Winning at monopoly – Tabcorp gets the Victorian nod
Tabcorp’s license renewal, Calif. tribal blow, UKGC consultation time (again) +More
Tabcorp wins the race for the retail betting monopoly in Victoria.
CNIGA says ‘no’, while Mississippi worries about online cannibalization.
Penalty! The latest UK Gambling Commission consultation looks at fines.
Virginia AG weighs in on the pick’em question.
Tabcorp wins
The Australian sports-betting and gaming operator once again wins exclusive retail betting license in Victoria.
Tabcorp shares rose by over 23% after the company was awarded the sole rights to operate retail betting in the state of Victoria for the next 20 years, despite strong competition from the Flutter-owned Sportsbet.
Modernist: The new agreement succeeds the current arrangement in place since 1994 and includes modernized terms, which the company said will create a level-playing field on taxation of gaming in return for A$864m ($579m) in license fees.
The new license no longer involves a joint-venture arrangement with Racing Victoria and sees the termination of the current industry funding obligations.
Instead, Tabcorp will pay a license fee of A$600m on June 28 next year and make a further 19 annual payments of A$30m starting as of August 2025.
This takes the total fee to A$1.1bn but, said the paper, the payments are not linked to inflation meaning the value will actually be A$864m.
Tabcorp said it would fully fund the 2024 payment from existing debt facilities.
In the dark: The Sydney Morning Herald said Sportsbet put together a competing bid that would have split the license between different bookmakers. The paper said the news as disclosed by Tabcorp’s stock exchange statement had “blindsided” Sportsbet, which was only informed of the decision a matter of minutes before the announcement went public.
CEO Adam Rytenskild said the news was “momentous” for Tabcorp while being a “positive outcome” for stakeholders and the state government. He added the new license terms “directly addresses the structural reform required in a modern wagering environment”.
“It’s a license that will allow us to ignite our total Victorian wagering business,” he added.
According to Tabcorp, under the new arrangement, its pro forma EBITDA for 2023 would have been A$189m vs. the A$49m under the current arrangement.
Pro-forma group EBITDA for 2023 would have been A$140m better at A$531m.
Ducks in a row: Tabcorp’s next retail exclusivity expiry is Tasmania in 2027, with South Australia to follow in 2032, New South Wales in 2033, Northern Territory in 2035 and Queensland in 2044.
Code breach
The Australian Communications and Media Authority has found that quick codes used by Ladbrokes, Neds, bet365 and Sportsbet violate strict rules around offering in-play betting. Under the terms of the Interactive Gambling Act of 2001, in-play is restricted to placing bets over the phone.
A quick code as deployed by the operator enables use of an operators’ website or app to build an in-play bet.
For that exception to apply, though, all information must be provided by the phone call, but the regulator found the bet had been communicated via the website or app rather than wholly over the phone.
ACMA noted that all three operators have taken steps to ensure their use of quick codes complied with relevant interactive gambling rules.
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No means no: CNIGA said last Friday that it had voted “unanimously to oppose” the two Californian sports-betting initiatives that were recently filed by Eagle 1 with the state’s Attorney General’s office.
“The opposition coming from Indian country is loud and it is clear,” said James Siva, CNIGA chair.
“The proponent of the measures are attempting to divide and conquer tribes by pushing an initiative that attempts to legitimize illicit off-shore operators and putting our governments at risk.”
Siva added that the tribes “will not be distracted by outside influences making empty promises” and called on the proponents to withdraw their “flawed initiatives”.
Massachusetts: DraftKings broke a Massachusetts state law by allowing residents to use credit cards to fund sports-betting accounts, according to state regulators, SportsHandle reported.
Cash for dishonors: The pro-gambling British MP caught in a newspaper sting operation offering lobbying services for cash has been suspended from the House of Commons for 35 days. The Standards Committee found Scott Benton had given the message he was "corrupt and for sale" in a meeting with undercover reporters posing as gambling industry investors.
If MPs approve the suspension it could lead to a by-election in Benton's constituency, Blackpool South.
Benton is appealing the suspension.
New South Wales: The state government has extended its cashless gaming trial to include 4,500 machines in 28 clubs and hotels across 24 metropolitan and local government areas. The trial will begin in the first quarter of 2024, according to Liquor & Gaming NSW.
What we’re reading
Meat you can eat: The Mississippi Mobile-Online Sports Betting Task Force report released last Friday gets the once over from Steve Ruddock in Straight to the Point, who noted the Innovation Group’s Maryland Study gets a mention in relation to the potential for online to cannibalize B&M gaming.
Ruddock suggested the final report was vanilla, but with some spicy overtones added in letters included from the anti-online lobby.
“To state it succinctly, statewide online sports betting will reduce our revenues, it will reduce jobs and it will harm Mississippi,” said Michael Bruffey of Island View Casino Resort.
A big week for…
Brazil: The lower house gets to take a look at the sports-betting bill following last week’s Senate vote to pass a bill with amended wording around iCasino. The question now is whether the deputies will consider reinserting other forms of gaming and the concomitant potential tax revenues.
Career paths
The Malta Gaming Authority has appointed Charles Mizzi as its new CEO, replacing Charles Brincat who is stepping down after two years. Mizzi was previously CEO of Residency Malta Agency.
More UK consultations
The gift that keeps on giving: More consultations have been announced by the UK Gambling Commission, first on the non-controversial issue of informing the Commission on ownership, finances and interests. But it is the consultation on financial penalties that has the potential to be much more controversial.
The Commission said the consultation was an attempt to “bring greater clarity and transparency to the way penalties following enforcement action are calculated”.
As part of this attempt, the Commission has laid out proposals for the estimates of the penal element of the penalty to be made with reference to the seriousness of the breach and a tiered system of fines equivalent to a set percentage of GGY.
Trigger warning: Responding to the Commission’s proposals, the team at law firm Wiggin said the Commission has, “in the eyes of many” within the UK betting and gaming sector, “been the gambling regulator most willing to dish out substantial financial penalties”.
But partner Stephen Ketteley added there has “always been a frustrating degree of opaqueness in how the regulator has run its numbers”.
He added that while the existence of a tariff system – a five-tiered scale of between 0.1%-1% and up to 10%-15% of GGY – “may bring more certainty, some will wince at the use of a revenue rather than a profit-based calculation”.
“In reality, the Commission was already undertaking its calculations based on GGY and other UK regulators (including the ICO) are issuing fines based on global revenue so this could have been worse.”
Ketteley suggested it “appears plausible” that while the high end of the tariff is reserved for very serious offenses, the level of jeopardy involved means there will be “more challenges to the Commission’s decision-making”. More so, he added, because the implementation phase of the White Paper proposals “by no means guaranteed to provide a clear set of requirements”.
“The scope for subjective judgment calls will remain, with argument and challenge likely to follow,” he warned.
The realization of the severity of potential fines often only strikes you after something else hits the fan, so it is worth taking time to digest the Commission’s direction of travel and submit your thoughts,” he added.
Virginia pick’em opinion
Picked apart: The Attorney General’s office in Virginia has issued an opinion that pick’em style fantasy sports games are a form of sports betting as defined by state law. The opinion came in a response to an inquiry from state house member Wren Williams.
Defining moment: In the latest blow to the likes of Underdog Fantasy and PrizePicks, the letter from the AG Jason Miyares said, because fantasy contests should involve multiple customers competing against each other, an “arrangement that involves customers betting on athletes’ performance metrics against an operator’s established baseline constitutes sports betting” as defined in Virginia law.
Fantasy sports was legalized in Virginia in 2016 while sports betting got into the statute book in 2020.
The AG opinion said that “although these activities have much in common, Virginia views them as distinct enterprises” existing within differing regulatory structures.
“Simply styling a game as ‘fantasy’ does not make it a fantasy contest,” it added.
The case for the prosecution: Virginia can be added to the lengthening list of states that have decided against pick’em-style contests, including Florida, where cease-and-desist letters were sent in September, and California, where similarly to Virginia, the AG Rob Bonta is reported to have been asked about the format’s legality.
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