Trouble brewing
The DoJ sweepstakes success in Missouri bears closer scrutiny
The guilty plea in early July possibly contains pointers for future actions.
In +More: Australian ad ban confusion.
Guo now: Philippines POGO mayor arrested.
The Netherlands Supreme Court makes Curaçao intervention.
New study criticizes ‘aggressive’ social media ad strategies.
All the Federales say they could have had him any day.
Close reading
Book ’em: More attention should have been paid to the nature of the recent successful DoJ action against the individuals involved in a sweepstakes business in Missouri, as sources suggested a more coordinated federal effort is brewing.
A clean sweep: In early July, the Department of Justice notched up a notable success when two people involved in a sweepstakes operation out of Missouri pleaded guilty to “conspiring with bankers to willfully fail to implement appropriate anti-money laundering (AML) controls” at a bank, as required by the Bank Secrecy Act (BSA).
If the sector was expecting action against sweepstakes, at first glance this appears to be an almost oblique way about it.
Kevin Brandes and William Graham, who, the DoJ said, owned and operated multiple sweepstakes businesses, “abetted bank officials in failing to implement key components of the bank’s AML program.”
You’ve got mail: Under the BSA’s rules, banks are required to file currency transaction reports with the Treasury’s FinCEN for any transaction over $10,000.
But in 2017, at the request of bank officials, Brandes and Graham signed FinCEN forms that classified their companies as “direct mail advertising” businesses.
Who, me? Further, in October 2016 at the direction of bank officials, Brandes and Graham had an outside attorney sign a legal opinion letter, then sent it to the bank, knowing that it contained false information.
The DOJ press release noted the letter indicated that one of Brandes and Graham’s companies stated it had not received a negative or unwanted legal action “by way of regulatory bodies or private suits.”
However, Brandes and Graham knew at the time this information was false because a state regulatory agency had filed a legal action against the company in question.
Trouble comin’ every day: Sources suggested the nature of the charges that ensnared Brandes and Graham provides a pointer to further action on the part of the federal authorities. They pointed out most of the sweepstakes operators are domestically domiciled and incorporated in Delaware.
“That makes them easier to go after,” said one source.
They also noted the Missouri action “shows there is a team and that they are getting their act together.”
They added that the extent to which this effort is directed at just sweepstakes or has a wider purview of quasi-gambling mechanisms in its sights is yet to be seen.
Stop it: The heightened scrutiny of sweepstakes follows on from news of cease-and-desist actions in Michigan and Delaware against Chumba operator VGW and the emergence of a memo from the AGA warning against a product that “threatens consumers and undermines gaming regulations.”
VGW is also subject to a class action in Georgia, which claims its offerings there constitute illegal gambling under state law.
Class actions have also been launched against social casino operators in Washington and Kentucky.
A note late last week from legal firm Herzog Fox & Neeman said operators of social casino games, and sweepstakes casinos in particular, should “carefully review and monitor these developments.”
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+More
Ad it up: Confusion surrounds the progress of the yet-to-emerge legislation in Australia that could potentially see the banning of gambling advertising. A report earlier this week from Sky News suggested the cabinet was set to discuss an outright ban on online and TV advertising.
However, Prime Minister Anthony Albanese subsequently told reporters during a press conference that discussions were ongoing and the government “has not come to a conclusion.”
Is this thing on? The Connecticut Department of Consumer Protection’s gaming division has fined DraftKings and its supplier White Hat Gaming after finding a glitch was stopping an online slot from producing wins.
DraftKings was fined $19,000 and White Hat $3,500 after Deal or No Deal Banker’s Bonanza ran more than 20,000 plays without producing a single win over the course of seven days in August.
UK: New regulations for the direct marketing of gambling products to consumers are to be pushed back to May 2025. The new rules from the UK Gambling Commission will update the Social Responsibility Code by requiring operators to ask for consent to market specific products.
Commercial
mkodo‘s GeoLocs geolocation offering has gained certification from Gaming Laboratories International.
+More Careers
Gamekeeper/poacher interface: Indiana Gaming Commission executive director Greg Small will be leaving his post to join sweepstakes sportsbook operator Fliff as head of legal affairs.
Junior Compliance Assistant – LatAm
Senior Compliance Manager – Cyprus
POGO mayor arrested
Guo ask Alice: A former Philippines mayor, Alice Guo, has been arrested in Indonesia having fled following allegations of involvement with an illegal offshore gaming operation (POGO).
Prosecutors allege Guo part-owned and funded a hub, in the Tarlac province where she was elected, with Chinese money.
The illegal operation was raised in March, and again in June, with hundreds of Filipino and foreign workers freed after having been kidnapped and forced to work under threat of torture.
Please don’t, Guo: When her real identity as Chinese-born national Guo Hua Ping was revealed, Guo was subpoenaed to appear before government hearings into multiple POGO scandals. Instead of testifying, Guo went into hiding and eventually turned fugitive, becoming the subject of an immigration lookout bulletin.
Guo’s sister, Shiela, and business associate Cassandra Li Ong were earlier arrested in Indonesia and returned to the Philippines.
Guo has been charged with human trafficking and tax evasion by the Presidential Anti-Organized Crime Commission and the Bureau of Internal Revenue.
She is also up on charges related to misrepresentation regarding her candidacy in the 2022 polls.
Recall: In July, Philippines President Ferdinand Marcos Jr stunned the market by announcing the POGO regime would be shut down by the end of the year.
Marcos said the move was made because of the instances of online gaming operators’ links to organized crime, particularly the Chinese-facing operators.
On the same day as Guo’s arrest was announced, police in the Philippines filed human trafficking charges against 16 foreign nationals and a Filipino following a raid of an offshore POGO hub in Lapu-Lapu City.
It was announced that 162 foreign nationals rescued will be moved to Manila where they will face deportation proceedings.
Netherlands’ Curaçao intervention
Who’s to blame: The attorney general of the Netherlands Supreme Court has advised that Curaçao-based online casino master license holders are legally liable when their sublicensees fail.
The decision overturned an appeal in a lower court serving the Caribbean countries of the Kingdom of the Netherlands.
Curaçao-based master license holder Cyberluck had tried to strike out an order to reimburse two players after two of its sublicensees failed to pay out players’ winnings.
Gaming in Holland’s Willem van Oort noted the Supreme Court usually follows the attorney general’s advisory opinions.
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Social criticism
Muddy waters: US sports fans are being swamped daily with gambling advertising via social media, with many ads potentially breaching regulations, a new study has found.
Researchers at the University of Bristol in the UK looked at gambling ads posted on X (formerly Twitter), Instagram, TikTok and Facebook by the four leading sports gambling brands – BetMGM, FanDuel Sportsbook, ESPN Bet and DraftKings Sportsbook.
Pump it up: They found nearly 1,700 pumped out during a single week, averaging more than 230 ads each day.
“The study uncovers notable gaps in regulatory compliance,” the report authors said. “By blending entertainment with advertising, content marketing often obscures the commercial intent of gambling promotions, making them harder to identify and potentially more misleading, especially for younger audiences.”
The report called for a “centralized repository for online gambling ads” to support better regulatory oversight.
Calendar
Sep 5: Sports Integrity Summit, São Paulo
Sep 10-13: European Conference on Gambling Studies, Rome
Sep 24-26: SBC Player Protection Summit, Lisbon
Oct 7-10, G2E, Las Vegas
Nov 5: Gaming in Germany, Berlin
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