Month: June 2023

On 16 June, Malta’s president George Vella signed Act No. XXI of 2023 – Gaming (Amendment) Act into law, which orders courts to refuse to recognise or enforce any foreign judgements against Malta-licensed operators active in the European market.   

Tabled on 24 April, the law will prevent any action being brought against Maltese operators for the provision of gaming services, when the activity is covered under their licence.

Many Malta-based companies – including some of the largest businesses in the sector – offer online gaming throughout the European single market.

Operators engaged in this activity argue that their gaming activity is covered under the Treaty of the Functioning of the European Union, the treaty that provides for the free movement of services across Europe.

However, European governments and regulators point to the 2017 decision by the European Commission to close infringement procedures and complaints in the gambling sector as the legal basis for arguing that they have the right to prevent Malta-based businesses from taking bets in their jurisdictions.

This ambiguous legal situation has been amplified by a number of ongoing legal cases.

German and Austrian legal action

The new law enters force in the context of a number of ongoing German and Austrian lawsuits regarding the legality of some operator’s activities in those countries.

In a June 2021 judgement, the Austrian Supreme Court (OGH) – confirming the decisions of two lower courts – ruled that Flutter-owned PokerStars were operating in violation of the Federal gambling monopoly.

As such, the court found that all of PokerStars’ gambling contracts were null and void. It therefore upheld the plaintiffs claim for reimbursement. The plaintiff, who was represented by G&L Rechtsanwälte, reported losses totaling more than €28,000 over a five-year period.

In Germany, the Frankfurt Higher Regional Court ordered an unnamed online casino to pay back over €26,000 in losses back to a player who used the site before online gambling was regulated in Germany, also a confirmation of a lower court’s decision.

These precedents have opened the door for many thousands of claims against operators with historic or present activity in those countries markets. One firm alone AdvoFin claims that it has recovered €40m in player losses for 1,500 plaintiffs through its legal activities.

Some operators refuse payment

While some operators – such as Entain – have opted to pay out in the event of losses, others have fought the decision.

Advofin has noted that 888-owned Mr Green and William Hill, as well as Flutter-owned PokerStars have not paid out for any judgements against them for a significant time period.

Subsequently, many lawyers had begun engaging in legal proceedings in Malta, where many of these businesses are based.  

In May, iGB spoke to an individual who had obtained a final non-appealable judgement against 888-owned Virtual Digital Services Limited, a subsidiary which offers gaming in the European market where the business does not possess a local licence. Since 888 had refused to pay out, the person had hired a local Maltese firm in order to sue the operator.

888 for its part argues that its Maltese licence allows it to offer its services to European consumers.

“This position is based on the fundamental EU principle of freedom to provide services,” said the operator in a statement.   

“While the Austrian Courts have challenged this, the group continues to contest the compatibility of the Austrian licencing regime with EU law.”  

Put forward as one of several proposed regulatory changes in the recent Gambling Act white paper, the levy would be paid to the Gambling Commission. Funds generated would fund research, education and treatment (RET) for gambling harms. 

A consultation on design and scope for this will take place this summer, with GambleAware and NHS England voicing their support ahead of this.

GambleAware delivers prevention and treatment services for gambling harms, including the National Gambling Support Network. It also works with and alongside a number of voluntary sector organisations, as well as the NHS, to ensure people can access services. 

Independence of funding

Henrietta Bowden-Jones, National Clinical Advisor on gambling harms for NHS England, said the levy would help ensure independent funding for programs and treatment for gambling-related harm.

“The statutory levy has the potential to finally ensure the independence of funding for treatment and research programmes, as well as for prevention initiatives to address gambling harms,” Bowden-Jones said.

“It must be implemented without delay in order for fully integrated treatment pathways to be established.

“In the interim period until the levy is distributed, the NHS has a commitment to continue the longstanding and constructive work with GambleAware to ensure that all patients in need of gambling treatment are accessing the service that they need.

“The NHS has no wish to be the sole provider of all gambling treatment at national level, on the contrary it is committed to working with non-statutory providers of gambling treatment across the country.”

Certainty and stability for future funds

GambleAware’s chief executive Zoë Osmond also welcomed the proposal, saying the levy would provide “certainty and stability” for funding.

“Gambling is a serious public health issue which can affect anyone,” Zoë Osmond said. “As commissioner, we work closely with DCMS, DHSC, OHID, the Gambling Commission and NHS England to ensure efficient and effective service delivery across the country.

“We welcome the introduction of a statutory levy on the industry to provide certainty and stability of funding, which will allow us and others to make long-term commitments to meet the needs of the population.”

White paper proposal

Published in April, the long-awaited white paper covered a range of major topics regarding gambling and future regulation in Britain.

One key topic included affordability checks. Proposals were for players who lose £1,000 within 24 hours, or £2,000 over a period of 90 days, being subject to detailed checks on affordability. In addition, operators will have to perform “passive” checks on players who have a net loss beyond £125 each month, or £500 per year.

The document also proposed a consultation on stake limits and plans to implement a limit of between £2 and £15 per spin. Lower thresholds would be applied to new accounts.

Other submissions included an easing on land-based restrictions, while the Commission will hold a consultation on new proposed advertising and promotional controls for customers. 

In addition, the government could give statutory backing to a voluntary agreement currently in place with payment providers, in which illegal gambling sites are blocked. This would mean the Commission could apply for a court order to force providers to block these sites.

Total revenue for the month amounted to $470.9m, which was 9.4% ahead of $430.6m in May 2022 and 1.8% higher than $462.7m in April of this year.

Land-based gambling remained the primary source of revenue at $227.3m, but this was down 2.4% from $227.3m last year.

Within the retail sector, slots revenue slipped 0.8% to $172.9m, while table games revenue also fell 7.3% to $54.4m.

In terms of internet gambling, revenue increased by 18.7% year-on-year to $161.4m. Online slots revenue jumped 19.0% to $159.1m, while peer-to-peer poker also edged up 1.7% to $2.4m.

Read the full story on iGB North America.

Non-licensed entities include white label partners.

The hub, which can be found in the compliance section of the Commission’s website, provides details on the Licence Conditions and Codes of Practice (LCCP). The Commission requires operators to adhere to the LCCP when dealing with third parties.

The Commission said it chose to create the hub after a spate of enforcement actions taken against operators for “failures” in completing due diligence third party checks.

One of these instances concerned SkillOnNet, which was ordered to pay £305,150 in May after the Commission determined it had breached several stipulations in the LCCP. The offences took place between January 2021 and December 2022.

The LCCP

The LCCP states that all operators are responsible for the third parties they contract with. This means that licence-holders must ensure that their third-parties adhere to the same rules the licensed operator is bound by.

These rules include anti-money laundering and social responsibility measures.

The licensee also has the power to terminate the third party’s contract if the third party breaches the LCCP.

The hub also reminds operators that the responsibility of gambling website compliance – including white labelled sites – falls only with the operator and no one else.

If an operator does not conduct business in a way that minimises licensing objectives, or does not comply with the LCCP, the Commission has the right to step in.

GB Gambling Commission

The hub launch comes at a pivotal point for the Commission. Following the publication of the Gambling Act Review white paper, in May Tim Miller, executive director for research and policy at the Commission admitted that the body would have “very little space” to consider policies not included in the white paper.

Later in the month, Sarah Gardner, deputy chief executive of the Commission said that the first white paper consultations are set to be published this summer.

Also in May, the Commission published its evidence gaps and priorities for the three years between 2023 and 2026.

Under the new agreement, PlayLive! will move to NeoGames’ suite of PAM, CRM aggregation and data analytics products by 2024.  

When the site intitially launched, the business announced that California-based igaming supplier GAN would provide the igaming solutions for the casino.

The operator will shift to the business’s AspireEngage CRM system, which NeoGames argues will provide an “improved player journey” and customer satisfaction from its previous offering. PlayLive! is to also feature integration with the Pariplay Fusion aggregation platform.

PlayLive! strategic partnership

NeoGames executive vice president of igaming and sports Quincy Raven said: “This strategic partnership reinforces PlayLive’s commitment to the best possible customer experience and provides them with the tools and services necessary to further elevate the PlayLive! experience across all digital channels.”

Cordish Gaming president Rob Norton added that the business was “excited” at the chance to enhance its igaming offering.  

“At Cordish Gaming Group, we pride ourselves on supplying players with a quality gaming experience, both online and offline. Through our PlayLive! brand, we’re able to provide players with real-life entertainment of a casino, on a digital scale.”

Cordish has previously signed agreements with Evolution and NetEnt to provide the operator with slot titles and online live casino.  

Aristocrat acquisition

In May, Australian gaming supplier Aristocrat Leisure announced that it would be acquiring NeoGames for $1.20bn.

As such, the NeoGames PlayLive! deal represents the first significant deal announced by the provider since the news of the business combination was released.

At the time of the acquisition Aristocrat said that it saw significant growth opportunities in “large, growth and still nascent North America segment.”

The company added that it believed that the acquisition would provide the business with the “global scale and capability” in the $81bn online real money gaming sector.

Spillemyndigheden said that the new rules will affect what the regulator is able to comment on in future, as well as what information it can supply.

The case that led to the court’s decision concerned whether the regulator would be able to refuse a request to access documents. The individual asked whether Danske Spil, Landbrugslotteriet or Varelotteriet have applied for new games that can be considered class lotteries.

Spillemyndigheden argued that it could refuse the request on the grounds that information is covered by the duty of confidentiality in a provision of the Tax Administration Act.

The court ruled that – as the Gambling Act cannot be considered a tax law – the stricter duty of confidentiality did not apply.

After the ruling, the court referred the decision on the documents back to Spillemyndigheden for renewed consideration.  

New confidentiality rules

The court’s decision will affect the kind of information that the regulator will be able to release on an individual’s “financial and business conditions”.

The judgement also will mean that Spillemyndigheden will be able to comment on specific cases to a greater extent, in line with the new confidentiality rules.

Despite this, the gambling authority emphasised that the general duty of confidentiality still applies.

“Thus, we do not disclose confidential information and trade secrets, and information about natural persons will always be processed in accordance with the rules of the data protection legislation,” said the regulator in a release.

“Matters concerning payment of taxes and duties are still subject to the special duty of confidentiality, as it falls under the Tax Administration Act.

“In all situations, we will assess the individual case to determine which information we can supply.”

On 16 June, PointsBet confirmed it received an unsolicited non-binding indicative proposal from DraftKings to purchase is US division for $195.0m (£152.0m/€178.2m).

PointsBet said its board assess the proposal, which would see DraftKings buy the business on a debt-free, cash-free basis with no financing conditions.

Having now considered the proposal, PointsBet said DraftKings’ DraftKings could lead to a “superior” proposal than that put forward by Fanatics last month. PointsBet added that it will now engage with DraftKings on its proposals.

However, PointsBet reiterated the DraftKings proposal does not constitute a binding offer or commitment from DraftKings to place a firm bid. 

In addition, the group said it would continue to recommend shareholders vote in favour of the agreed sale to Fanatics while it considers the DraftKings proposal. A vote on the Fanatics deal will take place on 30 June at an Extraordinary General Meeting.

DraftKings acted in good faith

PointsBet also addressed certain allegations that DraftKings had only put forward a proposal to disrupt the process with Fanatics.

Last week, Fanatics’ chief executive Michael Rubin said he was “sceptical” of the proposal. He added that it was a “desperate” attempt to slow progress on Fanatics’ own deal with PointsBet.

PointsBet last month reached an agreement for the Fanatics Betting and Gaming (FBG) arm of Fanatics to acquire the division for $150.0m.

Should FBG’s initial deal go through, it would grant the business access to 12 states. Among those are major betting and igaming hubs, such as New York, New Jersey, Pennsylvania and Michigan. But if PointsBet opts for the DraftKings proposal, FBG would need to seek other routes to these and other markets.

However, in assessing the offer, PointsBet said that it believed DraftKings had acted in “good faith” when submitting its proposition.

“Hell or high water”

In a letter to DraftKings’ CEO Jason Robins, PointsBet’s non-executive chairman Brett Paton set out certain expectations surrounding the proposal. Paton said PointsBet would conduct due diligence and requested DraftKings do the same.

“Given DraftKings is a key competitor of PointsBet, it’s our strong preference that DraftKings’ due diligence is conducted by a clean team,” Paton said. “This will require agreement of a clean team protocol prior to the commencement of due diligence. 

“In the interest of time, we suggest that DraftKings provides a clean team protocol that best works for your team. Please confirm you are aligned with this approach.”

Paton also said that PointsBet would require written confirmation of DraftKings’ position on funding the cash burn of the US. He added that the FBG deal caps PointsBet’s cash burn at $21.0m on 1 July.

In addition, Paton said PointsBet would hold DraftKings to a “hell or high water” standard in regard to anti-trust clearances.

“In light of the anticipated heightened scrutiny of an acquisition of PointsBet by DraftKings, as compared to the FBG transaction, please provide written confirmation that DraftKings will assume the risk of delay and/or denial of antitrust approvals,” Paton said.

“We intend to hold DraftKings to a “hell or high water” standard with respect to antitrust clearances.”

Q1 losses mount for PointsBet

DraftKings’ proposal came after PointsBet in April confirmed that the business was in talks with “multiple parties” regarding the sale of its North American arm.

The company also said that it had terminated previously reported talks to sell its Australian business to the News Corp-backed gaming venture behind the Betr brand.

Despite this, PointsBet said it remained in discussions with “other third parties” who have expressed interest in acquiring the business.

This came on the back of a first quarter in which PointsBet posted a 39% year-on-year rise in revenue to AU$106.6m. 

Expansion in North America drove growth, with revenue up 103% year-on-year to $49.8m. PointsBet’s Canadian business also experienced rapid growth over the period; growing 21% on a quarter-on-quarter basis to $6.1m.

Despite this, the company said it expects to make an EBITDA loss of between $77.0m and $82.0m for H2 FY3.

Additionally, the business expects cash outflow, including movements in player cash, to be approximately 30% lower than in H1 FY23. Due to these pressures, the company has attempted to cut costs in order to drive the business towards profitability.

Tipster had been operating under a multi-state licence in the country, but GGL said that the operator no longer met the requirements of this licence.

GGL did not disclose the specific reasons for revoking the licence but did state the decision was made to ensure player protection. It added that was no longer guaranteed with Tipster.

Tipster was also removed from the country’s whitelist of approved gambling operators.

“We take consistent action against licence holders if they violate elementary rules of the State Treaty on Gaming,” GGL board member Ronald Benter said.

The withdrawal comes just weeks after lawyer Dr Jörg Gollnick was appointed as provisional insolvency administrator for Tipster as part of insolvency proceedings against the business.

Gollnick, who works at Cologne law firm Heidland Werres Diederichs Rechtsanwälte, is also the provisional insolvency administrator for Tipster Service GmbH.

Alleged Tipster raid

This followed a series of raids at locations across Germany in April over an investigation into an unnamed sports betting operator.

The raids took place in North Rhine-Westphalia, Bremen, Berlin, Saxony and Bavaria, and were the result of a two-and-a-half-year-long investigation into alleged criminal activities. 

The alleged criminal activities include offering illegal gambling and forming a criminal organisation. A total of six people were arrested during the raids.

At the time, German tabloid Bild reported that the raids in Cologne took place at Tipster’s headquarters.

German Sports Betting Association (DSWV) released a statement confirming that the operator at the centre of the raids was not a member of the association.

Brown will assume his role with the business in January 2024 as a permanent replacement for David Flynn, who stepped down in December last year. Co-founder Jorgen Nordlund has been serving as interim CEO while.

As CEO, Brown will lead Glitnor’s ongoing growth plans. This include expanding its igaming operations and games development studios in Europe, North America and Latin America.

He joins the business after seven-and-a-half years at GiG, the majority of which was as CEO, having served in the role since November 2019. Prior to this, he had spells as chief operating officer, chief digital officer and managing director for GiG Media. 

Earlier in his career, Brown held a number of positions with Highlight Media Group and also had spells with Web Guide Partner and THG Sports.

Long-term ambition

“I am honoured to take on the role of CEO of Glitnor Group,” Brown said. “The teams have built a fantastic position in the industry. I look forward to working with them to further capitalise on the number of opportunities the business has ahead of it. 

“The group’s long-term ambition is impressive, supported by founders with a proven track record of success. I am extremely excited to help add value towards achieving those goals for the business, the groups staff and its shareholders.

Co-founder Nordlund added: “By appointing Richard, I believe Glitnor has secured one of the industry’s top C-level talents. I’m looking forward to the positive impact he’ll have on our business as we look to strengthen our brands and enter more markets in the future.

“Given the successful nature of his time at GiG and the wealth of igaming experience he has in general, I’m certain Richard has all of the necessary skills to help take Glitnor to a new level.

“I think I speak for everyone when I say we can’t wait to work with him as we enter our next phase of development.”

“Time was right” to exit GiG

Confirmation of Brown’s appointment comes after Brown last month announced that he would leave the business by the end of 2023.

During his tenure as CEO, the group has continued to expand into new markets, completed major acquisitions, sold off its B2C assets to Betsson and delivered record revenues in Q1 2023.

His exit came in the wake of a strategic review that could see GiG split into two independent corporate entities. The affiliate arm GiG Media, led by CMO Jonas Warrer, will continue under its current leadership, meaning the platform and sportsbook business is on the hunt for a new CEO.

Reflecting on his time at GiG, Brown said while he enjoyed working for the group, the “time was right” for a new challenge.

“I was fortunate enough to enjoy an incredible eight years at GiG with the last four as CEO,” Brown said. “But the time was right for me to embrace a new challenge at what I truly believe to be one of the most exciting business groups in the igaming industry.

“I very much look forward to starting in the New Year.”

Luncanu, who reached a career-high ATP singles ranking of 304 in 2009, was found to have breached the Tennis Anti-Corruption Program (TACP) on multiple occasions.

These included contriving the outcome or any other aspect of several matches, and directly or indirectly facilitating tennis wagering.

independent anti-corruption hearing officer (AHO) Raj Parker upheld five of seven charges brought by the ITIA. These charges were for match-fixing in 2017 and 2021. An additional charge of failing to co-operate fully with the ITIA’s investigation in 2022 was also upheld.

Luncanu denied all charges. However, the ruling means he cannot coach at or attend any tennis event authorised or sanctioned by the governing bodies of tennis until 8 June 2028. He was also fined $40,000 (£31,208/€36,588).

TACP breaches

Specific breaches of the TACP included D.1.b., whereby no player shall solicit or facilitate any other person to bet on the outcome or any other aspect of an event. This includes showing live betting odds on their website, writing articles about tennis for a betting publication and appearing in gambling adverts.

The ITIA also flagged section D.1.d., which states no covered person shall contrive or attempt to contrive the outcome or any other aspect of events.

In addition, the investigation uncovered a breach of section F.2.b. This requires all individuals to fully with ITIA investigations, including giving evidence at hearings.