Ripple effect
BC.GAME unravelling poses questions for Curaçao and the UK
The crypto operator’s collapse sends ripples across the Atlantic.
In +More: Desmond’s UK lottery license challenge.
The levy fallout in the UK sees high street bookmakers raise doubts.
The UK’s greyhound industry launches a campaign for a welfare levy.
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The unraveling
Domino dancing: Multiplying problems for the somewhat shadowy crypto-based operator BC.GAME in Curaçao appear to have caused a domino reaction across the Atlantic as the operator shuttered its UK operation.
The operator is reported to be set to find out whether it has had its license revoked by the authorities in Curaçao this coming Friday.
This follows reports within the past 10 days suggesting BC.GAME had been judged to be bankrupt in a Curaçao courtroom.
The company denied the reports and initially appeared to indicate the UK business was not affected.
Subsequently, however, the UK arm notified customers it was closing the operation.
A notice on the site suggested it stopped taking new registrants on November 14.
Outfoxed: BC.GAME used the route of a white-label arrangement with the controversial TGP Europe to claim a UK license. It was under this arrangement that the UK business operated and was able to advertise in the UK, including the two-year deal with Leicester City signed in the summer.
The football club initially stood by its beleaguered sponsor with a press statement suggesting it had received assurances that the company had “no issues with liquidity.”
Denial is not a river in Egypt: When contacted about the debacle, a UK Gambling Commission spokesperson merely noted that TGP Europe was the “operator of Bcgame.uk, not any other overseas business.”
“If an operator leaves the British gambling market we expect an orderly closure of its website to GB consumers and this includes providing consumers with clear information on how to obtain their funds,” the spokesperson added.
However, this still leaves open questions surrounding the UK white-label system and the controversial role of Isle of Man-based TGP Europe within it.
A recent UN Drugs and Crime Unit report noted the “apparent connections” between TGP Europe and jailed junket operator Alvin Chau’s Suncity Group.
Questions to answer: C+M sent a list of questions to the Commission regarding TGP Europe and its role within the UK licensing ecosystem, starting with whether the Commission was in direct contact with either BC.GAME or TGP Europe within the last fortnight and whether this raises questions about TGP Europe’s role.
The Commission refused to answer questions regarding whether consumers were being protected enough in situations such as has occurred within the last two weeks.
C+M also asked the Commission whether UK consumers are able to fully comprehend the nuances of the UK licensing system as it pertains to clear ties to larger offshore operators.
It also refused to answer questions regarding BC.GAME’s clear exposure to crypto-based gambling, which is not allowed, for now, within the UK.
Talk among yourselves: All this has occurred against the backdrop of internecine political squabbling in Curaçao, as the country’s Gaming Control Board refuted claims from politician Luigi Fanetye that there was no legal basis for handing out licenses.
The board reiterated that it is overseeing all licensing processes for the new regulatory National Ordinance for Games of Chance framework, which was introduced in July 2022.
The hope was that this process would be completed by the end of this year, but the board said implementation had been pushed back due to an influx of licensing submissions.
The Control Board also denied Fanetye’s claims of money laundering, as operators are required to pay fees to the government directly.
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+More
Bubbling under: The situation with BC.GAME isn’t the only area of controversy where the UK Gambling Commission is facing questions. According to The Telegraph, the UK’s gambling and lottery regulator is in discussions with former media tycoon Richard Desmond over a £200m deal related to the awarding of the last lottery license to Allwyn.
In court filings, Desmond’s Northern & Shell company argued the Commission mishandled the licence bidding process.
It also questioned Allwyn’s suitability to run the National Lottery, citing its lack of UK experience.
Recall, Northern & Shell was one of the companies passed over in the licensing process that saw Allwyn take over the running of the lottery from Camelot.
Brazil: The National Association of Games and Lotteries has claimed more than 2,000 illegal gaming sites are still live in the country, with the National Telecommunications Agency admitting the task of blocking illegal sites is so vast it will struggle to block all of them.
Paraguay: The government has presented a bill to modify the country’s current gambling legislation with the aim of liberalizing the market and ending the current gambling monopoly. A proposal has already received partial approval in the Chamber of Deputies and now goes to the Senate.
Argentina: The Chamber of Deputies has approved a bill including bans on all gaming ads and sponsorships. The bill was fast tracked after receiving support from multiple opposition groups in the legislature and now goes to the Senate.
Colombia: A bill proposing an increase in support and regulations surrounding problem gambling has been introduced by national gambling regulator Coljuegos. Under the proposals, operators will be required to increase problem gambling detections and introduce plans for better education of players.
India: The Competition Commission of India is investigating Google’s policies for real-money gaming in the wake of a complaint from iGaming operator WinZO, according to Reuters.
WinZO told the Competition Commission that a change in Google’s gaming app policy in 2022 continued to exclude WinZO from the Play Store despite it accepting some of the company’s competitors.
The operator was rejected because it offers games such as carrom and puzzles, which fall outside of the fantasy sports and rummy categories allowed under the 2022 policy update.
WinZO claimed Google effectively creates a two-tier market and grants preferential treatment to select app categories.
Levy fallout
Took my chevy to the levy, but the levy was dry: On-course and retail high street bookmakers appear to be the big losers from last week’s announcement of the UK government’s plans for the launch of a statutory levy to fund efforts to treat and prevent gambling harms.
The government published its plans for the establishment of a levy last week, which it hopes will raise up to £100m a year.
The rate at which the levy will be paid was laid out by the government with the tariff set at between 0.1% and 1.1% of gross gambling yield depending on the sector.
Devil WLTM the detail: The problems for the industry lie in the banding. Specifically, the independent bookmaking sector is set to suffer what a Betting and Gaming Council spokesperson told the Racing Post was a “hammer blow” after the government suggested high street bookies should pay a 0.5% levy.
This represents an increase on the 0.4% suggested by the BGC in its white paper consultation response.
Meanwhile, arcades have had their levy set at 0.2%.
While the BGC emphasized that its members support the introduction of a levy, the spokesperson told the Post it was “deeply concerned” about this effective tax hike on independent bookmakers and land-based casinos.
The higher rate “risks job losses and venue closures, while contributing a small amount to the overall levy total,” the BGC spokesperson added.
“At the same time, the government’s incoherent approach allows the National Lottery, adult gaming centres and seaside arcade centres, to pay significantly less towards the levy.”
Attention deficit: The exact nature of how the levy will work was highlighted in a blog form the betting and gaming team at law firm Wiggin, who suggested that one area of “significant attention” should be how the levy operates in practice.
As with the comments from the BGC, the team pointed out there was no one within the industry who would not agree with the objective of reducing gambling harm.
“However, what will be absolutely critical is how these governance arrangements work in practice.”
Critical to this is the £100m that will be raised every year. Wielding that sum, the team suggested “one would not just hope but expect that gambling harm is reduced in the near to medium term.”
Moreover, as harms are reduced, the burden of the levy on the industry should reduce.
Task force: Yet, this is likely not the view of the health professionals, and how the governance arrangements around the distribution of the levy funds work will be central over the next few years.
The team suggested the government really should be “put to task” to ensure there is an evidence-based process in place to, as the government’s aim says, to “monitor progress in reducing gambling harm.”
“As we sit here today,” the team added, “it is difficult to envisage a situation where £100m needs to be extracted from the industry every year” in order to pursue an agenda where regulatory change and better data and understanding is likely to achieve those goals anyway.
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Paw cousins
The home turn: British greyhound racing’s governing body has launched a campaign for a statutory levy to fund its welfare and integrity commitments.
The Greyhound Board of Great Britain (GBGB) enlisted the support of MPs at a reception at Parliament last week when it launched the campaign.
This is against the backdrop of a mounting welfare crisis, which threatens the viability of the sport and has led to the closure of the Crayford track by owners Entain.
Currently, the GBGB is funded through a voluntary levy of 0.06% of bookmakers’ gross profits on greyhound racing bets, compared to the 10% horse racing receives from its statutory levy.
The GBGB is forecast to receive £6.7m for the year to March 2025, a decrease in real terms of 67% since 2009, when the GBGB was formed.
Lamont-able: Greyhound racing unsuccessfully lobbied for a statutory levy in 1991 but then chancellor Norman Lamont ruled it out in the 1992 budget and called for a voluntary contribution from bookmakers while at the same time reducing betting duty.
Subsequent efforts to establish a statutory levy floundered on issues around EU rules on state aid. Brexit has removed that obstacle.
Off the beaten track: Entain’s statement as to the reasons it is closing Crayford takes some unpicking. “Ultimately, it is no longer viable for us to continue operating the site,” the company said.
It added that “dwindling support for the venue” had led to insufficient trainer interest to fulfil the schedules and fewer competitive race days.
This, in turn, led to lower attendances, which Entain said had “sadly” driven its decision to close.
Dog gone: Crayford dropped its well-attended Saturday evening and morning fixtures in favor of midweek meetings designed to fulfil its contractual obligations to its media partner Premier Greyhound Service, owned by ARC.
The battle for content between rival bookmaker live stream providers SIS and PGS had led to an almost doubling of the number of meetings broadcast on a daily basis over the last few years.
However, it has not been possible to double the supply of greyhounds, which has led to a battle for trainers and their dogs between rival promoters.
When the race is run: The increase in the number of dogs has led to a surplus of retired greyhounds needing rehoming. Consequently, many trainers have no room for new dogs because their kennels are full of ex-racers awaiting rehoming.
Entain has even resorted to exporting retired racers to the US to alleviate the rehoming crisis.
Rival bookmaker Star Sports, which recently bought the Durham track at Pelaw Grange, has expressed interest in taking over Crayford.
Pelaw has a media contract with SIS, however, which might make negotiations complicated.
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