GVC Issue German Warning

A leading European gambling operator has issued new warnings about the risks to the German betting market caused by new regulatory restrictions.

Martin Lycka, the Director of regulatory affairs at GVC Holdings, has warned that the rules could lead to an increase in use of the black market by German customers.

The warning is the latest in a series of concerns expressed by operators in the German market in recent weeks. Last month, the European Gaming and Betting Association urged policymakers in Germany to consider a simplification of the country’s complicated framework.

The backdrop to these concerns is the launch of a new regulatory framework for the gambling industry in Germany, which will come into effect from next July. These rules will allow for the registration of an unlimited+ number of sports betting operators, online poker games and virtual slot machines, along with a limited number of online casinos.

But writing in a European journal, Lycka focused on areas of concern, including a ban on live streaming of sport on betting sites and the outlawing of advertising before 21:00. In addition, the rules also enforce a one-minute delay for customers on each occasion when they switch between different games using the same site; a €1 stake limit for all virtual slot machines and the limitation of in-play sports betting to the final score. Lycka said that the new rules had the potential to drive German gambling customers to illegal sites:

“Due to the many restrictions surrounding the new rules, licensed products will be much less attractive and less competitive than their unlicensed counterparts. There is, therefore, a huge risk that customers will move to the black market, where there is zero responsibility, zero protection and zero tax being paid.”

He went on to add that the risk was being exacerbated by some federal states, such as Lower Saxony, who have attempted to impede gambling firms and payment providers. He warned that there was likely to be considerable inconsistency between states, particularly when it came to casino table games, which lead to an uneven playing field. He also contrasted the regulations’ approach to table games with the more lenient rules on slots, online poker and sports betting. It seems unlikely, however, that there will be significant changes to the proposed rules, which make up the Fourth State Treaty on Gambling, which were arrived at after many months of negotiations.  

Betting Companies Strike Football Sponsorship Deals

Betting Companies Strike Football Sponsorship Deals

Two leading European betting companies have continued to strengthen their links with high profile football clubs, despite the generally hostile sponsorship climate in many European countries.

Betway has lined up a sponsorship extension with Spanish club CD Leganes which will see the gambling firm continue as the club’s main sponsor for the new season, while fellow gambling operator W88, which previously had a deal with Aston Villa, has signed up with another Premier League club, Crystal Palace, to provide shirt-front sponsorship.

The deal between Betway and Leganes was originally signed in 2018, but the football sponsorship climate has become more difficult in Spain in recent months. The Spanish Ministry of Consumer Affairs is currently weighing up proposals which would toughen up regulations on betting firms, including new restrictions on sponsorship agreements and other forms of advertising exposure.

For that reason, the contract extension reportedly includes an exit clause which will trigger if the new Spanish government proposals come into effect next season.

Under the terms of the deal, Betway will continue to be the main front-of-shirt sponsor for the team. This deal was reputedly worth as much as €1 million while Leganes were in the top flight, though their relegation means it is likely to be less lucrative in the coming season.

Besides Leganes, there are seven clubs in La Liga which have a gambling company as their leading shirt sponsor, including Valencia, Granada, and Sevilla. All these deals will be under threat if the Spanish government successfully implements a ban on shirt sponsorship by betting companies. Such a ban already exists for youth teams in Spain.

There is currently no ban on gambling company sponsorship in the UK, and W88 have moved to secure a Premier League partnership, following the end of their £6.5 million one-year contract with Aston Villa. The new deal with Palace will see W88 replace ManBetX as main shirt sponsor at Selhurst Park, an arrangement that ran for three years.

But, as in Spain, the new deal could be overtaken by political events. Gambling companies operating in the UK have already voluntarily agreed to tighter advertising restrictions, but a House of Lords report recently proposed an end to all gambling sponsorship in UK sport. The UK government is also looking at a full review of gambling regulations in the country.

New Safer Gambling Push by UKGC

Gamblers in the UK will be given more support to stay safe while gambling online thanks to a new campaign from the UK regulator.

The UK Gambling Commission (UKGC) has announced the launch of a new public campaign focusing on nine specific ways that bettors can stay safe when gambling.

The campaign is based around raising public awareness of the safer gambling control tools and facilities that already exists, and of highlighting the work of problem gambling support groups such as  GamCare and GambleAware.

In addition, the UKGC is also aiming to offer better all-round guidance for consumers on how they can monitor their betting activity when betting online with licensed operators.

One of the headlines of the new approach is a reminder to the UK public that all licensed online gambling firms are obliged to give their customers access to their historic account activity, which the regulator says will help customers to make informed decisions about their gambling. The UKGC is also aiming to raise awareness of the existing in-play safety tools, including game alerts that pop-up on screen at set times, reminding customers how much time they have been gambling for, whether they are betting online or using a gambling machine at a betting shop.

Consumers who may be concerned over how much money they are gambling are also reminded that they have the power to set limits on their gambling spend, before they engage with any gambling operator. Customers with UK licenced operators also have the power to ask for a gambling timeout, lasting for up to six weeks. And consumers are also advised that they should take ‘reality checks’ over why they are gambling. By thinking carefully about their motivations for gambling, they may be able to prevent a gambling problem from developing.

The UKGC is also keen to highlight the availability of help through various gambling charities, including the GAMSTOP self-exclusion scheme, which can enforce a longer period of gambling exclusion, with a minimum timespan of six months.

This new campaign is the latest from the UKGC as it seeks to expand its initiatives on raising customer awareness of their rights when gambling. Last month, the UKGC began a wide ranging campaign on consumer rights related to the requirements and safeguards that all UK operators have to provide to all customers when they register.

The flurry of activity around problem gambling awareness comes at a time when the UKGC itself is under increased criticism from politicians, while the current UK government is committed to reforming the 2005 Gambling Act during the course of its term.

Changes to Massachusetts Gambling Proposals

The Massachusetts state legislature has amended the sports wagering bill that was forward last week, adding new provisions that would legalize online lotteries. At the same time, however, they have effectively doubled the tax rate for online betting.

Last week, a fresh economic development package bill was brought forward to the state’s legislature, which included a section that was aimed at introducing legal sports betting in the state. Put forward by the House Committee on Ways and Means, the bill was designed to enable the formation of partnerships between organisations in the state, and sets out a range of proposed measures including a Sports Wagering Act, which would legalize land-based and online sports betting across the state.

A range of new amendments to the bill have been taken up the House on a 157-1 vote. These include the legalisation of online lottery sales and permission for the state Lottery Commission to promote the sail of lottery tickets, including the provision of prepay gift cards. The Commission has also been asked to conduct a study to analyse state lottery law and suggest any necessary changes.

Lottery players will be given the option to self-exclude from playing online lottery games and will be given the power to set maximum deposit and spending limits. The bill also stipulates that operation and administration costs involved in running the lottery should not exceed 15% of ticket revenue. The state lottery will also be allowed to offer online fantasy sports under the new rules.

The initial bill also proposed a 15% tax rate for sports betting, but the new amendments have doubled this rate to 30% although a proposed rate of 50% was rejected. In addition, operators who hold Category 2 licenses, which cover racetrack betting, will be allowed to offer mobile betting.

Politicians in the state have also asked the Massachusetts Gaming Commission to produce a report on the possibility of launching a casino in the Southeast region of the state. While this was made possible by the 2011 Expanded Gaming Act, the project has been delayed in recent years due to concerns about competition from neighbouring states Rhode Island and Connecticut.

The bill is currently awaiting another reading in the House of Representatives, and if it is passed would then move on to the state Senate for consideration.

The development is good news for the Massachusetts State Lottery which recently announced that it had suffered a year on year drop in revenue for the 2020 fiscal year, mainly due to the impact of the coronavirus pandemic. Revenue for the year to June 30, 2020, amounted to $5.25 billion, which is a decrease of 4.7% from the $5.51 billion figure for last.

Russia Move to Modify Gambling Rules

Politicians in Russia have moved towards reform of the Russian sports betting system, through accepting the second and third readings of Bill 647044-7, which proposes big changes to the sports betting rules. Originally presented to the state Duma on 30 April, the bill will amend existing federal rules for the regulation of gambling in Russia.

The bill proposes to allow the Kremlin to implement  new limits on the types of sports events that punters can bet on, as well as in increase in the financial obligations associated with Russian sports betting licences. These include a new rule that licensed sportsbooks will only be able to accept bets that have been officially sanctioned by domestic or international bodies.

There remains some grey area in the bill’s interpretation of what counts as an international sports events, but the bill is clear that to qualify, international sports events will have to be monitored by a corresponding governing body with oversight of the event’s business.

In addition, the Kremlin will push ahead with expanding its quarterly 5% tax charge to international betting, in order to help fund Russia’s wide-ranging sports federations, a tax that was only previously applied to domestic betting events.

Further amendments include giving the Kremlin new legislative powers to directly suspend or terminate any bookmaker licence if the operator fails to meet tax obligations or for any firm that has failed to register their wagering activities for a period of six months. The Kremlin has also increased the legal obligations of licensed bookmakers. Operators will now have to maintain a minimum liability of €6 million in bank guarantees, along with €12 million in net assets.  

The latter measure was sanctioned due to the fact that 14 licensed sportsbooks had been exempt from the liability clause as they had earned their licences prior to 2010, before the existing financial requirements had been introduced.

Currently, Russia maintains 20 licensed sportsbooks that have been approved by the Russian federal tax authority. The new bill, which will have a significant effect on the market, will enter effect 60 days after it has been officially published. This won’t happen until the President approves the bill and other technicalities are resolved, with analysts predicting this could happen by mid-autumn this year.

McGreal Drifts in Tranmere Betting

The chances of Colchester United head coach John McGreal becoming the new boss of League Two rivals Tranmere Rovers have reduced, according to the odds offered by a UK bookmaker.

Last week, McGreal had been as short as Evens with some bookmakers to take over in the Prenton Park managerial role, including Sky Bet, who made him the firm favourite. But the same company now regard him only as third favourite at 3/1 to take over from Micky Mellon, as speculation continues about McGreal’s future with the U’s.

Wigan Athletic coach Anthony Barry has now been installed as the new favourite at 6/4, with Liverpool legend Robbie Fowler, who is now a free agent following his departure from his role as boss at  Brisbane Roar and who has also been linked with the job at Birmingham City position, is 13/8.

Other candidates included in the betting from Sky Bet are Tim Cahill at 10/1, Michael Jackson (14/1), Luis Milla (14/1), Alan Rogers (16/1) and Chris Greenacre (16/1). William Hill now have Robbie Fowler as their favourite, with McGreal second in the list, while some bookmakers still have  McGreal as favourite to take over at Tranmere but with Fowler as a close second.

The odds on McGreal taking the job have been drifting since Tranmere chairman Mark Palios stated that the club would not be rushed into making a new appointment. Speaking to the Tranmere website, Palios said that there was no specific time scale:

“We won’t be putting a deadline on it. Clearly we work as quickly as we can but we’re not rushing into a decision. When we have an answer, we’ll let the fans know as soon as possible.”

McGreal has well established links with the club, having made 200 appearances for Tranmere in his playing career, after coming through the Tranmere youth ranks. The 48-year-old has been in the hot seat at Colchester for a little over four years. He led the U’s to finish sixth in League Two this season, earning a place in the play-offs, while also guiding them to the quarter-finals of the League Cup, only the second time in their history that they had reached that stage.

He originally took over as Colchester head coach in May 2016, having been at Colchester since 2009 in their academy set-up, where he coached the likes of Sammie Szmodics, Frankie Kent and Tom Lapslie. He had previously done will with the club’s under-18s, leading them to a double in 2014.

Gambling Commission Consults on Slots Design

A leading gambling industry regulator is set to take a closer look at the design of your favourite online slots titles, following an announcement this week.

The UK Gambling Commission (UKGC) has launched a public consultation on the subject of the design of online slots games. The aim of the consultation will be to gather public views on how to provide for more protection for vulnerable online slots players.

The UKGC has already set out a variety of proposals in this area, as part of its ongoing efforts to tackle gambling harm and improve the quality of customer responsibility in the industry. These include new controls which aim at reducing the risk of harm associated with playing the most intensive online slots. The proposals are also focused on ensuring that operators take greater care of their players.

In a statement announcing the consultation, the UKGC said that they were aware that the success of many modern gaming technology companies, games industry digital content creators and other gaming machine software designers depends on the ability to create and then to maintain the engagement of their players, and that this principle applies across online, real world and mobile slots.

“We also know that speed of play, frequency of betting opportunities, as well as other factors on offer to players can increase addiction and risk of harm. The proposed changes outlined within this document will help to mitigate these risks for slots players.”

The statement adds that the UKGC are focused on slots because this area of the gambling sector is the largest, judged by Gross Gambling Yield figures. Although the number of online slots players is proportionately small compared to other forms of gambling, the UKGC point out that the nature of online slots brings together a variety of features that increase the intensity of online play. The result is that online slots are seen to carry a relatively large risk. The UGKC also say that this is reflected in the rate of online slots players who develop gambling problems.

Based on the statement, it also seems that the UKGC’s proposals are only the first stage of their efforts to ensure that players remain safe, and they urged slots developers to show more commitment in their efforts to innovate in the area consumer protection. They also emphasised that there was a significant need for regulatory engagement, and that this would continue:

“Regulatory intervention needs to keep pace with this and the proposals in this consultation form part of a comprehensive package of work we are taking forward to make online gambling safer.”

EFL Reacts to Gambling Sponsorship Proposals

The English Football League (EFL) has reacted to proposals that would ban sponsorship deals with gambling bans, by expressing their opposition.

The UK government is considering the findings of a report by a House of Lords committee, recently published, which had been set up to examine the impact, both social and economic, of the gambling sector. The report recommended that the government bring in a ban on betting companies sponsoring sports teams as part of a series of measures aimed at tackling gambling-related harm.

The EFL, which includes football clubs in the Championship, League One and League Two, fears that many of its clubs could be financially vulnerable to such a measure, given how many of them rely on sponsorship deals with gambling brands. The Football League itself has a naming rights deal with SkyBet, which is set to run until 2024, while 17 out of the 24 clubs in the Championship also have shirt sponsorship deals with betting companies.

In a statement responding to the report, the EFL focused on the fact that many of its clubs were financially vulnerable, due to the Covid-19 pandemic and associated shut down, which led to the early conclusion of League One and League Two. The EFL pointed out that betting companies fund EFL clubs to the tune of more than £40 million every season, underlining what the EFL described as the significant contribution that betting companies make to the financial sustainability of professional football, which they say is as important now as it has ever been.

Although the committee’s report recommended an end to gambling advertising, they also stated that such restrictions should not take effect for clubs outside the Premier League until 2023. Nevertheless, it concluded that gambling advertising in or near sports grounds or venues should be ended.

The review by the House of Lords followed on from the commitment made by the government to review the 2005 Gambling Act, and at a time when many have been criticising the industry.

In its statement, the EFL added that it was happy to collaborate with the government on gambling reduction, but reiterated its overall operation to widespread gambling advertising bans:

“The League firmly believes a collaborative, evidence-based approach to preventing gambling harms that is also sympathetic to the economic needs of sport will be of much greater benefit than the blunt instrument of blanket bans. It is our belief that sports organisations can work with government and the gambling industry to ensure partnerships are activated in a responsible fashion.”

Switzerland Acting on Overseas Gambling Operators

The Swiss Lottery and Betting Board (Comlot) officially blocked 88 domains run by foreign online gaming operators during 2019, according to its annual report, published on Monday.

Last year was the first in which blocks on foreign operators had been implemented following a change in the law. In June 2018 a majority of Swiss voters approved the reform of the country’s gambling law despite protests by opponents who warned of government censorship. The law came into effect in January last year, although enforcement action against foreign sites didn’t start until August.

Swiss gamblers are able to bet online only with Swiss casinos and with lotteries that pay tax in Switzerland. Registered sites also have to demonstrate that they take sufficient measures to protect people from gambling addiction. Other sites are automatically blocked by all Swiss telecommunications service providers through domain name server blocks.

The report from Comlot shows that the law had already started to have an effect before it came into force. A number of major players in the international sports betting market had made contact with the board at an early stage and had withdrawn from the Swiss market. But according to Comlot, some providers had tried to mitigate the effects of the access block by repeatedly adding new domains.

Comlot pointed out that this demonstrated the determination of foreign gambling operators to break the rules. They also said that it indicated the technical blocking measure was effective.

In its report Comlot also published gambling statistics for 2019. These showed that automated and online lotteries, along with sports betting had generated a turnover of $3.17 billion during the year. Around 83% of this figure was accounted for by the lotteries, mostly the EuroMillions and Swiss Lotto. Each of Switzerland’s 8.6 million residents gambled an average of $370 last year, while per capita winnings came to $248, which means each person lost $122 on average.

Kenyan Betting Tax Repealed

The National Assembly of Kenya has passed a bill that effectively ends the excise tax on betting stakes, the same tax that led to operators Sportpesa and Betin pulling out of the country.

The 20% excise tax on bets, introduced in the 2019/20 budget, was initially due to be carried over in the 2020/21 finance bill, but an amendment put forward by the country’s Finance and National Planning Committee has now led to its removal.

According to those proposing the reform, the excise tax had hit the finances of betting companies, leaving them with little money to support sports clubs. The Committee also heard that the tax had led many Kenyan betting customers to switch to foreign-based sites.

In the ensuing National Assembly debate, Joseph Kirui Limo, who chairs the Finance Committee said that tax revenue from the betting industry was going down, and that repeal of the tax would lead to an increase in revenue. A further proposal, to reduce the tax on winnings from 20% to 10% was rejected.

The original implementation of the excise tax on stakes, which was passed by Kenyan MPs in September 2019, had a significant effect on Kenya’s betting market. Local brand SportPesa said that it would pull out of the market, and another operator, Betin, followed suit.

The tax was also another step the ongoing dispute between Sportpesa and Kenyan authorities relating to tax payments. Back in August last year, the firm cancelled all sports sponsorship deals in the country following a ruling that telecoms companies were to block payments to Sportpesa over a tax revenue dispute. At the time, the firm said it was planning legal action against the regulators, the Betting Control and Licensing Board and the Kenyan Revenue Authority.

The ruling was reversed in November last year, a decision that Sportpesa said they welcomed, but although they said they may reconsider their withdrawal from the market, they have not yet returned. They have also declined to comment on the new reforms.

The bill is now set to go to Kenyan President Uhuru Kenyatta, who has the choice to sign it into law or send it back to the Assembly for further changes. The President has previously spoken out against the gambling industry, so it remains to be seen if he signs the bill. In fact, last year, Kenyatta called on the Assembly to pass a complete ban on gambling.