UK slots ban ‘will drive black market’
Slot stake limit dangers, Betr exit, financial risk checks debate and UKGC pilot +More
A black market opportunity of nearly half-a-billion pounds opens up in the UK.
In +More: FanDuel’s tribal appointment, Ohio’s NCAA props bet ban.
Betr joins the Florida ‘pick’em’ exodus.
Government rejects MP pleas to think again on financial risk checks.
Operators lambast a Swedish credit card gambling ban.
So put me on a highway, show me a sign.
UK slots stake limits threat
That’s your slot: The new £5 and £2 stake limits for online slots in the UK due to come into force in September will likely exacerbate the migration of players to the black market, warned gambling industry experts.
Discrepancy: While the percentage of annual revenue from slots play above £5 has fallen by 5 ppts between 2019 and 2023 to 23%, the analysts at Regulus estimate that ~£460m of revenue is likely to seek out black market opportunities.
This compares with government estimates published last Friday that predict an annual decline of £166m, representing a 5%+ decrease in slots GGR and a 2.6% decline in overall GGR.
To get to its number, Regulus calculated that ~£700m of total slots revenue comes from stakes over £5 while a further ~£30m is at risk from the under-25s £2 limit.
The team then determined that around 9% of total play is between £5 and £10 and will likely stick with the regulated space either through substitution or longer playing times.
Your loss: Regulus pointed out the problem for the government might be seen as being relatively small, with the shift of the resulting ~£460m in GGR to the black market causing a loss to the exchequer of ~£100m. But this might only be the start of the leakage.
Channel crossing: The migrating high-staking slot players would feed into a “burgeoning” black market model with “no shortage of credible supply,” the team said.
Further, once this disruption occurs, the black market sites are likely to capture ever more share of wallet from other products.
“Over time, slots limits are likely to drive a UK black market of ~10% of the total – more than double where we believe it is now.”
Inevitable migration: The team at Wiggin agreed it “does seem inevitable” that already existing unlicensed operators will “see the ability to offer high stakes slots games as a marketing tool.”
“Regardless of the arguments on the extent of the UK black market, the Gambling Commission will have a task on its hands to take enforcement steps to avoid it growing on the back of this and other forthcoming developments,” the team added.
Further reading: the Racing Post goes undercover to speak to an illegal bookie. “It’s a good service, especially if you like your racing and you’re struggling to get on anywhere else.”
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North America
FanDuel has appointed departing National Indian Gaming Commission chairman E. Sequoyah Simermeyer as its new VP of strategic relations, a move that appears designed to attempt to mend bridges with the tribal community.
The news was welcomed by tribal representatives. Pechanga’s Victor Rocha said on X the move was a “Big score for FanDuel.”
No props: The NCAA has lauded the decision by the Ohio Casino Control Commission to ban player-specific prop betting on all its collegiate competitions. NCAA president Charlie Baker said it was a “significant step” in the protection of student-athlete well-being and game integrity.”
The OCCC decision was made with the support of Gov. Mike DeWine.
In a written decision published on Friday last week, OCCC director Matthew Schuler said increasing instances of harassment of student athletes over their sporting performance “presents a clear danger to the best interests of Ohio.”
This was despite only ~1% of all wagers in 2023 being made on college player props, according to the official release.
Further reading: Dutin Gouker’s The Closing Line on the problem of banning college prop betting.
Minnesota: The sports-betting bill passed one committee stage in the state Senate on Thursday last week, but passage remains uncertain with discussion apparently continuing with the tribes and the racetracks to find wording that is amenable to both.
The Nevada Gaming Control Board is proposing changes to the way casinos report their dealings with agents who bring high-rollers to their properties, according to the Las Vegas Review-Journal. Instead of annual filings the operators will now have to keep records that the board can review upon request.
Meanwhile, the Nevada Gaming Commission has approved a license for FanDuel CFO David Jennings.
Global
Gibraltar has been removed from the Financial Action Task Force's gray list after making “significant progress” and completing its action plan.
A sweep of 33 websites by the Netherlands regulator uncovered 14 offering illegal and unlicensed gaming, officials said. Two separate investigations by Kansspelautoriteit found the sites granting illegal promotions and ways to circumvent the Cruks national self-exclusion scheme.
It has started enforcement cases, believing the owners of some sites to be “hiding.”
Cyprus has launched a new self-exclusion register, which will be managed by the National Betting Authority, covering all licensed online bookmakers.
Germany’s gambling regulator has asked the country’s Ministry of Justice to “rethink” reforms that it believes will loosen its ability to fight black market operators. Justice minister Marco Buschmann wants to remove a section from the country’s criminal code that enables regulators to file criminal charges with the public prosecutor’s office if it suspects illegal organization of games of chance.
Buschmann said the elimination of Section 284 was part of a wider reform of “outdated” criminal laws.
Such a revision would mean that unregulated gambling would only be punishable as an administrative offense.
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Florida fantasy pick‘em exodus
Florida blues: Three daily pick‘em fantasy sports operators are quitting Florida in the coming weeks after receiving cease-and-desist letters from the Florida Gaming Control Commission (FGCC). Although there are bills progressing through the legislature to regulate fantasy sports betting and license operators in the state, the situation is unlikely to change.
Stop! In the name of love: Last year, Florida gambling regulators sent cease-and-desist letters to Underdog Sports, PrizePicks and Betr, which is based in Miami, accusing the trio of offering “illegal bets or wagers”, with further notices sent in January this year.
“We can confirm that we have reached a negotiated resolution with the FGCC to cease operating our current contests on March 1st,” a PrizePicks spokesperson said, with Underdog doing the same.
Betr informed customers on Monday it was leaving the Sunshine State as of February 29 “with a heavy heart.”
“We are working with policymakers to bring greater clarity to fantasy sports laws in FL and hope to provide an update on these efforts soon,” the business founded by Joey Levy said.
Checkmate on risk checks
No U-turn: The UK gambling minister Stuart Andrew told MPs during a Westminster Hall debate yesterday, February 26, that it was too late to change course on the introduction of financial risk checks, regardless of the voices of concern raised.
"We want to protect those at risk and I make no apology for us doing that,” he said of the checks that are currently the subject of a consultation on the part of the UK Gambling Commission.
Andrew did reiterate the need for the checks to be as frictionless as possible. “I am clear that we must ensure these checks do not adversely affect racing, or those who work in the sector or interrupt the customer journey,” he told the assembled MPs.
Given the likely timings of the introduction of the checks and the upcoming pilot study (see below), the views of the Labour party could well be just as important as those of the current government. Shadow gambling minister Stephanie Peacock said there was a need for greater clarity.
“I think there is a consensus over the need to update our regulation so that vulnerable people are better protected from gambling harms in the modern age,” she said.
She added there was a need to ensure affordability checks are “carried out with accuracy” and don’t cause unnecessary friction.
Financial risk checks update
Miller time: Ahead of the debate on financial risk checks yesterday, the UK Gambling Commission executive director Tim Miller took to a blog posting to explain where the Commission now stands on the issue even as the consultation is still running. The aim, he wrote, was to “help explain some common misconceptions” regarding the proposals.
We don’t know where you live: Miller moved to quash previous rumors that the as-near-as frictionless-as-possible checks would involve any individual’s personal details such as their postcode or job title. He also said that for a “short period of time” the checks would be made at a higher threshold than previously stated.
Recall, the first level of background checks was set to take place at moderate spend levels of £125 net loss within a month or £500 within a year.
The second level of checks was to occur at £1,000 net loss within 24 hours or £2,000 within 90 days.
Gestation period: Miller also confirmed the planned pilot study that will follow the end of the consultation period will take four to six months. “We consider that conducting a pilot period with a selection of operators will give us sufficient information to inform future decision-making,” he said. Further details will come with the full consultation response.
Further reading: Tom Kerr, the editor of the Racing Post, on why MPs need to listen to the punters.
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Swedish credit card ban
End credits: Sweden’s proposed ban on gambling with credit cards undermines the government’s own experts and will push punters towards the black market, the country’s top lobby group has warned.
Uppror: The Ministry of Finance’s bid to comprehensively outlaw the extension of credit went down like a cup of cold surströmming with the Swedish Trade Association for Online Gambling (BOS), which lambasted the “180-degree turn.”
If enacted, the ban would extend existing measures that forbid operators from offering credit to gamblers under the ‘duty of care’ mandate.
Implementation of the credit ban would enter force on September 1 this year, with the full embargo from April 2025.
Say one thing: BOS secretary-general Gustaf Hoffstedt noted the proposals run counter to the government’s own state investigation into the matter as part of an inquiry into risky lending practices. The association had backed the findings of the inquiry, which concluded “there are not sufficient reasons to introduce a ban on paying for gambling with credit cards.”
“It is sad that the government does not listen to its own expertise and instead proposes a ban on credit cards when gambling, contrary to what the government investigation has concluded,” Hoffstedt said.
“The government is handing yet another competitive advantage to the unlicensed gambling market, which has a 41% market share when it comes to online casino.”
Told ya: He told the government to “change focus and show that it is on the same side as the licensed gambling companies.” Last year, Swedish regulator Spelinspektionen backed a full ban on gambling by credit card.
Annals of AML
Washing machine: A police operation across five countries focusing on the activities of a Russian-Eurasian organized criminal group also involves an unnamed Maltese financial institution that is alleged to have laundered at least €4.5m in criminal proceeds since 2015.
According to the EU agency for Criminal Justice Cooperation (Eurojust), four arrests and over 100 searches were undertaken by the authorities in Latvia, Germany, France, Italy and Malta.
The crime group operated mainly from Riga in Latvia and Berlin.
The Malta link: Eurojust said in a press release late last week that the sum of money laundered through the Maltese entity could run into the tens of millions of euros. The investigation began when the financial authorities in Latvia became aware of unusual transactions involving Malta.
Simultaneously, the German authorities had begun an investigation into the Maltese entity regarding suspicious money flows.
EGBA Frankfurt welcome
A European home: The European Gaming and Betting Association has welcomed the recent confirmation of Frankfurt as the home of the new European Anti-Money Laundering Authority. EGBA said the standardization of suspicious transaction reports will benefit multi-country operators in particular.
Frankfurt was chosen after a European Commission evaluation process involving nine member states.
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