Category Archives: Business

OPAP revenue jumps as pace of VLT rollout accelerates


opap-vlt-revenueGreek betting and lottery operator OPAP reported double-digit revenue gains in Q3 on strong growth in its betting and expanded video lottery terminal (VLT) divisions.

On Tuesday, OPAP reported that its revenue in the three months ending September 30 was up 12% year-on-year to €357.4m, while earnings shot up 49% to €93m and net income rose nearly two-thirds to over €48m.

It’s worth nothing that the earnings figure got a wind-assisted boost from a €14.7m reversal of litigation provisions, while Q3 2016 also suffered from €6.4m in one-off VLT arbitration-related costs. Absent those factors, earnings were up a more modest 13.6% to €78m. Similarly, adjusted net profits came in at €37.6m.

Delving deeper into the revenue numbers, OPAP’s betting revenue was up 21.4% to €112.3m in Q3, thanks in part to the ongoing deployment of its new self-service betting terminals (SSBT). The company’s virtual sports products were also credited with having a particularly strong quarter.

The mainstay lottery segment reported a modest 1.7% revenue gain to €193.9m while the Instant & Passive segment saw revenue fall 3% to just under €34.9m.

OPAP’s new VLT segment contributed nearly €16.3m, bringing the segment’s year-to-date contribution to €25.6m. OPAP had an installed VLT base of just under 5,300 at the end of Q3, up from 3,031 at the end of Q2.

OPAP says the pace of the VLT rollout has picked up in Q4 to date, with over 7k operational units as of November 15. The company expects to have around 10k VLTs in place by the end of the year.

On Tuesday, the Greek parliament approved legislation that will cap the total number of VLTs at 25k, a reduction of 10k from what OPAP was originally promised. To compensate, the new legislation frees OPAP from the requirement of subcontracting out a portion of its VLT business while also extending OPAP’s betting license by a further eight years.

Greek legislators have also promised to address two other gaming industry issues before the year is through. One bill would overhaul Greece’s land-based casino market, authorizing the relocation of the Regency Casino from its current spot on Mont Parnes while reducing casino gaming revenue taxes to something more compatible with operator profits.

The other piece of legislation would finally implement long-promised changes to online gambling regulations. The changes would include formal licensing of international operators, but questions remain as to whether the tax rates will be reduced to a level that would entice operators to submit applications.

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Bank of America – Merrill Lynch: Time to bet on William Hill


It’s the time of the year for window dressing and the folks over at Bank of America Merrill Lynch (Merrill) are suggesting that the stocks of British bookmaker William Hill are already ripe for plucking.

Bank of America – Merrill Lynch: Time to bet on William HillThe international financial investment institution has given the stocks of William Hill a “buy” rating from “underperform,” its biggest upgrade in more than three months that helped propel it toward the top of the FTSE 250, according to The Evening Standard.

Most investors are wary of making a bet not only on William Hill but also on other bookies, especially after the British government launched a crackdown on fixed-odds betting terminal (FOBTs).

The UK Department for Digital, Culture, Media and Sport (DCMS) is conducting its 12-week consultation on the sector and investors expressed fears that a potential reduction in maximum stakes to just £2 will cost the industry as much as £639 million a year and a whopping £5.5 billion over 10 years.

Merrill, however, urges investors to look way beyond the DCMS consultation since Hills’ shares have already priced in the worst-case scenario of a £2-per-spin cap on roulette machines.

The brokerage firm told investors to focus on the developments in the U.S., where the issue of the federal sports betting ban will now be tackled by the Supreme Court.

At this moment, only Nevada is allowed to offer single-game sports betting. The ban is currently being challenged by New Jersey before the high tribunal.

Should DCMS decide to impose a £2 cap on FOBTs, Merrill pointed out that the U.S. market could offer William Hill a lifeline. The financial investment firm pointed out that William Hill dominate sports betting in Nevada with a 55 percent share of the market and this will grow even bigger if the Supreme Court decides in favor of New Jersey.

“Even if William Hill lost market share it could prove to be a very large driver of growth,” the brokerage firm said.

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BetStars wins license in Czech Republic, gets banned in Slovakia


betstars-czech-betting-license-slovakia-banOnline gambling operator The Stars Group had a mixed week in the former Czechoslovakia, gaining a betting license in the Czech Republic while having other operations banned in Slovakia.

Late last month, Czech gambling affiliate PokerArena reported that The Stars Group’s BetStars brand had been granted an online sports betting license in the Czech Republic, the first online betting license the market has issued to an international operator. In February, The Stars Group’s flagship PokerStars brand became the first international operator to launch a Czech-facing online poker site.

But last week saw PokerStars and BetStars domains added to the growing online gambling blacklist in neighboring Slovakia. The finance ministry debuted its online blacklist in July and has been steadily adding naughty names of international companies not authorized to accept action from local punters.

Among the Stars-related domains making (or failing to make) the grade in Slovakia are BetStars.com, BetStars.eu, PokerStars.eu and PokerStarsCasino.eu. Unlike in the Czech Republic, Slovakia hasn’t opened up its online poker and casino market, choosing to leave those products as the sole responsibility of the state-owned TIPOS national lottery.

Among the other international names earning spots on Slovakia’s blacklist are numerous Bet365-affiliated domains, the Kindred Group’s Unibet and Stan James Online brands, JetBull, lottery betting operator Lottoland, Betfair.com, Betsafe, Betway, Winmasters and sports betting mainstays Pinnacle.

However zealous Slovakia’s ban-happy finance ministry may appear, they’re rank amateurs when it comes to the continent’s ban-hammer (and sickle) champs, Russia. In the month of October alone, Russia’s Roskomnadzor telecom watchdog brought its gavel down on 7,417 gambling domains.

Among these domains, a stunning 1,026 were related to online betting operator Fonbet, which has a Russian-licensed site but also operates an international .com business that offers products beyond those permitted under Russia’s sports betting-only regime. The fact that one single company could have over a thousand mirrors blocked in a single month amply demonstrates the inherent folly of such tactics.

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Sentencing hearing: Absolute Poker’s Scott Tom never inhaled


absolute-poker-scott-tom-sentencing-marijuanaAbsolute Poker (AP) co-founder Scott Tom and former US President Bill Clinton have at least one thing in common: neither one of them inhaled.

CalvinAyre.com has obtained the transcript of Tom’s September 28 sentencing hearing, which saw US Magistrate Judge Barbara C. Moses order Tom to spend a week in jail after he pled guilty to a single misdemeanor count of transmission of gambling information. (The full transcript can be read here.)

In case anyone needs a refresher, Tom and his step-brother Brent Beckley founded AP and its sister site Ultimate Bet, both of which went belly-up shortly after the April 15, 2011 Black Friday online poker indictments. Were it not for outside funds contributed by PokerStars’ former owners, AP’s customers would still be waiting to be reunited with their account balances.

One of the early items raised in the hearing by Tom’s attorney James Henderson was a correction to “one minor problem” in the pre-sentence investigation report that even Henderson admitted was “not of particular relevance to today’s proceeding.”

Henderson noted that the report’s claim that “five years ago Mr. Tom had smoked some marijuana or something.” This had led the Court to impose a drug testing regimen, with Tom being tested “10 or 12” times, all of which he passed with flying (yellow) colors.

Henderson said his client had informed him that the report’s pot-smoking claim was “incorrect information” and that Tom “has never used marijuana.” It’s worth noting that Tom was most likely not hooked up to a polygraph machine at the time he made this statement.

Tom’s insistence on asserting his lifelong ability to ‘just say no’ reflects recent attitudes at US border crossings, in which many an overzealous Barney Fife has questioned would-be tourists if they have ever – and we mean ever – smoked pot. Believe it or not, in today’s America, merely confirming that you once got hot-boxed in the back seat of a Chevette in junior high school can potentially bar one’s future entry into the country for five years.

TOM “REGRETS” RENOUNCING CITIZENSHIP
And Tom is considered a foreigner in US eyes, having renounced his US citizenship “many years ago,” although Henderson said that’s a decision that Tom now “regrets.” AP’s operations were largely based in Costa Rica, but Tom took up residence in Antigua – which lacks an extradition treaty with the US – after US authorities began actively targeting online gambling in 2006.

Henderson said Tom has been “trying to arrange to get back in the United States pursuant to visas in the future.” Tom still has family in the US, although his mother died during the period in which he was reluctant to set foot on US soil.

ABSOLUTE DISAGREEMENT WITH FATHER OVER BAIL MONEY
Tom’s father is still alive and was the source of the $100k that Tom was required to post at his bail hearing in February. The sentencing hearing revealed that there is sharp disagreement between Tom and his father regarding whose money this is.

Henderson told the court that Tom had inherited the $100k “from his grandmother” and that he’d given it to his father “to hold for him because he was obviously out of the country experiencing these legal difficulties.” Henderson said that Tom’s father “is now contending that that is his money.”

This poses a problem, because the release of this money was intended to provide a good chunk of the $300k that Tom was ordered to forfeit as part of his plea deal. Tom brought $25k to the hearing that he intended to pay toward this forfeiture.

Henderson said his office was working on resolving ownership of this $100k to ensure it didn’t go “back to the father and have that money disappear,” but Judge Moses took it upon herself to place the $100k into a trust account pending the resolution of the dispute.

LOCATION, LOCATION, LOCATION
As for the rest of the forfeiture amount, Moses left it up to the government to establish a payment schedule. How Tom will afford it was also addressed, with a mention of Tom’s Antigua-based business – a celebrity party boat recently profiled by Flushdraw’s Haley Hintze – that Henderson assured Moses had “survived the hurricane problem down there.”

Moses inquired about Tom’s former residence in Costa Rica as another potential source for raising the forfeiture funds. While the “fairly nice home” is currently generating rental income, Henderson claimed it “appears to be basically unmarketable” based on the fact that a home of equal value just down the street had been on the market “more than three years” without a single offer. Tom “just can’t make [his CR house] liquid at this point.”

In delivering Tom’s sentence – which included the surprise seven-day jail stint – Moses said his AP involvement “does indeed appear to be the only significant blemish on an otherwise law-abiding life” and that Tom had “demonstrated that you are capable of living a law-abiding life for a sustained period of time.”

But Moses emphasized that Tom “did commit a crime. That’s why you’re here. You pleaded guilty to a crime … It is a misdemeanor, to be sure, which has immigration and other consequences, but a misdemeanor is a crime. I cannot ignore that.”

Tom’s sole statement during the hearing is reprinted below in its entirety:

“Your Honor, I very much regret the choices I’ve made, and after years of isolation and time to think, I realize I needed to come and face the Court in the US to try and move forward with my life. I hope you can consider my apology, and I look forward to returning home to a productive life.”

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US offered Antigua pennies on the dollar to resolve WTO dispute


antigua-america-wto-dispute-ronald-sandersOn Friday, Sir Ronald Sanders, Ambassador Extraordinary and Plenipotentiary to the United States and the Organization of American States for Antigua and Barbuda, appeared before the World Trade Organization’s Dispute Settlement Body, to update his government’s position on its 14-year online gambling trade fight with the United States.

The dispute, which has been covered at length on this site, involved US efforts to block Antigua-licensed gambling sites from doing business with US customers. The WTO found the US to be in violation of its international trade obligations, and dismissed US efforts to overturn this ruling.

To pressure the US into abiding by its obligations, the WTO authorized Antigua to collect $21m in annual penalties from the US. To date, the US has neither altered its protectionist stance on the online gambling issue, nor has it paid Antigua a single penny of the $270m in outstanding penalties that have piled up since the WTO first ruled in Antigua’s favor.

Earlier this month, Sanders (pictured) urged the US to honor its debt to Antigua to help fund the rebuilding efforts in Barbuda, which was devastated by Hurricane Irma’s Category 5 fury.

On Friday, Sanders repeated his call for timely justice, and also revealed that the US had offered Antigua a mere $2m to resolve the matter last year — a sum that represents less than 1% of America’s outstanding obligation. Sanders noted that $2m would not even cover the legal fees that Antigua has spent pursuing justice at the WTO, and that the US has failed to respond to Antigua’s communications since making this pitifully small offer.

Sanders also noted that Antigua has yet to undertake its ‘nuclear option’, i.e. offering royalty-free digital downloads of US intellectual property, despite the WTO having granted Antigua full authority to take this step. Sanders said it would be “very regrettable” if Antigua was forced to take this route, as Antigua would prefer not to inflict harm on individual copyright holders, and because Antigua has and continues to view America as a friend. Sanders’ full speech is reprinted at the bottom of this article.

In its response, the US Trade Representative reportedly expressed sympathy for Barbuda’s plight and said it was working with Antigua to aid Barbuda’s recovery, while repeating its claims that it remains committed to resolving the online gambling dispute through future engagement with Antigua.

Lip service aside, it’s clear the US had bigger fish to fry at the WTO on Friday, including injecting more molasses into the process by which international trade disputes are resolved. The DSB had permitted certain judges to continue to work on files after their four-year terms had expired, essentially allowing judges with experience in certain cases to finish their work, rather than turn the process over to new members who may not be as up to speed on the details.

The US rejects the validity of reports filed by these former judges, and claims that disputes should now be decided by unanimous content of the judges present. Critics say this creates the possibility that lone judges could nullify appeal rulings, and believe that such tactics reflect US President Donald Trump’s disdain for all international bodies that could interfere with US hegemony.

Tellingly, Friday saw the US approve a ruling involving some of these former judges, but only because it involved a dispute between Indonesia and the European Union, i.e. the US had no skin in this game, and thus could afford to look committed to the idea of ‘and justice for all.’

——-

WT/DS285: United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services

Antigua and Barbuda’s DSB Statement
By Ambassador Sir Ronald Sanders
on
Friday, 29 September 2017

Mr Chairman

It continues to be most unfortunate that, despite 14 long years of deprivation, Antigua and Barbuda has to appear before this body, year after year, to report that the United States has not seen it possible to offer fair and equitable terms to my small country for the significant losses in trade revenues that it has suffered as a result of U.S. violation of the General Agreement on Trade in Services (GATS).

At the last meeting of this body on 23rd November 2016, at which this matter was discussed, the delegation of the United States indicated that it had offered “a broad range of useful suggestions to settle this dispute in November 2013, only to have Antigua ignore the U.S. offer for a long period of time before finally indicating that it was not acceptable”.

For the record, Chair, my delegation is compelled to advise that, in accordance with the award made to my country by the Arbitration Panel established by this Body, the trade losses to Antigua and Barbuda now stands at more than US$200 million.

The U.S. offer that my Government found “not acceptable” did not amount to $2 million.

It should be no surprise, therefore, that my Government could not accept the offer.

It cost my small country much more than $2 million simply to bring the trade dispute to the attention of this Body and to seek redress in conformity with established and binding rules.

The U.S. delegation also told this body last November that “pursuant to Article XXI of the GATS”, the U.S. offered “a generous package of services concessions as compensation for removing internet gambling from the U.S. schedule”, adding that “Antigua is the only Member to block the United States from completing this process”.

My delegation is further obliged to point out that my Government has not “blocked” the United States from removing its commitment from its schedule.

We have acted to safeguard our rights.

And at such time as the U.S. makes a fair, equitable and just offer to Antigua and Barbuda for the extreme harm done to our economy, we stand ready to act in an appropriate manner consistent with the rules of this Organization that the U.S. helped to fashion.

Chair, other countries – not named by the U.S. delegation last year – have released the U.S. from its GATS obligations in this particular matter because, although these countries did not pay the cost of bringing it before this Body, the U.S. has settled their losses in ways that remain undisclosed to this Body and to my government.

It can hardly be fair or just that the U.S. has reached settlements with other countries and not with my small country which was the principal victim of losses in trade revenues and employment.

The delegation of the United States also told this Body last year that “the regulation of cross-border gambling is a matter of public morality”.

Consequently, my delegation is obliged to point out that in April 2005, the Appellate Body of this organization found that the U.S. could not invoke a “morals defense” to its violation of the GATS.

What is more, while the U.S. has banned internet gaming from foreign providers, domestic gambling service providers continue to operate and thrive.

Last November, the U.S. delegation advised this body that the government was reviewing “the most recent communication” from my government and that it “will continue to work expeditiously toward finding a realistic settlement”.

It is with profound regret that my delegation has to advise that 10 months later, my Government has not received a response from the U.S. despite many overtures, including our most recent letter of 5th June 2017 to the US Trade Representative which has gone unanswered.

Chair, my delegation points out that the size of Antigua and Barbuda’s economy is a mere US$1.4 billion; the size of the US economy is US$18 trillion.

Further, over the 14 years in which my small country has suffered trade revenue losses in this particular matter, exceeding US$200 million, we have in no way taken any hostile or retaliatory action against the U.S.

Indeed, the contrary is the truth.

For, over that same period, the U.S. enjoyed a trade surplus with Antigua and Barbuda of U$2 billion, as we continue to purchase almost 70 per cent of goods and services from the U.S.
We have not diverted our purchases away from the U.S. market.

Therefore, while the trade revenues losses to my small country is almost 20 per cent of our Gross Domestic product, settling with us would represent only .0011% of one year of the GDP of the United States.

Chair, my country has just suffered enormously from the ravages of Hurricane Irma.

Three weeks ago, the island of Barbuda, our second most populous island, was completely decimated by the Category 5 hurricane’s battering which left all the inhabitants homeless and with no potable water, no electricity, no hospital and no school.

My government was forced to declare the island a disaster and to evacuate all the residents to Antigua where they are now being maintained in difficult and cramped circumstances despite our best efforts with limited resources.

For the first time in 300 years, there is not a single permanent resident on Barbuda, and Antigua is faced with an unexpected and unscheduled increase of 3 percent of its population and all the demands that such a sudden influx of people entails.

Additionally, we are confronted with an estimated cost of more than US$250 million to rebuild Barbuda and to resettle its inhabitants in their homeland.

There would be no better time than now, for the United States to settle this long-running issue which mars an otherwise friendly relationship between our two countries that has existed for generations.

Of course, Chairman, Antigua and Barbuda has the option of implementing suspension of U.S. intellectual property rights which is the award given by the Arbitral Bodies of this Organization.

Over these many years, we have not done so, not because we can’t, or because we haven’t had offers to help us implement the award in a transparent way and consistent with the DSB’s authorization.

We have not done so because we have too high a regard for the U.S. owners of intellectual property who have contributed much to the enjoyment and advancement of the world.

We had hoped that the U.S. government would respond to our restraint in ways that would settle this issue without causing any loss of income to U.S. copyright holders.

Chair, we are aware that in 2010, Brazil was awarded the right to suspend payment of U.S. intellectual property rights in compensation for trade losses.

The US settled with Brazil by cash payments of over US$440 million and other ways in 2010 and 2014.

It would be very regrettable, Chair, if tiny Antigua and Barbuda were compelled to be the first country to have to suspend payment of U.S. intellectual property rights despite its best efforts to reach a settlement with the U.S., its largest and richest neighbour to whom it has always been – and remains – a friend.

Thank you, Chair.

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Uruguay to block online gambling domains, payments, marketing


uruguay-bans-online-casino-pokerUruguay has made good on its threats to impose strict prohibition of online casino and poker sites while introducing new taxes on state-approved forms of gambling.

Last week, the Uruguayan Senate voted 30-6 in favor of the country’s new Accountability Law, which includes the new gaming provisions. The bill was previously approved by the country’s lower house, and was signed into law on Monday by Uruguyan President Tabaré Vázquez.

Among Law 19.535’s gambling-related changes is a new 0.75% tax on gambling turnover made through officially approved casinos, gaming halls, racetracks, sports betting shops and the operations of the state-owned National Directorate of Lotteries and Quinielas.

The national lottery operator is also the only operator approved to operate online gambling, and only for sports betting. Law 19.535’s Article 244 states that “casino games such as poker, roulette, slots” and similar products are “absolutely prohibited” via any remote channels.

To ensure this restriction is observed by internationally licensed online gambling operators currently serving Uruguayan punters, Article 245 empowers the state to “adopt various preventive and sanctioning measures to prevent the proliferation” of online gambling, including “blocking of access to websites, financial frauds, as well as the prohibition of commercial communications, sponsorship and advertising of unauthorized games.”

Uruguay’s Ministry of Economy and Finance had signaled its intention to take the prohibitionist road in July, while National Party deputy Jorge Gandini had publicly railed against the fact that GVC Holdings’ Sportingbet brand was able to market its wares in the country via its sponsorship of local sports icons Club Nacional de Football.

Uruguay’s regressive stance stands in stark contrast to the new regime in Colombia, which became the first South American jurisdiction to formally approve online gambling legislation last year. Colombia has since issued two online gambling licenses, with four more reportedly coming in the coming weeks, although Colombia too has found it necessary to impose domain- and payment-blocking measures to wall off its regulated market.

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Schleswig-Holstein vote dooms Germany’s new gambling treaty


germany-gambling-treaty-schleswig-holsteinGermany’s latest gambling treaty appears dead in the water after two state parliaments decided not to sign on.

In March, the leaders of Germany’s 16 länder approved the country’s new State Treaty on Gambling, which was to take effect on January 1, 2018. But the treaty required the unanimous approval of each state’s legislature, and legislators in the northern state of Schleswig-Holstein voted on Friday to opt out of the treaty.

Schleswig-Holstein’s vote wasn’t unexpected, as the state’s newly elected government announced in June that it planned to revive the state’s previous gambling legislation, which, unlike the federal treaty, was cool with operators offering online casino and poker in addition to sports betting. Friday’s vote wasn’t even close, with only the Social Democratic Party members voting in favor of the federal treaty.

Schleswig-Holstein had also announced in June that it would team with the state governments in North Rhine-Westphalia, Rhineland-Palatinate and Hesse on a new regulatory scheme based on the original Schleswig-Holstein licensing regime that it hoped the rest of the states would eventually join.

Earlier this month, legislators in North Rhine-Westphalia announced that they too would not be ratifying the new law, and therefore the state didn’t intend to take over responsibility from the state of Hesse for implementing the new federal treaty.

The net result is that the status quo will likely prevail in Germany for the foreseeable future, meaning German-facing sports betting operators holding licenses in other European Union jurisdictions can continue to serve their German punters provided they pay attention to anti-money laundering responsibilities and don’t violate advertising restrictions.

The new treaty the states agreed to in March was intended to address the failings of the 2012 treaty, which capped the number of available sports betting licenses at 20. That cap, along with the unnecessarily opaque licensing process that followed, was routinely rubbished by both local courts and EU legal bodies.

But the new treaty was similarly condemned by the European Commission just days after its release, and a temporary workaround proposed by Hessian regulators met its Waterloo in a local court a couple months later.

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Australian online bookies face new taxes, bonus restrictions


australia-online-bookmakers-new-rulesAustralian online sports betting operators are facing new taxes and promotional restrictions as state governments continue efforts to rein in the nation’s only authorized online gambling activity.

On Thursday, the state government in Western Australia (WA) unveiled its latest budget, which included a 15% point of consumption tax (POCT) for online bookmakers who generate revenue from WA punters. The new tax, which will take effect January 1, 2019, makes good on a promise the WA government announced one year ago.

South Australia was the first Aussie state to introduce an online POCT, based on its belief that Northern Territory-licensed online bookmakers weren’t paying their fair due. This view was supported by domestic operators Tabcorp and Tatts, who have a physical presence across Australia and thus face a much higher tax burden.

The Responsible Wagering Australia (RWA) industry group protested WA’s plans, claiming that a go-it-alone approach will complicate the federal government’s plans to develop a national POCT policy.

RWA director Stephen Conroy claimed bookies are facing an effective tax rate of 40% on their WA punter revenue, and Conroy warned that operators will pass on at least some of these costs to WA bettors. This will encourage bettors to seek out more competitive offers from internationally licensed betting sites, which will result in “lower returns to the state’s racing industry and an increased reliance on government funding.”

NEW CURBS ON BONUSES, FREE BETS
Meanwhile, a meeting of federal and state ministers has agreed on new rules that will ban online bookmakers from offering punters certain types of free bets and other inducements.

On the chopping block are bonuses for new account signups and ‘refer a friend’ programs, and operators must allow punters to withdraw bonus bet winnings with no further turnover requirements.

Bookies will also require punters to ‘opt in’ to receive marketing pitches, and information on how to turn off these alerts must be made more accessible.

A national self-exclusion register must be operational by the end of 2017, while a voluntary pre-commitment scheme – under which bettors can set binding deposit limits – will be mandatory as of June 2018. New customers will also be prompted to set deposit limits when they open accounts.

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FTC lets skin betting shills TmarTn and ProSyndicate off the hook


csgolotto-skin-betting-promoters-ftc-settlementA pair of eSports promoters has pretty much gotten away with shilling for a skin betting site without disclosing their ownership of said site.

On Thursday, the Federal Trade Commission released a consent order of a settlement it reached with Trevor Martin (aka TmarTn) and Thomas Cassell (aka ProSyndicate) for using their social media status to promote skin betting on the CSGOLotto site without revealing that they each owned a 42.5% stake in the site.

Over a year ago, an observant eSports fan revealed that Martin and Cassell were posting YouTube videos showing them betting ‘skins’ – virtual goods earned via game play or purchased with cash – on CSGOLotto, while leaving viewers with the impression that the site was something they just happened to stumble across, but gosh golly wow, was it cool.

The pair also paid four- and five-figure sums to other individuals with large YouTube followings to promote CSGOLotto without requiring these YouTubers to disclose that their endorsements were bought and paid for.

The FTC’s Bureau of Consumer Protection investigated these allegations and submitted a draft complaint to the FTC, which determined that there was sufficient evidence that Martin and Cassell had violated the Federal Trade Commission Act. However, this complaint has been set aside following the settlement, which is about as meek a punishment as a federal agency is capable of meting out.

The deal essentially requires the pair not to pimp any more products or services without disclosing any financial interests they might have in said product or service. Martin and Cassell must also ensure that any hired third-party shills endorsing a product owned or operated by Martin and Cassell must disclose their financial ties to the pair.

Should Martin or Cassell fail to live up to these requirements, they could be liable for civil penalties and other relief. Or perhaps just another stern talking to.

The FTC’s acting chairperson Maureen Ohlhausen issued a statement saying consumers “need to know when social media influencers are being paid or have any other material connection to the brands endorsed in their posts.” Ohlhausen claimed the settlement “should send a message that such connections must be clearly disclosed so consumers can make informed purchasing decisions.”

The CSGOLotto affair was just one of a number of high-profile scandals that cut the legs out from under the skin betting sector last summer. The pressure eventually led developer Valve Corp to order skin betting sites to stop accessing its Steam marketplace, via which skins were traded or purchased in order to have currency to wager on the betting sites. Many skin betting sites folded their tents shortly thereafter.

Last September, the UK Gambling Commission filed criminal charges against a different pair of YouTubers for illegally promoting gambling on eSports titles. The pair originally pled not guilty, but ultimately admitted that it was a fair cop and paid a combined £265k in fines and costs.

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