trying to bypass the tribes at the outset and gain their backing down the road was a terminal mistake. And unlike the publicly traded commercial operators, tribes don’t have the same outside pressures.
“We can wait. We measure time in a different manner than the industry does,” Rocha said. “We don’t measure it in financial quarters.”
On social media, he was similarly dismissive of the Thompson/Collins plan, calling it a “clown car.”
Divide and conquer: Not waiting for tribal support wasn’t the only mistake. The initiative supporters also caused tribal division, pitting non-gaming tribes against gaming tribes, and amplifying the already existing tensions that exist between the two groups.
To gain tribal support, supporters amended the proposal in December to increase the amount small and non-gaming tribes receive from the Revenue Sharing Trust Fund.
The proposal would increase the annual funding of the RSTF from the current $1.1m to as much as $15m per year.
That garnered the support of four smaller tribes: the Cahuilla Band of Indians, the Karuk Tribe, the Blue Lake Rancheria and the Chicken Ranch Rancheria.
Taking advantage: The same division occurred during the Prop 26 and Prop 27 fight in 2022 when several tribes lined up behind the commercial operators. The major gaming tribes saw that for what it was: a way to allow commercial operators to partner with non-gaming tribes for access to the California market.
Such tribes were deemed more easily influenced by multi-billion-dollar companies and more amenable to other forms of mobile gambling.
Call this a setback: There’s a saying that no one wins in a fight, and that is very much the case when it comes to gambling in California. The state spent nearly a decade trying to legalize online poker.
Progress was slow, but there was at least progress, right up until the fight boiled over with both sides calling each other obstructionists in a tension-filled 2016 legislative session.
It was the last serious attempt to legalize online poker in California.
One thing or another: For anyone who was around during the online poker debates, the sports-betting initiatives in 2022 were familiar, including the larger issues existing under the surface. California tribes are genuinely concerned that one form of mobile betting will lead to another.
OSB will not cannibalize B&M casino revenue, but many tribes believe online casino gambling will.
Under the cover of the night: Stopping outside forces from bringing online casinos to California is very much a tribal priority. Rocha hinted at this during his World Series of Politics appearance, saying of the commercial operators: “We understand what their motivation is, but they don’t understand what ours is.”
He added that the tribes understand this isn’t about sports betting, it’s about online gaming and, according to him, “that’s a multi-year process.”
California’s gaming tribes have now beaten back efforts in 2022 and 2024 that would open the door to online commercial operators.
The tribes believe such operators are trying to stealthily bring online casino gambling to California.
A blessing in disguise: The failed effort did lead to one positive outcome, as it brought the tribes and commercial operators such as FanDuel and DraftKings together to fight a common enemy. That said, tribes have exceptionally good memories, and 2022 wasn’t that long ago.
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North America
WynnBet has become the latest operator to announce it is exiting the Massachusetts market after Betr said last week it would not pursue a license renewal. The company has submitted a notice of intent to the Massachusetts Gaming Commission to cease online sports betting in the state.
The Commission will discuss the notice at its meeting later today, Feb. 1.
Recall, WynnBet exited OSB operations in most states last August barring Massachusetts, Nevada, New York and Michigan.
In the latter two instances, it is thought Wynn is looking to sell on its licenses.
Georgia progress: Bill 386, which would legalize sports betting in the state, has advanced out of a key Senate committee. The bill provides for 16 licensees to be handed out to sports franchises and venues and features a 20% tax rate. Importantly, the bill would not need a constitutional amendment.
ProhiBet will provide its monitoring technology to SlamBall.
Global
The French gambling regulator l'Autorité Nationale des Jeux has issued a warning about illegal gambling websites being promoted on Facebook.
The International Betting Integrity Association has reported a 35% year-on-year decrease in suspicious alerts in 2023.
The International Tennis Integrity Agency has provisionally suspended a Bosnian official in relation to pending corruption charges.
UK National Lottery
The changeover: Allwyn officially becomes the operator of the UK National Lottery today, February 1, the first time the lottery has switched stewards in its 30-year history, amid warnings over a predicted decline in sales and charitable donations.
It could be you: Allwyn won out over Camelot in the race to be the lottery operator in September 2022. Camelot had been operating the lottery since its launch in 1994.
But according to insiders who spoke to the FT last week, sales are expected to dip in the first 12 months of Allwyn’s period of incumbency.
The paper said annual revenues are expected to fall from £8.2bn in the last year of Camelot’s reign to £7.8bn for Allwyn’s first year.
The fear is this could lead to shortfalls in funding to the lottery’s 12 associated charities.
Fingers crossed: Allwyn told the FT it remains committed to its promise of doubling annual funding to good causes by the end of its 20-year license. “The only change to our plans is to the timing, due to delays caused by the unsuccessful legal action brought against the Gambling Commission by others,” it told the paper in a statement.
On that score, the good news for Allwyn and the Gambling Commission was that IGT halted its legal action over the awarding of the license early in January.
Allwyn has now committed to using IGT under its new contract.
Allwyn will be launching a new marketing campaign for the lottery’s main game with a new slogan ‘Will you be next?’
Italian police seizure
You rang: The Italian finance police have seized $432m in corporate assets, trusts and financial holdings of an unnamed Maltese online gambling and betting business with suspected mafia links.
The ‘Operation Galaxy’ raid intended to disrupt the ‘Ndrangheta’s underground gambling rings targeted Antonio Ricci, the suspect at the center of the sting who is accused of running a criminal stable that illegally collected online bets via Reggio Calabria and branches across Malta, Romania, Austria and Spain.
Ricci was arrested in 2019 by Maltese police working a European Arrest Warrant, and his lawyers had attempted to keep his name out of the public domain while he fought extradition to Italy.
He had been living in Malta for the past 10 years and had strong family ties on the island.
Bookmakers allegedly entered agreements with Ricci’s gang, transferring collected sums to the association’s overseas administrative base to evade Italian taxation.
Justice officials last week ordered the seizure and subsequent confiscation of three online gaming and betting companies, two Maltese trusts and related financial portfolios, estimating the total value at approximately €400m.
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Token Word
In the (wonton) soup: Police have seized Bitcoin worth around $1.7bn after a former Chinese restaurant worker tried to buy a $30m mansion in London with suspect funds. A British court heard Monday that Jian Wen, a Chinese-British citizen, was allegedly recruited to aid a $5bn money laundering scheme.
The main suspect, Zhimin Qian, entered the UK under a false identity and attempted to clean money stolen from a Chinese investment fraud scheme facilitated from 2014 to 2017.
Qian, who is on the run, met Wen at the South London takeaway in which she worked, and recruited her to act as the front, converting Bitcoin into cash and buying luxury items and real estate with the proceeds.
This included a $30m seven-bedroom mansion in Hampstead with a swimming pool, however the sale didn’t go through because Wen could not explain the source of the crypto assets.
’Course I make a little money: Authorities then raided a house that Wen and Qian rented, the court was told, and confiscated various devices containing more than 61,000 BTC, worth about $1.7bn when it was accessed back in 2021.
Wen first claimed the crypto had been legitimately mined, then altered her story to claim it was a “love present,” presenting a deed stating that she received 3,000 BTC from Qian.
Wen is accused of three counts of money laundering between October 2017 and January 2022, of which she denies all charges.
Crypto casinos
Shock and awe: “Astounded” UK lawmakers have promised action against ‘ready-to-gamble’ crypto casino accounts, which are being openly sold on Facebook and other social media sites.
An investigation by Sky News found punters could pay less than $10 (£8) for ready-made accounts that will access crypto casino Stake.com, which is otherwise blocked in the UK.
The accounts were fully set-up, with buyers able to simply log in and start gambling without the need to add personal details. Ads for the illegal services featured across Facebook, Discord, TikTok, Telegram, Reddit, and X (formerly Twitter).
The probe revealed many accounts were being sold by addicted gamblers who had gone broke, as a final attempt to pay their bills.
“I lost $225,000 [gambling] this month,” one seller told Sky News. “I don’t have any money anymore. I’m poor now. I need money for food in the next week.”
We’re not gonna Stake it: Crypto casinos are unregulated in the UK, however their popularity is soaring. Stake, the largest and most controversial, sponsors gambling influencers and celebrities, such as rapper Drake.
The crypto casino was lined up to sponsor London soccer club Chelsea until a fan backlash caused it to pull out.
Carolyn Harris MP, who leads an influential parliamentary group that scrutinizes gambling-related harms, called the findings “astounding” and said she would investigate further.
Stake said it “has the strongest controls in the industry.” It was banned from Twitch in 2022 after a gambling streamer confessed to scamming fans out of more than $200,000.
Calendar
Feb 6-8: ICE, London incl. World Regulatory Briefing
Mar 5-7: SBC Summit Rio
Mar 27-28: Player Protection Forum, London
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