Month: September 2022

Issued by the Sachsen-Anhalt state administration office, the body responsible for national online casino regulation and licensing, the licence will allow Rootz to offer online slots to players in the country.

The licence will cover the Wildz.de, Wheelzgames.de and Spinz.de German-facing websites.

The operator will join the nine businesses and 12 brands already licensed by the Sachsen-Anhalt office. Earlier this month, Solar Operations, trading through its Sonnenspiele.de brand, was also added to the German whitelist.

Of the 15 brands now licensed to operate in Germany, six are connected with Gauselmann Group in some capacity, with other large businesses – Tipwin and Novomatic – additionally represented on the whitelist.

The German national online slots market was formed following the Federal Republic’s 2021 State Treaty on Gambling (GlüNeuRStv). The settlement created provisions for a nationwide online regulated market for slots and poker businesses, but the development of the market has in practice been stymied by Germany’s relatively penalising regulatory regime.

Specific rules of concern include a 5.3% stake tax, cross-operator deposit limits of €1,000 per month and €1 stake limits. 

The Consumer Protection Zone was launched by Clarion Gaming at ICE 2018.

Since its inception, sponsors have raised £146,000 ($157,300/€163,000) which has been distributed to safer gambling organisations.

“It [the Consumer Protection Zone] has brought player protection front and centre,” said David Richardson, strategic partnership manager of Better Change.

He went on to outline what Better Change did with funds it received at the Consumer Protection Zone.

“The contribution we received as a result of being part of the Consumer Protection Zone at ICE 2022 has helped us develop our product range and continue to strive towards our mission of protecting everyone from gambling related harm,” continued Richardson.

“We believe working with operators and in collaboration with all industry stakeholders is the way to achieve this and we look forward to working with the industry in 2023 and beyond.”

Rob Mabbett, director of external engagement at Gordon Moody said that ICE London has played a key role in progressing the safer gambling debate and providing a platform for organisations in the space.

“The introduction of the ICE Consumer Protection Zone in 2018 has meant that organisations including Gordon Moody have been able to raise awareness and network with key stakeholders from all areas of the sector,” he said.

Mabbett also pointed to the value of having a safer gambling hub.

“Generating a focus for safer gambling and gambling therapy services provides organisations such as Gordon Moody with a voice, which is invaluable.”

Ewa Bakun, director of industry insight and engagement at Clarion Gaming, spoke of how the Consumer Protection Zone has developed in the last four years.

“The zone has grown in importance and reputation which has been reflected in its inclusion on the shortlist of organisations and brands across two categories in the Vixio Global Regulatory Awards,” she said. “Just to be shortlisted is recognition of the work that’s been ongoing since 2018 which has seen the feature take up a prominent position in a high footfall area of the ICE show floor.”

“ICE London was the first business-to-business gaming event to recognise the importance of safer gambling and has led the way in bringing providers and operators together. We will shortly start allocating stands and we are expecting all of our 2022 supporters to return next February as we highlight the industry’s commitment to reducing gambling related harms.”

In June, the regulator said it had reported Tipwin to local police and issued injunctions over failings in the anti-money laundering efforts undertaken at its retail betting shops.

The regulator said the business had breached two different sections of the Danish Money Laundering Act: Section 7, which deals with risk assessments, and Section 8, about policies and practices for staff to detect possible cases of money laundering.

However, after what Spillemyndigheden described as “careful consideration”, it cancelled the injunction that related to section 8. It said that, as Tipwin’s staff that should have been responsible for these practices were outsourced, the operator did not commit a failing here. However, it did note that the failings would be covered by a different section of the Act: Section 24.

Under this section, “companies or persons [that outsource tasks] ensure, before entering into the outsourcing agreement, that the [outsourcing] supplier has the necessary ability and capacity to handle the task in a satisfactory manner, and that the supplier has the necessary permits to undertake the task”.

Despite this, the regulator did not say that it had issued a new injunction. Instead, it just noted that Tipwin would no longer be subject to the additional rules related to Section 8 that it was ordered to implement by 20 September.

However, it also noted that there were still additional rules in place because of the failings related to Section 7.

Spillemyndigheden has made money laundering a particular point of emphasis this year. In June, it released a statement reminding businesses in the sector that they are “obliged” to comply with regulations that prohibit financial interactions with “countries, individuals, groups, legal bodies or entities”.

In July, it then promises that it would begin a new crackdown on money laundering, as part of  Ministry of Justice’s new national anti-money laundering strategy.

Besides Tipwin, other operators that have faced injunctions for AML reasons in recent months include Casumo, Casino Copenhagen and Bet365.

The Hub, which is based on Freer Street, will encourage cross-discipline working and project development.

“We believe a collaborative approach is the best way to drive results and truly innovate when it comes to product delivery,” said Matthew Taylor, vice president of software engineering at FanDuel.

“The official launch of our new UK Collaboration Hub today signals an exciting new chapter in the FanDuel story that will proactively bring together the best talent from across the country to innovate and excel in this dedicated creative space.”

Employees will focus on specialist projects, relating to technology, product and UX. The Hub can accommodate 550 people.

“The continued boom of the UK and Scottish tech sector is undisputed, and we wanted to create a new world-class environment to match our world-class engineering teams,” Taylor continued. “Investing in our people is key and the Collaboration Hub helps us continue to recruit, develop and support our colleagues as we further grow our UK employee base.”

Consumers at the casino will be able to place sports bets at 20 internet-connected kiosks, while GAN will also roll out a ‘Bet the V’ branded mobile sportsbook to complement the retail offering.

The mobile solution will be enabled by GAN’s GameSTACK Player Account Management (PAM) system for omni-channel sports betting via retail kiosks or mobile devices while on location at the casino.

GAN will also provide supporting marketing and customer services, while the deal will allow for the state-wide roll out of mobile sports betting, should Mississippi pass the relevant laws to expand wagering in the future. At present, consumers are only permitted to place mobile bets while on-site at a licensed casino.

The launch was made possible after GAN acquired Vincent Group, the parent company of operator Coolbet, for $175.9m in January last year, with its GAN Sports offering based on Coolbet technology.

GAN said it expects to announce further launches of GAN Sports throughout 2023.

“Following our 2021 acquisition of Coolbet we are thrilled to announce the premiere of GAN Sports, perhaps the most innovative sports experience available on-property anywhere in the US today,” GAN chief executive and president Dermot Smurfit said.

“We are greatly encouraged by the sales momentum for our omnichannel sports betting technology and managed trading services solution and anticipate a high-margin financial contribution as the economics of B2B sports technology provision are highly favorable and incremental to our existing B2B offerings.”

Island View Casino Resort vice president of operations, Steve Hendricks, added: “We selected GAN for the quality of their sports betting technology and managed trading services following our evaluation of all major potential suppliers.

“GAN has now brought to our patrons an exciting new on-property sports betting experience enabled by their modern technology and market-leading user interface design greatly encouraging our patrons to construct high-margin, multi-stage parlay bets as well as traditional single-game wagers.”

The chief executives of the RSPCA, Blue Cross and Dogs Trust issued a joint statement urging an end to greyhound racing as soon as possible, suggesting a phase-out over a period of five years to allow the racing industry and animal welfare organisations to plan and coordinate the care of dogs affected.

The charities said in some parts of the UK, such as in Wales where there is just one track, it is expected that the phase-out period needed would be significantly shorter and racing could end sooner.

Referencing data from the GBGB, the body governs licensed greyhound racing in Britain, the charities said over 2,000 greyhounds died and nearly 18,000 injuries were recorded from greyhound racing between 2018 and 2021, while more dogs were injured on independent tracks.

As such, the charities issued a call to put a stop to what they described as the “unnecessary and completely preventable deaths” of hundreds of dogs every year.

Responding to the statement, GBGB chairman Jeremy Cooper and chief executive Mark Bird said in an open letter that they were “deeply disappointed” with the change in stance from the charities towards licensed greyhound racing in Britain.

The letter set out how each of the charities had been working with the sport to protect and safeguard greyhound welfare, but have now switched to working against racing and calling for a ban with what they described as a “total disregard” either for the facts or for the implications.

The GBGB highlighted its ‘A Good Life for Every Greyhound’ long-term welfare strategy, which it said sets out progress that has taken place over the past four years within the sport, as well as plans for driving forward welfare standards further still. 

The organisation also said it was keen to continue working with the RSPCA, Blue Cross and Dogs Trust to further improve and protect animal welfare in the industry. 

“All those who love any sport or pastime with animals – whether it is horseracing, show jumping, dog agility or fishing – will be concerned that your change of stance puts them on notice that their sport is next,” the letter said.

“The RSPCA’s approach to greyhound racing has always been the same as its approach to horseracing; you have worked with us not against us. But today’s announcement shows the true agenda of the animal rights extremists who hold substantial sway over your organisations.

“Everyone involved in our sport puts the health and happiness of our greyhounds at the centre of all we do. Indeed, our welfare standards have never been higher and are improving year-on-year. 

“We see no justification for your change of stance today, other than placating animal rights extremists and we know that other sectors which involve working animals will be equally shocked and threatened by your ill-conceived, misguided approach.”

Earlier this week, KSA announced that all new registrations with Cruks had been halted due to a problem with DigiD, a form of online ID in the country. This meant it was not possible to register with Cruks or for a player to change their registration.

The fault has now been resolved and new registrations with Cruks are now possible again.

KSA noted that licensed gambling operators in the Netherlands were able to carry out their standard checks on customers throughout the outage. This meant operators could see if a player was registered with Cruks and whether they should be allowed to gamble.

Cruks launched in October last year to coincide with the opening of the country’s regulated online gambling market.

Since going live, Cruks has registered more than 20,000 consumers, all of which are now excluded from gambling with licensed operators in the Netherlands.

Players can voluntarily exclude themselves from online gambling, as well as retail slot machine arcades and Holland Casino’s land-based casinos for a minimum of six months.

Consumers can also be admitted to the list involuntary through a request from a partner, family member or gambling provider, though KSA must first approve the application before a player is added to Cruks via this method.

The £2.8m fine was imposed under section 121 of the 2005 Gambling Act. A warning was also issued under section 117(1)(a) of the Gambling Act.
The offences that led to the fine took place between October 2019 and December 2020.

In one instance, a customer lost £70,000 within a ten hour period one day after opening their account.

Another customer was contacted by the operator when they deposited £20,700 and lost £10,200. However, the next interaction with this customer did not occur until four months later, when the same customer had deposited £323,715 and lost £69,371.

The operator said that, in these instances, Petfre violated paragraphs 1 and 2 of the social responsibility code of practice, which deals with customer interaction.

The Commission said that the company did not account for anti-money laundering and terrorist financing risks, including not having the right policies, procedures and controls in place to combat risks.

This included a lack of employee training, poor analysing of transactions, and insufficient AML, customer due diligence and source of funds checks.

It also said that any AML procedures in place were not implemented or enforced properly.

“This is a further example of us taking action to investigate and sanction alarming failures,” said Leanne Oxley, director of enforcement and intelligence at the Gambling Commission. “We expect this gambling business and all other licensees to review this case and look closely to see if they need to make further improvements to demonstrate active compliance.”

“Where standards do not improve, tougher enforcement will follow.”

Last week, the Gambling Commission issued a fine of £400,000 to Betway for marketing on children’s web pages, after the operators’ logo appeared on a West Ham web page which contained a colouring-in activity.

Other operators that have been the subject of recent enforcement action include Smarkets, Entain and SpreadEx.

On a global scale, lotteries are a diverse group of companies. There are huge differences between the operators, with very few unifying features. 

Broadly speaking, the most common thing that binds them is their exclusive right to run lottery games. Yet when looking at the World Lottery Association’s membership, not all companies even have this monopoly position. However, in this article, I will focus on lottery companies that operate at scale, namely state lotteries.

Lotteries as a monopoly

The term ‘state lotteries’ refers to the fact that these companies were originally under the direct control of the state, and sold lottery games. Most lotteries originally sold scratchcards and lotto (or draw-based games). It is only in the past three decades that these businesses have started to expand their product portfolios into new verticals, such as sports betting. 

Many lotteries have joined the sports betting business in the 21st century, but there are also companies in the ‘lottery family’ whose origins actually lie in sports games. For example, all Nordic lotteries started in sports. As a result, the role of sports games in lotteries varies greatly.

The sweeping changes in gambling legislation in the US market have prompted discussions over how lotteries should react to, for example, online gambling and the possibility of launching sports games alongside scratchcards and lotto. 

So far, there’s little commonality between different US states’ solutions to this conundrum. In many cases, US lotteries have ended up launching operations in digital channels, and entering the betting vertical.

Is sports betting worthwhile for lotteries?

Is it worth lotteries joining the competition in the sports betting market? There are plenty of examples of lottery companies making a success of sports betting, even though they do not have a monopoly in that vertical. 

For example, in Europe, Greece’s OPAP and France’s La Française des Jeux (FDJ) are among the biggest players in their respective sportsbook markets. Nordic lotteries also enjoy a significant share of their countries’ sports betting market, as do state lottery companies in Israel, Italy, Portugal, Spain and Switzerland.

In principle, lotteries can be successful in competitive markets. Success, however, requires solutions that differentiate an operator from the competition, and you cannot be particularly successful by offering the same product as others. 

In addition, lotteries cannot compete on price by tweaking payout percentages, meaning their products are traditionally weaker than those on offer elsewhere in the market. This is hardly a good starting point for success.

Cross-sector collaborations

In gambling, as with all industries, a company looking to compete must have at least one advantage over its rivals.

Lotteries have been successful in lottery games, of course, with the help of their monopoly position. And though they do not enjoy the same status when it comes to sports betting, thanks to their lottery monopoly, these businesses already have a large customer base that knows the company and values its operations. 

This appreciation and trust can also be used in other product areas.

The most significant reason why lottery games are so popular is the size of the jackpots, which other gambling companies simply cannot offer. Lotteries have harnessed their large customer bases and launched games with prizes stretching into the tens of millions. 

Lotteries already understood 20 years ago that there is strength in cooperation. The companies operating in their jurisdictions do not compete with each other, making cross-sector collaboration relatively straightforward. 

Together, lotteries leveraged their strength even further to offer jackpots far larger than they could provide alone. EuroMillions and Eurojackpot games in Europe and the Mega Millions and Powerball games in the US were born as a result.

Taking cross-sector collaboration into sports betting

Lotteries could have the opportunity to collaborate in sports betting as well. However, a few things need to be clarified here. There are two product groups in betting: fixed-odds and pool-based (totalisator) games. 

In the fixed-odds game, customers play against the company, and in that game, the company has a slight advantage of scale. 

The best example of a pool-based game is lotto. A large number of customers participate in the game, the company gets a risk-free share of the sales, and the winning customers share the rest of the money among themselves. 

In a pool-based game, economies of scale work very well, and lotteries should focus on this.

Sportsbooks, with a few minor exceptions, only offer fixed-odds betting. On the other hand, horse race betting operators use pool-based betting in several countries, including the US. 

Thanks to this – and, of course, the lottery games – most customers know the principles of pool-based (pari-mutuel) betting. Even if the products in question are not as familiar to a fixed-odds consumer, they could still be a commercial success for lotteries. 

In this area, lotteries could also further leverage collaboration, similar to Euromillions or Powerball, to offer a product that other companies would not be able to match.

In Europe, pool betting is already common, especially in the Nordic countries. And it’s already prevalent in lotteries; before the Covid-19 pandemic, about 10% of sales for European Lotteries’ (EL) members came from pool betting, with 17% from fixed odds. 

While its contribution in terms of revenue is smaller, pool betting is robust in my home country Finland, Sweden and Norway. Spain’s SELAE and France’s FDJ also offer reasonably large pool-based games, while the UK’s football pools remain popular. 

The fixed-odds conundrum

It could therefore be possible to develop pool betting into a unique product for lotteries – a kind of sports jackpot game, where customers’ primary motivation for playing is the opportunity to win a lot of money from a small bet. 

From the lottery’s point of view, it is a positive that large winnings do not raise the prospect of financial risk, as big fixed-odds wins would. In addition, the payout percentages of football pools, or similar games, are much lower than for fixed-odds betting.

Yet most lotteries currently offering sports betting use fixed odds. The competition in this area is particularly fierce – there are thousands of competitors doing the same. 

The profit margins for fixed odds are small, and there are plenty of profit seekers. Gambling companies offer the same matches and markets, and the number of betting events has grown exponentially in recent years. 

In the past, there were only a few betting options available for a single match, but nowadays you can bet on hundreds of different outcomes within one match. 

All this has not significantly increased revenue from fixed-odds betting. In addition, the large number of betting opportunities often makes betting too complicated for the average sports fan. 

Active bettors are a different matter, but their number is relatively small compared to the lotteries’ customer base.

One option for lotteries could be to innovate with a simplified fixed-odds offering, one that could be easily understood by an ordinary lottery consumer with an interest in sports. 

Successful products, it should be noted, tend to be the ones that are the simplest to use. Lotteries could whittle down the markets to the most significant sporting events each day, from which only a couple of betting markets would be made available. 

Going live

While in-play betting has expanded the range of markets offered, around 90% of stakes are placed on the winner and the final result. Lotteries could use this same idea more widely for that simplified fixed-odds product.

My purpose is not to tell lotteries what to do in the betting business, but rather to highlight the opportunities on offer. Companies must first recognise their strengths, then try to find ways to leverage them if they are to succeed in sports betting. 

And it seems those strengths are the power of their brand, their broad customer base, and the ease of cross-sector collaboration. 

On this basis, it is possible to develop betting products suitable for the unique operating conditions that lotteries face, while maintaining that mass market appeal. Let’s face it: doing things differently but keeping it simple is a good principle for developing innovative activities.

Kambi has largely been seen as a single-minded business: dedicated to its sportsbook, rather than trying to offer operators a wide range of other products.

So does its acquisition of Shape Games indicate a significant change on the horizon?

Chief executive Kristian Nylén suggests it just might. He notes that operators that used Kambi’s sportsbook had needed to obtain other front-end solutions, and noted it may make sense for Kambi to acquire when that is the case.

“When the opportunity came about; it was part of a product we were missing,” says Nylen. “We had a front-end but it was not a fully-fledged, native front end like Shape’s. It fits perfectly into our portfolio.”

“There is a bigger and bigger need for front-end applications. We don’t have it in-house, so we have always had to partner up – or our operators have always had to partner up – with another supplier for that purpose.”

As the two businesses had a close relationship and shared clients before the deal, the acquisition was a natural next step.

“We [Kambi and Shape Games] have been working together for many years and we already have a few customers together, such as BetWarrior and betJACK,” says Nylén. “We have a good relationship and we know it’s a good cultural fit.”

The customer question

None would doubt Kambi’s expertise in the core areas of sportsbook, such as trading and risk.

But Nylén believes the addition of Shape Games to Kambi’s portfolio will bring customers’ sportsbook experience to the forefront. Rather than simply dealing with the odds, Kambi is making clear that it plays a role in the customer journey as well.

“With the sportsbook, it is never better than the best front-end experience you get,” he continues. “You can always make it easier to place a bet and with more data from us, Shape will be able to better analyse the player journey and improve how they are working with the front-end.”

“One area where I think it there will be greater demand is in personalisation, which I think will probably help us take a big leap.”

To Nylén, the deal is part of the natural next step for Kambi following the migration of some high-profile customers onto house-built platforms. The supplier’s revenue was hit hard by its former largest customer – DraftKings – creating its own sportsbook after merging with SBTech. In the following years, Penn Entertainment and Kindred also set out plans for their own migrations.

Needing to think about its future in the wake of a high-profile exit like that, Kambi set its sights on a strategy built around modularisation. Rather than offering every aspect of the Kambi sportsbook to a customer together, operators could pick and choose what they want.

Shape appears to fit perfectly into that. For those that want only a front-end solution, it’s there. For those that want only a sportsbook, there’s the core Kambi product.

“We have talked a lot about our modularisation strategy and obviously this is a module in itself that fits well into our strategy,” he says. “More importantly, I think it also complements very well our fully managed service.”

Expanding the opportunity

In this sense, Nylén believes that the acquisition will be mutually beneficial – Shape Games’ software will benefit Kambi’s sportsbook product by bolstering its front-end, while Shape Games’ front-end capabilities can become stronger as a result.

“Our expertise has always been in producing a great sportsbook”, he says. “I think we have a very good front end experience, but it’s not where we have put most of our efforts.”

“In getting Shape on board, I think we can get much stronger in this area and together with the data we have I think Shape’s front end can also become much sharper.”

As well as fulfilling a missing piece in Kambi’s portfolio, the acquisition could also bolster Kambi’s pitch to future clients. Nylén notes that native applications – software that has been designed specifically for a particular platform – have been increasing in demand over the last few years.

“We’ve seen greater demand for native apps over the last few years, and we have had a few situations already where it has been a requirement in bids we have been part of.”

So where is Kambi looking for its next clients? Off the back of the deal, Nylén is optimistic about Kambi’s future expansion potential. He believes opportunity is rife, revealing that Kambi has its eye on markets that are edging towards regulation.

“In every market that is about to regulate, we are looking for more opportunities,” he says. “I wouldn’t say we’re too focused on any particular state, but there are two areas we’re focusing on, which are the Americas, both Latin America and North America, and what had historically been our core market – Europe.”

“Longer term, Asia will become a very interesting market but it has to start to regulate first.”

It may be interesting to wonder what Kambi will look like when these markets open: still mostly focused on one product, or as a wider-reaching supplier?