Month: May 2023

The DSWV membership unanimously elected Böhm to a second five-year term. The chief executive has been a member of the Presidium since 2018.

Following a stint at the Kartal Lawyers firm, Böhm became Tipwin’s chief legal officer for eight years.

The gambling compliance expert owns boutique legal practice Böhm & Hilbert, which specialises in anti-money laundering and administrative law.

“I would like to thank all the members who re-elected me to the association’s executive committee at the DSWV meeting in Berlin today,” said Böhm.

“I am very much looking forward to continuing the work I have started with my esteemed colleagues from the office and the executive committee in a constructive and friendly manner, as always.”

Böhm said that he sees the lobbying group’s work to be connected to his role at Tipwin.

“I consider the work of the association to be absolutely necessary for our company Tipwin and the entire industry, in particular to maintain good and professional communication with politics and the GGL.”

Over the past decade, Imperial Pacific International’s Saipan casino project has gashed a path of destruction across the Commonwealth of Northern Marianas Islands, specks of US Pacific territory at least four hours’ flying time from Asian markets.

Among the ruins: unfinished, shuttered Imperial Palace casino hotel despoiling Saipan’s downtown Garapan beachfront; dozens of ancestral graves, plus fallen Japanese and American World War II fighters, disturbed on the site. One dead construction worker and others mangled through forced labour trafficking. Some $3 billion in uncollected gambling debts. Some $20m owed to creditors, much more due CNMI authorities. FBI raids on the governor’s office; and elected officials admitting to wrongdoing to enable the casino.

A brutal legacy

Despite IPI’s brutal legacy, many appear ready to bet again that casino gambling amid tropical weather and visa-free entry for Chinese tourists can aid CNMI’s teetering economy and cash-strapped government.

Businessman Glen Hunter filed a lawsuit that led to three legislators, including future Governor Ralph Torres, admitting violating CNMI’s Open Government Act to pass Saipan’s casino law in 2014 without public hearings, ignoring two Saipan referendums rejecting casinos. Those lawmakers and other elected officials accepted luxury visits to Macau and Hong Kong from IPI associates.

Match fixing?

“It was a corrupt process that was handled behind closed doors and done to satisfy one particular investor. The entire bidding process was a farce,” Hunter, owner of beachfront restaurant The Shack, says.

“The sole licensee was arranged and chosen far in advance of the bidding process. They had wined and dined our elected officials and took them on private trips through Asia to win them over and secure that licence through corrupt means.”

Yet, he adds in an email, “We have learned some very tough lessons…. I do believe if done properly, a true casino investor or investors could successfully run a casino(s) in the CNMI.”

The “particular investor” behind IPI is Ji Xiaobo, a former executive of Hengsheng Group, Macau’s self-declared first mainland China led junket promoter. Ji and associates acquired Hong Kong listed First Natural Foods, changed its name to Imperial Pacific International and made Ji’s mother Cui Lijie, once one of Mao Zedong’s barefoot doctors, majority shareholder.

Upping the ante

After winning the licence requiring a $2bn investment and 2,000 new hotel rooms, IPI announced a $7.1bn development plan with 4,000 rooms, including a beachfront hotel in Garapan and a tropical Pacific version of Macau’s Cotai Strip on a site to the north.

“A $7bn development on an island with a population of only 43,000 was never ever realistic,” iGamiX managing partner Ben Lee says. “The market nor the local infrastructure could ever support that kind of a beast.”

“Those staggering figures were put forth for one reason only – to scare off any real casino investor,” Hunter says. “No sensible investor would ever agree to that type of investment in our region.”

‘Bait and switch’

In 2015, IPI opened a casino in Garapan’s DFS shopping mall catering to tourists, “a bait and switch,” Hunter says. Under former Sands China Macau president Mark Brown, a Trump Casinos alumnus, IPI began reporting otherworldly VIP rolling chip volumes.

In 2017, IPI reported VIP volume of $49.5bn on an average of 18 tables. That same year, Venetian Macao reported $26.2 bn volume on its 100-plus VIP tables. During VIP operations from late 2015 to its March 17, 2020 Covid shutdown, IPI reported VIP roll in excess of US$100bn and $3.3bn in VIP revenue.

Many view the figures skeptically. “It’s something that is very difficult for industry professionals outside of Saipan to believe because the rolling numbers were so ridiculously high. But for those that witnessed the action firsthand it was real. Mind boggling, but real,” former IPI Saipan CEO Donald Browne tells iGB.

“If there is any skepticism at all, it should be on the credit side. Since all credit approvals came down from the corporate office, we had no knowledge of the customers’ ability to repay the debt.”

Deadbeat VIPs

Indeed, IPI’s uncollected player debt nearly matches its reported $3.3 billion VIP revenue. To John Kucera, lead US prosecutor in the 1MDB Malaysian sovereign wealth fund case, uncollected VIP debt far beyond industry norms suggests money laundering.

“If you cannot come up with a legitimate business explanation for why you were doing what you did with your money, that’s when, as an investigator, you’ve got a pretty good idea that something fishy is going on,” Kucera, now a partner at Boies Schiller Flexner, explains, without knowing specifics of the IPI situation.

“That you can point to actual gambling doesn’t mean there were not illicit proceeds going in there. Win or lose, you’ve laundered your money when it comes out the other side.”

As a US territory, Saipan has more stringent anti-money laundering controls than many other jurisdictions. (A remark from Ji during a group conversation suggests he thought, as do some lawyers, that CNMI’s commonwealth status exempts it from US money laundering laws. Browne says, “Contrary to beliefs, Ji was very adamant that compliant AML was critical to the operation.”)

Shooting and hopping

A cooperative US based financial institution, such as a casino, however, can be a golden ticket for money laundering. Saipan, with the patina of US regulation but far less scrutiny due to distance – Saipan is farther from Los Angeles than London is from Tokyo – and diligence, is an ideal place to “shoot the gap,” according to Kucera. 

“The trick in money laundering is getting the hop, hopping from a bank in a more or less illegitimate place, or a less legitimate place, to a more legitimate place.” Kucera theorizes funds from Saipan could be sent to a small onshore US bank then to a large US bank with a robust compliance reputation for banks around the globe to rely on.

To be clear, IPI has not been charged with casino money laundering, even after the FBI raided its Saipan offices in November 2019 as part of an operation that included searching the offices of an IPI consultant, then-Governor Torres and his brother’s law firm. Last year, Torres was impeached then indicted on charges of misusing government funds before losing his November reelection bid.

Palace coup

“The most critical mistake was that the company took on too much responsibility in the construction and placed family, friends and investors with little knowledge of construction, building code or labour laws directly involved in the development of the project,” Browne says of Imperial Palace, where construction began in 2015.

IPI claims spending $1bn to date on the unfinished 344 room hotel. The casino designed for 193 tables and 365 machines partially opened in July 2017.

Executives from IPI and China state owned construction firm MCC International’s Saipan affiliate were indicted in August 2020 on federal charges related to forced labour and human trafficking.

Attorneys Aaron Halegua and Bruce Beline won judgments totaling $6.9 million from IPI and two construction companies for seven Chinese labourers that suffered severed fingers, burns and other serious injuries, working under inhumane conditions and denied medical care.

“We were very pleased when the court recognized the egregiousness of IPI’s conduct and the severity of the suffering that it caused our clients,” Halegua says. “However, too many forced labour victims only obtain a piece of paper. We worked hard to ensure that the defendants paid the money awarded by the court, and are very pleased with this result.” 

Unpaid bills

Many IPI creditors remain unpaid. Since late last year, Fortuna Investments Worldwide senior partner Tim Shepherd has conducted four court sanctioned auctions of Imperial Palace property on behalf of creditors, with a fifth scheduled for June 9.

Previous auctions sold cards, chips and furniture. Remaining items include some 170 slot machines, closed circuit TV components, sundry table gaming equipment, and, perhaps, two dragon chandeliers spanning 60 metres, studded with 2.5 million crystals and weighing 40 tons hanging in the Imperial Palace lobby.

Auction proceeds won’t approach what IPI owes creditors. Trying to collect IPI’s unpaid gaming debts from VIP players is an option.

Debts still to be repaid

“IPI’s liquidator can decide to pursue any parties that owe IPI money,” bankruptcy lawyer Kingsley Ong, a partner with CMS Cameron McKenna in Hong Kong, says. “Before pursuing the debts, the liquidator will need to be satisfied that the debtors are worth pursuing, there are sufficient resources available from IPI funds or other sources to fund the pursuit, and that this course of action would be in the interest of IPI’s creditors.”

While gambling debts are not legally enforceable in mainland China, debtors may have assets in other jurisdictions where collection is possible. The liquidator could also sell debt to a collection agency for a fraction of its face value.

Beyond private creditors, IPI owes CNMI annual casino licence and regulatory fees of $18.65m for 2020, 2021 and 2022, plus penalties. Hong Kong trading in IPI shares has been suspended since 1 April last year with the last price below one US cent. Attempts to contact IPI were unsuccessful.

Licence to kill

CNMI lawmakers are urging the Commonwealth Casino Commission to cancel IPI’s exclusive licence. “We’re told that get rid of the exclusive gaming licence and we’re gonna get investors,” Representative Joel Camacho says. He suggests licensing three small casinos.

“I had actually conducted a preliminary feasibility study in 2011 and had in fact advised the government that a single monopoly was not in the interest of the island,” Ben Lee, whose company operated Club C slot parlor in Saipan, says. His presentation to legislators a dozen years ago suggested a $10 million investment floor.

“I believe that Saipan has potential due to the Japanese and Korean markets that visit the island,” EuroPacificAsia Consulting managing partner Shaun McCamley, once an executive at Tinian Dynasty casino on Saipan’s neighboring island, says. “A $20m investment would be tops in my view.”

“Amazing things can happen with a gaming licence and an entrepreneur.”

A property “similar to a southern Caribbean or Puerto Rico casino-hotel, where the casino is an amenity rather than a tourism-inducing pipe dream, would be best and easiest to staff,” Convergence Strategy Group managing partner Scott Fisher, who’s consulted in CNMI, says. 

“If an Asian Atlantis was constructed on Saipan, it would succeed on just the Chinese market alone,” Imperial Palace architect Paul Steelman says, referencing the 3,800 room beachfront resort in the Bahamas. “Amazing things can happen with a gaming licence and an entrepreneur.”

Amazingly good and otherwise.

Citing Muhammad Cohen

I’ve covered the Saipan casino saga since its 2014 licensing process. So when I met five CNMI legislators in Manila attending the ASEAN Gaming Summit in March, I hoped we could learn from one another.

I had an off the record lunch with four Representatives from CNMI’s House Ways and Means & Gaming Committee, chairman Ralph Yumul, Joel Camacho, John Paul Sablan and Marissa Flores. I also spoke individually with them and Senator Corina Magofna.

Afterwards I emailed them all to comment for this article. None replied. Neither did Governor Arnold Palacios, who served as lieutenant governor under predecessor Ralph Torres before defeating him in last November’s election. 

Facing criticism for spending public funds to visit Manila, Yumul’s committee held a press conference available on YouTube.

Flores invoked my name and credentials to express her opinion that the primary government culprit in Saipan’s casino fiasco is the Commonwealth Casino Commission. “The commission did not understand the consequences of implementing substandard regulations. The current situation is a testament to that, and there is no denying it.”

“Like blaming Lincoln’s assassination on the play.”
Fortuna Investments Worldwide senior partner Tim Shepherd has dealt with regulators across Asia for 20 years and consulted on CNMI casino project Tinian Diamond, due to open this year. He calls the CNMI commission “a responsible, professional regulator.” 

Other committee members echoed Flores, bashing the commission, not the corrupt legislative process that led to licensing IPI in 2014. Three committee members were sitting legislators then, Yumul, Sablan and Roman Benavente, who did not travel to Manila.

During the press conference, a reporter asked Flores if Muhammad Cohen suggested what CNMI should do. “He stands on the sentiment that the CNMI at that time made a big, big mistake that we poorly regulated this industry, and that’s all I have to say about that.”

My emailed response to Flores and colleagues: “To set the record straight, I believe blaming the Casino Commission for the problems of the IPI project is like blaming [US President Abraham] Lincoln’s assassination on the play.”

The fantasy sports provider announced late last year that it had finalised the restructure of its B2B operations. This led to the closure of 11 partnerships and cutting the total number of co-operations to 13.

This followed the news in September that Scout had raised SEK101m (£7.6m/€8.7m/$9.4m) in a share issue process to help save the business. Scout also initiated a major restructuring of personnel – laying off 68 of 131 full time workers.

The restructure has seemingly begun to pay off, with the provider posting a net profit in Q1, despite revenue falling. However, chief executive Niklas Jönsson warned of potential cost reductions as part of its long-term plan.

“One key success-factor for the group to reach profitability is a continued cost control,” Jönsson said. “The first quarter does not fully reflect the already executed cost reductions which we already have performed. We are continuing our transformation of the group. 

“Management is in a process to evaluate further reductions in costs, but these need to consider the organisations capabilities to deliver to the existing partners which are live and to those who are becoming live in the coming months.”

Scout Q1

Revenue for the three months to 31 March reached SEK6.5m, down 3.0% from SEK6.7m in the corresponding period last year.

B2B revenue was 125.0% higher year-on-year at SEK5.4m, with Scout putting this down to an increased focus on this vertical.  The provider noted that by the end of the quarter, it had 12 integrated and active B2B partners.

Turning to B2C, revenue fell 62.1% to SEK1.1m, primarily due to a reduction in what Scout described as “non profitable” marketing campaigns. However, Scout said its B2C business has the potential to generate “profitable” growth under the controlled measures being rolled out and expects to realise these in 2023.

In terms of spending, operating costs were 45.5% lower at SEK16.5m. Personnel costs fell 31.4% to SEK9.6m and other external expenses 56.1% to SEK6.8m. As such, operating loss was 58.1% lower at SEK9.9m.

When also accounting for an additional SEK17.0m in profit from undisclosed financial items, this left a pre-tax profit of SEK7.0m, in contrast to the SEK21.7m loss last year. Scout did not pay any income tax in Q1, meaning net profit was also SEK7.0m.

In addition, earnings before interest, tax, depreciation and amortisation (EBITDA) improved from a loss of SEK23.6m to an SEK9.4m loss.

“We believe the journey which we on have shown a lot of positive signs and in the transition to become a profitable company and to create shareholder value a lot of work remain,” Jönsson said.

“More efficiencies to achieve and a sharp focus and engagement from all of us in the organisation is required.”

First announced in a bill introduced in December last year, the changes primarily relate to payment providers and Spelinspektionen’s regulatory powers in this area.

With the bill now having been approved, payment providers will now be required to submit certain information to Spelinspektionen. This includes details on whether their systems are being used to process payments to and from unlicensed operators in Sweden.

The government said that the changes would enable a more efficient system for blocking payments, allowing the regulator and payment providers to work together to combat unlicensed gambling.

“Illegal gambling business causes great damage and must be removed from the Swedish gambling market,” Sweden’s Minister of Financial Markets Niklas Wykman said. “What we are doing now is aimed at blocking payment mediation for such criminal activities and thereby increasing the protection for Swedish consumers.”

The regulatory changes will come into effect from 1 July.

Greater cooperation

Confirmation of the new laws come after the government in its Spring Amendment Budget also announced Spelinspektionen would receive an increased grant to help strengthen its activities against illegal gambling. 

In addition, the government called on Spelinspektionen and national financial supervisory authority Finansinspektionen to work closer together to combat illegal gambling.

The government said collaboration between the two bodies could help strengthen efforts to ensure greater control over monetary transactions related to gambling.

The affiliate at its annual general meeting said that it saw a “strong” start to Q1 with the launch of sports betting in Ohio. However, in other markets is said results will be lower than last year due to the launch of online sports betting in New York in 2022 and later in Massachusetts.

XLMedia also noted that the level of acquisition spend by operators has also fallen, with “less generous promotions available to attract new customers”. This, it said, reflected its understanding that growth in the US will not be “linear”, with significant spikes generated by periodic state launches.

The company said it does expect the US market to pick back up again in the second half of the year with new products launching in the sector ahead of the new NFL season.

“Looking longer term, we can expect to see many more US states legalise online sports betting and online casino,” XLMedia said. “23 states are yet to legalise online sports betting, including California, Georgia and Texas, three states are legal but not yet operational, including Florida, and 43 states are yet to legalise online casino.”

It also acknowledged performance in Europe is in line with management expectations. XLMedia added that it will issue a trading update for the first half of the year in July.

Let’s look at Great Britain’s gambling industry, or more specifically, the coverage of gambling lobbying. Now, I am, it has been noted, a fan of journalism. Not all of it. There’s some proper rubbish out there masquerading. 

I’m a fan of the real thing, where someone is getting their nose into a story, weeding out information, changing the way that we see the world. Good journalism is genuinely transformative; bad or even just lazy journalism is not. Well, not in a good way.

I don’t know where this column fits into that idea, and luckily that’s for you to decide, not me.

I’m a huge fan of The Guardian; I think their investigative journalism is peerless in the UK, and there are very few titles that come close even globally. But I do think, and with justification, that the newspaper is deeply disappointing with its approach to stories about the gambling industry. 

There, the newspaper reverts to playground rules where the business is evil and its customers are victims of a nefarious plot to ruin lives and take money.

Dastardly, underhand tactics?

The story on 21 May concerned Entain’s dastardly, underhand tactics to undermine the recently-landed white paper. Apparently the company has been engaging in ‘dishonest’ gambling lobbying.

In “emails seen by The Guardian”, Entain-founded organisation the Players’ Panel emailed its list to say: “The government has decided to limit when and how much you can bet. This is going to significantly impact your ability to bet responsibly.” 

The group then urged recipients to write to their MP voicing their opposition to the reforms.

First, let’s just address that second sentence quoted in the email: “This is going to significantly impact your ability to bet responsibly”. That’s obviously a serious stretching of the truth. Nothing in the white paper does any such thing but I suppose it could depend on your definition of a responsible bet.

But now let’s look at the meat and veg here. Lobbying is a thing, there are rules as to how it can be done, and Entain has, I believe, not broken a single rule here. Maybe they could have been more above board. They could have sent Entain headed paper for people to print their letters on for their MPs, for example, and perhaps supplied some Entain-branded ‘GAMBLING IS BRILLIANT’ postage stamps. But they don’t make the rules. 

They have, however, played by them and there are zero issues with this. It’s a non-story on its best day, despite some journalists protesting otherwise. 

Biased coverage of gambling

I should state right now, I’m a huge fan of Rob Davies’ work – he’s a terrific journalist, right up until he deals with the gambling industry. Then, we just go right back to the old polar argument of one side is good, one side is bad. 

I co-host The Gambling Files podcast with Fintan Costello, and we welcomed Rob on to talk about his book Jackpot – How Gambling Conquered Britain and he was great. Super smart, very funny, and highly knowledgeable.

I tweeted Rob about the story, actually jumping into a conversation he was having with someone already about it. He wasn’t particularly happy to discuss it, I think it’s fair to say, but as I pointed out players, industry, anybody with the opposing view has no way to redress this in the pages of the newspaper, so here we are. 

I do think that when it comes to gambling, The Guardian shows bias. A lot of bias, actually. And the newspaper routinely gives our critics a platform to speak (regardless of how fast and loose they might be with actual facts) while denying the industry the right to reply.

But then who should reply for the industry? The Betting and Gaming Council? Isn’t this precisely the kind of conversation they should be having and exactly the kind of representation as an industry we can expect?

I’ve emailed The Guardian’s business editor to point out that there is a lack of balance and a right of reply, and I quote his email to me here verbatim. It’s the bit between the speechmarks: 

“ ”.

Is gambling an easy target?

I believe that part of the issue with bias is pretty simple. We’re an easy target as an industry. People – even when they understand business – don’t necessarily understand how an igaming business works, or how stupid and sometimes very harmful mistakes happen (not that any mistakes happened here). 

We could explain it to them, if we were allowed. But we’re not, and we have an industry body that already has its friendly journalists and doesn’t seem bothered by the idea of dealing with rest of the national press. And our critics are more concerned with, well, being critics than doing anything to further the conversation.

Most journalists now are middle-class. It’s not always been the case, but more and more, journalism (and in fact publishing as a whole) is about who can afford to fund the education needed to get in the door. Or in some cases, who can afford to be funded by their parents while they do five years as an unpaid intern. 

I freely admit I’m not in that group, and it’s seriously unlikely that anyone will be making their way into publishing the way I did decades ago. Losing working class voices from journalism can result in damaging bias like we’re seeing in The Guardian right now – a moral bias which sits in judgement of an industry it barely understands. 

Part of the fabric of the community

I was lucky enough to mediate a panel on ethics in the industry with the shadow gambling minister Alex Davies-Jones recently, for The Gaming Boardroom. She was terrific, and what shone out was that she comes from a working-class town and understands the part that the local bingo hall and the bookies plays in the fabric of the community. 

I’m not singling any journalist out when I say this, I promise you. I sincerely doubt though, that any middle-class journalist in the national press has spent any time at all in the bookies or bingo hall of an average British working-class town. Or lived somewhere where the best hope of a good job was working your butt off to get in at the ground floor of a local casino. 

At the top end of the industry are hundreds of people who have worked up from the very bottom level and rose through the ranks with hard work and aptitude.

In the story we started discussing, plenty of politicians have weighed in about this apparently dreadful-but-totally-legal and not-even-slightly-rule-breaking lobbying of Entain’s (if the templates were in fact supplied by them – this remains unconfirmed). 

But the problem there is, it’s all about timing and context. See, if a reporter from a national newspaper phones you and says “Can I have a comment about this terrible behaviour from the gambling industry?” then no politician is going to say anything other than, “Gosh yes. What terrible behaviour by the gambling industry”.

Populist points-scoring

I once had a client who insisted that despite their massive cost-cutting measures, their Christmas party was going on regardless. Several courses in a stately home, free bar, you name it. It wouldn’t have been fine dining, but it would have been very nice I’m sure. 

I pointed out the issues with this while they are bleating about cost-cutting to me. Their reply was, “But Jon, the Christmas party is very important to people.” I replied that no, it’s not. It’s about context. 

If you ask a downtrodden office peon if they want a Christmas party, they will of course say yes. If you ask them if they want a Christmas party or an extra £200 at Christmas, not one person will take the party.

Ask them if they want a party or for two of their colleagues to still have jobs for a year… You get the idea with that. No politician is going to walk away from scoring easy, populist points, and so that’s what they got. 

Another non-story on gambling lobbying

An earlier Guardian gambling lobbying story on the UK industry was similar in its non-story scope, but this one at least had the easy target of an MP in its sights when Philip Davies visited Mayfair casino Les Ambassadeurs in the months before the white paper was published. 

The story claimed he lobbied on behalf of the casino and if that’s true, it is the cheapest and most effective lobbying in history. It didn’t even warrant a hospitality declaration, and he received no money from the club, yet somehow they managed to persuade him that something had to change and he did it from the kindness of his heart. Top man!

OR… Or maybe they just had a conversation. Maybe the club just sat down with him, some adults in a room together, maybe a bite to eat, and explained something that might be really useful for them.

They explained how it worked and what it would mean, and let him go away and make his own mind up about it. 

Les Ambassadeurs employs the brilliant Tracy Damestani, former head of the National Casino Forum and someone who knows how to have a conversation with another adult. Even a politician.

A fact of life, and a fact of business

Lobbying is a fact of life and a fact of business. If these business leaders were not doing it, they would not be doing their jobs. It was explained to me that newspapers don’t just cover stories where something illegal has happened. And I get that, I’ve been doing this for a while as well. But it helps if something has happened.

Good journalism is genuinely transformative and is an absolute necessity in any democracy. But to thrive it needs balance regardless of any author or editor’s own bias, and it needs a variety of voices and opinions so readers can form their own balanced view. Right now, The Guardian is achieving none of this.

PS: If anyone wants to lobby me, I’m very, very cheap and a steak dinner will usually always work.

Last night (25 May), the Commission of Economy, Central Bank, Ministry of Finance, Financial Intelligence Unit and the Congress of Peru approved the new rules that will establish the legal framework for gambling in the South American country.

The amended Law No. 31557 establishes a 12% point of consumption tax. The Peruvian sports betting association (APADELA) has criticised the previous version of the law for effectively exempting foreign operators from the gaming tariff by only taxing Net Win.

End of retail licences

The new law also ended the practice of retail licences. Under the new regulations, points of sale will be required to pay a warranty of Sol24,750 in order to offer gaming services.

New Know Your Customer (KYC) rules are to be included. Players will be required to register to place bets, as opposed to the previous status quo where many bet anonymously.

Penalties for non-compliance range from fines, up to four years in jail for culpable individuals and licence suspension or cancellation.

Platforms will be able to offer games of chance on Peruvian URLs (bet.pe /.bet / .com.pe/ .pe).

Once the technical regulations have been approved, the new rules will enter into effect after 120 days.

Public consultation on Peru gaming law

The shakeup of the regulations came about following a public consultation, which catalogued the views of a number of interested parties regarding how to best approach the regulation of the gambling industry.

On 19 May, the Ministry of Foreign Trade and Tourism (Mincetur) published the results of the consultation. The process – which ran from 11 November to 2 December collected 772 contributions from public and private stakeholders.

These included the Ministry of Justice and Human Rights, the country’s Financial Intelligence Unit, igaming and sports betting operators, suppliers and individuals.

Law No. 31,557

In August 2022, the Peruvian president Pedro Castillo signed the initial Law No. 31,557, which regulated the country’s gambling industry.

Among other measures, the law put the industry under the supervision of Mincetur, established rules for suppliers active in the market and issued directions for where money raised through gaming taxes should be sent.

Lower spending was the result of a number of cost-saving measures including two successive restructuring programs during 2022. These reduced staff headcount and pushed personnel costs down.

Marketing spend were also lowered year-on-year, while as other operating costs were down, allowing Bet-at-home to flip an EBITDA loss in Q1 of 2022 to a positive.

Chief executive Marco Falchetto said that while some costs may increase during the year, the operator remains on course to hit certain full-year targets, including revenue forecasts. 

This was despite Q1 revenue reaching €13.3m (£11.5m/$14.3m), down 5.0% year-on-year. 

“Gross betting and gaming revenue in the first quarter 2023 was €13.3m and is thus within expectations for the full 2023 financial year,” Falchetto said. 

“Due to a high level of awareness of our brand in German-speaking countries, the strategic focus in terms of revenue in the 2023 financial year will be on expansion in the core markets of Germany and Austria. In the 2023 financial year, the group will offer all products in Germany based on national licences.”

Q1 revenue 

Breaking down revenue performance for the three months to 31 March, net online sports betting revenue reached €9.7m, up marginally from €9.6m in 2022. However, revenue from online gaming fell 36.1% to €500,000.

Operations were impacted year-on-year by Bet-at-home’s decision to exit the British market shortly after its licence was suspended. The operator last year also wound down its online casino activities in Austria.

Another key development in Q1 was Bet-at-home launching its Malta-licensed offering with the EveryMatrix platform. The outsourcing of its German-licensed platform to Bet-at- home.de is currently being finalised and is due for completion soon.

“Bet-at-home intends to have key corporate functions performed by the outsourcing partner in the course of the 2023 financial year,” Falchetto said. “In doing so, the group will focus exclusively on those customer-relevant components that cannot be sourced or operated externally, or only to an insufficient extent. 

“The outsourcing order volume will be based on the net gaming revenue generated from online sports betting and is expected to reach a low single-digit million Euro amount per year going forward.”

Cost savings

Turning to spending and expenses were down across the board as a result of the cost-saving measures. Personnel costs were cut by 43.3% to €2.5m, marketing spend fell 22.9% to €2.7m and other operating expenses were down 31.4% to €3.5m.

Amortisation and depreciation costs reached €467,000 and Bet-at-home also noted €29,000 in other financial income. This left a pre-tax profit of €1.3m, compared to a €2.0m loss last year.

The operator paid €539,000 in income tax, leaving a net profit of €775,000, in contrast to a €2.7m loss in 2022. In addition, EBTIDA was transformed from a loss of €1.4m to a positive figure of €1.8m.

Working in partnership with regulator Kansspelautoriteit (KSA), police carried out the raid at a location on Nieuwpoortkade in Amsterdam-West on 20 May. This was in response to reports of illegal commercial gambling taking place at the site.

During the raid, investigators discovered people taking part in an illegal poker game. Police recovered playing cards and other poker supplies, as well as drugs and two firearms,

Investigators also seized a number of electronic devices including phones and hard drives.

Police said investigations into the arrested individuals remain ongoing, while it is not yet clear as to who owns the firearms.

KSA supported the police during the raid and is in the process of preparing its own report on the case.

“Illegal gambling involves unfair competition with companies that do have a licence and must comply with all kinds of rules, for example to prevent gambling addiction among customers,” KSA said.

“The presence of this kind of illegal gambling activities and narcotics on a business park constitutes an infringement of public order. 

“In addition, places where illegal gambling takes place are a breeding ground for crime and these places offer the opportunity to launder criminal money. There is a chance that this will attract people who are not afraid to use violence.”

Illegal poker

Poker gaming in the Netherlands is only legal at Holland Casino country-specific locations. However, the police in recent months have carried out a number of similar raids in response to reports of illegal activity.

Casino Nieuws reported that earlier this year, two illegal poker tournaments were broken up by police.

In January, four suspects were arrested in Valkenswaard for organising an illegal event. One month later in Vlissingen, two people were arrested during an illegal cash game.

Privatisation

This week, it emerged that the Netherlands is “exploring” new options for Nederlandse Loterij (NLO), including the possibility of privatising the state-owned enterprise.

Dutch finance minister Marnix van Rij released an evaluation of the state’s shareholding in the NLO. The government plans these evaluations on a regular seven-year cycle for all state-owned assets. This year the main question concerned the status of the NLO and Holland Casino.  

The report said that the lottery company would be “ready for privatisation both financially and organisationally”.

Morales Churata, a green badge official, was found to have manipulated scores for betting purposes. He incorrectly entered scores into a handheld device at ITF World Tennis Tour events in 2021 and 2022.

The suspension was backdated to the start of a provisional suspension on 8 December 2022 and will end on 7 December 2028. Morales Churata will be prohibited from officiating at or attending any tennis event authorised or sanctioned by the governing bodies of tennis.

In addition, the ITIA ordered Morales Churata to pay a fine of $10,000 (£8,098/€9,315).

Corruption charges

The ITIA noted multiple breaches of the Tennis Anti-Corruption Program (TACP).

These included five breaches of Section D.1.b of the 2021 TACP, whereby no covered person shall facilitate any other person to bet on the outcome or any other aspect of an event.

Morales Churata was also found guilty of five breaches of Section D.1.m of the 2021 TACP. This relates to individuals purposely delaying or manipulating entry of scoring data from an event.

The ITIA also flagged five breaches of Section D.2.b.i of the 2021 TACP. This requires covered persons to report any approaches of corruption to the relevant authorities as soon as possible.

In addition, the ITIA referenced Section D.2.b.ii of the 2021 and 2022 TACP. This also covers a responsibility to report incidences or suspicions of corruption to the ITIA at the earliest opportunity.