When Germany’s fourth state treaty on gambling (GlüNeuRStV) comes into effect, operators must connect to two systems.
The first is an evaluation system, allowing for the collection of gambling data across the entire market. The second system allows for the country’s cross-operator deposit cap to be implemented, and prevents players gambling with multiple operators at the same time.
The state government reminded operators that they must correctly record all necessary data for the data collection system, and must set up “safe servers” at their own cost in order to protect player privacy while doing so.
For the enforcement of deposit limits and prevention of “parallel play”, operators must record player data pseudonymously in order to keep data on individuals securely. Operators will have unique authorisation certificates in order to access this data.
Players will have a status that can be set to “active” or “inactive”. If the status is active, meaning they are currently gambling with one operator, they would be restricted from playing with another at the same time.
If a player deletes their gaming account, their data must be deleted immediately.
The State Administrative Office of Sachsen-Anhalt will oversee these systems for the first 18 months, after which IT management business Dataport will take over.
A sandbox test system has been made available for operators, though the state government said it was not intended for mass tests of a large number of players. Rather, it is simply to help adjust to the user interface. Real personal data should not be used in the sandbox.
While the new State Treaty is set to come into effect on 1 July, it risks being delayed because of concerns about the tax rates involved. The Bundesrat has proposed a 5.3% tax on turnover for online slots and poker, a rate that the industry has said is so high as to be unworkable.
As a result, German industry association Deutsche Sportwettenverband (DSWB) has filed a complaint with the European Commission, arguing that the tax rates unfairly favour the land-based sector and so constitute state aid in violation of European law.
DSWB’s argument echoes a similar concern raised by the European Betting and Gaming Association, which said that the difference in tax bills between the land-based and online sectors in Bavaria would come to €293.9m.
Currently, online gambling may be offered in Germany via a transitional regime, in which operators must follow the rules of the new treaty. These terms include restricting slots to a €1 stake limit per spin, with an average spin speed of five seconds.
Covering the period from 2021 to 2024, the strategy identifies four key strategic ambitions that GamCare will work towards during the three-year period.
These include ensuring gambling harms are widely recognised and prevented across Great Britain, whereby GamCare will raise awareness of such issues to help people seek support, as well as identify needs to understand who needs help and train more people to deliver support and treatment.
GamCare will also work to ensure its own work is trusted, valued and effective for people by supporting staff in their development, using and sharing data to support sector learning, maintaining processes that assure quality and performance, and build partnerships to support its aim.
The charity will also continue its work to ensure there is universal access to effective tools and support by improving its processes to make them more available to people. GamCare also said it will continue to collaborate with people with lived experience of gambling harm to enhance its offering.
In addition, GamCare is targeting universal access to evidence-led and integrated treatment for those suffering with gambling-related harm. This will include expanding treatment in all areas of Britain, integrating treatment pathways to offer a seamless experience to users and pioneering new treatment to support people moving forward.
“Over the next three years, we want to put gambling harms on the map and ensure more people know about them,” GamCarechief executive Anna Hemmings said. “We will expand our services to make lasting and positive changes to those harmed by gambling.”
GamCare said the new strategy builds on its achievements of the past three years, during which it said it supported more than 100,000 people harmed by gambling via its helpline, chat rooms and treatment services.
The charity also said it had stepped up both its treatment and training services, delivering treatment provision in 161 locations across Great Britain and training 23,732 professionals across to identify and support people impacted by gambling harm.
In terms of how it will achieve its core strategic aims, GamCare said it plans to invest more and expand its services to make lasting and positive changes for its users, with the charity saying that this will also help it navigate the changing regulatory landscape following the Gambling Act Review.
GamCare added that it intends to increase its collaborative work with stakeholders who have an interest in reducing harms caused by gambling in Britain.
Publication of the new strategy comes after GamCare last month released data indicating that 71% of under-18s that contacted its National Gambling Helpline in the last three years did so because of their own gambling activities.
Gamcare’s user data also revealed that 20% of under-18s that contacted its services had concerns for family or friends, with 8.5% considered “at risk” of irresponsible gambling.
Football Index was once the quirky, money-spinning platform that was advertised through every available medium, rewarding fans for their knowledge of the game. Now, it’s a failed experiment placed in the hands of administrators tasked with salvaging what they can from the wreckage.
The GB Gambling Commission is now facing more questions than ever before about its credentials as a regulatory body.
With all things considered, one question still remains: how was Football Index allowed to happen?
“There’s human law considerations to take into account”
Football Index was far from a perfect product from its inception in 2015. It was a platform advertising itself under one guise, when in reality it was a different entity. This lack of clear direction served to create confusion not only for players, but over its regulatory status.
“Looking at it now it’s pretty obvious that it was effectively operating as a narrow bank,” says Gamban co-founder Matt Zarb-Cousin (pictured).
Matt Zarb-Cousin
“Really you needed the FCA [Financial Conduct Authority] to be involved in the way that it was operating, so you needed things like capital controls and liquidity ratios and oversight that frankly the Gambling Commission wasn’t equipped to provide.”
Alasdair Lamb of law firm CMS says that ultimately, despite any window-dressing, the product was fundamentally a betting operator.
“Ultimately what they were offering was fixed-odds betting, be it dressed up by talking about shares and dividends,” he says.
With the power of hindsight it’s clear that Football Index as a product was hard to define, which played into many of the problems that followed.
The business itself realised there were problems with the platform, leading it to remove the ‘instant sell’ function that allowed players to instantaneously redeem their shares for money, leaving only peer-to-peer trading. The removal of such a function could have raised red flags that Football Index may not be able to pay everyone out in the event of a “bank run”.
In an attempt to counteract this, Football Index increased its dividends – winnings paid out for player achievements. However doing so created a situation where dividends were being paid out at an unsustainable rate, and customer growth wasn’t fast enough to match that level of payment. Though licensed as a fixed-odds betting product, albeit marketed somewhat differently, Football Index even went as far as to tamper with the fundamental ideals of fixed-odds betting – the guarantee of a certain amount of winnings.
Lamb says that while this change may have been permitted in the operator’s terms and conditions, that doesn’t make it a fair decision.
“What they were doing was changing the odds of the bets that had already been placed that hadn’t been settled, which goes against the whole notion of fixed odds betting,” he says. “I suspect their terms and conditions gave them the contractual right to do that.
“Even if it did, that doesn’t necessarily mean that that would be a term which would be enforceable, as there’s human law considerations to take into account.
“As and when there are claims from players, that’s something that will probably be looked at. A court will be able to rule whether those types of terms apply with consumer law or not.”
“Their argument is that it’s not their job… But how can it not be?”
The regulatory issues surrounding Football Index were manifold, and the buck for that ultimately stops with the body that licensed it: the Gambling Commission.
After the platform’s collapse and BetIndex’s entrance into administration, the Gambling Commission revealed that it had been investigating BetIndex since May 2020.
The Commission was warned about the problems with the product, but waited until March 2021, with the platform already suspended, to officially intervene and suspend its licence. The regulator defended its decision at the time, arguing action could have expediated the operator’s collapse.
A new Gambling Commission statement to iGB said the Commission didn’t have the means to provide the kind of checks required to prevent BetIndex’s collapse for every licensee.
“Our regulatory remit does not extend to continuous, real-time monitoring of the financial health of operators within an open marketplace,” it said.
“When we license an operator we look at suitability, including their financial circumstances and we may review these aspects as part of any subsequent compliance activity we take, but we are not able to oversee their businesses on a day-to-day basis or monitor the financial health of all licensed operators directly. Such an approach would represent a very different form of regulation and would require a significantly different funding model to the one currently set out in legislation.”
Zarb-Cousin sees it differently.
“Their argument is that it’s not their job to monitor the solvency of its licensees. But how can it not be?” he argues.
“In order to have a fair bet, the entity that they’re licensing has to be solvent in order to pay out, and that’s what it comes down to.”
The ambiguity of the Football Index product couldn’t have helped, but swifter action from the Gambling Commission could have saved some customers’ money.
The Commission says it puts customer protection at the forefront of the work that it conducts,
“Of paramount importance is the protection of customer funds,” it said.
“There will always be financial risks associated with using gambling operators, especially as there is no statutory fund that protects customer money, as is the case in some other regulated markets such as financial or legal services.
“Nevertheless, we require operators licensed by us to keep customer funds in a separate account/s so that there is some level of protection should a company run into financial difficulties. However, there is no guarantee that this will ensure that customers get all their money back.”
“It’s ruined my life”
With all the investigations, enquiries and finger pointing in the wake of the Football Index scandal, it shouldn’t be forgotten that the victims of the situation are very real people and their very real money.
As well as monetary investment, a lot of time went into people’s portfolios. Now, there’s nothing to show for it.
One player declined to speak on the matter, stating that the whole saga has drained them enough. For another, the Gambling Commission’s promise to make customer protection a priority will seem hollow at best, and disingenuous at worst.
“I had £25,000 invested at most,” explains Steve Ellis, who began using Football Index after the 2018 World Cup.
“By the time the index collapsed I had £10,000 left of my own money to take out. I had a portfolio of over £50,000 before it started to go wrong in 2020 – that feels like a long time ago now. It truly was a wonderful concept, it’s just a shame we had cowboys running it.
“It’s ruined my life. I was about to buy a house before Covid-19 happened. Now my Index money has gone, I lost my job during Covid and I’ve been forced to live off the rest of my savings since. It’s a nightmare. In February last year I was in the best place I’ve ever been in. I was so excited for the future. Now its all fallen to pieces.
“I’m a man in my 30s that’s been forced to move in with his mother. It’s embarrassing. I had a great job and plenty savings. Now I have nothing. I have debts and bills crushing me. I have a daughter that was expecting her dream home with her daddy. Now I have to live hundreds of miles away from her as I can’t afford to live in the same city she lives in. What a mess.”
“There’s a genuine risk to their existence now”
Stern questions of the Commission have been asked during the fallout.
How was Football Index allowed to operate for so long? And why would a regulatory body take so long step in even after a major problem has been brought to its attention?
Zarb-Cousin says: “I don’t think they fully understood the product, and as a result they weren’t well equipped to regulate it.
“There was a series of things that happened that meant by the end Football Index looked like a Ponzi scheme. The Gambling Commission probably thought they needed to act but didn’t want to make the situation worse.
“But really they shouldn’t have licensed it in the first place, and when they realised that they were unable to regulate it adequately they should have frozen everything.
“Everyone knows that the Gambling Commission isn’t really fit for purpose, but the reason they’ve become defensive is that there’s a genuine risk to their existence now.”
Regular Gambling Commission reviews are carried out by in-house staff. However with Football Index, the commission deferred to a ‘specialist QC’ to review the business model. To some, that could appear to be an admission that the Commission didn’t understand the product they were licensing.
“It should be a privilege to get a gambling licence, not a right”
The first thing to address in the near future will be the reimbursement of player funds, which lies in the hands of the High Court.
With only £4.5m funds allocated to player protection plus a further £7.2m in another account – and thousands of customers waiting with nearly £100m worth of active bets -the process won’t be straightforward.
“Until the administrators have done their job, they are effectively ahead of the consumers in the queue have got their money back,” Lamb says. “Clearly Football Index has some real financial problems so there’s a question mark over what if anything would be left to claim.”
In addition to the money, lessons need to be learned all around to avoid such a debacle ever happening again. The Gambling Commission in particular will need to pay extra attention to any businesses it gives an operating licence to.
Zarb-Cousin adds: “There’s been an era of naivety giving out licences to everyone as if everyone can be trusted to offer gambling services, it’s just not the way the industry operates. It’s just very, very naïve and frankly a bit stupid.”
“It should be a privilege to get a gambling licence, not a right.”
There’s also the prospect of Football Index relaunching, with new ownership, once the High Court issue has been settled. Plans to do so were conceived in the wake of the company going into administration, and it is believed that the platform could be viable once again with the right tweaks. Whether it could reach the same level of popularity is a different discussion.
“It’s a joke,” Ellis asserts.
“Football Index screwed us. They ruined us. They stole from us. They have turned that loyal following into thousands of enemies. We won’t stop until the owners of this company lose everything. It’s only fair.”
While Football Index may have difficulties bouncing back, the Gambling Commission and industry as a whole may have no choice to do so. But what it can take from the lessons of the Football Index scandal may be a key question going forward.
The Welfare Lottery brought in CNY11.16bn of the total revenue, a drop of 6.2% year on year, while the Sports Lottery totaled at CNY17.93bn, an increase of 56.3%.
Instant gaming made up CNY2.40bn of Welfare Lottery’s revenue and CNY2.43bn of the Sports Lottery’s revenue, an increase of 111.0% and 103.1% year on year.
Keno games brought in CNY1.5bn for the Welfare Lottery, 14.2% of its total revenue.
Sports wagering revenue accumulated by the Sports Lottery was CNY9.5bn, a rise of 2119.1% from CNY432m year on year.
Video lottery sales were recorded as nil for the Welfare Lottery and CNY80,000 for the Sports lottery, a 166.6% rise from CNY30,000 the previous April.
Lottery sales mostly decreased compared to April 2020. Sales in Shanxi decreased by 19.6%, while sales in Xinjiang fell by 26.5% year on year.
This takes the country’s cumulative revenue for the year to MOP42.49bn. This is up 28.7% from the same point in 2020.
Part of the reason for the month-on-month revenue increase is down to the lifting of travel restrictions from mainland China back in February. The year-on-year increase, meanwhile, came from a very low base as the region instituted strict entry requirements because of the novel coronavirus (Covid-19) pandemic in May 2020.
These figures remain a long way below pre-Covid figures, however. Revenue for the month was down 59.8% from May 2019. Revenue for the year was down 66.2%.
The boards of Gamesys and Bally’s announced that they had come to an agreement on a £2bn ($2.74bn/€2.31bn) deal in March of this year.
Under the deal, Lee Fenton, currently chief executive of Gamesys, would become chief executive of the combined group, while Bally’s chief executive George Papanier would remain in charge of the land-based business.
Bally’s has offered Gamesys shareholders either a cash option or a share option to acquire the business. Gamesys shareholders may either receive £18.50 or 0.343 Bally’s shares per share in the Jackpotjoy operator.
Gamesys’ board of directors have already opted to take up the share option for all of their stakes, with the exception of finance director Michael Mee, who will exchange his holding for a combination of cash and shares.
Coming in its latest emerging risks bulletin, the Commission noted that the NCA had recieved more suspicious activity report submissions during the Covid-19 pandemic.
A statement from the bulletin read: “The NCA during COVID-19 pandemic has seen an increase in SAR submissions and it is vital that operators submit a SAR to the United Kingdom’s Financial Intelligence Unit (UKFIU) whenever there is knowledge or suspicion of money laundering or terrorist financing.
“Failure to do so may result in licensees committing a criminal offence.”
Cryptoasset payments have also been flagged as high risk with regards to money laundering. Operators have been asked by the Commission to remain on alert, as the number of Bitcoin and crypto scams are expected to rise in the next few years according to the UK’s Crown Prosecution Service.
The Commission notes that the threat of organised crime is increasing globally, meaning that operators should properly scrutinise the source of customer’s funds.
This includes monitoring transactions to customers in high-risk third countries such as Barbados, Cayman Islands, Cambodia and Senegal. Pakistan was recently added to the risk of high-risk countries by the UK government. These countries are considered to carry an increased threat of being used as a middle step in money laundering.
Vita Media said the purchase was a “strategic investment” and will increase the offering to its affiliate partners.
Launched in 2014, Trada Casino features a range of comes powered through Aspire Global technology. The brand will be integrated with the Ekstrapoint.com cross-loyalty platform as part of the acquisition.
This integration will allow players to win extra points and different prizes and rewards via Ekstrapoint.com, as well as have the opportunity to exchange points to products in the Ekstrapoint shop
Designed and developed by Vita Media Group, Ekstrapoint.com works with more than 300 partner casinos and has over 250,000 users.
“This investment is vital to our efforts of becoming an important player in the industry and increase the offering to our loyal and rapidly growing affiliate partners,” Vita Media Group chief executive Jimmi Meilstrup said.
“As a Danish company, we stand for trust and transparency and we are sure that Trada Casino and its partners will benefit from being part of our group.”
Trada Casino director Tony Stewart-Lord added: “By combining the marketing expertise of Vita Media Group with the reputation of Trada Casino, we see this as the next step in the evolution of the casino.
“It will allow Trada Casino to leverage the powerful Vita Media Group marketing platforms, resulting in expansion in all our current markets in the EU and beyond.”
The business did not report any revenue for the quarter, but did record costs of sales of $87,817, of which $71,557 was spent on third-party platform fees and the remainder on free bets.
In terms of costs and expenses, share-based compensation came to $551,531, an increase of over $551,271 compared to the first quarter of 2020. Salaries and director fees rose by 7.0% at $486,492 year on year. Advertising, marketing and investor relations totaled at $382,906, a rise of 184.9%, while consulting fees came to $315,889, another increase of 69.8%. Legal and professional fees amounted to $286,376, an increase of 219.3% year on year.
General and administrative costs at $135,619 were the sixth highest of the quarter but dropped 28.1% in comparison to Q1 2020. Transfer agent and filing fees totalled at $44,620, and insurance fees came to $37,917. There were no comparative figures for these two amounts.
Foreign exchange gain and travel and accommodation costs, at $28,946 and $24,798 respectively, added to the loss. The addition of depreciation costs of $19,063 and the loss of bad debt recovery costs at $129 brought the total expenses costs to a loss of $2.3m, a rise of 116.4% year on year.
Before income taxes, the loss totaled at $2.4m. However, a tax benefit of $1,560, totaled the overall net loss at $2.3m, an increase of 112.4% from Q1 2020’s loss.
Currency translation adjustment at $764 brought expenses up further to $2.4m.
“We spent the first quarter of 2021 building a solid foundation from which Luckbox can grow,” said Luckbox CEO Thomas Rosander.
“We are focused on optimizing our product platform and customer acquisition funnel to increase ROI ahead of scaling up our marketing spend.”
Hageman replaces existing CFO Matt Ashley, who was appointed to the role in April last year and leaves the company to take up the role of CFO for software and information technology business, Micro Focus plc.
Eric Hageman joins William Hill from IWG plc, the Switzerland-based workplace operator formally known as Regus, where he held the position of Group CFO.
Eric Hageman
Prior to that role, Hageman had also acted as CFO for several listed companies including TeleCity Group plc in the UK and communications group Royal KPN NV in the Netherlands.
Commenting on Hageman’s appointment, William Hill chief executive Ulrik Bengtsson said: “We are delighted to welcome Eric to the William Hill team. He brings a wealth of financial and operational experience within digital and technology driven industries as well as senior management experience.
“I look forward to working with him as we lead William Hill through the next chapter. I also want to thank Matt Ashley for his substantial contribution to William Hill through the challenging period of the global pandemic.”
Hageman added that: “It is an exciting time to join William Hill and I look forward to working with the William Hill team and its shareholder Caesars on the next chapter”.
In April, American casino operator Caesars Entertainment finalised its acquisition of William Hill, paying £2.9bn (€3.35bn/$4.04bn) to take ownership of the business. Caesars said it is buying the operator for its US business, and intends to sell the remainder of its operations.
