UKGC accused of ‘wilful ignorance’ on black market
Commission's blind spot, North Carolina expansion, Skins return, regtech focus – idPair +More
Good morning. On today’s agenda:
The UK Gambling Commission’s comments on the black market are criticized.
Gambling expansion is still on the table in North Carolina.
Skins: forgotten but not gone…
NCAA says a quarter of schools have had a gambling-related problem.
Regtech focus is single-player view provider idPair.
I’ll pretend my ship’s not sinking.
Blind spot
The UK Gambling Commission CEO Andrew Rhodes is under fire for black market threat dismissal.
Black watch: Industry sources reacted with dismay to Rhodes’ apparent disregard during this week’s Culture, Media and Sport Select Committee hearing when he was quizzed about the potential threat posed by the black market in the UK.
While acknowledging that he “didn’t think there is no risk”, he suggested the dangers of the black market flourishing due to a harsher regulatory regime around affordability checks was “overrated”.
“The size of the black market is very small in terms of what they estimate the position to be, but estimates do vary,” Rhodes added.
“Every time I’ve heard someone say to me, ‘Well, based on what's happening, people are going to the black market’, I’ve asked them the same question, ‘Tell me where?’ and I’ve not once been given the name of an operator person or a location, anything I can act upon,” he claimed.
When asked for comment on the questions raised by Rhodes’ views, a Commission spokesperson said the regulator “will always investigate allegations of companies illegally interacting with British consumers”.
Wake up and smell the roses: Sources reacted with incredulity to the suggestion that the Commission hasn’t been informed by its licensees of specific black market activity facing into the UK. “It doesn’t pass the smell test,” suggested one.
“100% we have sent them the details of black market sites,” said another UK industry source.
“It shows a staggering level of incompetence,” they added. “They just need to ask ChatGPT what sites are illegal.”
King of wishful thinking: Another industry figure said Rhodes’ comments “feels like wishful thinking”. “By pretending the black market doesn’t exist they don’t have to acknowledge that their policies might result in negative unintended consequences,” they added.
The source pointed out that “assessments of illegal activity are always tricky” given the circumstances. “The GC has admitted it needs greater resources in order to understand and address risk.”
They noted the Commission has adopted its current position on the black market “despite, by their own admission, not really understanding it”. “They therefore have an a priori bias.”
Compounding the confusion, the Commission has asked for increased resources “for a problem it states does not really exist”.
“It is also interesting that this is the only matter on which they are prepared to express an opinion (despite admitting their ignorance),” the source added.
“They have repeatedly refused to call out inflated claims in relation to other matters (e.g. gambling harms) where there is much stronger evidence that people are making things up.”
Under the radar: Meanwhile, the regulator was also under fire for comments made to the committee by deputy CEO Sarah Gardner, who suggested the principle of affordability and financial risk had been enshrined in regulation since 2014/15. As one legal source was quick to point out yesterday, “It hasn’t.”
“Spend as a proxy for harm/risk of harm only arrived into regulation explicitly in the Customer Interaction Guidance in October 2019,” the source added.
Noting it had been mentioned in Commission policy papers in 2018, the source added that “yes, operators have had to identify risk and interact accordingly as far back as 2008 but spend specifically came a lot later”.
“To suggest the Commission’s proposals in the consulting reflects the current position and that it has been in place for eight to nine years is horribly deflecting.”
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Reputation Matters
After the White Paper: +More Media’s Reputation Matters takes place on October 26 at the Barbican in London, where representatives from Entain, Playtech, Gamban, Regulus Partners and many others will convene to discuss the next steps for the sector following the publication earlier this year of the UK government’s Gambling Act Review.
Sponsored by UK law firm Wiggin, the event consists of an afternoon of panels, fireside chats and keynotes.
Tickets can be purchased for the event via the Reputation Matters 2023 Eventbrite page.
Still in play
A slew of gambling expansions, including online casinos, is still on the table in North Carolina.
Saine in the membrane: On Tuesday, Republican lawmakers met behind closed doors in a caucus meeting to gauge the level of support for casinos, video gambling terminals and online gambling, speaker Tim Moore said, per the AP. Also on Tuesday, an op-ed from Rep. Jason Saine extolling the benefits of online gambling was published in The Charlotte Observer.
“iGaming is the next evolution of digital entertainment and works in tandem with online sports betting to offer an immersive and interactive gaming experience,” Saine wrote.
He likened expanded land-based gambling without online to building movie theaters but prohibiting streaming.
Among the benefits listed by Saine, online gambling “maximizes tax revenue now and into the future, regulates and makes safe a thriving illegal market, and complements traditional brick-and-mortar casinos”.
Saine in the brain: Saine’s core argument is that online gambling is accessible whether it’s authorized or not. “Anybody with a smartphone – at any age – can visit a foreign website and place bets on digital table games like poker or blackjack, digital slot machines and the like,” he said.
“These foreign providers are entirely unregulated. Their trade practices are a free-for-all, and scams and identity theft are all too common.”
We shall soon see if Saine was able to sell enough of his colleagues on online gambling in the closed-door meeting, as a vote on the budget is expected next week.
New Hampshire scandal
Car trouble: The spouse of a key New Hampshire lawmaker is at the center of a criminal investigation into misappropriated Covid funds. Andy Sanborn, the husband of Rep. Laurie Sanborn, who chairs the House Ways and Means Committee, allegedly used $844,000 in Covid funds for “cash payments disguised as rent, the purchase of two Porsches for himself and a Ferrari for [his wife]”.
According to local reporting, Sanborn not only misappropriated the money but “left out the registered trade name for his business ‘Concord Casino’ on his loan application”, as casinos were ineligible for the funds.
Sanborn owns a charity casino in Concord and was approved for another license before the investigation was made public. Both licenses are now in serious jeopardy.
The investigation has major implications for New Hampshire gambling.
Rep. Sanborn has already resigned as chair of a commission to study gambling in the state and was a ‘no’ vote on online gambling earlier this year – the legislation passed by the Senate died in the Ways and Means Committee. Charity casinos were the key impediment to online casinos.
Sanborn’s clear conflict of interest makes it difficult to gauge New Hampshire’s chances in 2024.
She may be forced aside given the scandal, or the investigation could overhang any gambling discussions, making it a toxic issue in 2024, which happens to be an election year.
Maryland hopes
Mary, Mary, quite contrary: Maryland is 2024’s best bet to legalize online casinos, according to Eilers & Krejcik Gaming’s director of policy Becca Giden. She told USBets no state tops 50% in her opinion, but Maryland is the closest to that figure.
“My optimism for even the best-chance state to legalize in 2024 currently tops out at about 50 percent. It’s just plain difficult generally, but it has been especially tough in the last two-ish years.”
“Maryland ticks a lot of our ‘momentum-increasing characteristics’ boxes.”
Giden’s tempered optimism aligns well with comments from Rush Street Interactive’s Richard Schwartz during RSI’s recent earnings call, where he noted: “A prominent legislative member in the state has expressed optimism about the potential for passage of [the] iGaming bill when the legislator reconvenes in January.”
Also working in Maryland’s favor is that the Maryland Lottery and Gaming Commission must submit an iCasino study by the end of 2023.
If Maryland takes up iCasino in 2024, legalization would most likely be accomplished through a referendum.
News you can’t use
No-go: The latest edition of Dustin Gouker’s The Closing Line provides a handy cut-out-and-keep list of sites that advertise offshore gambling sites. “It’s easy to get confused and sometimes difficult to spot; the sites often do fairly good aggregation or even original reporting. But that’s the point, to confuse you (and Google),” he writes.
Skins return
226 of the top 300 CS:GO streamers by watch-time in 2023 have a skin gambling relationship.
The rash that keeps coming back: Analysis undertaken by Ollie Ring in his latest Esprouts post shows formerly rampant skin betting has evolved, with casino now at the forefront of more ill-regulated sites. The analysis also found 90.5% of sites analyzed accept crypto as a deposit method as well as skins, with 81% taking fiat currency (including gift card workarounds).
90.5% of skin-deposit sites analyzed have a casino product. Of those that offer casino, 100% take crypto as a deposit method and 89.5% fiat.
Only 23.8% of sites offer esports betting, with three of five offering traditional bookmaking and just two a peer-to-peer exchange betting system.
One of the larger sites, CSGOEmpire, saw €563,625 wagered on 387 roulette spins (in approx. 4 hours) at an average of €1,460 per spin.
Two UK and US HQed sites (unlicensed) offer ‘Case Battles’. Multiple users purchase the same crate, everyone opens it, whomever unboxes the highest value takes all. Not gambling… by the way.
Further reading: For more on this story, see the latest edition of Esprouts.
NCAA survey
Over a quarter of schools have dealt with a sports-betting problem.
Problem child: The survey of more than 500 college campus compliance directors conducted on behalf of the NCAA found that 27% of schools had been forced to deal with sports-betting problems among athletes or staff within the past year.
The survey also found that 25% of respondents said they were aware of students being harassed either online or in person by someone gambling on their games.
It also found that 100% of schools educate their coaches and players about gambling.
Comments from compliance directors to the survey indicated that a majority of schools send personal messages and texts to players around big events such as March Madness and the Super Bowl.
However, two-thirds of schools said they did not use an integrity service to monitor games, with the majority of those that don’t saying it was because their conference doesn’t do so on their behalf.
Regtech focus – idPair
C+M spoke to CEO and founder Jonathan Aiwazian about his anonymized data tool and how it can help push the responsible gambling message.
A singular view: As idPair’s website promotes, the company is working on a responsible gambling tool that is “rooted in science”. “What we’re trying to do is connect data from multiple operators into a single database and run RG analysis based on a customer’s cumulative data,” says Aiwazian.
The problem being addressed by idPair is that of people having multiple accounts.
But by using the tools of big data – and in particular the services of AWS – idPair believes it can provide a centralized data source for all transactions.
“We’ve committed to use that data and analysis to promote and protect healthy play and provide critical insights to stakeholders such as legislators, regulators, even university researchers,” Aiwazian says.
“The key for us is that because we can get all the data and put it in one place, we can see when an individual is trending toward a problem and intervene earlier before it gets to a bigger issue.”
The mechanics: The company has developed a program that the operator has locally on their own system, which anonymizes the personal information of each individual and takes their name, date of birth and social security number and turns that into a unique ID.
“Anonymization is kind of the key word there,” Aiwazian says. “The individual account version is kind of similar to what’s out there now, where operators are analyzing their own data.”
“We just do that for them and apply standards and give them intelligence and analytics on the players,” he adds.
“But that’s what we see as a toe-in-the water approach to the ultimate goal, which is connecting all the data across the sports book.”
He notes the system is built to cover all produce, not just OSB and iCasino but also iLottery, horseracing betting, fantasy sports and, in some cases, retail where there is a rewards or loyalty program.
“The ultimate goal here is a universal limit setting tool, which is a few iterations away and requires some integration and other steps,” Aiwazian says.
The hesitations: Aiwazian admits there are obvious fears around data sharing, as much with the regulators as with the operators. “It's kind of unAmerican to tell someone not to do something. We’re just looking to help people manage their play and understand when they’re trending toward a problem, rather than saying, ‘Hey, you’re cut off’.”
“Regulators are pretty receptive. The hesitancy comes when we say, ‘OK, let’s go get the data from the operators and make it a regulator tool’. Then some jurisdictions are less excited about forcing anyone to do anything.”
But this is a “common sense product”, he adds.
The technology that's made this possible wouldn't have been possible five years ago,” he says. “It would just have been way more expensive and probably outside of the cost that an operator is willing to spend because when you’re running a query on, you know, billions of transactions, you know it’s expensive.”
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Asian notebook
Philippines: Alejandro Tengco, chair of the gaming regulator Pagcor, was among 10 people charged with financial crimes in connection with an online platform that allowed gamblers to wager on cockfights, according to The Philippine Star.
The alleged crimes involve the release of a $1.32m performance bond owed to Kamura Highlands Gaming, the operator of the gambling platform.
Inside Asian Gaming reported that the release of the performance bond was authorized by Pagcor’s board before Tengco was sworn into office in August 2022 and the payment was made the following month.
Tengco and Diane Jogno, acting chief of staff at the regulator, were also charged with obstruction of justice for allegedly trying to conceal their crimes and failing to cooperate with investigators, reported the Star.
Macau: The authorities want to criminalize the unauthorized exchange of Hong Kong dollars for other currencies in its casinos and their surrounding areas to crack down on gambling-related crime, Secretary for Security Wong Sio Chak said in a press conference.
European notebook
The Netherlands: The gambling regulator has fined three unnamed licensed operators for breaching the country’s brand-new ban on untargeted gambling advertising. The regulator said various online operators have been cautioned for advertising their products and services via billboards and in bus shelters.
Spain: The Ministry of Consumer Affairs has published a draft proposal to set limits on gamblers’ deposits with online operators. The new joint deposit limit per player would apply across the entire iGaming spectrum and would not be a per-operator limit. The regulator’s draft measure suggests a daily limit of €600 and a weekly limit of €1,500.
Malta: The Malta Gaming Authority (MGA) has canceled Tipster’s licenses after the business was recently wound up. The license had previously been suspended in July after the company was subject to insolvency proceedings the previous month.
Events
Gaming in Germany: The latest edition takes place in Berlin on October 16 at the Chamäleon Theater. Confirmed speakers include Benjamin Schwanke, co-chair of the German regulator Gemeinsamen Glücksspielbehörde der Länder (GGL).
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