Stake.com’s F1 deal hits legal barriers
Stake’s Swiss issue, Florida fight continues, Alabama shakes +More
Switzerland investigates Stake.com following F1 naming rights deal.
In +More: PrizePicks takes a pause in NY; Crown CEO cleared of wrongdoing.
West Flagler hopes to take its case to the Supreme Court.
A ‘minor blip’ threatens to derail Alabama efforts.
Donations from sports-betting and crypto firms to state AGs ‘raise eyebrows.’
And if you don't love me now, you will never love me again.
Stake courts Swiss controversy
Ad Stake: Crypto-based betting and gaming operator Stake.com announced a sponsorship deal with Formula 1 team Sauber Motorsport on Monday last week, before being hit with legal proceedings in Sauber’s home country, Switzerland, on Tuesday.
The Swiss Federal Gaming Board is unimpressed, according to Switzerland’s largest publisher SRF, and has started to investigate the partnership.
Only those with a gambling license (ie. Swiss land-based casinos) can advertise in Switzerland.
“In the present case, the brands Stake and Sauber are so linked together [on the company’s website and in its social media presence], or the term Stake is so strongly imprinted in the minds of viewers, that we have probably crossed the red line into unauthorized advertising," Swiss competition law Professor Patrick Krauskopf told SRF.
Kick the habit: Upon revealing the new Stake F1 Team Kick Sauber identity, Sauber boss Alunni Bravi said it would need to be known as the Kick F1 Team in certain jurisdictions where there is a gambling advertising ban.
“If Stake is banned, we will have an alternative team name. Depending on the country, we work with Stake or Kick, a different sponsor,” said Bravi. “We always comply with all applicable laws, including in Switzerland. We took all measures to comply with them.”
The potential fine could be as much as CHF500,000 (~$570,000).
Stake knives: Stake’s celebrity and sports sponsorship-led growth doesn’t come without its controversies. Last summer, a potential deal to become the shirt sponsor at Chelsea caused fan outrage.
Meanwhile, the streaming platform Kick – which shares a large percentage of ownership with Stake – has also made headlines via sponsorship deals with slot gamblers.
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North America
Escape from New York: PrizePicks has told customers in New York it will no longer offer its popular pick’em daily fantasy sports games as of this coming Thursday. Players were notified by email on Monday.
“Due to recent updates in the licensing rules enacted by the New York State Gaming Commission, we must pause our paid contests in the state,” the email read.
Missouri: Rep. Dan Houx said the state House is likely to vote on and pass a bill to legalize sports betting as soon as this week but that he’s unsure of its fate in the state Senate. According to LegalSportsReport, there’s little chance that Sen. Denny Hoskins will relent in his opposition to Houx’s bill.
Hoskins has held up sports-betting bills in the last two legislative sessions because he wants to include provisions to legalize and regulate VLTs.
Out: Betr and WynnBet have been granted approval by the Massachusetts Gaming Commission to cease operation in the state.
Meanwhile, also in Massachusetts, BetMGM has been found to have handled 15k of NCAA College football prop bets, contrary to the state regulations, after an investigation by the MGC’s Investigations and Enforcement Bureau.
The commission has referred the matter to the bureau for an adjudicatory hearing to determine whether penalties are warranted.
Oklahoma: Sen. Casey Murdock has introduced a sports-betting proposal, SB 1434, as outlined by Gov. Kevin Stitt in November. The bill would allow federally recognized Indian tribes to conduct in-person retail sports betting pursuant to a state-tribal compact. Revenue would be taxed at 15%.
Global
The Netherlands: The minister for legal protection Franc Weerwind has said he does not favor further financial limits on gambling due to the complexity of the necessary legislation and the difficulties likely to be encountered in enforcing it. Weerwind said he also opposes expanding prohibitions on gaming ads until an evaluation of the effects of existing measures is completed.
Crown Resorts CEO Ciaran Carruthers has been cleared of any wrongdoing by internal investigators probing a whistleblowing complaint. Back in December, the Australian Financial Review reported that Carruthers was under investigation over claims he allegedly intervened to reinstate a patron who had been removed and handed a one-year ban from a casino for bringing a child into a gaming area.
Following an internal review, it was found “no regulations or laws were breached.”
The group’s chair, Bill McBeath, said the board had started a review of the company’s security policies “to ensure clearer lines of authority and accountability over operational decision-making.”
Sky fall: New Zealand-listed casino operator SkyCity is to be the subject of civil proceedings brought by the authorities over AML and financing of terrorism act failures. The department of internal affairs has set out five causes of action for the claim, which SKC said refers to historical issues including previously self-reported incidents.
Thailand: The house committee in Thailand tasked with considering casino expansion has requested another 120 days before reporting its findings, according to Inside Asian Gaming. The key sticking point is whether to allow locals to gamble in any approved casinos, according to the report.
Florida fight may go to SCOTUS
Talk to my lawyer: West Flagler is not going down without a fight, having said it wants to test the legality of the state of Florida’s tribal gaming compact with the Seminole Tribe of Florida in the US Supreme Court.
The Florida pari-mutuel filed a writ petition seeking review of the US Department of the Interior’s approval of the compact under the Indian Gaming Regulatory Act (IGRA) on the deadline for registering its appeal last week.
It claims the Seminole Tribe’s sports-betting monopoly breaches both the IGRA and the Florida Constitution. They also stated the IGRA doesn’t enable the compact to permit gaming outside of tribal land.
The compact provides that online bets routed through on-reservation servers are deemed to have been placed on Indian lands within the meaning of the IGRA. The compact was approved in August 2021.
Three months later, a US District Court decision invalidated the compact, before the US Court of Appeals for the DC Circuit reversed the decision last June.
In October, the Supreme Court denied a petition from West Flagler seeking the recall and stay of that ruling.
Decision time: SCOTUS is expected to determine before the end of its current term in June if it will hear the case or deny the request from the pari-mutuel.
The Court usually hears between 60 to 80 cases a year, but receives many thousands of requests.
West Flagler is also challenging the legality of the compact at state level, with its case pending before the Florida Supreme Court.
The Seminole Tribe relaunched its mobile sports-betting app on November 7 and in-person craps, roulette and sports betting at its casinos on December 7.
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Alabama shakes
Bump in the road: A “minor blip” on Friday threatened to derail the much-vaunted Alabama gambling bill before it gained momentum, however, the wrinkle appears to have been resolved per noises from local voices. “Some things happened that shouldn’t have happened and it caused a problem,” said Arthur Mothershed, executive vice-president for business development and government relations with the Poarch Band of Creek Indians (PCI).
“I believe we have most of that straightened out and we’re all working together still. We do have a couple of problems with the bill as it’s currently written, but we’re still working with lawmakers so that we can address those issues and get a bill passed that we can all agree on.”
The PCI declined to offer more details on its problems with the current bill, which is due to feature in a House committee this week.
A source familiar with the negotiations told the Alabama Political Reporter both the PCI and local track owners want at least a provision in the bill that allows them to make the last and best bid on the various casino licenses.
The current bill establishes a statewide lottery, sports wagering and 10 casino locations around the state. It limits non-PCI locations to counties or municipalities where either current dog tracks or other operational bingo halls exist.
Where are we going? A different set of amendments, regarding the location of a new tribe casino, sparked rumors the bill would collapse as Republicans met on Saturday to discuss matters further.
However, a lawmaker who has worked closely with the parties involved told APR he felt the issues would be worked out, because “there’s just not much disagreement.”
“There are a lot of people out there who don’t have the state’s best interest in mind and they’re working overtime and stooping to new lows to stop this bill,” they said. “But we’ve got a good bill and a lot of support.”
Rep. Andy Whitt, who masterminded the current legislation after touring the state’s black market, blamed a lot of the issues on outside entities working against the bill.
“Despite what a few out-of-state funded groups will tell you, the only goal with this legislation is to offer Alabamians an opportunity to make an informed decision on the ballot and enable the state to put the bad actors out of business,” Whitt said.
“I find it very ironic that many of the opponents to this gaming legislation, in fact, are the most pro-Trump supporters in Alabama. If this is a moral issue then did they forget he made much of his money in the gambling industry?”
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AG donations in spotlight
Buy yourself something nice: Donations to state attorneys general made by sports-betting and crypto firms have raised eyebrows given the extra regulatory scrutiny both sectors are undergoing.
Documents lodged with the Internal Revenue Service recently reveal cryptocurrency exchange Coinbase, operator Boyd and several sports-betting associations have given thousands or tens of thousands of dollars each to the Democratic Attorneys General Association (DAGA) or Republican Attorneys General Association (RAGA).
A report by Politico highlighted how the donations, entirely legal, are creating potential conflict of interest concerns given the increasing role of prosecutors in policing both sectors.
Democrat California Attorney General Rob Bonta is currently investigating the lawfulness of daily fantasy sports betting in the state, while several other AGs have issued deceptive practices warnings against sports-betting companies.
Shut up and take my money: The fantasy sports industry has gifted hundreds of thousands of dollars to associations of attorney generals from both parties over the last year, data shows.
According to the report, the Fantasy Sports Operator Coalition gave $125,000 to DAGA, and the Coalition for Fantasy Sports gave about $125,000 to RAGA, while Underdog Sports handed $35,000 to DAGA, with competitor PrizePicks giving $750 to RAGA and $25,000 to DAGA.
Underdog Sports and PrizePicks also donated thousands to Bonta’s campaign in 2023, according to state data.
Several entities gave to DAGA or RAGA while facing potential legal trouble, including Coinbase, which is currently being sued for violating securities laws. In late July, it gave $105,000 each to DAGA and RAGA.
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