Category: Gambling

Switzerland Votes to Block Foreign-Based Gambling Operators

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Switzerland’s referendum had two main highlights – first, they voted in favor of allowing the local casino operators to offer online gambling and second, the voted to block the domains of the international gambling operators licensed to operate in the country. The international operators’ only option will then be to secure partnerships with local casinos.

The new Gambling Act which won the support of 72.9 percent of the voters was previously approved last fall but the student wing of the Free Democratic Party moved to challenge it and succeeded by gathering enough petition signatures to force a referendum under Swiss law. Now that it has been passed yet again, the new gambling law will take effect at the beginning of next year.

The Swiss government says that that the law is designed to tackle gambling addiction by enforcing strict rules such as the blocking of known addicts among other things. In addition to providing a solution to the issue of problem gambling, the law is also expected to allow the government to effectively tax gambling revenue which will be channeled towards these anti-gambling measures and initiatives.

The Specifics

According to advance polling, the ‘No’ side appealed mostly to youngsters who feared that the law in many ways provides a precedent that would allow the Swiss government to block other domains it found objectionable.

Older voters, on the other hand, tended to lean towards to the ‘Yes’ side since they believed that allowing foreign or international gambling sites to operate in the country would impede the Swiss government’s ability to fund social programs such as pension funds.

A Win for Local Casinos

The local casinos stand to benefit the most from the new gambling law and they could not wait to celebrate the news of this huge win. Marc Baumann, the chief executive officer of Swiss Casino Group issued a statement shortly after the results of the vote urging the government to put the new gambling law into effect as soon as possible.

Swiss Casinos Group currently runs a free-play online casino and has been planning to venture out and cooperate with a foreign company for a real-money gambling site. So far, so good. This might actually happen.

Will It Work?

Domain-blocking has proven to be rather ineffective in forcing online gamblers to stick to the locally authorized gambling sites. This has been true in other markets including Belgium and as such, Switzerland will have quite a tough time ensuring the law is adhered to. But this does not mean that it cannot be done.

Then, there is the issue of tax. The local gambling operators are looking at between 20 percent and 80 percent in revenue taxes. The president of the Swiss Federation of Casinos, Beat Vonlanthen, however, said that the government will do its best to cushion the tax blow by offering the local casino operators tax breaks of up to 50 percent for the first four years. This grace period will allow the casinos to lure in a sufficient number of steady customers before the ‘un-cushioned’ tax-rate kicks in.

New Jersey Law Proposes a Limit on Esports Betting

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So far, one of the biggest sports and gambling stories of the year has been the United States Supreme Court ruling pertaining to the legality of sports betting. By striking down the Professional and Amateur Sports Protection Act (PASPA), the court paved the way for sports betting in the country.

However, while we now know that states are going to have the final say about whether or not to legalize sports betting, even in states where there is a lot of pro-sports betting discussions Esports betting still lingers in limbo. New Jersey has become the first state to speak out on this issue but, unfortunately, the state’s stance on Esports betting is not very reassuring.

The New Jersey state legislature this week introduced a bill that calls for a ban on betting on professional gaming and Esports events. To put this into perspective, the bill’s synopsis says that the law “allows wagering at casinos and racetracks on certain professional and collegiate sports or athletic events,” but it also defines “all high school sports events, electronic sports, and competitive video games” as “prohibited sports events.”

On the brighter side, this ban will not apply to international Esports events where half of the participants are over 18. Still, these limitations have caused an immediate reaction from some of the proponents of the competitive electronic video gaming field one of the most vocal being Bryce Blum, an Esports attorney. The ESG Law founding partner took to Twitter to share his concerns:

“NJ’s sports betting law excludes ALL esports events unless they are (1) international and (2) more than 50% of players are over 18.

The law treats esports the same as high school sports, which is actually insane. Obvious problem w/ ppl regulating something they don’t understand. pic.twitter.com/WbzcULETph”

 

“This is a perfect example of why I fear any form of regulation surrounding esports.

Here are the bill’s sponsors – do they look like esports experts to you?

You cannot effectively regulate what you don’t understand. This could be just the tip of the iceberg. pic.twitter.com/rL8O0qvXm7”

Esports  Betting Was Just in the Line of Fire

Apparently, the bill was not specifically meant to target Esports and thus there is a certainty that the topic will be discussed and analyzed explicitly in the coming weeks in order to clear things out. One of the major concerns emanates from the fact that bettors are allowed to bet on overseas events such as League of Legends European LCS, but are prohibited from betting on the outcomes of local Counter-Striker tournaments.

Being at its earlier stages, the bill’s wording is certainly still very vague and its full implications are yet to be fully thought through. As such, with the apparent localization of the bill’s effect and its vague nature, it remains to be seen how exactly it will change the Esports status quo both in New Jersey and the United States as a whole.

Delaware Becomes First State to Launch Sports Betting

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Barely a month after the United States Supreme Court paved the way for nationwide legalized sports betting through a landmark ruling that lifted a federal ban on sports betting, Delaware has become the first state to launch sports betting. This move not only marks the dawn of a new era for both the gamblers and the operators but also gives a significant boost to legal sports betting in the country.

This began at 1.30 p.m. ET last Tuesday when the Delaware governor, John Carney, placed the first bet, wagering $10 on the Philadelphia Phillies to beat the Chicago Cubs.

Always Been Ready

The state had made prior preparation for the new development – during the duration of the federal ban, the state was already offering parlay betting. Launched in 2009, the parlay cards offered by the state were provided through the state lottery. In addition to this, Delaware also went ahead to build sportsbooks within its casinos in preparation for the inevitable lifting of the federal ban on sports betting.

When the state’s sports betting industry went live on Tuesday, three Delaware-based casinos – Delaware Park, Dover Downs and Harington Raceway – launched single-game wagering on NBA, MLB, NFL, and the World Cup. These will eventually be followed by sports betting offerings for others sports including college football, the NHL, and golf.

So Far So Good

Despite the absence of big game events such as Stanley Cup or even an NBA Finals game on the day Delaware sports betting went live, there was still plenty of betting action to go around. Vernon Kirk, the secretary of the Delaware state lottery reported that $322,135 was bet on sports at the state’s three casinos on the first day.

“For us, it’s really an enhancement of our tourism industry,” Governor John Carney told ESPN on Tuesday. “It will attract a lot of visitors to our state, particularly at this time of year, during the summer, coming to our beautiful beaches south of here. They come here and stop at the casinos and do slot machine and table gaming. This will be another opportunity for them.”

Projections from Eilers & Krejcik Gaming, a research firm, anticipates that the amounts wagered on sports every year will be in the range of $350 million and $760 million – this is if online sports betting is implemented fully. Of these projections, the state will receive between $23.1 million and $49.6 million annually from both sportsbooks and online sports betting services.

Fortunately, according to the secretary of the state lottery, Delaware intends to offer internet and mobile sports betting products in the near future but first wanted to get the physical sportsbook off the ground before proceeding.

Esports Betting Already Enticing Criminal Fixers

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Esports just like any other sports is unanimous with betting and as always, where there is gambling money, vices are not far behind. Putting into consideration the approximately 380 million people who will watch Esports games and tournaments this year, it is very likely that Esports fixers are already looking devising ways to get the best out of what is now the fastest growing sports in the world.

According to iNews, Esports bets will inevitably go over the $45 billion mark this year, a sum that is bound to attract the attention of fixers. Already, a number of Esports players and fixers have already, been banned and, in some cases, even imprisoned for cases of match-fixing. Similarly, last year, the Esports Integrity Coalition is reported to have received 39 suspicious betting reports with at least 13 of them being genuine fixes.

Apparently, no game is harder to detect fixing in than Esports since it is a product of geography, technology as well as its relative newness. About 15 percent of traditional sports betting in the world is fully legal and this makes it rather easy for anti-fraud and anti-fixing bodies to trace and follow betting patterns in order to identify game fixing. On the other hand, only 4 percent of Esports betting in the world is fully legal.

According to Ian Smith, the head of the Esports Integrity Coalition, the low numbers are partially due to the fact that Esports is most popular in East Asian countries like South Korea and China, where, as it turns out, traditional sports betting is illegal. Even in the United States where Esports has been going nowhere but up, 99 percent of Esports betting is illegal, even though with the recent Supreme Court ruling that revoked a federal ban on sports betting. Still, all these factors make match-fixing in Esports very hard to detect and even when detected, just as impossible to track.

Is Regulation the Answer?

New Esports games are constantly being invented and popularizes and this makes it harder to ascertain what should and what should not be regulated. This is unlike the cases with traditional sports where there is an abundance of history and data that can be used to inform anti-fixing bodies about criminal activities of this kind.

“If you get an alert in say cricket you can be reasonably certain – 80 or 90 percent – that there is something wrong,” explained Ian Smith. “In eSports, it’s kind of the opposite – because it’s all a little bit chaotic and new and changeable, about 90 percent of alerts don’t mean anything and only 10 percent do.”

The main takeaway here is that the institutional weakness of Esports makes it particularly susceptible to match-fixing simply because we still do not have a universally accepted governing body for the activity. The formation of such a body is perhaps the only way to keep the rapidly growing Esports ecosystem from being a serious criminal enterprise.

Integrity Fee Included in New N.J. Sports Betting Bill

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Just a few days ago, a top lawmaker in New Jersey called for all governors to reject the efforts by pro sports leagues to have an “integrity fee” on sports betting revenue included in the various states’ sports wagering laws. State Senate President Steve Sweeney, the lawmaker who also happens to have championed the state’s efforts to have the federal ban on sports betting overturned, said that the demands by the leagues are tantamount to “extortion.”

“Essentially, the leagues are asking to be paid to allow games to be played fairly,” Sweeney wrote. “Ironically, they are calling this extortion attempt an `integrity fee,’ even while fully aware that providing participants a stake in the volume of betting would amount to what could more accurately be called an ‘anti-integrity fee.’”

Sweeney expressed concern that the leagues had blatantly shifted their focus on getting a piece of the sports betting pie instead of concentrating on the integrity of their games. The lawmaker’s sentiments are quite justifiable especially considering the fact that, prior to realizing the inevitability of the abolishment of the Professional and Amateur Sports Protection Act (PASPA), the leagues had spent millions of dollars fighting against the sports betting laws in New Jersey.

“The Leagues fought with all of their resources to stop states from allowing their citizens to legally wager on sports,” Sweeney wrote in a letter that was addressed to the governors and lawmakers in all 50 states. “Now that their efforts have been ultimately unsuccessful they wish themselves to make ‘the fast buck’ and to ‘get something for nothing.’ Essentially, the Leagues are asking to be paid to allow games to be played fairly…. Taking the Leagues at their word, giving them a ‘piece of the action,’ would make suspicions grow whenever turning-point calls in close games go in favor of the more popular team — whose presence in the ‘big game’ would drive ratings and betting.”

New Jersey, however, chose to take a different approach – the state introduced a new bill with a proposed integrity fee, only that its version of the integrity fee is completely different from the ones in other bills and the one that the professional sports leagues have been lobbying for.

What It Entails

The proposed integrity fee, called the Sports Wagering Integrity Fund, diverges from the other bills mostly because it will be controlled by the state instead of the leagues. The idea is to bypass the pro sports leagues’ push for the 1 percent integrity fee on handles while at the same time offering them an alternative to ensure that do not miss out entirely on the fund’s coffers.

The draft bill states that all the money deposited into the Sports Wagering Integrity Fund will be channeled towards the recovery of any costs and expenses incurred during investigations that will be carried out in order to maintain the integrity of sports betting.

Push for Lower Online Gambling Tax Rate Succeeds in Victoria

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Following massive concerted lobbying efforts by corporate bookmakers led by the executive director of Responsible Wagering Australia, Victoria has made a decision to introduce its own tax on digital betting that is nearly half the rate of other states. Last year, South Australia levied a 15 percent consumption tax on online gambling that has been rumored to be also appealing to Queensland and Western Australia.

The Australian state of Victoria, however, chose to take a different path that was made public on Monday when state officials announced that it was planning to implement an 8 percent tax rate for online betting entities. This directive, according to Victoria’s state Cabinet Minister in charge of finance, will be implemented as from January 1st next year.

After years of tax evasion, targeted online gambling operators will be required to pay the rates which, as indicated in the announcement, will only apply to the bets that are placed in the state of Victoria. As such, said online gambling operators will be required to effectively put in place measures that are geared towards determining the locations of their customers.

Tim Pallas, the states finance Cabinet Minister, the move to introduce the move to lower the tax rate is long overdue and it will be implemented primarily to ensure that Victorians get their fair share of the highly lucrative multibillion-dollar online gambling industry. In addition to this, the state government projects revenues of up to a whopping AUS $30 million every year.

The Mixed Reactions

Even though the Conroy-led Responsible Wagering Australia (RWA) expressed that they were a bit disappointed by the announcement made by the state of Victoria, they did acknowledge what they termed as “consultative approach” by the government – the RWA is the body mandated to ensure that responsible betting practices are adhered to in Australia.

“The online wagering industry already pays a significant amount of consumption tax through the GST, as well as corporate income tax to the federal government,” Stephen Conroy said. “An 8% tax does not adequately account for these significant contributions and will result in Victoria having one of the highest effective wagering tax rates in the world.”

The organization argued that by setting the Point of Commission tax rates at half of what is offered by other states such as South Australia, Victoria will undermine the betting companies that are currently operating in other states where the tax rate is set at 15 percent.

Conroy further pointed out that online gamblers and online betting operators are currently being charged significant amounts through Goods and Services Tax (GST) and the federal government tax scheme. His concern is that the consequence would be the likely occurrence of a double taxation which will, in turn, make Victoria’s tax burden is actually higher than what it seems.

Nevertheless, Victoria’s tax course is intact and has already been finalized so as to guarantee the legislation is rolled out in full by January 2019.

U.S. Lottery Industry Wants In on Regulated Sports Betting

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A decent number of states have either already legalized sports betting or are on exploring similar legislation that will lead the United States to a new era that will be defined by a regulated multibillion-dollar industry. This presents a plethora of new opportunities that have attracted a number of new interested parties including the gaming operators, the professional sports leagues, and most recently, the lottery industry.

The $80 billion United States lottery industry through the North American Association and Provincial Lotteries (NASPL) said in a statement that the lotteries are prepared to “help establish the real-world network that would be involved if called upon to do so.” The state lotteries have always supported the idea of state governments being given back the ability to decide on gambling laws for their respective states.

Thanks to last week’s Supreme Court ruling that lifted the federal ban on sports betting, all states can now legally draft their own sports betting laws and regulations and this opens up the field for interested parties to begin offering sports betting services.  The NASPL believes that they are well positioned and sufficiently equipped to join and offer sports betting services if given the opportunity to do so, their main advantage being, their strong relationship with pubs, bars, and clubs.

“In addition, some American lotteries already sell their products on the internet, a potential avenue for sports betting if a state allows that option,” the group’s officials said. “The court’s ruling on PASPA will help preserve the founding principles and integrity of American lotteries. The ruling will also potentially provide the freedom necessary to enhance the more than $22 billion that American lotteries returned to their states in FY2017.”

The Next Big Growth Category

Among the aggressive proponents of the Supreme Court ruling and subsequently the involvement of the lottery industry is the founder and chief executive of EquiLottery, Brad Cummings. He believes that industry should take advantage of the opportunity to ensure the legislation is benefits all the relevant gaming verticals. He pointed out that both state and national lotteries should look into creating new categories tailored specifically for sports gambling. This will give them a fighting chance and allow them to compete with all the other gaming entities that stand to benefit from a regulated sports betting market.

“Some states allow at least live horse racing to be a basis for a lottery game, some states prohibit any live sports integration with lottery and most are silent on the issue,” he said. “We advise that regardless of their situation, state lotteries should fight to be included and expand their product offerings into the sports gaming market. While these will be games of chance that don’t directly compete with the skill versions that are sure to be offered by others, the lotteries have some unique advantages that allow them to solve problems that traditional sports gaming cannot; a big one being the licensing fee leagues are demanding for their product to be utilized. Since the margins are much larger on lottery games, especially draw games which I think are the most analogous to a live sports lottery category, the fee won’t be cost prohibitive like it can be if taken out of a vig.”

Chinese Government’s Gambling Ban Is Still Almost Intact

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As it stands, all forms of gambling save for two types of lotteries are still officially victims of the gambling ban that has been imposed by China’s government. While horse racing operations are allowed albeit to a very limited extent, sports betting has been banned completely with all the forms of gambling being confined to the autonomous region of Macau, the only place in China where casino gambling is allowed.

Hundreds Arrested in Illegal Online Gambling Ring

As part of the efforts to implement the gambling ban, the country’s authorities have recently dismantled a major illegal gambling ring and in the process arrested over 100 suspects – this was done in two separate and effectively coordinated operations. The antigambling administration of China has also been working diligently against land-based gambling operators.

The raid on online gambling rings reportedly involves 13 different gambling websites with over 100,000 registered users who had collectively wagered over RMB350 million ($55 million) before the crackdown. The investigation began in February after Chinese authorities received a tip that a local firm had been renting out its servers and providing technical support for unauthorized online gambling operators. Since then, the number of people that have been arrested for being suspects in the online gambling rings has reached 453, and this could be an indication how deep-rooted the activity is.

Is Moving Gambling Operations to Hainan the Answer?

A number of industry experts do not believe that the country’s island of Hainan could become the next Chinese casino hub, much like Macau. The experts believe that such a decision would be made by the government and at the moment it would be a long shot to think that the Chinese government would allow such a thing. However, if by some miracle this goes through, the casino industry experts have expressed a lot of optimism that the island, which is considered to be China’s “Hawaii” could open doors for several kinds of sports lotteries.

A couple of months ago, there were reports that the government had been considering legalizing some forms of gambling on Hainan Island. This came to pass later in April 2018, when the government officially revealed that it was going to officially legalize horse racing as well as many other types of sports lotteries on the island. The move was part of the country’s bid to turn the island into the largest pilot free-trade port.

While this would have effectively ended the gambling monopoly of Macau, it will take some time before it officially begins. In fact, according to Su Guojing, gambling sector expert, and founder of the China Lottery Industry Salon, casino gambling outside Macau contradicted to the overall ideology and legislation in China. As such, it was nearly impossible for the Chinese government to allow the establishment of land-based casinos outside Macau, at least not for the moment.

What Is Next for Pro Leagues After Supreme Court Ruling?

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It has been a week since the United States Supreme Court repealed the Professional and Amateur Sports Protection Act (PASPA) thus effectively giving states the go-ahead to liberate over their own sports regulation and rules. Still, the landmark ruling remains quite a big deal especially because the implications it comes are huge, to say the least. While it will take time for various stakeholders to adjust appropriately to this development, it is impossible to ignore the ongoing discussion pertaining to how a legalized and regulated sports betting system will affect the professional sports leagues’ businesses.

In the recent past, a number of leagues – the most recent being the NFL – through their commissioners or other high ranking officials have expressed concern about the integrity of their games being compromised due to increased legal sports betting. This has been touted by many experts as a misguided opinion. To elaborate this, Nevada is a great example of a legalized sports betting market that has thrived without any evidence of match-fixing.

Getting the Best Out of It

It is estimated that more than $150 million is illegally wagered on sports each year. On a similar note, the Nevada Gaming Control Board also recently revealed that over $4.8 billion had been wagered on sports in Nevada Sports Books. As such, the Supreme Court ruling will actually be beneficial to the professional sports leagues by taking the billions that are illegally wagered in sports and subjecting it to state regulation and the league’s oversight.

Acknowledging the fact that sports betting has always been with us is the first step towards making it work for everyone involved. By bringing it to the open, the ruling will make it easier for the leagues to monitor the games that are most likely to be fixed and the players they need to keep an eye on. This kind of oversight would be impossible in an illegal sports betting market.

Also, the ruling came at a time when most state legislatures in the United States are already in recess. This means that the professional sports leagues have plenty of time to ideally and strategically position themselves to collaborate with individual state legislation when the 2018-2019 legislative period begins. This way, they will be able to effectively assist in tailoring new sports betting laws in order to ensure that their interests are also considered as the United States enters a new era of legalized sports betting.

The relationship between professional sports and gambling has never been as mainstream as it is now. While the leagues have not been particularly welcoming to the idea of embracing sports betting, the professional sports teams have on the other hand participated in one way or the other albeit indirectly. For instance, a number of teams have willingly invested in Daily Fantasy Sports and accepted money for the use of their logo in state lotteries and in-stadium casino signage. Clearly, there is a bright future ahead for all the stakeholders, they just need to know when and how to capitalize on this new opportunity.

New York Lawmaker Wants Online Poker Bill Passed In June

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After the United States Supreme Court repealed PASPA last Monday and paved the way for the legalization of sports betting in various states, a related concern has arisen and it is now being heavily debated – that is, the future of other skill-heavy forms of gambling such as online poker. While there is no direct correlation between the Supreme Court ruling that struck down PASPA and the legalization of online poker, it is believed that states that push forward with sports betting legislation will eventually lean more towards an all-inclusive gambling legislation rather than sticking to individual types of gambling.

In New York, the push for the legalization of sports betting surges with most recent development being the renewal of calls for the same by New York Assemblyman Gary Pretlow. The lawmaker hopes to have the online poker bill passed by next month. In fact, Pretlow believes that putting the bill on the Assembly floor is the only thing that stands in the way of its passage.

“To get it to the floor is all that’s needed. He [Heastie] is not going to guarantee passage, but get it to the floor and I’ll debate it and get it passed,” Pretlow said.

It will not stop there though. The assemblyman further confirmed that his long-awaited sports bettings bill will follow through next week and despite his current efforts to have online poker legalized he will not be including online poker in the legislation. According to him, every bill he introduces “should stand on its own merit.” As he sees it, such a move would be perceived as a plan to sneak in something else that some people may be opposed to. He, however, agrees that the expectation that a sports betting bill could be passed next month improves the chances for online poker.

“This will be helpful to getting online poker done,” Pretlow commented the sports betting bill. “There are more people interested in pursuing sports betting than pursuing online poker. For whatever reason, people consider online poker to be gambling but don’t consider sports betting to be gambling. I’m going to show them this is all gaming, and all forms of gaming happening are related.”