Confusion in German Betting Market as DRC Continues to Operate

A prominent German jurisdiction that holds responsibility for the awarding of online sports betting licences is continuing to accept licence applications while awaiting an appeal against a court ruling.

The Darmstadt Regional Council (DRC) is still accepting sports betting licence applications even though a court ruling earlier this month prohibited the council from continuing to offer licenses. The authority, which is based in the state of Hesse has filed an appeal with a federal supreme court seeking to overturn the decision of the Darmstadt administrative court.

The DRC have said that they will not issue licences until the appeal is heard but is continuing to accept and applications and review them, so that they will be able to issue licences quickly if their appeal succeeds. As of February, over 50 betting operators had applied through the DRC or had expressed a desire to do so.

The DRC was one of a pair of authorities given responsibility for sports betting licences back in January under the terms of the Third State Treaty on Gambling. But the process was suspended after Vierklee, an Austrian betting company, said that the process lacked transparency. Their claim was that the process also discriminated against operators from outside Germany. The DRC has appealed against the ruling through the Kassel Administrative Court.

The Third State Treaty on Gambling, which came into effect at the beginning of January, is designed to cover the period until the long-debated Fourth State Treaty comes into effect on July 1 next year. That legal framework will authorise online casino and poker games for the first time in Germany. Currently, sports betting is the only form of legal online betting, but the complicated legal situation in Germany has resulted in confusion for punters and operators alike for a number of years and the DRC licencing controversy is only likely to add to that confusion.

New Limits for Gamblers in Finland

Finland’s Ministry of the Interior has adopted an average loss cap of €500 for all gamblers in the country amid concerns over the risk of gambling harm. This cap will apply to Veikkaus, which is Finland’s sole gambling operator, offering online casino services.  

Online gamblers will now be subject to a monthly loss limit of €500. If that level is reached they won’t be able to gamble for the rest of the month.  Finnish officials have decided to introduce these steps to reduce possible gambling problems that may occur during the Covid-19 pandemic.  

Average loss restrictions had been at €1,000 before those temporary regulations but the new rules will tighten the limits considerably. According to the government, the rules will apply to all online slots, online bingo, instant winning games and table games with the exception of poker. They are expected to be enforced from Friday May 1 and will remain in effect until at least the end of September.  

Veikkaus has also announced that it will place its raffle draws on hold until further notice. The producer is currently looking to concentrate on its main lottery products.  Finland’s monopoly gambling company acknowledged that online casino revenue has gone up after land-based outlets were shut down following the introduction of compulsory social distancing measures.   

One of Finland’s neighbours has also applied limits. On the other side of the Gulf of Bothnia, Sweden has also placed provisional limits on online gambling.  

Minister of Social Security Ardalan Shekarabi last week announced that weekly gambling will be capped at the equivalent of a little over £400. Digital bonuses will also be capped, and players will also have to set limits on their play time at the casino. Sweden’s limits on online casinos are set to remain in place until at least the end of 2020.

GambleAware Hits Target

The UK gambling sector charity Gamble Aware has revealed its list of contributors for the last year, with the £1.46 million donated by GVC Group topping the list.

In total, there were donations from 956 organisations, most of which operated in the gambling sector. These amounted to a total of £10.1 million, which was just in excess of the charity’s aim of £10 million following their failure to hit that amount last year.

Ladbrokes Coral owner GVC was one of only three operators who gave a seven-figure sum, with Flutter Entertainment, which owns Paddy Power Betfair William Hill giving £1 million each.

GambleAware asks all businesses who profit from gambling in the UK to donate at least 0.1% of gross gambling yield, or if their gross gambling yield is less than £250,000, then to donate at least £250. The charity also received £1.4 m through three regulatory settlements agreed by operators and the Gambling Commission during the year.

The largest of these payments was from Gamesys, which paid £690,000 after it was found to have failed to prevent gambling harm while also breaching rules on UK money laundering. LeoVegas, meanwhile, paid a fee of £600,000 in 2018 for violations related to false advertising. Playtech also paid a penalty of £155,000. In a statement, the industry group the Betting and Gaming Council (BGC) said it was delighted to see its members contributing funds to support healthier gambling:

“We are pleased that our members have stepped up their funding of GambleAware along with a range of other charities to increase the help and support available to those at risk.”

The BGC added that it would step up its commitment research, education and treatment towards safer gambling in the future. Their statement said that their largest members had gone further and committed an additional £100 million towards education research and treatment

Call for Credit Card Ban in Northern Ireland

A politician from Northern Ireland has called for the region to fall in line with the rest of the UK and ban the use of credit cards for online betting.

Kellie Armstrong, an MLA from the Alliance Party, who speaks on community issues, has said that credit card gambling is particularly dangerous as it enables people to gamble with money they don’t have. She was speaking a day after new rules regarding credit card gambling came into effect in the rest of the UK.

The rules were introduced by the UK Gambling Commission (UKGC) following a period of consultation last year. Originally announced at the end of 2019, they came into effect on April 14. The rules ban all gambling companies from accepting credit card payments. They also restrict e-wallet payments that use credit cards as the original source.

With the exception of purchasing scratch cards and National Lottery tickets from physical venues, customers in England, Wales and Scotland are now restricted to using debit cards or cash physically deposited into an account in order to gamble.

But the rules will not apply in Northern Ireland. Unlike the rest of the UK, where gambling is regulated under the Gambling Act 2005, gambling in Northern Ireland is governed by a much older legislative instrument, the 1985 Betting Gaming Lotteries and Amusements (NI) Order. Politicians and stakeholders in Northern Ireland have called for the updating of this legislation.

Armstrong emphasised that during the ongoing pandemic lockdown, online gambling has become more popular than ever, leading to more people using gambling sites, which required a legislative response to protect individuals at risk:

“We now need a similar law for Northern Ireland. Understandably, most resources are targeted towards combating Covid-19, however, we need to tackle the problem of addiction and helping gamblers stay safe.”

Warning for Lottery Players in Michigan

Lottery game players in Michigan have been warned to be on their guard against a scam that has targeted the state.

The Michigan Lottery has issued the warning to the public after identifying a scam that promises a big prize, but first requires a fee or the handing over of sensitive information.

The initial contact comes in the form of an email, letter or phone call that informs the player that they have won a large lottery prize. If the victim agrees to hand over a fee, they are asked to send a check, go through an electronic funds transfer or arrange a meeting to collect the money. Alternatively, victims have been induced to hand over sensitive data that can be used in identity fraud.

On some occasions, scammers have returned to the original victim, asking for more money, claiming that this is due to processing fees or other costs. The ongoing lock down during the COVID-19 crisis is likely to increase concerns that isolated individuals could fall prey to such scams.

In their advice, the Michigan Lottery warn people to apply common sense, particularly in cases where they are offered prizes for lotteries that they haven’t entered. Michigan residents were advised to use the official lottery site to establish whether any promotion, prize or lottery is legitimate, while those who feel they have been the victim of a scam are advised to get in touch with their local law enforcement agency.

On Tuesday, lawmakers in the state voted to extend the existing state of emergency for another 23 days. The previous state of emergency, which grants Governor Gretchen Whitmer extensive powers, ran out this week. All of the state’s gambling facilities have been shut down, a measure that affects over 19,000 employees and could cost over $1 billion in lost economic activity.

Gambling Industry Urged to Improve on Age Verification

The UK gambling sector has been urged to improve its standards on age verification, as a result of research into the problem.

Gambling organisation GambleAware commissioned the research, which was carried out by polling agency Ipsos MORI and the University of Stirling’s Institute for Social Marketing. According to the findings, the regular exposure of children to gambling promotions can change their perception of gambling as an activity. The report found that 41,000 followers of gambling company social media accounts in the UK were under-16. And an alarming 17% of the followers of e-sports gambling accounts were estimated to be underage.

Speaking about the findings, the CEO at GambleAware, Marc Etches, said that gambling was an adult activity, but the research shows that it is becoming a part of normal life for many children and young adults, with potentially serious results:

“This constant exposure to it through advertising and marketing, or via close friends and family, has the potential for serious long-term implications for children and young people.”

Etches went on to say that there was a need for social media giants to improve their tools for age screening, and for companies to make better use of the existing tools. He also emphasised that problem gambling was a public health issue, that can have a serious impact on mental health, and flagged up the support available through the National Gambling Treatment Service.

The report came up with a range of recommendations, including the idea that the gambling industry should put more emphasis on the need to produce clear and more effective safe gambling campaigns. It also suggested that more effort needed to be put into education programmes, and that advertising technology be significantly improved to prevent young people being exposed to gambling adverts.

Global Gambling Hit

There was further confirmation about the potential impact on the betting sector of the COVID-19 virus at the weekend when a leading European industry organisation published new research.

The European Gaming Commission (EGBA) has issued a warning that global revenues in the gambling sector could fall by as much as 11% on previous forecasts. According to figures produced by a leading industry analyst, gross revenue in gambling sector in 2020 could fall from an estimated $473 billion to $421 billion. Those figures would represent a return to the revenue levels of 2016.

The decline in gambling revenue is likely to be softened by a surge in online betting, and analysts predict that the online sector’s share of global gambling industry revenue could rise from the current level of 13.2% to around 15.7%.

The unprecedented cancellations of major sports competitions around the world is likely to be the main factor in the decline of revenue. At the time of writing, the list of events that have been postponed or cancelled includes the English Premier League, the Bundesliga in Germany, Spain’s La Liga, the Champions League, UK Grand National and the Masters; all of which are traditionally popular betting events with punters around the world.

Back in 2018, EGBA says that its members generated around €2.36 billion in sports betting revenue, which accounted for 44% of their overall online revenue. But addressing the issue, the Secretary General of EGBA, Maarten Haijer, said that neither sport nor revenue was the priority:

“It’s sad that so many iconic sporting events are being cancelled or suspended and it will obviously have a negative impact on our sector. But the safety and health of the public is obviously more important and we fully support the sporting authorities and others in the difficult decisions they face right now.”

Rates Blow for Bookmakers

Those who run betting shops and other gambling operators were dealt a blow on Thursday when the UK government announced that they would not be able to benefit from one of the measures designed to help businesses during the COVID-19 outbreak.

The UK Chancellor Rishi Sunak announced that all hospitality and retail businesses would be free from paying the business rate for a year. But betting shops and a number of other businesses are not eligible to benefit from the relief.

Speaking about the decision, the Chief Executive of the Betting and Gaming Council, Michael Dugher, said that it could lead to widespread closures:

“This decision is a hammer blow to an industry that pays billions in tax, employs 70,000 hardworking, decent people in this country, and it is one that helps keep sports alive, in particular horseracing. Without any form of support or help we will see the wholesale collapse of a number of businesses in our industry.”

Dugher also said that the gambling industry was prepared to help with the effort to tackle the crisis, and that members of the BGC had offered to release staff to help. And he said that they would continue to pressure the government to change their decision.

The two politicians who co-chair the All-Party Parliamentary Racing and Bloodstock Group, Laurence Robertson and Conor McGinn, said that the government needs to ensure that the livelihoods of hundreds of thousands of individuals who depend on the betting and horseracing industries are supported. They called on the government to act to support the sport.

The Federation of Racecourse Bookmakers have also contacted the UK Gambling Commission, over the level of fees they have to pay. The fees are graded by three tiers, according to the number of race meetings the bookmakers attend, but with racing suspended in the UK until the end of March, they will argue that they should not be liable to pay these fees.

Kindred Hit by Big Fine

Major gambling group Kindred have been hit with a large penalty by Sweden’s gambling regulator over failings over bonuses and lottery games.

Spelinspektionen issued the large fine, worth £8.3 million due to failings at the Kindred subsidiary, Spooniker. The operator was found to be in breach of Sweden’s Gambling Act, which came into effect at the start of January 2019. The failings, which followed a review instigated in March 2019, relate to the offering of a range of unauthorised bonuses, as well as lottery games that were not permitted according to the terms of Spooniker’s licence.

According to the rules on penalties in the Swedish sector, fines should not exceed more than 10% of the operator’s turnover, but in this case, Spelinspektionen said that the nature of the breach and the number of offenses justified a higher penalty than normal.

But in announcing the decision, Spelinspektionen confirmed that there would not be any further action, such as license suspension or revoking:

“However, since Spooniker Ltd has made a correction and it is assumed that in future the company will not violate the rules on bonus offers or offer games that are not covered by the license, the Spelinspektionen considers, however, that a warning together with a penalty fee is a sufficient intervention.”

The penalty specifically related to a number of Spooniker offers and promotions that Spelinspektionen considered to be financial inducements or bonuses, in breach of the Act. But in their response, Kindred asserted that the Act itself was vague on the issue of what offers are considered to be bonuses. As a result, the group said that they would be appealing against the decision in order to gain further legal clarification on the subject.

Kindred currently operates six betting brands in the Swedish market, including Unibet, and iGame. They are the latest betting operator to be hit by Spelinspektionen action as the regulator attempts to enforce the regulations in the re-launched betting market.

Germany Ratifies Gambling Treaty

The long-awaited new rules on gambling in Germany have finally been approved after the proposals, that will include the regulation of online casino and poker gaming were signed off this weekend.

At a meeting of the country’s state leaders in Berlin, lawmakers approved the regulations, known as the Fourth Treaty, which will have effect from 1 July, 2021. They also confirmed the base of the new Germany regulatory body.

The treaty, known as the Glucksspielneuregulierungstaatsvertrag (GlüNeuRStv), expands the nationally regulated online market beyond online sports betting for the first time. It will now go before each of the state’s parliaments before being submitted to the European Commission. Once the Commission have approved it, the rules can be implemented.

And, according to reports in the German media, the new gambling sector will have a new regulator, which is set to be the state of Sachsen-Anhalt. A number of states, including Nordrhein-Westfalen, Schleswig-Holstein, Baden-Württemberg and Hesse – the current regulator under the Third State Treaty, had expressed an interest in hosting the regulatory body.

Reports also suggest that there have been no significant changes to the drafts of the Treaty that had already been made public. This means that there will be significant restrictions on a number of gambling sectors. In the case of sports betting, this means that live betting will be limited to markets on the next scorer or the final result, while slots games will have a €1 per spin limit applied. Slots games must also be offered separately to table games, and both jackpots and autoplay are banned. In addition, the limit on deposits of €1,000, introduced by the Third Treaty, will remain.

Until the end of June next year, the Third Treaty will remain in force, although the body with oversight of the online betting sector, the Regional Council of Darmstadt, has yet to award its first licences. Last month it revealed that there had been 30 applications, and another 20 operators had indicated that they were interested in applying.