October 31st is not just Halloween

By Andrew Tottenham

Managing Director, Tottenham & Co

“Brexit” is a word that everyone is fed up hearing, so I will keep this article as short as possible. As most of you are aware, I am sure, the UK could find itself outside of the EU as of the 31st of October, without any arrangement (deal) covering the terms of the UK´s withdrawal – the Benn Act notwithstanding.

This outcome would have significant consequences for the land-based and online gambling industry, so much so that the Department of Culture, Media and Sport, the UK Gambling Commission´s sponsoring Ministry, has issued an eight-point checklist for regulated UK-facing operators, the only ones that fall under its jurisdiction. But in the event of a no deal, UK operators with operations in or facing other EU jurisdictions could also find things getting very complicated.

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Empire building

By Hannah Gannagé-Stewart

CDC Gaming Reports

Seventeen months ago, on 14 May 2018, the US Supreme Court struck down The Professional and Amateur Sports Protection Act (PASPA), opening up the US sports betting market. Back then, all eyes were on which of the major European players would swoop in and create the first transatlantic behemoth.

Both William Hill and Ladbrokes Coral were occupied with stabilising their domestic UK businesses, while Bet365’s notoriously shady Asian businesses were expected to put US regulators off. That left it to London-listed Flutter Entertainment, the parent company of the UK’s popular Paddy Power Betfair brand, to deftly execute first mover tactics. It had started negotiating with US daily fantasy sports operator FanDual prior to the court decision; nine days after that decision, the two companies announced that FanDuel would be acquired by Paddy Power Betfair.

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European Regulators: Lootboxes don't constitute gambling

VGR - 5 October 2019

The Gambling Regulators European Forum (GREF) has decided that loot boxes do not universally constitute gambling and so they will not be taking any action to regulate them. GREF tasked a working group to study the issue; their report can be found here. One of the reasons given is that the definition of gambling differs amongst the member countries of the organisation and loot boxes might not meet the definition of gambling in all the member countries, hence no action.

I don´t think the video game industry can heave a sigh of relief, though. Since there are no common gambling regulations in Europe, each member state is, under the principle of subsidiarity, free to take individual action against what it deems to be illegal gambling. In some jurisdictions it is clear that loot boxes do meet that definition. Interestingly, the video gaming industry is moving away from loot boxes, whether through public pressure, or the fear of being prosecuted, or perhaps a waning of their popularity. (AT)

France to launch new regulatory body ahead of FDJ privatisation

iGaming Business - 4 October 2019

France is launching a new gaming regulatory body ahead of its privatisation of Francaise des Jeux, the state-owned lottery and online sports betting operator, which has just turned in a solid performance for the first nine months of 2019. The idea is to bring the regulation of all gambling products under a single national gambling authority, L’Autorité Nationale des Jeux. At the moment many regulatory bodies and ministries of the French Government are responsible for the different gambling verticals, including the Ministry for Agriculture, so merging this responsibility in one regulator makes a great deal of sense. However, the land-based casino industry will continue to be the direct responsibility of the Ministry of the Interior. That doesn't sound like fully joined-up governance to me. (AT)

Paf to reduce annual loss limit for players in 2020

Gaming Intelligence - 4 October 2019

Paf, the Finnish operator based on the Åland Islands, has decided to reduce the amount that punters can lose each year by €5,000, to €25,000. In June 2018, Paf became the first international operator to introduce a loss limit, initially capping potential losses at €30,000. Gaming Intelligence reports that the move will cost Paf around 2% of revenue, equivalent to approximately €2m. The industry is often condemned for relying on high rollers to sustain its business model. However, commenting on the move, Paf CEO Christer Fahlsted said: “We are prepared to say no to this unsustainable money that a relatively small number of players in the gaming industry stand for.” (HGS)

UKGC Issues Guidance for Gambling Businesses that Close Down their Operations

European Gaming - 4 October 2019

The UK Gambling Commission has issued a reminder of what should happen to players´ money in the event that an operator closes their UK-facing operations. There is no absolute requirement that players’ money needs to be completely ringfenced in a trustee account, which leads to the possibility that upon closing there will be insufficient funds in the bank to pay out all customers.

Given the delays in receiving money from Payment Service Providers (PSP), it is not unusual for an operator to have mingled the money in players’ accounts with working capital, knowing that a large payment is on its way from the PSP. The difficult facing operators is to reconcile what is owed to players, against what is in the bank and what they expect to receive from payment service providers; among complications are that payment cycles vary considerably among the different PSPs. Quite a few operators use Excel spreadsheets to perform this reconciliation, which is labour intensive, and with human involvement mistakes get made. Others automate the reconciliation process and top up the bank account as necessary; their Finance Directors can rest much easier, knowing that they have the money in the bank if all goes wrong. 

An additional challenge is what to do about bets that are outstanding at the point of exit. The UKGC says that operators need to warn their customers who place long-term bets that their stakes and winnings are not secured if the business goes bust. (AT)

SKS365 founders and owner named in mafia probe

iGaming Business - 4 October 2019

Several former board members of the Rome-headquartered Planetwin365 operator, SKS365, are among 51 suspects charged in Italy’s largest money-laundering investigation, Operation Galassia. The investigation alleges that SKS365 ⁠ran illegal gambling operations funded by the Martiradonna crime family. The operator was acquired by Dutch private equity firm Ramphastos Investments in late 2016; in a statement, Ramphastos distanced itself from the allegations, saying that they related to the previous management. However, iGaming Business reported last week that Ramphastos owner Marcel Boekhoorn and two other partners of the firm were also named in the investigation. Ramphastos denies any wrongdoing. (HGS)

Ukraine expects to submit gaming bill 'in the coming days'

SBC News - 4 October 2019

This month the Ukrainian government committed to legalise gambling before the end of the year, following a ten-year prohibition on the industry in the country. In June, newly elected Ukrainian president Volodymyr Zelensky called on ministers to draft a gambling bill, which is due to be submitted to the country’s parliament shortly. The bill will restrict gambling to hotels and is intended to combat the prevalence of illegal slot machines in the country, as well as contribute between 2 and 2.5bn Ukrainian hryvnia to the new government’s coffers each year. (HGS)

Liechtenstein casinos bring in combined 53.5m francs

iGaming Business - 2 October 2019

Revenue from Liechtenstein’s two casinos totalled CHF53.5m (£43.5m) in 2018, according to the annual report of the principality’s Department of Economic Affairs. It was the first full year of trading for the two casinos following Liechtenstein’s introduction of a licensing regime in 2016. Casino Admiral, which opened in August 2017, contributed CHF34.8m while Casinos Austria, which opened two months later, took in CHF18.7m – a marked rise from the CHF2.7m in 2017. The casinos’ combined contribution to the Liechtenstein treasury was CHF19.9m in gambling taxes and fees. (HGS)

Mega-merger set to disrupt gambling sector for 'years'

iNTERGAME - 2 October 2019

Intergame Online quotes gambling consultant Julian Buhagiar, the co-founder of RB Capital, in its report on the £10bn merger planned between Paddy Power Betfair parent-company Flutter Entertainment and The Stars Group. Calling the merger “highly disruptive,” Buhagiar said that in an increasingly crowded gambling market, the Flutter-Stars merger “did not come as a surprise,” but added that “the estimated savings of £140m per annum is aspirational at best”. He also flagged the potential turbulence that can followed large-scale mergers, such as those between Bwin/Party, Ladbrokes/Coral and Flutter/FanDuel in the past. (HGS)