Month: December 2023

Brazil’s chamber of deputies has now voted to approve online gambling, giving the final green light for the market to be regulated in 2024.

Yesterday evening’s vote on 21 December follows the senate plenary approving Bill 3,626/2023 on Tuesday 12 December last week.

Now that the Bill has been approved by the chamber of deputies, it will be passed onto the office of the president, Luiz Inacio Lula da Silva, for final approval.

Brazil’s gambling regulation: the final process

While the bill for Brazil’s online gambling regulation was previously approved by the chamber of deputies in September, the chamber was required to vote again to agree on the changes made to the bill by the senate last week.

Senator Angelo Coronel presented the bill to the senate on the 12 December. It contained the latest round of amendments following initial approval of the bill three weeks ago by Brazil’s Economic Affairs’ Commission.

The bill faced significant opposition in the senate, which saw three key highlights voted on.

In addition to the exclusion of igaming, the senate also voted to exclude virtual games and sports betting terminals. Also turned down was an amendment that would prohibit sports betting advertising in stadiums.

All taxation recommendations introduced by the Economic Affairs Commission on 22 November were also approved.

This confirms that GGR (gross gaming revenue) will be limited to 12%, instead of 18%. The taxation on winnings has also been modified.

Bettors will be taxed only once a year, at a rate of 15% on net winnings. This exceeds the exemption threshold of BRL2,112 (£339/€394/$425).

Licensees will also be required to pay an initial fee of up to BRL30m. By doing so, they will be granted the right to operate up to five different abrands.

How did igaming return to Brazil’s gambling regulation?

While the senate voted to remove igaming from the bill yesterday, the chamber of deputies retained the authority to overturn the exclusion.

In an interview with iGB earlier this month, Neil Montgomery, founder and managing partner of Brazilian law firm Montgomery & Associados, expected opposition to igaming from the senate.

This was especially the case for the Evangelical Parliamentary Front. During yesterday’s vote, Deputy Eli Borges, a leader of the Evangelicals, highlighted that “we are taking another step forward to involve Brazilian citizens in an unprecedented situation”.

The debate

The president of the Chamber, Arthur Lira, countered Borges’ criticism by highlighting that the proposal was already approved by deputies in September and by the senate, where many aspects of the bill had already been compromised on.

Lira highlighted that postponing the vote does not prevent online games, but encourages lack of control and money laundering.

“If we simply don’t vote on the regulations, will games cease to exist? Will people stop playing, bets stop working and sponsoring teams, events and tournaments? No,” said Lira.

He highlighted that gaming platforms already exist and need regulation. “Here we are not increasing or decreasing, we are trying to regulate and give seriousness [to the sector] to avoid, for example, money laundering,” he said.

At the request of the Evangelical Parliamentary Front, all mention of physical gaming or casinos have been left out of the text.

With the exclusion of online gambling however, it was projected that projected taxation revenue would fall short of what was originally expected.

Budgets and taxation

With an initial target of BRL1.6bn, the loss of igaming would risk reaching less than half of that amount. This was estimated at BRL700m. That total is in glaring contrast to what was initially hoped for via taxes and licence fees.

In many ways, Neil Montgomery saw approval as almost inevitable. This is “since the federal government is pushing for the approval to contribute to helping achieve zero fiscal deficit next year”. Montgomery is referring to the Brazilian government’s aim to hit a zero-deficit target in 2024.

Assuming the current bill is approved by the president, 36% of the tax will be directed to sports and 28% will go to tourism. Public safety initiatives will be given 14% and 10% each will go to education and social security.

The value of inspection fees is also expected to be changed. It will no longer be calculated based on the amount of premium paid. Rather, it will be based on lower levels of GGR.

Budding operators must also receive approval from the ministry of finance in order to operate in Brazil.

To qualify for a licence, operators must have a Brazilian partner that holds a minimum of 20% of the company’s capital in the country. They also must have the appropriate cybersecurity systems in place.

The bill also outlines that operators will have to implement identification processes. It stipulates facial recognition technology as a potential method.

Unlicensed operators will not be allowed to advertise in Brazil. In addition, B2B partners will be prohibited from providing technology to unlicensed B2C companies. Bonuses will also be banned.

Gambling regulation: How did we get here?  

As we’ve covered extensively on iGB, Brazil’s legalised sports betting and casino story has been a long and winding one.

The final stretch of the journey kicked off in May when Brazil’s government announced PM 1,182 for sports betting.

Da Silva gave the PM the all-clear. The president subsequently signed it into law in July.

Initially, the PM was not well received. The main points of contention were around the 18% tax rate, advertising restrictions and ambiguous regulation around payments.

Following that, Bill 3,626/2023 was introduced – which made amendments to PM 1,182.

The biggest change was the addition of online casino. This was approved by the chamber of deputies in September, with the tax rate still at 18%.

Lottery.com said it will use the funds to “accelerate” its strategic acquisition plans. It also said the Prosperity investment will support market development initiatives for both its Lottery.com and Sports.com brands.

Prosperity will fund Lottery.com through an investment vehicle provided by United Capital Investments Limited (UCIL).

Matthew McGahan, who was appointed CEO of Lottery.com earlier this month, welcomed the new financial backing. He described Prosperity as the “ideal” funding partner for the business.

“They appreciate the value of Lottery.com and Sports.com and are investing both capital and strategic resources to benefit both our organisations’ stakeholders,” McGahan said. “Prosperity’s expertise and network in high-profile sports arenas offer an unrivalled opportunity for brand exposure and consumer engagement. 

“This partnership not only fortifies the company’s balance sheet but also positions us to leverage the global appeal of motorsport for market development and audience expansion.”

Lottery.com and Prosperity: heading for the chequered flag?

Prosperity has interests across a range of industries but significantly so within the world of motorsports. This includes Formula One, where two of its ambassadors – Sergio Perez and Alex Albon – currently compete.

Prosperity’s founder, Warren Mecal, said that he is excited to be part of the resurgence of Lottery.com. He also referenced the “genesis” of the Sports.com brand.

“Our company has a unique understanding of the motorsports sector,” Mecal said. “Our motorsports ambassadors represent every major racing circuit and we are excited at the opportunity to leverage them in support of the rollout of the Sports.com brand.”

Lottery.com built on this, saying in a statement that the collaboration marks a “pivotal” step in expanding its footprint in the international sports arena. 

It also comes after the group acquired Nook Holdings to help develop the Sports.com brand in the Middle East. In addition, a partnership was struck up with ex-Elite Special Forces Commander Ant Middleton to expand brand awareness.

“These partnerships underscore the company’s commitment to integrating a dynamic sports experience with wellness, aligning perfectly with the broader vision of Prosperity in the sports industry,” Lottery.com said.

McGahan concluded: “This investment from Prosperity strategically aligns with the company’s vision. It provides the necessary capital infusion to accelerate strategic growth plans, particularly in the rapidly evolving digital sports and gaming sectors. 

“Lottery.com is poised to redefine the industry’s landscape, bolstered by the synergistic partnership with Prosperity, UCIL and the exciting new ventures under the Sports.com brand.”

Could Lottery.com be turning a corner?

The investment comes at the end of what has been another year of ups and downs, although recent weeks suggest a change in approach for the troubled operator.

McGahan took charge as CEO in mid-December. McGahan is now permanent CEO having served in the role in the interim since July 2023. This followed the departure of Mark Gustavson after only taking the position in February at Lottery.com.

Joining McGahan in the leadership team is Gregory Potts, who has been promoted to chief operating officer.  In addition, the Lottery.com board approved Robert Stubblefield as the group’s new chief financial officer. 

Also this month, Lottery.com published its Q3 results, revealing lower revenue but a reduced net loss. Revenue fell 59.9% to $285,523 (£225,050/€259,359) but cost of revenue also fell 73.4% and operating spend was down 47.7%. As such, net loss hit $3.4m, an improvement on last year’s $6.0m.

Wider concerns still linger

While there has been some good news for Lottery.com in recent weeks, there is no doubt the group has endured another tough year.

Changes in management were announced early in the year while, in May, Lottery.com said it faces “material weakness” over accounting non-compliance. This relates to a class action suit served in August 2022 on behalf of investors and former high-ranking employees.

Lottery.com was also a lawsuit by John Brier and Bin Tu, founders of lottery data business TinBu. This claimed it failed to give them promised compensation after the company was acquired.

Other developments in 2023 included Lottery.com in April resuming ticket sales to support affiliate partners through its Texas retail network.

Lottery.com also regained compliance with Nasdaq stock market rules after falling foul of regulations. In September, Nasdaq’s listing qualifications department confirmed the broker evidenced compliance with minimum bid price requirements. 

Handle for November was down 15.7% from $93.1m in the same month last year. However, it was 2.0% ahead of October this year and the highest monthly total in New Hampshire for eight months.

Of the total wagered, $67.9m was bet online and $10.6m at retail sportsbooks across the state of New Hampshire.

Turning to gross gaming revenue, this amounted to $8.2m in November. This was 64.0% up from $5.0m last year but 5.8% behind October’s $8.7m haul.

Online sports betting accounted for $6.6m of all wagering revenue during the month. Retail betting generated the remaining $1.6m.

DraftKings remains the only operator offering online sports wagering in New Hampshire. It secured exclusive rights for the state in November 2019.

In terms of tax, the state took $3.6m from sports betting during November. This comprises $2.9m in online betting tax and $711,830 from retail wagering.

New Hampshire year-to-date handle falls just short of $300m

Looking at the year-to-date performance in New Hampshire, spending was down but revenue remained in line.

Players wagered a total of $298.9m in the five months to the end of November. This was 14.3% behind the $348.7m spent in the same period in 2022.

As for revenue, this reached $30.0m in the five-month period. Comparing this to last year, it was only slightly lower than the $30.1m reported at the end of November 2022.

VGCCC ruled eight ALH venues in Victoria ran electronic gaming machines (EGMs) outside permitted operating hours. The regulator said the facilities also failed to observe mandatory shutdown periods.

Venues flagged were the First and Last Hotel, Croxton Park Hotel, Albion Charles Hotel, Berwick Inn Taverner, The Millers Inn Hotel, Village Green Hotel, Elsternwick Hotel and Boundary Taverner.

Activity was detected outside permitted hours on 15 EGMs across venues from 15 February 2023 to 25 May 2023. Gaming venues are required to close for four hours after every 20 hours of gaming. They must also comply with the set hours they have nominated to operate EGMs. 

All venues, with the exception of Boundary Taverner, were found to have operated outside of trading hours and failed to observe mandatory shutdown periods between 15 February 2023 and 21 April 2023. This resulted in a $420,000 fine.

A further $60,000 fine was issued in relation to activities at the Boundary Taverner. Again, the venue operated EGMs out of hours and failed to observe shutdown period, but only on 25 May 2023.

“We expect all venue operators to provide gambling services responsibly and to observe the trading hours for their electronic gaming machines,” VGCCC CEO Annette Kimmitt said.

“Ensuring patrons take breaks and are not exposed to extended, continuous periods of play are critical to the responsible service of gambling. VGCCC will continue to monitor gaming machine operations to ensure our expectations are being met.”

Second major fine for ALH in 2023

ALH is the largest operator of EGMs in Victoria, with 4,690 machines across 76 venues. This marks the second headline fine the group has faced in 2023.

In August, ALH was handed a $550,000 fine for breaching state rules on gambling control.

An anonymous tip-off in late 2021 led to the VGCCC inspecting various ALH venues across Victoria. The regulator identified 220 machines running without YourPlay, the mandatory pre-commitment technology installed.

YourPlay allows players to set limits of time or money spent and keep track of their machine play in Victoria. All licensees in Victoria running gaming machines must install YourPlay on terminals.

Last November, VGCCC charged ALH with 62 counts of failing to ensure that YourPlay was properly installed on machines across 62 of its 77 venues. The case was then passed on to the magistrate’s court.

Upon passing its ruling, the magistrate agreed the breaches were serious and wilful. This led to ALH being slapped with a $550,000 fine and ordered to pay VGCCC legal costs of $50,000.

Other operators in the firing line in Victoria

ALH is not the only leading operator to feel the wrath of the VGCCC this year. In September, Tabcorp was fined a then-record $1.0m over its conduct during a major system outage in 2020.

Tabcorp is also embroiled in a series of other cases in Victoria linked to underage gambling. In September, VGCCC charged Tabcorp, along with eight venues, for allegedly allowing minors to gamble on electronic betting terminals.

In a similar case, a magistrate this month ordered the Preston Hotel to pay AU$25,300 for allowing underage gambling.

The record fine could soon be surpassed after the VGCCC in October warned Rumotel, operator of the Tower Hotel, it could face an additional fine of up to $1.4m for allegedly breaching responsible gambling rules. This followed an initial set of charges filed back in September.

Boucher will join the GambleAware board and support the charity’s commissioning of best practice prevention, education, treatment and support services. GambleAware served the Great Britain gambling market.

Boucher is a retired senior professional services partner and chartered accountant, with a career spanning over 34 years.

He has held a number of senior positions during his career, with the standout being as a partner of PwC. Boucher served in the role for more than 16 years, specialising in helping groups developing and implementing their tax strategy.

Boucher also spent time as EMEA tax manager at Accenture and European tax manager at Smith & Nephew. 

Later in his career, Boucher was engaged with social purpose actions in both a personal and professional capacity. These include social mobility, homelessness and homelessness prevention and neurodiversity in the workplace.

“We’re delighted to welcome Andy to the board,” GambleAware Chair of trustees, Baroness Kate Lampard, said. “He has a range of skills and experience which will benefit us and help guide our direction through the upcoming years. 

“We look forward to working alongside him and know he has an enormous amount to contribute to help ensure the best outcomes for people experiencing gambling harms.”

Lampard also serves on the GambleAware board alongside Saffron Cordery, Siân Griffiths, Michelle Highman, Rachel Pearce, Paul Simpson, Baroness Hilary Armstrong, Marina Gibbs, Mubin Haq, Koravangattu Valsraj, Mel Nebhrajani and Sir Alan Moses. 

GambleAware report links problem gambling with discrimination

The appointment comes after GambleAware this month published new research linking problem gambling with discrimination. Carried out by Ipsos UK and ClearView Research, supported by the University of Manchester, the study focused on potential links between problem gambling and discrimination.

GambleAware said the core finding was the relationship between problem gambling and discrimination. Half of those from minority communities experiencing problem gambling were more likely to have been subjected to discrimination in public, compared to those who did not have a gambling issue.

Some respondents spoke of a link between experiencing of discrimination and susceptibility to gambling harms. This included racism and discrimination leading to exacerbated gambling behaviour, as well as feelings of social exclusion, reduced employment opportunities and heightened risk of mental health issues.

More help on the way from GambleAware

In other news, GambleAware is this month opening a new funding programme. This will seek to address some of the issues flagged in similar research.

A separate study found gambling participation rate for minority groups was 31%. This was lower than that of white British people, of whom 48% participate in some form of gambling. However, 42% of gamblers from minority backgrounds suffered some form of gambling harm, compared to 20% of white British gamblers.

In response, GambleAware will make £4.3m (€5.0m/$5.5m) available to organisations in England, Scotland and Wales to help address such issues.

I read a story recently that shocked me to my very core – shocked me, I tell you. 

A British politician has been suspended following a standards committee report accusing the minister of corruption. Blackpool MP Scott Benton earned his suspension after two journalists posed as gambling industry investors and he agreed to pose questions in parliament for the industry.

That in itself isn’t illegal, it’s that he agreed to do it for cash money. Not even a lot, he seems to have been a bit of a bargain at £4,000 a month. If the reporting on this does nothing else, it at least establishes a price list for MP services. The industry should certainly take note of that, at least.

I know, it sounds crazy – a Conservative politician, corrupt in the UK? It beggars belief.

Sarcasm, lowest form of wit, et cetera. But what can you say about the ruling body that hasn’t been said before? What bothers me with this one though, is that our industry was used to make poor behaviour look even worse.

“The moustache-twirling villain”

When did we become the excrement used to smear a character? When – and how? – did we become the device used to show how low someone’s character is? 

We’ve basically become the moustache-twirling silent movie villain. Tying the innocent public to train tracks while cackling and rubbing our hands together in glee.

I’ve joked on more than one occasion that when in a social situation, I tend to tell people I work in banking or real estate, rather than the gambling industry. 

I don’t actually do that. I just think it’s funny to suggest those particular fields are in some way nobler than our area of industry. But the joke seems to have become reality. The only bonus here is that I’m already prepared for those social situations, I’ve got the tools to hand.

Do we deserve this status?

Mostly, obviously not. But there can be a colossal disconnect between what we say and what we do. Not always, of course; there are great people in our industry, innovators and thinkers, people doing solid work everywhere. 

Conversely, there are also businesses talking about how incredibly important responsible gambling is in their active markets. They don’t use it in their grey market ventures however. Businesses that only apply the standards when it suits them, who spin a nice line in bullshit. That’s their prerogative, of course – but it makes a really easy target for our critics.

All for one, one for all

Some businesses go a step further and don’t just give our critics the ammunition. They also load the gun, give it a nice polish, hand it to them, and paint a nice circle on their back in luminous paint. This is while standing just a few feet away so they can’t possibly miss.

And that’s what’s happened with the handy guide prepared by 1XBet. It shows sports fans how to place bets in countries where the practice is illegal, or where it doesn’t have a licence. 

The company had its fair share of controversy (for example, another newspaper investigation in the UK saw it pushed out the UK in 2019 after it was found to be “promoting a Pornhub casino”, among other charges). I don’t think its guide is a huge surprise to most of the industry; it’s in line with an awful lot of content out there by the less-salubrious affiliates working the grey markets. 

The problem for us is, we all then get tarred with that exact brush. We become newspaper fodder. It doesn’t matter what good we can do in the world, it doesn’t matter the things we do that nobody sees, that go unreported. We are held to the lowest standards possible, because that’s how we are perceived by the media and, consequently, by the public. 

As far as the media goes, it’s just about how we can go lower. That’s their only interest.

Make the horror stories history

And what can we do about that? The only thing we can truly influence is what we do with our own businesses, our own teams, the cultures we propagate and the standards we hold ourselves to. 

Nobody’s perfect, but like I always say to my kids: if you’re in a situation where there is a choice between being a berk and not being a berk, always choose to not be a berk.

If we want to grow the industry, cleaning up that perception would be a stunning first step. Be active, begin the difficult conversations. Show what we do, how we fund research and support for those with problems. How we are developing software and tools to detect issues early, supporting research. Promote the great minds working to improve things, elevate them and make those voices heard. 

Hold ourselves to higher standards so the bad actors are shown to be exactly that – an outlier and not the norm. We can, and do, do great things in the world. It would be nice if someone chose to shout about that for a change, but to achieve that we have to make the horror stories history.

I think we should start doing that in 2024. WHO’S WITH ME???

Weerwind’s letter comes in response to “worrying and undesirable developments” in the Netherlands’ gambling industry. With the evaluation of the Remote Gambling Act not expected until 2024, Weerwind has decided to push on with the government’s new plans before then.

The new measures, announced on Thursday, include providers being required to contact players who have set a deposit limit of €350 (£303/$386). Operators should inform such players of the risks of gambling in such high amounts.

As reported by CasinoNieuws, Weerwind’s other proposals involve exhibiting financial amounts in euros and pushing for further research on overarching gaming limits.

In October, Weerwind announced a multi-year digital resilience campaign programme to combat fraud associated with online gambling.

In his letter, Weerwind said: “Everyone who wants to do so should be able to play a game of chance responsibly. But responsible gaming can turn into problematic gambling.

“Players must be aware of this and be protected against it. This is not happening enough now. Research shows that providers encourage players to bet more money than they can afford to lose.

“With these measures, we oblige providers to intervene earlier and we give players more control over their gaming behaviour. This gives players more protection against excessive gambling and addiction.”

NOGA responds to Weerwind’s problem gambling proposals

Peter-Paul de Goeij, chairman of the Dutch Online Gambling Association (NOGA), warned Weerwind that his plans could lead to gambling being seen as “unattractive”.

“It is good that the minister clarifies the rules for safe gambling and thus makes the duty of care more concrete,” De Goeij stated.

“At the same time, we must always be careful that legal gambling is not made too unattractive. We will study the proposal carefully and make suggestions to improve it and thus achieve the desired effects.”

Meanwhile, Helma Lodders, chairman of the Licensed Dutch Online Gaming Providers (VNLOK), highlighted two areas of Weerwind’s letter that need further examination.

“Firstly, that imposed measures are actually effective in keeping the number of problem players as small as possible,” Lodders explained.

“Secondly, that the legal offer remains sufficiently attractive for the vast majority of players who participate in a responsible manner. The latter is important to prevent them from returning to the illegal supply.”

Netherlands’ Gaming Authority starts consultation on updated rules

Alongside Weerwind’s letter, the Netherlands Gaming Authority (KSA) has also started its consultation for an update to the Responsible Gaming Policy Rules.

The new rules include providers recognising and acting upon signs of excessive gambling within an hour, while players who make a net deposit of over €700 in a calendar month will be contacted and proof of income requested. This number drops to €300 a month for those aged 18-24.

Furthermore, new rules include a clamp down on role models to glamourise gambling, as well as a ban on untargeted advertising.

Parties who have been involved in the KSA’s consultation will respond before 1 February 2024. The aim is to publish the new rules in April.

A KSA report in September found players were at risk of “serious damage” due to the lack of operator care.

In the high-stakes world of gambling, the allure of beating the house is a tale as old as time. Yet, even with advanced fraud, verification and payment risk management tools, the industry still struggles with fraudsters scaling bonus abuse, a problem costing billions.

The gambling industry carries a reputation that often makes it easy for opportunists to justify ethical transgressions. When answering the question “what do you do for a living?” I am always met with an intrigue surrounding the ingenuity of the fraudsters outsmarting the industry. It’s the defiance of odds, the Robin Hood narrative.

Hollywood blockbusters like Ocean’s Eleven have glamourised this aspect, and real-life figures like the MIT card counters have achieved almost legendary status. It’s often perceived as an intellectual duel against the epitome of raw capitalism.

Take the case of Jonathan Howard, a husband and parent jailed earlier this year in the UK. If asked, I don’t believe Howard would see his actions as inherently wrong. This moral ambiguity, coupled with the enormous potential gains, drives individuals to extraordinary lengths to exploit system and process vulnerabilities. Scaling bonus abuse, after all, is the equivalent to having your own money printing press.

Despite a plethora of fraud and verification tools in the market, the counter-industry against bonus abuse, worth billions, continues to thrive. The secret, known all too well in bonus abuse communities but less so within the industry, is the relative ease of bypassing these security solutions.

Gaps in the armour

For instance, device fingerprinting, a common security defence, has its limitations. Our research in New Jersey revealed that a single identity exploiting every welcome offer could yield profits upwards of $18,000. In many jurisdictions, this figure is even higher. 

Fraudsters can scale this across multiple identities by using unique devices and IP addresses for each identity. The additional cost of the hardware required will only make a small dent in their earnings. But usually, the methods are simpler. There’s dynamic IPs, clearing cookies and using common browsers and devices that fall into a grey area of false positives.

Good verification is always at odds with user experience and cost. While background verification offers minimal user friction, it remains incredibly vulnerable to scraped and stolen data. 

In the UK the data required for thousands of verifiable casino accounts is publicly available on the Companies House register. Guess which data source many verification tools use? The use of Social Security numbers is considered more secure, but continual data leaks have proven this process quite ineffective. 

Another common verification practice is “document upload upon withdrawal”, which fraudsters exploit through collusion. By aggregating winnings from multiple accounts into a single account and using sophisticated forgeries, they only require a single set of convincing fake documents to target an operator with thousands of identities. 

Advances in AI have made detecting these forgeries increasingly challenging. In fact, a recent viral demonstration on LinkedIn showed how AI can animate still images to bypass costly liveness checks which are considered one of the most secure defences.

This AI versus AI scenario creates a technological arms race, resulting in security measures being outsmarted.

Virtually impossible?

The introduction of digital wallets and virtual cards has dramatically altered the landscape of payment-based risk management in gambling. Previously, the unique payment card requirement was a formidable barrier against multi-accounting. However, digital wallets like PayPal, Apple Pay, Neteller and Skrill have eased the creation of multiple accounts linked to a single wallet. 

The advent of virtual cards has further exacerbated this issue, allowing users to generate hundreds, if not thousands, of unique card details for one wallet. The dilemma arises when trying to block virtual cards, as their identification codes (BINs) often overlap with those of physical cards. 

Blocking all cards from providers like Monzo and Revolut could alienate a significant customer base. And it goes against the trends in banking innovation and consumer privacy demands. 

Maybe we will find a solution to these challenges. Maybe blockchain-based digital identities will be able to tie players to a digital trust score, validated via an encrypted retina scan. 

The problem is, this still doesn’t solve the challenge of syndicates. 

Here’s how it works… A ringleader will recruit people to exploit bonuses. The ringleader will provide them with guides on how to exploit each offer and the ringleader will take a cut. The problem with this setup is that each player is using their own device, IP, cookies, browser, geo, payment method and KYC docs, leaving no traceable correlations.

Finnish bonus abusers are notoriously difficult to catch because they adopted this process in response to open banking, which has led to many operators going bust. The US is dealing with the same challenge emerging as a response to geolocation tracking. 

Analysing gameplay to stop bonus abuse

Don’t get me wrong, risk solutions are an absolute necessity. But none of them are currently a full solution and anyone that is depending on them to be so, is leaving themselves exposed.

In high bonusing markets a full solution requires device fingerprinting, verification, payment analysis and gameplay analysis. The problem is that almost all risk mitigation products used in the industry are multi-industry focused. They neglect the thing that makes this industry unique – gameplay.

Gameplay is the only process that can’t be spoofed and acts as a failsafe. If a player is taking value, they are taking value. If a player is cheating, then a player is cheating. It’s black and white. 

The issue is that operators aren’t well equipped to make these distinctions. Many top tier operators can be exploited for over 12 months on a single account, at a cost of thousands before they are able to identify it, by which time it’s too late. We need to get better at analysing gameplay risk and we need to break down the silos between risk teams and CRM. 

After all, VIPs and bonus abusers are at the two ends of the same value scale.

British, Irish and Japanese horse racing regulatory bodies have joined forces to create the Joint Cooperation Committee.

The deal sees the British Horseracing Authority (BHA) and Horse Racing Ireland team up with the Japan Racing Association (JRA).

The aims of the committee include promoting Japanese horses, while easing the travel of connections between the regions. Other objectives include the enhancement of awareness of each industry, creating a regulatory partnership and “further internationalising” horse racing.

The chairman of the new committee will be Joe Saumarez Smith, who is also the BHA chairman.

Commenting on the partnership, he said: “The British and Irish horse racing industries have enjoyed a close and fruitful relationship with the JRA – and the wider Japanese racing industry – for many years now.

“We are delighted to be collaborating with the JRA and are hugely grateful for their significant support. This can only lead to increased participation in each other’s racing, resulting in deeper fan engagement and increased and new revenues.”

British horse racing looking to stem decline in betting

In 2023, the BHA has made efforts to slow what it calls a decline in betting on British races.

For its 2024 fixture list, the BHA improved prize money and quality of races to support the betting aspect.

The BHA have improved the spread of fixtures on Saturdays while strengthening its Sunday offerings. The BHA expects the schedule changes, combined with the increase in competitiveness and quality of racing, to entice punters to bet on British horse racing again.

The alterations could help improve racing’s finances by approximately £90m over a five-year period. However, BHA chief operating officer Richard Wayman warned not all of the changes would be “immediately successful”.

In the new role, Hughes will lead all areas of security for the National Lottery. Allwyn is due to take over the running of the National Lottery on 1 February 2024.

Hughes, who also becomes a member of the Allwyn executive leadership team, joins from Smart DCC. He has been serving as chief information security officer since September 2022.

Prior to this, Hughes spent 16 years with Vodafone, the majority of which was as UK chief information security officer. He also held security-focused roles at Borders and House of Fraser.

“I’m thrilled to be joining Allwyn and being part of the next chapter in the journey of the National Lottery,” Hughes said. “Working for an organisation that literally makes dreams come true and contributes to good causes is a huge privilege and I can’t wait to get started.”

Hughes added on LinkedIn: “I couldn’t be more proud and excited to be joining an organisation that changes lives in so many fantastic ways.”

Allwyn’s UK CEO Andria Vidler added: “I’m delighted to welcome Mark to our team. Preserving the security of The National Lottery at all times is of critical importance, including as we roll out our ambitious plans for the transformation of The National Lottery so that it becomes more modern, digital and engaging for players.”

Allwyn set for UK National Lottery duties

Hughes joins Allwyn just six shorts weeks before it takes control of the UK National Lottery. 

Allwyn saw off competition from several rival bidders to lands the fourth National Lottery licence. The competitive tender process also involved The New Lottery Company – owned by Health Lottery operator Northern and Shell – and Italy’s Sisal, as well as incumbent Camelot.

The previous licence, held by Camelot, was initially set to expire in August 2023, but this was pushed back by six months. Camelot has controlled the National Lottery since its launch in 1994.

The Gambling Commission’s decision to select Allwyn drew criticism from Camelot and IGT, Camelot’s technology provider. Both companies eventually challenged the decision in court.  

Camelot issued a legal challenge arguing the Commission was not forthright in its communication. Camelot also said its employees were “owed a proper explanation” as to why its licence was not renewed. 

This led to the High Court automatically suspending the licensing choice. However, Camelot in September withdrew its high court challenge, following media reports money for good causes could be at risk in a lengthy court case. This ultimately removed Allwyn’s final obstacle in receiving the licence.

Camelot’s legacy set to live in

While Allwyn will be replacing Camelot, the latter will still have links to the National Lottery. This is through a series of acquisition deals struck by its successor.

The group acquired Camelot UK, current operator of the UK’s National Lottery in February this year. Allwyn also acquired Camelot Lottery Solutions (Camelot LS) earlier in 2023. The US-facing business has since been rebranded as Allwyn North America to reflect the purchase. 

Allwyn has already referenced the impact of both acquisitions, saying they helped improve its performance in H1 and Q3.

Earlier this month, Allwyn announced a 98% rise in consolidated total revenue to €2.01bn (£1.74bn/$2.20bn) for Q3. This, it said, was driven by its acquisition of both Camelot UK and Camelot Lottery Solutions Group.

Other stand-out figures from Q3 include consolidated gross gaming revenue rising 98% to €1.92bn. As for geographical performance, the UK is now the core market for Allwyn, with total revenue in the UK in Q3 at €956.5m.

In terms of year-to-date performance. total revenue for the nine months to 30 September reached €5.70bn. This was also up 98% from last year’s €2.88bn.