Month: February 2023

The yearly review assesses the promotional strategies of the seventeen approved online operators and the two operators under exclusive rights, including FDJ. ANJ states it aims to strike a balance between legitimate advertising of legal gaming operations and potentially harmful excessive promotions.  

The regulator highlighted its intention to focus particular pressure on digital levers, as well as strengthen the protections of minors and vulnerable groups – but emphasised that all media channels would be looked at.

ANJ rejects strategy

The ANJ’s rejection stems from the stricter framework that applies to monopolies stating its promotional policy must be implemented more conservatively. Under the regulator, monopolies cannot actively encourage the public to play the game.  

Primarily, the ANJ stated that FDJ was not comprehensive enough in its response to the 2022 reservations regarding promotional strategy. In regard to 2023, among the rejection reasonings are three key points the regulator found objectionable.

The number of large-scale promotions planned for the year, which spiked concerns of saturation, a strategy to make the lottery a product of every-day consumption and a promotional strategy that makes a direct link between gambling and popular interest.

FDJ will have to submit a new request for approval by the ANJ within one month. The ANJ notes that it is considering of proposing additional measures to local authorities in order to further enforce advertising regulation.

In July of 2018, the French government decided to sell 50% of its 72% ownership of FDJ in order to make the company public. However, it kept its monopoly status by paying €380m (£325.0m/$448.4m) to the French state to continue to exclusively offer lotteries and retail betting. 

Details on the new independent regulator were released as part of a football industry white paper, which was brought about by a call for reform in the form of a fan-led review of football governance.

The review brought up a number of key issues concerning the sport, including the controversial European Super League – a proposed competition that was criticised for being elitist and exclusionary of certain clubs.

While the football white paper does not specifically mention how the place of the gambling industry will be addressed going forward, it focuses greatly on financial sustainability for clubs and efforts to “reduce harm.”

“There exist fundamental problems of perverse incentives, poor governance, and defective industry self-regulation,” reads the report. “These, along with the risk of breakaway competitions, threaten the stability of the football pyramid as a whole and risk leaving fans alienated and powerless.”

The new regulator will require clubs to demonstrate “good basic financial practices”, alongside having measures in place to meet cash flows and protecting clubs “core assets.” from harm – including their stadiums.

While these issues are mainly centered on how clubs receive and spend money, the question of financial sustainability and harm are reminiscent of gambling’s intrinsic link with the sport.

Protecting the sport

Lucy Frazer, the recently-appointed Secretary of State for the slimmed-down Department of Culture, Media and Sport, said that the new regulator would have governance over football’s key assets and issues.

“This white paper represents the most radical overhaul of football governance since the rules were first invented over a century ago,” said Frazer.

“It commits to an independent regulator backed by legislation, and sets out the technical details of how that will work in practice – including the licensing regime the regulator will operate, and the non-regulatory reforms also needed within football.”

Michelle Donelan, who had been named as the head of the original DCMS by former Prime Minister Liz Truss in September 2022, now heads a new department – the Department of Science, Innovation and Technology.

Stuart Andrew, Minister for Sport, said that the reform is necessary to preserve the place of football in English culture.

“It is clear that football must be reformed,” said Andrew. “Under the guidance of the new independent regulator, football will be set on a more sustainable course for the future, from today and for generations to come.”

In the past year, there has been tense discussion regarding gambling shirt sponsorship deals in football, with rumours that leagues were considering a voluntary ban in July 2022.

White paper woes

The release of this football governance white paper serves as a reminder for the gambling industry’s own long-awaited white paper – a policy document that will come off the back of the 2005 Gambling Act review.

Last month, iGB reported that Downing Street is set to step in to advise on revisions of the Gambling Act white paper.

Numerous changes in parliament and the political landscape have all but halted the progress of the Whitehall document, which is allegedly to be published in the subsequent weeks.

The large losses are principally the result of an AU$988m non-cash impairment of the group’s Sydney assets, which came from the costs and penalties associated with the business’s ongoing regulatory difficulties.

Last year the Bell review – a NSW parliamentary inquiry into anti-money laundering and safer gambling failings at the company’s properties – found that the operator was “unsuitable” to hold a licence in the state.

In order to continue operations Star underwent a costly transformation, that saw the business attempt to change its culture and operations to prevent a repeat of numerous and serious failures that characterised the company’s previous operations.

Difficult landscape

Star CEO and managing director Robbie Cooke highlighted the difficult regulatory landscape.

“We have been pleased with the ongoing strength of trading across our Queensland-based properties, while trading at The Star Sydney has been impacted by operational changes associated with the outcome of the Bell Review and increased competition,” said Cooke.

Cooke said that it was the business’s key priority to regain the trust that it has lost, as well as demonstrate it is suitable to hold its casino licences. As part of that effort, the CEO said that the organisation would be supporting the ongoing state-wide initiatives around cashless gaming and reduction of harms.  

“Our focus has been and remains on working constructively with our regulators and the NSW Manager and Queensland Special Manager to urgently remediate our businesses as we seek to return to suitability.”

Financial situation

The business recorded AU$1.01bn in revenue for the six-month period ending 31 December, a 75.6% increase year over year.

Other income, combined with share of net profit from joint entities, added AU$8.7m to the total revenue for the half-year period.

However, a number of costs caused the revenue to fall to the overall loss. Depreciation, amortisation and impairment totaled at AU$1.08bn – a shocking AU$986.1m higher than in H1 2021.‬

Employment costs at AU$376.5m were the second highest of the period. This was followed by AU$350.0m in fines and penalties and AU$103.9m in other expenses.

The remaining costs were made up of a number of other expenses – including government taxes and levies, property costs and cost of sales.

Earnings before interest, tax, depreciation or amortisation (EBITDA) stood at AU$199.7m for the period, a 550.5% increase compared to the same period the previous year.

The financial boost provided to the casino operator by the equity raising will be used to repay the business’s outstanding debts, as well as increase the company’s overall liquidity.

In addition to raising money, the business has renegotiated its financial relationship with its creditors – securing covenant relief from bank lenders.

This package of debt relief and new sources of funding may be an attempt to keep its creditors at bay after numerous existential risks to the business.  

Impairment charge     

Earlier in the month, the business released an earnings update and outlook that indicated that the business is expecting a non-cash impairment charge in the range of AU$400m- AU$1.6bn.

The company says this would be due to a number of factors, including operational changed implemented following the Bell review, a New South Wales (NSW) parliamentary inquiry into the casino’s anti money laundering (AML) and safer gambling practices that found the casino “unsuitable” to hold a casino licence.

Other reasons for the charge relate to amendments in the NSW casino control act, as well as increase in NSW casino duty rates in 2024.

The business said that the higher estimate of the impairment charge would be in the case of casino duty almost doubling from 32% to 60.67%, as was proposed by the NSW government in December. 

“Whilst the outcome of recent regulatory and legislative developments remains uncertain, we have taken a prudent approach to assessing the carrying value of our assets, which has resulted in a non-cash impairment charge which will be recognised in our 1H FY23 results,” said group CEO and managing director Robbie Cooke.  

Earlier this month, Bally’s revealed in its preliminary results that it would likely post a large net loss for the 12 months to December 31 as a result of impairment charges, in particular a $390.7m charge related to its North America interactive business in the fourth quarter.

The final FY net loss was slightly higher than preliminary guidance, though incoming chief executive and current president of interactive, Robeson Reeves, was upbeat about the operator’s wider performance in 2022.

Read the full story on iGB North America.

La Liga, the organisation that oversees the knockout tournament, contacted Cenpida after it received information from an anonymous confidant regarding the December 2021 match between CD Huracán Melilla and Levante UD.

Levante, which plays in the top tier Le Liga won the first round match 8-0. At the time, CD Huracán Melilla was competing in the Primera Autonómica de Melilla, the sixth level of football in Spain.

Details of the allegations were not disclosed, but it was confirmed that an investigation was opened in the Investigating Court No. 2 of Melilla, with statements taken from six people with links to CD Huracán Melilla.

La Liga added that Levante UD has no relation to any of the information being investigated.

“This anonymous information received through the reporting channel demonstrates the trust that exists in the work of LaLiga’s Integrity and Security area, in collaboration with the police and the corresponding bodies, when it comes to detecting and reporting possible cases of match-fixing, La Liga said.

Real Betis eventually won the 2021-22 Copa del Rey, beating Valencia in the final in April 2022. Levante were knocked out by Alcoyano on penalties in the second round.

Under the text of the bill, the state’s 11 tribes will have exclusive rights to offer sports wagering both at tribal casinos and by mobile.

The bill would allow individuals aged 18 to engage in the activity – which differs from a number of other US jurisdictions which have implemented a minimum age of 21.

Tax regime

The bill imposes a 10% tax on wagers placed via mobile and online sources. However, bets placed on Native American land are not subject to state taxation.

The proposed law outlines a system where tax revenue generated by sports betting activity would be split between responsible gambling initiatives, the costs of regulation and youth sports.

“Minnesotans have been waiting a long time for the opportunity to engage in fair sports betting,” said Rep. Stephenson.

The representative highlighted the extent to which his party has engaged with tribal entities.

“House DFLers have continued to listen to and consult with the 11 sovereign tribal nations and other stakeholders over the last few years to ensure the best outcome for Minnesotans,” he continued. “Our bill is a step in the right direction to ensure consumer protection while engaging in sports betting.”

Positive reception

The bill has seen a positive reception from both tribal interests and professional sporting organisations.

According to a joint a statement provided to Fox9, the Minnesotan Indian Gaming Association (MIGA) and the state’s sports teams said that the law would be an acceptable arrangement for both organisations.

Total GGY for the online sector in the three months to 31 December 2021 stood at £1.20bn (€1.36bn/$1.44m), down marginally from the previous year, according to the Gambling Commission.

The decline, the Commission said, was driven by a decline in both the real event betting and casino verticals. 

Online real event betting GGY fell 3% to £446m, despite the number of bets rising 21% and the amount of average monthly active accounts increasing 20%. 

The Commission said the rise in general participation was most likely due to the 2022 FIFA World Cup taking place across November and December, but the suspension of top European leagues due to the national team tournament may have led to a drop in overall spend.

Virtual betting GGY also declined 30.2% to £12.0m and esports betting GGY slipped 29.4% to £2.4m.

Turning to online casino and GGY was down 8% overall, with slots GGY falling 2% to £582m for the quarter. This was despite the number of spins increasing 8% to 19.7 billion and average monthly active accounts up 13% to 3.7 million, with the number of spins per active player down 5%.

Other gaming GGY, including casino, slipped 7.8% to £159.7m, while poker GGY was down 11.6% to £17.6m and GGY from other activities declined 37.5% to £2.0m.

Land-based

Looking at the land-based segment, GGY increased 5% year-on-year to £560m, while the total number of bets and spins increased by 2% to 3.4 billion.

Over-the-counter (OTC) GGY fell 5% to £158m, with the number of bets placed falling 4% to 140 million. The Commission noted the impact of the World Cup, absence of the Premier League and horse racing fixture abandonments were particularly apparent in December, with OTC bets at their lowest level since shops reopened fully after the pandemic.

Self-service betting terminals (SSBTs) continued to experience growth with GYY climbing 20% to £100m, with the number of bets placed increasing 25% to 35.1 million.

Machines GGY was also up 6% to £302m with the average spend per session increasing to £12.48. The average number of spins per machines session also climbed to 133 spins in Q3. 

In addition, the Commission noted that 3% of total machines sessions lasted more than an hour in Q3.

During Q4, GLPI agreed to establish a new master lease for seven Penn Entertainment properties, including a funding option to allow Penn to pursue growth opportunities in several of its existing markets including Illinois, Ohio and Nevada.

This followed other significant activity earlier in the year including the sale of the Tropicana Las Vegas Hotel and Casino to Bally’s Corporation, a $1.00bn leaseback on two casinos in Rhode Island, again to Bally’s, the acquisition of several casino locations from Bally’s and the purchase of tow Pennsylvania properties from The Cordish Companies.

GLPI chief executive and chairman Peter Carlino said these agreements sets the group up for further growth in 2023, with GLPI shortly after the year-end having also acquired Bally’s Tiverton Casino & Hotel in Rhode Island and Bally’s Hard Rock Hotel & Casino Biloxi in Mississippi.

Read the full story on iGB North America.

In a statement, the FATF said Russia’s invasion of Ukraine and the continuing attacks “unacceptably run counter to the FATF core principles aiming to promote security, safety, and the integrity of the global financial system.”

“Considering the above, the FATF has decided to suspend the membership of the Russian Federation,” the statement continued.

The organisation also argued that Russia’s invasion represented a “gross violation” of the commitments to cooperation that make up the FATF Standards – rules that all members must agree to implement as a condition of membership.

Despite Russia’s expulsion from the FATF, the country will remain a member of the Eurasian Group on Money Laundering (EAG), and will be expected to maintain its financial obligations.

The FATF said it would continue to monitor the situation and consider whether these restrictions should remain in place at each Plenary meeting.

The decisions were taken following the conclusion of the second Plenary of the FATF under the Presidency of T. Raja Kumar of Singapore in Paris.

The watchdog includes members from over 200 jurisdictions from across the world.

Gibraltar remains on list

The FATF also confirmed that Gibraltar would remain on its grey list.

The British oversea territory and major global online gambling hub was added to the FATF list of jurisdictions of increased monitoring following the watchdog’s June Plenary. The same meeting saw Malta removed from the list.

On that occasion, the FATF stated that Gibraltar’s status as a locus of gambling activity was a major factor in its decision, in particular taking aim at the local government’s failure in “applying sufficient fines for anti-money laundering failings”.

In the FATF’s report, it highlighted the territory’s high-level political commitment to work with the watchdog and strengthen its anti-money laundering and counter-terrorist financing regime.

The body also outlined the good work in this area which has meant service providers, lawyers and gaming businesses there are now using a range of effective sanctions for AML and counter terrorist financing failures.

This has meant, in practice, more enforcement actions, financial penalties and the publication of specific cases.

However, the task force opted not to remove Gibraltar from the grey list on this occasion. In the organisation’s report it pointed the way forward.

“Gibraltar should continue to work on implementing its action plan to address its strategic deficiencies, including by showing that it is able to pursue more final confiscation judgments commensurate with the risk and context of Gibraltar,” said the FATF.

Mañasco joined Mansion in 2010 and initially took on the role of chief financial officer in 2012, before going on to also become CEO in January 2017.

However, Mañasco was suspended by Mansion in September 2021 as the Gibraltar-based online gambling operator launched a disciplinary investigation into his actions while at the business. Mañasco resigned from the operator in December of the same year.

Last year, Mansion filed a claim with the courts in Gibraltar alleging Mañasco had breached his duties, with the operator seeking damages.

Among the claims made by Mansion were that Mañasco paid himself bonuses of €327,033 (£288,111/$347,139) and £427,500 in the 2019 and 2020 financial years, respectively, as well as a sum of £66,237 in personal allowance payments he was not entitled to.

Mañasco was also alleged to have made payments of €2.5m and £127,073 to a company known as White Wizard Media incorporated in the Marshall Islands, without it having provided any known services to Mansion.

Other claims included Mañasco failing to take reasonable steps to comply with directions given by the regulatory authority in Gibraltar, which resulted in Mansion having to agree to a regulatory settlement of £850,000.

Mansion said Mañasco also caused the operator to purchase four high value vehicles for his own personal use at a cost of £192,140, as well as payments of £27,876 and €91,935 for luxury watches that were no use to Mansion and Mañasco failed to account for.

In addition, Mañasco was alleged to have racked up £249,951 worth of corporate credit card charges for personal expenses, £14,756  to purchase a domain name that Mansion said was for his own benefit, and £71,931 in other personal expenses including legal fees and rent.

Mañasco denied the allegations, saying as CEO of the operator, he was authorised to order and oversee all of the transactions noted in the filing and he was acting in the interest of the business.

However, Dudley and the court sided with Mansion group, ordering a £5.0m global freezing order on Mañasco’s assets.

Mañasco stated he would contest the ruling. 

Site closures

Last month, Manion closed down its UK casino business, with its three brands – Mansion Casino, Slots Heaven and Casino.com all announcing to customers that the company would be winding down operations.

This was Mansion’s second wave of brand closures – having also announced it would shut down its sports betting brand MansionBet in March 2022.