Boom Predicted for Virginia Sports Betting

Virginia’s new sports betting industry is set to grow into one of the largest markets in the country, according to research released this week.

Analysts PlayVirginia say that the market could ultimately generate more than $5 billion in annual wagers, and as much as $400 million in revenue, with $60 million going to state taxes.

Last month, Virginia became the 20th US state to offer sports betting. And early indications are that the state is in the position to become one of the most lucrative markets, with forecast revenue of almost $1 billion and $125 million in state taxes by 2024.

Virginia’s likely strength as a betting hub is due to a number of factors. The state has a large number of sports fans, and is also in a strong position to draw customers from Washington DC, where there has been some dissatisfaction with the state of the sports betting sector, and the city of Baltimore, at least until the state of Maryland launches its own sports betting market. Virginia may also be able to draw some business from North Carolina.

The state launched as a solely online market, which is relatively rare in the new US betting sector, and puts Virginia in a strong position compared to states that require in-person betting. Virginia also has a tax structure that is considered favourable for the growth of the sector. The state’s regulatory framework imposes a 15% tax rate on sports betting revenue. Although this is a higher rate than most states, it is below both Tennessee and Pennsylvania and both of those territories have generated considerable revenue from their sports betting industry.

The launch of Virginia sports betting has also happened at one of the busiest times of the year in sport, with the Super Bowl taking place last weekend.

Swedish Betting Operators Criticised over Gambling Harm

The gambling regulator in Sweden, Spelinspektionen has said that operators need to do more in providing information about gambling-related harm along with links to the Swedish self-exclusion scheme Spelpaus on their sites.

The criticism follows an inspection of licensed operators carried out last autumn. Although the regulator said some improvements had occurred since the last survey in 2019, which was published in April last year, more work was still required from operators, with further regulatory action not ruled out.

The regulator reminded licensees of their responsibility to ensure that they keep up to date with all new regulatory requirements.

The report showed that most of the sites reviewed showed responsible gambling logos for both logged-out and logged-in mode, along with enough references to an independent gambling helpline, both of which represent improvements from the findings of previous reports.

The regulator emphasised that these features are of huge importance for consumer protection and that all websites that are licensed for online gaming should meet these requirements. But it also said that many of the websites were lacking in information about the licensee. Several did not even have a telephone number and email address listed.

Among the other concerns highlighted by the report was the fact that many of the websites also lacked information concerning licence durations, and failed to mention that Spelinspektionen serves both as a supervisory and a licencing authority.

There was also some major shortcomings identified with regard to gambling risk. The regulator has reminded operators that information on the specific risks of gambling along with concrete examples of the negative consequences of gambling should be provided.

In addition, operators needed to do more in providing links to Sweden’s self-exclusion scheme, Spelpaus. A marketing campaign to promote the scheme was launched in June 2020, after Spelinspektionen reported that player awareness of the system was limited.

The Spelpaus scheme has in fact been live since January 2019, coinciding with the launch of the Swedish online gambling market. Suspensions through the Spelpaus scheme can last for one, three or six months, or can be applied on an indefinite basis.

Optimism for Czech Gambling Operators with New Directive

Gambling companies who hope to run operations in the Czech Republic have been given cause for optimism in recent days after a new administrative development.

The gambling sector in the east European nation will  be hoping that the Czech government will continue with their proposed regulatory adjustments to both banking and customer verification requirements across the industry, in the hope that this will make it easier for new operators to enter the currently restricted Czech gambling market.

Back in 2017, significant amendments to the rules around Anti Money Laundering (AML) along with the controversial new Czech Gambling Act, caused consternation in the betting sector. The Ministry of Finance enforced a controversial new requirement that asked operators to impose ‘face-to-face’ customer verifications at around 7,500 authorised ‘check-point’ venues.

The stringent measure, which was combined with taxes on the industry of of 23% GGR on sports betting and 35% GGR across all Czech online casinos, saw the Czech Republic witness the marketplace withdrawal of a host of foreign operators.

A significant number of gambling operators including bet365, Entain (which was formerly known as GVC) and William Hill left the market stating that conditions in the sector had become unworkable. Their complaints included the argument that the Ministry of Finance had imposed compliance requirements that had not been considered appropriate in any other European market.

At the time, the Czech Ministry of Finance stood firm on the measure, stating that face-to-face verifications were essential in order to fulfil AML obligations and other concerns with regards to gambling transactions.

With foreign incumbents subsequently declining to reapply for licences, the subsequent years have seen a decline in the Czech sports betting market which has been reduced to only three domestic incumbents. Tipsport, Fortuna and Synot make up the market, while the Czech lottery sector is dominated by the SAZKA Group.

But after three years in effective regulatory isolation, there is rewnewed hope for a revival in the Czech market with the approval of the new directive on AML, which seeks to bring modernisation to the country’s customer compliance and banking rules. As part of the 5th Directive on AML, the country is set to adopt alternative remote customer verification measures that have been created by by individual banks within the country.

Known more commonly as bank IDs, these new compliance tools could give the government the freedom to relax its existing face-to-face verification requirements. Speaking about the development, Denisa Marcekova, who heads the Czech and Slovak Internet Gambling Association, offered the Association’s public support and said that the bank ID method had been shown to provide effective verification when it was used in Sweden:

“I strongly believe this is a significant step in the right direction. I hope that the recently launched governmental review of the Czech gambling regulation will result in even smoother access to the market in the near future.”

Online Betting Era Dawns in Michigan

A new era of online betting is set to dawn in the US state of Michigan after the Michigan Gaming Control Board confirmed that the state will permit online gaming and sports betting from noon local time on Friday 22 January.

Nine betting operators have been authorised to launch this week. All will be paying a tax rate of 8.4% for online sports betting while igaming tax will range from 20% to 28%. Casinos located in the city of Detroit may also have to pay a municipal services fee and a development agreement fee to the city.

The money collected in taxes from the three Detroit casinos: Greektown, MGM Grand Detroit and MotorCity, will be allocated to the city of Detroit, the state Internet Sports Betting Fund, the state Internet Gaming Fund, and the Michigan Agriculture Equine Industry Development Fund.

The city of Detroit also has the safeguard of a hold-harmless provision to enable it to recoup any lost gaming tax revenue if it collects below $183 million during a single fiscal year.

In the case of the state’s tribal casinos, online sports betting payment tax revenue will go to the Internet Sports Betting Fund and the Michigan Strategic Fund, while tax revenue derived from internet gaming will be split between the Strategic Fund, the Internet Gaming Fund and a local government body that oversees local services. It is also reported that revenue from the new online sector will help to fund the Compulsive Gaming Prevention Fund, The First Responder Presumed Coverage Fund, and The State School Aid Fund.

Speaking about the new launch, the MGCB Executive Director Richard Kalm, said that the state and its residents were looking forward to the new era:

“Michigan residents love sports and, judging by inquiries we’ve received, eagerly anticipate using mobile devices to place bets through the commercial and tribal casinos.”

He added that they hoped that online gaming and sports betting would give casinos new opportunities to engage with their customers and that the state and local communities would benefit from taxes and payments made from betting revenue.

A number of local casino venues have been given permission to offer sports betting and/or internet gaming, including the Bay Mills Indian Community, through a partnership with DraftKings, and Grand Traverse Band of Ottawa and Chippewa Indians, who have signed up with UK operator William Hill to provide their sports betting platform. Greektown Casino Hotel, Hannahville Indian Community, Keweenaw Bay Indian Community, Little River Band of Ottawa Indians and MGM Grand Detroit Casino are among the other venues to launch their online betting this week.

According to Kalm, the period between the authorisation and launch date would enable operators and platform providers to have extra time to test and make adjustments before going life. In addition, the MGCB say that they hope to licence further providers over the next few days and weeks.

New Push on Kentucky Sports Betting

Another attempt to introduce sports betting to the US state of Kentucky is underway, but it faces significant hurdles before becoming law.

Kentucky Republican Representative Adam Koenig has once again filed legislation to legalise online sports betting in the state, with House Bill 241. The new bill is similar to House Bill 137, which was filed by Koenig in the 2020 legislative session, with the core aim of legalising online sports wagering, but the new bill also includes proposals to regulate online poker and fantasy sports.

The bill is currently with Kentucky’s House of Representatives’ Committee on Committees, and is sponsored by 17 Representatives.

If it became law, the sports betting aspect of the bill would allow for betting online, mobile and at approved sports venues in the state, and consumers would be able to bet on both professional and collegiate contests. The Kentucky Horse Racing Commission would be given the overall responsibility for the regulation of horse racing, pari-mutuel wagering on horse racing and sports betting.

The bill calls for sports betting licences to be set at a cost of $500,000, with an annual renewal fee of $50,000. Licensed operators would also face a 9.75% tax on their adjusted gross revenue on bets placed at the track or via professional sporting venues, along with an extra 0.5% tax to help to raise money for two new horse racing funds in the state. All licensees operating online, through mobile or via other off-site technology would pay a 14.25% levy on adjusted gross revenue. According to the bill, the regulated Kentucky sports betting market would be set to launch on January 1, 2023.

Koenig’s bill would also legislate for fantasy league contests. Companies offering fantasy league platforms would have to pay a $5,000 registration fee as well as a renewal fee of 6% of their adjusted gross revenue. It is not clear what level of taxation such operations would have to pay, but the bill does provide for a start date for fantasy sports contests of January 15, 2022.

Poker operators are also included in the bill, although it does not set a date by which online poker betting should be up and running in the state. Poker operators would pay an initial licensing fee of $250,000. These licences would run for a year and would be renewable for a further fee of $10,000. They would also have to pay 6.75% of net poker revenue every month.

Koenig’s House Bill 137 made it as far as the House Licensing, Occupations and Administrative Regulations Committee in March last year but made no further progress, and although some pro sports betting lawmakers are hoping for better this year, the bill faces significant hurdles.

Due to the Kentucky constitution, the 2021 legislative session is shorter than the 2020 session, which means time is strictly limited, and in the area of betting, there is a more pressing matter for lawmakers to resolve. That centres on Historical Horse Racing (HHR) a form of betting that is a vital source of funds for the Kentucky horse racing sector. Last year, the state Supreme Court ruled that HHR breached the state constitution, and addressing that issue is likely to take priority in 2021.

Sports Betting Green Light for Puerto Rico

Sports betting fans in Puerto Rico will soon be able to bet on their favourite sports thanks to the passing into law of a sports betting bill.

The former Governor of Puerto Rico Wanda Vazquez Garced signed Senate Bill 1534, which paves the way for the launch of sports betting and esports in the country. The measure was among the final to be signed by the Governor before stepping down after 16 months in charge.

The bill effectively reforms the previous Gambling Law, with the stated goal of enabling new industries and businesses to create jobs in Puerto Rico. It is also hoped that sports betting will create new sources of revenue that will sustain government programs and essential services.

Speaking about the bill signing, Vazquez Garced said that he was pleased to be able to finally put his name to the legislation:

 “It’s a measure that paves the way for the esports and sports betting industries in Puerto Rico, and encourages businesses and jobs in this sector. With this amendment, we can complete and launch a new industry with the potential to create thousands of jobs.”

There will now follow a period of regulatory action, which will be overseen by the new government of Pedro Pierluisi ,who will be in charge of implementing the law and activating these industries.

Speaking to the local media, the Executive Director of the Gaming Commission, José Maymó Azize, said that the bill amended the law in some important areas that were in need of change.

Of these the most significant is the removal of the original proposal for players to be able to register online and in person. Under the new bill, each customer will initially have to register in person.

Speaking about the bill, the outgoing Executive Director said that the regulation process has been completed, but as that happened during the transition period, they had not yet been able to unveil it. He admitted that it had been a complicated process that had involved many obstacles, but that the regulations would serve to define sports betting and fantasy sport in Puerto Rico.

The Puerto Rico Gaming Commission has selected Gaming Laboratories International (GLI) to advise them on the regulation of esports operations on the island, drawing on the experiences of previous processes from other American jurisdictions. According to government estimates, esports could bring around $87 million in profits to the Puerto Rican government in the first five years of operations.

Crackdown on Gambling Advertising in Norway

The Norwegian gambling sector is set to face a significant crackdown in the New Year due to new guidelines that will severely restrict the sector’s ability to advertise.

From January 1, the Norwegian Media Authority will be able to stop TV advertising from overseas gambling companies, and from the same date, the Norwegian Ministry of Culture will also tighten the guidelines on advertising for the country’s legal operators Norsk Tipping and Norsk Rikstoto, which will limit their advertising to that considered necessary to channel consumers away from unlicensed overseas operators and towards the two state-owned bookmakers.

The new guidelines will include a reduction in the Norsk Tipping’s ability to promote the money they give to good causes in their marketing, and will add new requirements for responsible marketing, with all gambling advertising required to include contact information for gambling help services.

The launch of the Norwegian Media Authority’s new rules that will prevent gambling advertising on television and the tightening of the guidelines for Norsk Tipping is part of the government’s preventive work to tackle problem gambling. The rules follow in the wake of the University of Bergen’s recent study that showed an increase in gambling problems in the country between 2015 and 2019 and found that gambling advertising was a significant factor.

Speaking about the issue, Abid Raja, the Minister of Culture, said that gambling problems were increasing in the Norwegian population and that the government was working on solutions:

“The possibility of stopping TV advertising from foreign gambling companies is an important measure in the work of preventing gambling problems. With less gambling advertising on TV, we can also tighten the guidelines for Norsk Tipping’s marketing.”

At the start of the month, Norsk Tipping brought in a series of temporary measures that will run throughout December and January and that are designed to reduce customer spending and playing time. The operator cut the maximum monthly loss limit for all high-risk games and increased the break that all customers have to take after playing for an hour.

At the time of that announcement, the Chief Executive of Norsk Tipping, Asne Havnelid, said that they were aware that these were their busiest betting months and that the additional factor of the Covid-19 measures meant that vulnerable players were more at risk.

In addition to the new rules on advertising, the Norwegian government has announced that it will be adding significant extra investment to problem gambling research and treatment. The announcement of new funding followed a call from the Norwegian Industry Association for Online Gaming (NBO) in October suggesting that there should be a rethink on the rules relating to the gambling sector as a response to new proposals for gambling legislation.

The NBO say that the bill, which would unify the various existing gambling Acts, while underlining the monopoly status of Norsk Tipping and Norsk Rikstoto, offered poor standards of customer protection and value. NBO has advocated for a licensing model that would allow private operators to provide betting services, paying a tax rate of 15%.

Gambling Ban Hits Slovakian Capital

Betting operators and customers in the Slovakian capital city of Bratislava face an uncertain future after local politicians moved to ban gambling in the city.

City councillors reportedly voted to ban gambling last week, following the receipt of an anti-gambling petition. The ban on gambling is due to come into effect on 1 January, next year. According to the local newspaper, the Slovak Spectator, all but one of the council’s 40 members in favour of the gambling ban whilst the remaining councillor chose to abstain.

Bratislava may not be the last authority in Slovakia to go down this road. Other cities are said to be considering similar legislative changes, and there have been sporadic recent attempts to bring in a gambling ban. The city of Nitra has been pushing for such a ban since 2019, although those efforts have so far been unable to produce any concrete legislation.

Three years ago, there was an effective national ban on gambling in the country. This ran from May 2017 to December 2018, but it ultimately collapsed due to a legal challenge. The Regional Prosecution Services declared that the law was not in compliance with Slovakian law, and this opinion was backed up by the Bratislava Regional Court.

The new law will not mean that Bratislava’s casinos and gambling venues will face immediate closure. Instead, the new rules allow existing gaming licenses to expire. Most of these are due to run out in 2023 and 2024. Matus Vallo, the Mayor of Bratislava, has said that he is hopeful that the new law will bring significant positive changes to the capital, but gambling venue and casino operators have said that they do not believe the legislation will have any effect. One casino operator, Robert Vystavil, was quoted in a local newspaper arguing that the current rules are adequate, and that by bringing in complete bans, nothing will be solved. He also alleged that the government was doing little to tackle the problem of illegal gambling in Slovakia.

Gambling has a long history in Slovakia. Horse racing was a popular vehicle for gambling during the 19th century, while a local land-based casino industry began to emerge in the early 1990s. The gambling industry also generates significant revenue for a number of authorities in the country, including in Bratislava. According to official figures, by the end of last year, the city had 89 gambling venues, with six casinos and two bingo halls. Data on revenue showed that they earned €2.76 million.

The gambling sector in the country is officially overseen by the Interior Ministry, but individual cities have the powers to introduce regulations in this area.

Leading Conservative Calls for UKGC Scrapping

The UK gambling regulator, the UK Gambling Commission (UKGC) has come under fire this week from a senior politician as the UK government gets its long awaited review of the 2005 Gambling Act underway. Leading Conservative MP Iain Duncan Smith has repeated his call for the government to scrap the UKGC altogether as part of a major shakeup of the sector.

Writing the widely read news source Politics Home, Duncan Smith said that the All-Party Parliamentary Group (APPG) for Gambling Related Harm, on which he serves, had been the only committee to keep up the pressure on the government to go through with its review of the gambling sector in the country, which he was happy to see:

“We have been calling for reform of our gambling laws for many years, and so I very much welcome the launch of the long-awaited gambling review published this week.”

Duncan Smith, who is a former leader of the Conservative Party said that APPG’s volume of first-hand accounts of how gambling addiction can ruin young peoples’ lives should form part of the DCMS inquiry. And, focusing on gambling’s current regulatory structures, he criticised the UKGC, accusing them of inaction, claiming that while the industry and its profits had grown exponentially, they had gained most of their money from those customers who were most addicted. According to Duncan Smith, around 60% of profits came from just 5 percent of UK gamblers.

The criticism is in the same vein as his comments at the start of the year, when he criticised the UKGC for its decision to consult with GVC Holdings on how the industry could develop new rules that applied to the treatment of high value customers.

Duncan Smith reiterated his belief that not only should the government review the UKGC, but should get rid of it altogether and set up a regulatory body that monitors the industry independently. Although all UK operators have agreed to restructure and audit their VIPs programmes, Duncan Smith says that all VIP customer schemes should be banned completely as he believes it represents a pernicious aspect of gambling that pushes players into high debt levels.

Concluding his comments, Duncan Smith told ministers that they had a duty not to hold back from undertaking radical reform that was needed to prevent gambling addiction from becoming our number one public health crisis. He urged the government to be clear, saying that industry needed a reset and should be made to understand its responsibilities.

Gambling Firms Warned in Sweden

Gambling operators in Sweden’s regulated market have been warned about their responsibilities to provide fair conditions for their customers.

The Swedish consumer affairs regulator, Konsumentverket, has put out a public warning to all licensed online gambling operators after a recent review. The agency claimed that it had found what it described as ‘numerous shortcomings’ having undertaken a full review of terms and conditions across the sector, through analysing 13 operators who were picked at random.  

The operators that were reviewed by Konsumentverket included AG Communications, Blue Star Planet, Ellmount Gaming, Genesis Global, MOA Gaming Sweden, Smarkets, Svenska Spel, Interwetten and Zecure Gaming.

In discussing their findings, Konsumentverket said that it had discovered significant failings in operators’ websites that were related to a range of issues, including withdrawal restrictions, ID and verification rules, unclear promotions, liability disclaimers and inconsistent terms of play. The agency discovered that in total, eleven firms had applied what they described as ‘contract terms’ on customer registration but had not disclosed in full what documentation those same customers are required to provide in order to be fully verified.

The agency also found that four operators referred to terms used by foreign regulators that related to the website’s conditions of play and customer care duties. Three companies also said that a foreign court would take the lead on adjudicating any player disputes. Finally, the agency said that they were concerned over six firms who had applied contract terms that effectively limited the consumers right to take out money from their accounts.

In response to the findings, Konsumentverket has demanded that all operators immediately examine and take steps to update their terms and conditions. The agency has also sent the findings of its results to the Swedish Gambling Inspectorate, Spelinspektionen and to the national gambling trade association, Branschforeningen for Onlinespel (BOS). The agency has also indicated that it would be revisiting the issue in future to monitor progress:

“The Swedish Consumer Agency intends to follow up the current review to see how the gaming companies have taken into account the assessments made in the current memorandum. Such a follow-up may take place in the form of individual supervisory matters.”