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.

Gambling Boosts Malta Economy

The gaming industry in Malta made a contribution of €1.56 billion to the country’s economy in 2019, a rise of 9.6% on 2018, according to figures released by the Malta Gaming Authority (MGA) in their latest annual report. The report also showed that the MGA has drastically increased enforcement action, cancelling a total of 14 licences during 2019. The number of companies operating in the Malta sector increased by 3.9% to 294 although was still below 2017 levels.

The €1.56 billion figure was calculated by deducting the total value of goods and services consumed from those produced. It makes gaming the third-largest contributor from the private sector to Malta’s economy. In its report, the MGA also emphasised the contribution that the sector makes through linking to other industries including financial and ICT sectors, hospitality and catering, real estate, distributive trades and professional services. In total, the gaming industry accounted for 7,417 jobs during 2019, a rise of 9.2% year-on-year, with 6,593 of these jobs in the online gaming industry.

Casino games produced 56.0% of revenue, rising from 55.4% in 2018. Of these, slots were the most popular, bringing in 74.4% of casino gaming revenue, with table games accounting for 21.5%. Sports betting was the second highest contributor, with 36.3% of revenue, with over three quarters of that amount coming from football betting. Skill games, including the use of betting exchanges and poker, produced 7.7% of revenue overall.

The increase in cancellations from 8 in 2018 to 14 in 2019 reflected a significant shift in the MGA’s focus, along with another 11 suspended licences. In their statement, Heathcliff Faruggia, the Chief Executive at the MGA, emphasised the importance of the change:

“In 2019, a great focus was placed on ensuring that the Authority’s governance and structure reflected the increased focus on compliance and enforcement. More resources were given to compliance, with the scope of implementing the risk-based approach towards regulation more effectively.”

In total, the MGA issued 53 new gaming licences, out of 89 applications. This figure was significantly lower than the 93 licences given out in 2018, but the MGA said that this was largely down to a change to its licensing system. From August 2018, operators who already had a gaming licence no longer needed a new application if they wished to provide products in a different class.

Looking to the future, the MGA also announced that it had conducted a survey of licensees in April, in order to assess the impact of the Covid-19 pandemic on the gaming industry. Based on the findings, they forecast that gaming revenue is likely to drop by 12% in 2020, due mainly to a dramatic drop in sports betting revenue as a result of the Europe-wide cancellation of sports.

NHS Warning on Football Gambling

A senior figure in the National Health Service has warned of the risk of an increase in problem gambling associated with the return of Premier League football this week.

Claire Murdoch, the Director of mental health at NHS England has warned betting operators not to take advantage of the return of televised football with promotional campaigns that could cause more problem gambling, at a time when health service resources are stretched due to the global pandemic.

Murdoch, who has headed up the establishment of 14 specialist clinics across the country to treat those suffering from gambling addiction, said that the NHS service could struggle to cope with what she described as the ‘avoidable harm’ produced by gambling advertising. And she said that the aggressive marketing of gambling companies was causing widespread problems:

“The NHS is stepping up to the plate to offer specialist treatment, but with my colleagues having spent this year focused on protecting people from a once-in-a-generation global pandemic, the last thing NHS staff and patients need is for avoidable harm to be caused by reckless advertising and behaviour from the gambling industry as normal life begins to resume.”

Murdoch emphasised the risks of betting companies restarting their aggressive advertising campaigns to make up for the losses they have incurred with the suspension of live sport in the pandemic.

The industry itself, faced with an imminent government review of the 2005 Gambling Act, has brought forward a number of measures, many focused on the changed betting landscape shaped by the coronavirus lockdown. And in his response to Murdoch’s comments, the Chief Executive of the Betting and Gaming Council, Michael Dugher focused on the range of measures that the industry has introduced, including the ban on advertising during live sports television broadcasting. He also stated that at least a fifth of TV and radio advertising by gambling operators will be dedicated to promoting safer gambling, while the sector was setting aside £100 million for research and treatment.

But Murdoch says that she is concerned that the whistle-to-whistle television advertising ban is not matched by a similar ban on online promotions, particularly on mobile phone apps, which are used by many gamblers to bet in-play. Back in January, she wrote to a number of major gambling companies including William Hill and Bet365 criticising them over their marketing practices and underlining that there was a clear and worrying connection between gambling and mental illness.

EGBA Launches New Customer Protection Rules

European betting company customers are set to receive a new level of protection with the news that the region’s leading industry body has launched new rules for its members.

The European Gaming and Betting Association (EGBA) has released a new Code of Conduct that governs how online gambling firms should approach data protection, further strengthening their commitment to upholding the European Union’s GDPR regulations.

The code of conduct, which will be adhered to by all EGBA members, will detail a number of data protection measures that operators should take to ensure that the industry continues to enforce a high level of compliance with the best data protection practices. Individual compliance with the code is set to be monitored by a third-party organisation and will focus on a number of areas.

These include enhancing what are known as ‘portability rights’ which enable customers to move their personal data from company to company in a quicker and more secure way. This includes rules related to player account registration and marketing preferences.

Operators will also have to commit to supporting transparency. This includes adhering to a set list of details that need to be included in a privacy policy, and those areas that can be excluded. Operators will be obligated to bring in plans that will prevent breaches of personal data, and to ensure that their method of setting up VIP accounts respects the privacy and personal data of the customers.

In addition, gambling operators will be given clear guidance on how to balance the need to protect a customer from problem gambling, with the requirement to protect their privacy, including guidance on the issues of direct marketing and respecting self exclusion. New measures will also be suggested in the area of fraud prevention to offer more protection for customers.

Speaking about the rules, the Secretary General of EGBA, Maarten Haijer, said that they were pleased to be able to bring forward a new code, demonstrating the commitment of the industry to protecting customer data, on the two year anniversary of the successful launch of GDPR:

“We’re pleased to be one of Europe’s first industry sectors to introduce a self-regulatory code which supports compliance with GDPR. Data, and how it is used, is playing an increasingly important role in how citizens and businesses interact online, and the online gambling sector is no different.”

Haijer added that the code would set out clear rules on how online gambling companies should make sure that their customers know how their personal data is being used. He said that it also offers clear guidance for operators on how to use that personal data in all of their customer interactions, with particular focus on the issue of problem gambling behaviour.