The power of three: Vermont choose DraftKings, FanDuel and Fanatics
Vermont regulations, Swedish legislative changes, the token word, ICYMI – Brazil +More
Vermont sets the date; selects DraftKings, FanDuel, Fanatics.
Three legislative amendments will significantly change the landscape in Sweden.
The token word: Sen. Elizabeth Warren garners support to tighten cryptocurrency regulations.
ICYMI: ¡El Senado brasileño dice sí!
Vermont launch date
The regulator has set Jan 11 as the launch date and selects DraftKings, FanDuel and Fanatics as its OSB partners.
Green light: Online sports wagering will launch in Vermont on Jan 11. Through a “competitive” bid process, the Department of Liquor and Lottery selected DraftKings, FanDuel and Fanatics Sportsbook to operate mobile sports-wagering platforms, state officials announced Tuesday. Under the law, revealed in June, each operator is required to pay at least 20% of their revenue to the state on top of a $550,000 pay-to-play fee.
However, all three have agreed to hand over more, and it is estimated the bill will add about $7m to state coffers in the first year.
Frankly, Mr Shankly: DraftKings and Fanatics will each pay 31% and FanDuel will pay 33%, said Wendy Knight, commissioner of the Department of Liquor and Lottery. “Frankly, I am thrilled with the revenue share that we were able to secure with the operators,” Knight said. “It is much higher than it would have been in a tax rate.”
Griffin Finan, senior vice-president and deputy general counsel for DraftKings, said the company was looking forward “to expanding our presence in New England and introducing eligible customers in the state to the DraftKings Sportsbook, equipped with a plethora of betting options and a robust suite of responsible gaming tools”.
Missing you: Five companies applied, with the department rejecting applications from BetMGM and Penn Sports Interactive, Knight said. Penn apparently missed crucial documents in its application, while BetMGM proposed an alternative revenue-sharing deal that didn’t go down well with officials.
Initially, operators balked at some of the rules, including a first-of-its-kind requirement that would give independent testing labs access to a sports-betting platform’s source code.
The proposals were watered down following lobbying, but the final bill contained several of the more controversial policies, including the requirement to send in source code for testing along with stronger KYC and registration policies.
Not all sports are permitted. Wagers can’t yet be taken on horseracing, Knight told local media without elaborating other than the decision lies with her department, “so that could change at a later time”.
Pre-registration is now open, allowing the operators to market their brands and register players before the January launch.
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The Kentucky Horse Racing Commission has given permanent approval to nine sports-betting operators for licenses for next year. All of the temporary license holders have been included: bet365, BetMGM, Caesars, Circa Sports, DraftKings, Fanatics, FanDuel, Kambi and Penn Entertainment.
Circa Sports is licensed but is not yet taking bets and Kambi is working with retail sportsbook operators.
No new operators submitted license applications despite Kentucky law allowing for up to 27 sportsbooks.
The wagering total in the first full month of operations in October hit $295m, while preliminary reporting showed wagering of more than $260m in November.
Delaware: The Internet Sports Lottery Legislative Working Group has recommended Delaware expands its gaming market to allow multiple operators when online sports betting launches next year, according to Delaware Public Media. The group’s report, originally due in June, was delayed by five months.
The Delaware Lottery has already appointed Rush Street Interactive as the state's sole iCasino and OSB vendor.
Macau’s government is rebooting its illegal gambling criminal law to include a full ban on online wagering and harsher penalties for those caught flouting the rules. It will include a total ban of the operation, promotion and organization of all online gambling activities, regardless of whether the respective IT systems and equipment are installed in Macau.
Getting twitchy: The Italian advertising regulator AGCOM has levied multi-million euros worth of fines against Google and Twitch after finding the social media giants in violation of the rules contained within the Dignity Decree.
The fines announced earlier this week amount to €2.25m for Google and €900k for Twitch.
The investigation was instigated after “numerous reports” were communicated to AGCOM of promotions for sports betting, iCasino and lottery scratchcards.
The Netherlands Gambling Authority has published an updated enforcement policy on illegal land-based gambling, noting it intends to be more proactive in tackling illegal operations rather than farming enforcement out to local authorities.
The Swedish Gambling Authority has banned Slots Safari for unlicensed operation. Spelinspektionen said it found Swedish information on the operator’s website, indicating it was targeting residents in the country despite not having the authorization to do so.
A preliminary money-laundering investigation in Finland has found that millions of euros were transferred as part of an illegal lottery scheme between 2016 and 2022. Two individuals are alleged to have sold and distributed unauthorized tickets for lotteries around the world while living in Finland.
ICYMI
¡El Senado brasileño dice sí! The Brazilian Senate got around to passing the sports-betting proposals, with a lower tax rate but sans iCasino. See Earnings+More and, en espanol, LosIngresos+Mas.
What we’re reading
Legendarily bad: The ex-Jags employee was a high-stakes DFS player – but just not very good at the game.
On social
Financial fair play: An Ohtani meme is born. Can somebody do this for Chelsea?
Sweden regulatory landscape
First, the bad news: Three legislative amendments – including new rules, AML fines and gambling on credit – will change the landscape in Sweden, but it will likely be a 4% tax increase that has the biggest impact
The Swedish government is considering bringing AML fines into line with any other infringement of gambling laws. “We are fine with the equalization but not with today’s level of fines in general, which are extremely extremely hefty,” said Gustaf Hoffstedt, the secretary-general of the Swedish Trade Association for Online Gambling, BOS.
Just last month, Spelinspektionen fined Videoslots around €760,000 for AML failures but bet365 was fined almost €6m for social responsibility failings in April.
The good news, according to Hoffstedt, is that there has been no change in the interpretation of what constitutes an AML failing, so he does not expect a new wave of prosecutions.
However, he warned: “AML is a matter that is very close to the heart of this government and will continue to be a focus as long as this government is in power, which is at least another three years.”
Some relief: Operators can thank the Swedish government’s political expediency for its reluctance to follow the general trend of imposing a credit card ban on gambling transactions (more on the general trend next week).
Credit card use is extremely prevalent in Sweden and the government’s view is there are enough checks on the creditworthiness of customers when they apply for a card.
Behind the scenes it is understood the government fears a ban on gambling on credit cards would prompt a discussion on whether they should also be banned for purchasing Absolut Vodka in shops. The government has a monopoly on selling booze in Sweden.
Now, the very bad news: The gambling tax rate is expected to be lifted from 18% to 22% from July 1, 2024. Hoffstedt cited an independent study by Copenhagen Economics conducted ahead of the 2019 re-regulation of the Swedish market that found the optimum tax rate to be between 15% and 20%.
“If you raise tax higher than that, paradoxically you get less money in tax because it changes the behavior of people,” said Hoffstedt.
ATG recently found the channelization rate to be as low as 59% (the government claims to be aiming for 90% channelization).
“The UK and Denmark can afford to increase the tax rate because their channelization is high, but we have already lost more than 40% of the market,” sighed Hoffstedt.
The token word
Brand-new standards: Sen. Elizabeth Warren is garnering support among colleagues for a new bill that would tighten cryptocurrency regulations. The proposed Digital Asset Anti-Money Laundering Act would extend existing Bank Secrecy Act anti-money laundering laws and know-your-customer regulations to entities in the digital asset space.
Money service businesses, crypto exchanges, wallet providers, miners and validators would all be forced to verify their clients’ identities and report suspicious transactions, like banks currently do, under the new rules.
Additionally, the legislation mandates identity verification for specific large peer-to-peer cryptocurrency transactions that take place through unregulated intermediaries or originate from unhosted wallets from unregulated services.
Supporters argue that broadening AML standards to digital assets will add transparency and safeguards.
However, some critics believe that regulating the decentralized crypto ecosystem could compromise the anonymity and privacy that are hallmarks of cryptocurrency.
With a little help from my friends: The Massachusetts senator has been vocally critical of crypto in the past, and on Monday announced that five senators joined as co-sponsors. Three of the five additions, Sens. Raphael Warnock, Laphonza Butler, and Chris Van Hollen, sit on the Senate Banking Committee with Warren, which may have a major role in shaping crypto regulation over the coming year.
Sens. John Hickenlooper and Ben Ray Luján have also joined the bill as co-sponsors.
Crypto “has become the payment method of choice for terrorist organizations, drug cartels and authoritarian regimes”, said Van Hollen.
“Rogue nations like Iran, Russia and North Korea, which has emerged as one of the world’s most prolific crypto-criminals, stealing $1.7bn in digital assets in 2022 alone, have turned to digital assets to evade sanctions and fund illegal weapons programs,” Warren added.
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