Month: April 2024

KSA issued a binding order to DigitalOcean following an investigation that unfolded throughout 2023. A binding order is usually given in cases where an infringement has occurred, but a sanction is not yet deemed appropriate.

Initially, the investigation focused on two websites – Casinozonderregistration.net and Nieuwe-casinos.net. The regulator was not able to find or contact the owners of the websites. However, it was able to detect DigitalOcean as the hosting provider.

For this reason, KSA’s board decided to issue the binding order to DigitalOcean alleging violations of Article 1, paragraph 1(b) of the Netherlands’ Gambling Act. This section of the Act prohibits the promotion of, or participation in, gambling offered by unlicensed entities.

Upon being contacted by KSA regarding the two websites, DigitalOcean confirmed that it was the host. However, DigitalOcean said it would not cease hosting the websites without a court order, despite KSA ruling that Casinozonderregistration.net and Nieuwe-casinos.net were offering games illegally.

KSA gets the green light from the District Court of Rotterdam

In a letter dated 22 September 2023, KSA confirmed that it intended to impose a binding order. In response DigitalOcean again asked for a court order before they address the case.

The District Court of Rotterdam authorised KSA to continue its action against DigitalOcean on 26 January 2024. In issuing the binding order, KSA instructed DigitalOcean to cease and desist from violating Article 1, paragraph 1(b) of the Netherlands’ Gambling Act by 22 March 2024. This must be done by taking “all necessary measures”. If DigitalOcean does not comply, KSA can impose a penalty or issue a fine.

DigitalOcean can lodge an appeal against this decision. The binding order comes days after KSA entered into an agreement with Cloudflare. Cloudflare will aid in identifying those offering illegal gambling services in the Netherlands.

Latest regulatory action from KSA

The binding order against DigitalOcean follows on from a busy period of regulatory action by KSA.

Last month, it imposed a €19.6m (£16.8m/$21.2m) penalty against Gammix Limited for offering games while unlicensed in the Netherlands. Gammix had been ordered to exit the Dutch market previously and threatened with €1.4m in weekly fines if it did not comply. After this order was not addressed, Gammix was fined €4.4m.

Gammix slammed the fine as “outrageous and unsubstantiated” and vowed to contest the decision.

“The KSA has imposed upon our company a penalty that is both outrageous and unsubstantiated,” said Phil Pearson, director of Gammix, at the time. “Now that we are able to talk openly about the case, we can confirm that we are fighting on all fronts as, to us, this is an extraordinary and unnecessarily heavy-handed action from a regulator that many already regarded as unapproachable.”

Last week, KSA’s monitoring report revealed that the Dutch market now has more than one million active online accounts.

The 1st Civil Senate of the Federal Court of Justice of Germany (BGH) will schedule a hearing on 2 May. It will focus on the reimbursement of player losses from gambling with unlicensed operators.

The case has been brought forward by a plaintiff (claimant). It was originally dismissed by the Lower Court of Dresden (OLG Dresden) in 2023.

The defendant is an Austria-based sports betting operator that offered sports betting to German players during 2018.

During this period, the defendant did not have permission to provide sports betting to German players. The plaintiff in the case therefore claims that sports betting is inadmissible, thus rendering betting contracts as void.

As per the court documents, it is claimed that the defendant’s sports betting offer was illegal. This is because it did not meet the requirements of Section 4 Paragraph 5 No 2 GlüStV 2012 (Germany’s State Treaty for Online Gambling), which covers monthly maximum stakes per player.

It also breaches Section 4 Paragraph 5 No 5 GlüStV 2012, which separates sports betting and other gambling. The defendant also offered a cash-out function, which is non-permissible under the State Treaty.

With their lawsuit, the plaintiff also demands that the defendant repay the payments made to them in the amount of the losses suffered of €11,984.89, plus interest.

Will this become the norm for unregulated losses?

Munich-based Hambach & Hambach, a German law firm specialising in gambling law (among other verticals), outlines the current situation in Germany.

According to Hambach & Hambach partner Claus Hambach and senior associate Phillip Beumer, ruling in the plaintiff’s favour will set a risky precedent for Germany.

“The Federal Court of Justice, Germany’s highest Civil Court, has recently published an extensive note, outlining its preliminary view that a players could in principle be entitled to being refunded their losses from participating in sportsbook offers.”

This covers all precedents for operators not in possession of a German licence. “Until the end of 2020, not a single licence had been issued. Due to this note by the Federal Court of Justice, a reimbursement is now more probable under specific circumstances.”

The question now is whether this will set a precedent for a deluge of complainants.

“Mass media reports have already picked up on the above note by the Federal Court of Justice. According to representatives of the “player claim industry”, this indeed might now result in a deluge of complaints and court cases,” Hambach & Hambach explains.

“This could indeed be possible due to massive advertising and media reports. This reflects that financers seem to be ready to continue financing such claims now even for sports betting losses and not only casino losses.”

Could compensation claims for gambling losses be enforced?

“The majority of operators are not based in Germany and they do not have assets in Germany that could factually be enforced,” Hambach & Hambach explains.

In most cases, every jurisdiction would provide the opportunity to challenge the enforceability of foreign judgements. Notably, if players look to enforce their judgements in the country of licensing (for example, Malta), it is likely, in Hambach & Hambach’s view, that operators will apply for this to be rejected.

There has been precedent for this already, with Malta’s enaction of Bill 55. The law orders courts to refuse to recognise or enforce any foreign judgements against Malta-licensed operators in the European market.   

Approved in 2023, 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.

This law has proven to be very contentious in Europe. The German gambling regulator said the law conflicts with the Brussels Recast Regulation, which governs how legal judgements are settled between EU members.

In response to this, the MGA has pointed to the section in the Recast Regulation which says a member state may refuse to recognise a legal judgement if it does not match with the principles of its legal system.

In July 2023, the European Commission said it would examine it to ensure its compatibility with EU law. As such, it said it has requested more information from Malta’s authorities.

Once the Commission makes a decision, the case could make its way up to the European Court of Justice. The court has historically been the final decision maker in disputes between European and domestic law.

Is it in Germany’s interest to reimburse unregulated player losses?

Hambach & Hambach are adamant that reimbursing will be detrimental to the interests of this country.

“It is not in Germany`s interest!” says Hambach & Hambach. “The main reasons are three-fold. Germany’s massive black market will even grow further. If players are reimbursed for losses with unlicensed operators, this will only incentivise them to bet with unlicensed operators as the case law basically established betting without a risk of loss”.

As highlighted previously by iGB, a study from the University of Leipzig has warned that close to half of all online gambling in Germany still takes place with unlicensed operators.

The study was commissioned by the German Online Casino Association (DOCV) and the German Sports Betting Association (DSWV). It highlights that close to 50% of all German players use unlicensed sites.

The study estimates three-quarters of online revenue is generated by the black market. As a result, hundreds of millions of Euros in annual tax revenue is missed out on.

Most recently, Yield Sec charted an 11% growth in the illegal market in Germany, giving it a 47% share of the total marketplace for online betting and gambling, compared to 53% legal.

YIELD SEC’S DATA FOR THE UNREGULATED GERMAN MARKET HIGHLIGHTS A WORRYING TREND

If this ruling were to rule in the plaintiff’s favour, then Hambach & Hambach highlights that Germany will have to reimburse all taxes previously paid to the state. “Germany will have to reimburse paid taxes for the past,” they explain.

Solving Germany’s regulatory quagmire

The third issue, as highlighted by Hambach & Hambach, is that German states will be liable for all damages incurred.

“The German legislator has first enacted a licence system for sports betting with an illegal limitation to 20 licences which was in breach with EU law. As a result licences have not been issued.

“After lifting the limitation in a new law the responsible licence authority implemented a non-transparent licensing proceeding. The issuing of licences have been stalled again. However, the German states and their gambling authorities have tolerated sports betting offers until licences have finally been issued.

“Gambling authorities have issued 30+ sports betting licences (including reliability checks) and dismissed those not being reliable (by breaching interim regulation standards of 2020).

“That these reliability checks by state authorities can be ignored by courts is absurd. Germany should be held liable for the legal chaos that it has created.”

Clearly, Germany has a raft of regulatory problems that need to be solved. That, however is unlikely to be solved in the next few years.

As previously highlighted by iGB, the current Interstate Treaty on Gambling does not expire until 2027. The “painful process of thrashing out regulations is an experience that state leaders don’t seem keen to repeat until then”.

Speaking to iGB previously, a spokesperson for the GGL says it is working on standardising procedures for licensing games to ensure that new ones could be approved quicker.

It is also understood that the GGL wants to tighten up procedures on fighting illegal gambling. It also aims to gain legal clarity on whether it can use IP blocking to stamp out black market sites.

Until then, though, providing “risk free bets” for players with the black market will be detrimental to Germany’s interests.

The new requirements came into effect on 1 April. Victoria-licensed operators must now ensure their systems meet the standards set by the VGCCC.

These changes focus on how certain information is displayed to players within their online gambling accounts. This includes information on spending, with their net loss now excluding free and bonus bets.

Net wins, the Victoria regulator said, will also now be more accurate. Consumers’ monthly statements will subtract all stakes from their total payout amount.

Licensees must use plain English, avoid unnecessary jargon and limit the use of colours to black and red to clearly show losses. In addition, gambling harm messaging should feature on each monthly statement.

Operators that fail to comply with the measures could attract 60 penalty units. The VGCCC said this is equivalent to AU$11,539 (£6,025/€7,033/US$7,645) for each non-compliant activity statement issued. 

“The days of inconsistent player activity statements are over,” VGCCC CEO Annette Kimmitt said. “Wagering account holders will be better informed about their spending. Therefore, they are better equipped to make informed decisions about their gambling, thanks to the clarity and fairness these changes bring.”

Extra time for operators to prepare

The changes are not a new concept, with proposals having been discussed 18 months ago. National Consumer Protection Framework (NCPF) activity statement requirements began in November 2022.

The Victoria regulator undertook a review of monthly activity statements being produced by 12 wagering service providers. Soon after, it issued an Activity Statement Expectations Guide with an updated statement prototype.

After reviewing feedback from this study, the VGCCC worked with licensed providers to provide further clarifications. It eventually settled on the new measures and communicated these to operators. 

These were originally due to come into effect from 1 December 2023. However, the VGCCC granted extensions to 31 March 2024 for Tabcorp, Entain and Betfair to enable sufficient time for system changes.

Victoria working to protect players

This is by no means the first step the Victoria regulator has taken to better protect players from gambling harm. The VGCCC has stepped up its efforts to clamp down on operators breaching rules related to responsible gambling.

This month, MintBet was fined AU$150,000 for repeated breaches of responsible gambling rules in the Australian state.

The VGCCC has also targeted the land-based sector as part of this effort. In January, Tabcorp was ordered to make most of its electronic betting terminals cashless following multiple incidents of underage gambling.

Crown keeps hold of Victoria licence

Also in the land-based market, the VGCCC recently deemed Crown Resorts suitable to hold a licence. The decision means Crown can continue operating its Melbourne property.

This followed major changes at the casino in the wake of the Royal Commission into casino licences. The VGCCC was scathing in its criticism of what it deemed “illegal, dishonest, unethical and exploitative” behaviour.

Having taken into account such efforts, the operator will hold on to its licence. The Victoria regulator added it is in the “public interest” Crown retains the licence, with Crown Melbourne the largest single-site employer in the state. 

Player spending on sports betting in March amounted to $272.4m. This was 17.1% ahead of $232.6m in Iowa last year and also 23.5% higher than $220.6m in February.

Online handle in March reached $254.2m, while a further $20.4m was wagered at retail sportsbooks across the state. 

However, higher spending failed to halt a decline in revenue. The $18.2m generated during March was down from $19.9m last year but 52.8% ahead of February’s $11.9m haul.

Revenue from online sports betting hit $16.5m, while retail’s share amounted to $1.7m.

FanDuel and Diamond Jo Dubuque lead the pack in Iowa

FanDuel and partner Diamond Jo Dubuque remain the market leaders in Iowa by some distance. For March, the partnership heralded $5.3m in revenue from $69.2m in total bets.

DraftKings and Wild Rose Jefferson kept hold of second place, reporting $2.9m in revenue for the month. Players spent $44.8m betting on sports across retail and online.

Wild Rose Clinton, another DraftKings partner, again placed third with revenue of $2.2m and a $32.6m total handle. Wild Rose Emmetsburg, the third Wild Rose property in Iowa, was not far behind with revenue of $2.0m from $27.9m in bets.

Diamond Jo Worth, which, like its sister Dubuque property, is partnered with FanDuel, also had a good month. For March, this partnership generated $1.4m in revenue from $21.7m in total wagers.

Iowa players won $254.2m during the month, while the state collected $1.2m in tax.

GMGI shareholders voted in favour of the acquisition in March.

When GMGI announced the planned merger in January 2023, it explained MeridianBet would give it more access to regulated B2C markets. The deal was expected to close in the first half of 2023.

The Loev Law Firm acted as legal counsel to Golden Matrix in regards to the transaction, and Howard & Howard acted as legal counsel for MeridianBet.

The stock of the new combined company will continue to trade on the Nasdaq Capital Market under the GMGI ticker symbol.

Brian Goodman, CEO of GMGI, said that GMGI is now well-situated to continue capitalising on its current growth.

“This is a momentous occasion, and one that we believe will result in a fundamental, as well as a transformational, change for our rapidly growing company,” said Goodman.

“The consolidated businesses are expected to deliver significant increases in both revenues and profitability; and we believe we are now well-positioned to continue our growth trajectory and deliver incremental value to all our stakeholders.”

Acquisition more than a year in the making

Six months after confirming the deal, GMGI and MeridianBet agreed to a number of amended terms. The new terms saw the cash to be paid by GMGI at closing lowered from $50.0m to $30.0m. An further $20.0m in non-contingent cash consideration was agreed to be paid post-close.

It was also agreed that stock consideration will be $3 per share, with 82,141,857 common stock shares due at the deal’s initial closing. These amended terms re-evaluated the deal at roughly $331.0m.

In October 2023, GMGI made further amendments to the deal. The stand-out aspect of this round was an extension to the original agreement. This projected that the deal would close in Q1 2024.

The other revision made in October related to the financial closing terms. This dictated that GMGI could use up to $20.0m of cash-in-hand of MeridianBet to pay part of the $30.0m due at closing.

The closure of the deal comes after GMGI reported record results in its first quarter ended 31 January 2024. Revenue was up 9.3% year-on-year to $11.8m, an all-time high. Adjusted EBITDA hit $1.2m, an increase of 33.8%, while B2B and B2C revenue totalled at $4.6m and $7.2m respectively.

In a preliminary results announcement, Rivalry said revenue growth was complemented by higher betting handle and gross profit. All this, it added, contributed to a 22% reduction in net loss.

Reflecting on 2023, co-founder and CEO Steven Salz highlighted the operator’s diversification as the main reason for its success. He said growth in new markets such as traditional sports, casino and fantasy, alongside its core esports offering, allowed it to emerge from 2023 as an “increasingly diversified” business.

“Last year we gained meaningful traction in new segments,” Salz said. “This is widening our opportunity set and positioning us for sustainable growth in the medium- to long-term. 

“We’re happy to have finished the year with all-time high customer economics, diversified revenue streams and a reinforced competitive moat around Gen Z betting entertainment and experiences.”

Rivalry looks beyond esports

This diversification strategy has led Rivalry into various new markets and areas. Among its new launches in 2023 were two significant roll-outs in the regulated Ontario market in Canada.

In March, Rivalry announced the launch of its online casino product in Ontario. Just a few months later, Rivalry followed this up by extending its Casino.exe sports betting brand into the market.

This expansion, coupled with a rise in demand to license in-house casino games, which in turn is accelerating the advancement of its B2B vertical, sets Rivalry up for potentially more growth in 2024.

“Our operational excellence across product and brand marketing last year are seen across positive KPI trends and continued year-over-year growth,” Salz said. 

“Ultimately, we are proving that we can acquire and retain a coveted Gen Z demographic through an entertainment-led product set, culturally relevant brand and a team unafraid of pushing past a long-standing industry status quo.”

Records tumble in 2023

While Rivalry did not publish its full results for 2023, it did reveal certain key figures to show its progress during the year.

Revenue was the headline figure, with this driven by a 92% hike in casino revenue to $6.4m. Casino also represented 52% of betting handle for the year, with total betting handle rising 82% to $423m.

Rivalry also noted all-time high average handle per customer – up almost 30% – and a record low cost of customer acquisition, down 15%. In addition, total player registrations eclipsed two million in 2023. 

All this, Rivalry said, contributed to a 66% increase in gross profit to $16.2m for the year. The operator also noted a $1.0m drop in total operating expenses to $38.9m, helped by lower marketing expenses, offsetting increases in general and administration and technology and content expenses incurred to support the growth of the business. 

Revenue growth, combined with reduced spending, left a lower net loss of $24.3m for 2023.

Positive figures despite mixed Q4

The strong preliminary figures came despite a somewhat mixed performance by Rivalry in the last quarter of 2023. 

During Q4, revenue fell 32% to $6.5m. Rivalry put this down to less favourable sportsbook outcomes compared to an abnormally favourable result experienced in 2022. Betting handle, however, edged up from $83.9m in 2022 to $85.2m.  

Gross profit was, unsurprisingly, lower in Q4, dropping 40% to $2.0m. However, there was better news in terms of net loss, which was cut from $12.3m to $9.0m. Net loss adjusting for accruals, other non-cash items and one-time costs, would have been approximately $7.0m.

Where next for Rivalry?

Keen to build on its overall success in 2023, Salz detailed Rivalry’s current strategy. During Q1, he said the operator has been strategically deploying capital from Q4 investment in areas that are driving customer acquisition and revenue. This includes amplifying proven marketing strategies, releasing higher margin products and developing proprietary betting experiences.

Salz expects this to begin materialising in its results throughout the first half of 2024 and beyond.

With this, Rivalry has re-affirmed guidance and anticipates achieving profitability in H1 2024.

“The year ahead is rife with new, innovative product releases arriving in Q2 and continuing throughout 2024,” Salz said. “In addition to the strength of our core roadmap, we are in the process of unlocking what we believe to be two of the most material developments to our business model since launching Rivalry in 2018. 

“The first is a B2B vertical to license in-house developed games. The second is exploration and development within the crypto ecosystem – each representing an impactful growth catalyst on our path to profitability this year.

“I have never had more confidence in our product roadmap and what Rivalry is building this year. Apart from new products, original games and proprietary features, we have been working to dial up the overall feel and entertainment value of our core product to provide a tech-savvy, next-generation customer with a tailored experience that is well-differentiated within the larger sports betting marketplace.”

Total wagers for the 12 months to 31 March 2023 were 19.8% higher than $16.40bn in New York in FY22. It is also the highest yearly online sports betting spend of any regulated state in the US.

In terms of gross gaming revenue, this was up 20.6% year-on-year and another US record. New York only opened its legal online sports betting market in January 2022, with FY23 only the second full year of regulation. 

As it did in year one, Flutter Entertainment-owned FanDuel continues to lead the New York market. During FY23, FanDuel processed $8.10bn in online wagers and generated $845.8m in revenue.

DraftKings remained second with $619.6m in revenue from $7.02bn in bets. Placing third was Caesars with revenue of $140.4m and a $2.03bn handle.

BetMGM was the only other operator to process more than $1.00bn in wagers during the year, with a handle of $1.26bn. The brand posted $86.1m in total revenue.

Best of the rest in New York

As for the other online operators active in New York, Rush Street Interactive led the chasing pack with revenue of $37.8m. This came off the back of a $643.6m handle.

Fanatics, which replaced the PointsBet brand last month, posted $23.5m in revenue from a $361.9m handle. Resorts World followed with revenue of $5.5m and a $79.9m handle.

Wynn Interactive generated $3.5m in revenue off $103.7m in wagers. BallyBet completes the market line-up with revenue of $1.7m from $43.7m in total bets. However, BallyBet paused operations in New York for four months of the reporting period – July to October – and did not relaunch until November. 

March revenue declines year-on-year

As for the final month of the year, there were some surprising figures for New York. Handle in March was 3.4% higher at $1.85bn but revenue slipped 6.8% to $151.7m as players were more successful.

On a month-on-month basis, handle was up 4.5% from $1.77bn in February, while revenue increased 15.5%. 

Unsurprisingly, FanDuel led the pack with $73.1m in revenue and a $781.2m handle. Again, DraftKings placed second with $48.8m from $612.2m in wagers.

Caesars followed in third with revenue of $13.6m from $189.4m in bets, ahead of BetMGM with $7.8m off $125.9m. Fanatics posted $3.8m in revenue from $53.2m in wagers, while Rush Street was close behind with $3.3m off $66.2m.

As for the rest of the market, Resorts World generated $714,649 in revenue from $8.4m in bets. Wynn Interactive reported $285,923 off $4.2m, and BallyBet $267,132 from $8.3m.

Kannor will officially depart Bragg on 3 June. He is stepping down as CFO to pursue other career opportunities away from the business.

Kannor has served in the role for four years, having joined Bragg in May 2020. Prior to this, he was group CFO at Stride Gaming Group for more than five and a half years.

Before joining the gambling sector, Kannor worked for several businesses in the property industry. These include Inspired Real Estate, where he was CEO for almost six years, and VC Development Group.

Bragg confirmed it has already commenced a search to appointment a replacement CFO.

““It has been an honour to be part of the Bragg team which has successfully navigated many challenges and continued to deliver consistent growth over the past four years,” Kannor said. “I thank the board for their support throughout my time with Bragg. I am now fully focused on ensuring a smooth handover to my successor.

“Special thanks goes to my finance team, who work tirelessly to deliver the positive change and financial growth that the company continues to achieve. I wish them and all of my colleagues continued success with Bragg now and in the future.”

Bragg CEO and board chair Matevž Mazij added: “We thank Ronen for his dedication and commitment to Bragg over the past four years and for his unwavering service as a pivotal member of the leadership team.

“During his tenure as CFO, the company has undergone huge positive transformation. This includes being uplisted to the Toronto Stock Exchange, dual listed on the Nasdaq and successfully completing two acquisitions, all while reporting consecutive years of revenue, gross profit and adjusted EBITDA growth. 

“We wish Ronen all the very best in his future endeavours.”

Bragg mulls potential sale

Confirmation of Kannor’s upcoming exit comes at a time of potentially significant change for Bragg,

Last month, the provider announced it is considering several strategic alternatives, including a full or partial sale of the business. Other possible routes for Bragg include a merger, new financing and further acquisitions. 

Bragg has formed a special committee to review these alternatives for the business, with no timetable set to complete the strategic review.

Alongside this, Bragg also published its full-year results for the year to 31 December 2023. There was somewhat mixed news for the business during the year, with the main highlight being a 9.8% rise in revenue to €43.6m (£37.4m/$47.2m).

Bragg hailed the impact of new content deals with several major operators such as Betsson, 888/William Hill and PokerStars. The group also entered new markets through partnerships, including Mexico with Caliente and Italy with Microgame.

Alongside this, Bragg said it continued to grow its presence in existing markets, highlighting the US, UK, Spain and Switzerland.

However, turning to expenses, spending was higher almost across the board. Ultimately, this offset revenue growth, pushing the business to an increased net loss of €5.0m. 

There was, however, some good news in terms of adjusted EBITDA, with this increasing by 25.6% to €15.2m.

Since the start of the session, Senator Matt Klein and Representative Zack Stephenson have been shepherding their state-wide, online mobile bills through the state’s long committee process. Stephenson brokered a deal between the tribes and charitable gaming to take one long-standing barrier to legal sports betting in Minnesota out of the way.

And then came 1 April when Minnesota’s horse racing commission voted to allow historical horse racing at horse tracks. Some say this is a violation of the state’s exclusivity agreement with the tribes and others say is outright illegal. The machines look similar to slot machines and in most jurisdictions are considered games of chance. This is also an area for which the tribes have exclusivity.

Whatever the situation, the decision has raised tempers. On 3 April Stephenson said in an informational hearing before the House Commerce, Finance and Policy Committee, of which he is chair: “I just want to be clear; in no universe will a bill leave this committee with historical horse racing.”

New bills to consider

A day after the hearing, Senator John Marty dropped a bill that would put a 40% tax rate on legal sports betting. It also prohibits HHR, bans in-game wagering and sends significant funding to problem and responsible gambling programmes. Stephenson added an amendment to his wagering bill and a separate bill that expressly prohibits HHR.

House and senate committees will hold hearings on the new bills today (8 April) and tomorrow.

The Minnesota Indian Gaming Association (MIGA), which has been present and is monitoring the progress of betting bills throughout the session, used its strongest language yet in response to the racing commission.

“Slot machines not located on tribal land remain illegal in Minnesota,” MIGA executive director Andy Platto said in a statement Tuesday according to the Minn Post. “After decades of debate at the capitol on the topic, the Racing Commission decided to usurp legislative authority and unilaterally authorise slot machines at the state’s horse tracks. We will strongly oppose any efforts to implement the Commission’s decision and will be looking at all available options.”

For tribes, exclusivity, sovereignty at stake

It is clear that MIGA will continue to lobby against HHR and any bill that would infringe on its exclusivity. MIGA could also take legal action if necessary.

Among the key sticking points in passing legal sports betting in Minnesota over the last four years has been how the state’s horse tracks fit into the equation. The tribes want to protect their exclusivity and, by extension, sovereignty.

Minnesota’s horse racing industry has been in decline for many years. In some states, such as Illinois, Louisiana and Massachusetts, horse racing has been propped up by legal sports betting. This is because it is legal in those states for the tracks to offer on-site and, in some cases, digital sports betting.

Study: HHR would bring $5.9m for purses

However, there is no precedent for a state with gaming tribes with majority market share to then cede provision to horse racing tracks. Legislators have offered up ways to compensate the tracks to try to prop them up. Stephenson’s latest bill has $625,000 that would be directed to purses, which commerce committee member Ann Neu Brindley called “pennies”.

The Minneapolis Star-Tribune reported that a study commissioned by the tracks showed that HHR would bring in $5.9m for purses and could also fund retired racehorse programmes, the state breeders fund and cover regulatory costs.

But the situation in Minnesota just got more heated and likely more difficult to solve.

Published today (8 April), the gambling regulator’s new corporate strategy sets out priorities for the period from 2024 to 2027. The Commission has identified areas for improvement and will put in place actions to bolster its operations.

Setting out the strategy, the Commission highlights two broad areas. One covers delivering on decisions taken to bring about significant and lasting change to how gambling is provided. This also covers how the National Lottery is operated. 

In addition, the second area will cover how the regulator invests. This will see it look to improve in how it delivers work towards “players, the public and licensees”.

Commission to address white paper proposals

The first heading mainly related to the government’s white paper. Published last April, this set out a host of recommendations to modernise the way gambling is regulated in the UK. 

Among the key points from this document were new affordability checks, stricter stake limits and possible new advertising rules. While some steps have been announced, such as the new online slots deposit limit, others are yet to be finalised. The Commission said it will work with the government and industry members to “strike the right balance”.

Also under the first heading is delivering a successful National Lottery. In February, Allwyn took control of Britain’s National Lottery, marking the first licensee change since the game launched in the mid-1990s. The Commission said that it will support Allwyn in ensuring a successful future for the lottery.

Ensuring gambling is fairer and safer

As for investment, again some of this relates to changes proposed in the white paper. The Commission said targeted investment in priority areas means it can continue to regulate effectively in the future. 

“That investment will be in our approaches, our systems, the evidence we rely on and, most importantly, our people,” the Commission said. “In this way we can ensure our regulation continues to reflect developments in the gambling industry with the ultimate aim to provide the best outcomes for consumers and the public.”

The regulator has identified where it can make improvements to licensing, compliance and enforcement work. This, it adds, will ensure it is as effective and efficient as possible. It will also consider a positive, longer-term direction for regulation as approaches to regulatory risk mature.

“We intend to look at opportunities that exist for new regulatory approaches to build on the work outlined within this strategy, such as earned recognition and we will be testing and learning what works and what does not,” the Commission said.

“All these actions will ensure that we improve the way we work to ensure gambling is fairer, safer and crime free for the benefit of consumers and the wider public.”

Five areas of strategic focus

The Commission says regulatory work remains core, but will commit resources to five key areas of strategic focus. These, it says, will allow for improvements to regulation that have the biggest impact on consumers the public and licensees.

The five focus areas comprise: using data and analytics to make gambling regulation more effective; enhancing core operational functions; setting clear evidence-based requirements for licensees; being proactive and addressing issues at the earliest opportunity; and regulating a successful National Lottery.

“We have identified these areas based on our understanding of the gambling industry and developments since 2021, including the award of the fourth National Lottery licence and the commitments in the government’s white paper, High Stakes – Gambling Reform for the Digital Age,” the Commission said.

“They also reflect our experience of regulating including evidence from casework, consumer engagement, research, data and input from stakeholders including our advisory groups.”

What is the Commission hoping for?

Summarising its objectives and duties, the Commission said its ongoing goal is for a “fair, safe and crime free gambling market where consumers and the interests of the wider public are protected”.

In terms of protecting from harm or exploitation, work includes ensuring underage players cannot access age-restricted products. It will also seek to protect vulnerable people from gambling-related harm by effective regulatory requirements and compliant licensees.

As for fair gambling, the Commission commits to ensuring licensees are fair and deliver what they promise. It also said players should be able to make informed choices about gambling and that licensees facilitate this. 

Going further, the Commission aims to prevent crime by making it difficult to provide illegal gambling to British players. Also on this point, the regulator will work to ensure licensed gambling poses a low risk of money laundering and terrorist financing. 

Finally, in reference to the National Lottery licence, the Commission commits to ensuring the lottery is run in a “fit and proper manner”. This will include protecting all participants and maximising returns to good causes.

“This strategy will improve gambling regulation and move us closer to that vision” the regulator said. “These outcomes reflect our vision, regulatory role and remit. All of our work is ultimately aimed at helping deliver these headline regulatory outcomes. 

“We will demonstrate our progress in delivering them by measuring and publishing impact metrics associated with each outcome.”