Category Archives: Business

South Korean K-pop star jailed one year for gambling $3m online

south-korea-singer-jailed-online-gamblingA former K-pop singer has been sentenced to a year in South Korean prison for blowing over $3m on an illegal online gambling site and lying to the authorities investigating his activity.

On Monday, South Korea’s Yonhap news agency reported that the Seoul Southern District Court had sentenced Jung Jin Woo (pictured), a member of the pop group M2M who got his big break via an Idol-style television program, to one year in prison for illegal gambling.

Court documents indicate that the 32-year-old Jung was originally cautioned over his gambling activity way back in 2007, but the warning didn’t take. Jung was again caught gambling online in 2014, but he convinced his mother’s boyfriend to claim that he’d been the one gambling on Jung’s online account. Mom’s squeeze was eventually slapped with a KRW 1m (US $900) fine.

But Jung’s close call failed to dissuade him from continuing to gamble online, and he even acted as a promoter for the unidentified online sports betting site from August to September last year.

Eventually, the authorities closed in on Jung, who reportedly spent a whopping KRW 3.5b ($3.1m) in 1,500 separate transactions with the betting site over the years. Jung later told the authorities that he gambled online to make money to maintain the flash life of a celebrity that his fans had come to expect.

Jung eventually copped to his misdeeds, but in doing so, revealed the subterfuge involving his step-father. The court claimed this deception played a major role in Jung’s sentence. Worse, step-dad’s false confession earned him a sentence of two years of probation.

Jung isn’t the first South Korean celebrity to fall afoul of the country’s strict anti-gambling laws. Numerous K-pop stars, TV personalities and sports figures have all been forced to do the bow of shame after getting caught engaging in illegal gambling activity.

Incredibly, South Korea’s anti-gambling laws don’t even stop at the water’s edge. South Korean citizens are subject to prosecution even if they’re gambling in a jurisdiction in which such activity is completely above board, although prosecutions tend to be reserved for serious spenders, as leniency can be shown to those who gamble “just for momentary pleasure.”



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Online betting drives Kentucky Derby to new wagering record

kentucky-derby-online-wagering-recordRace bettors wagered a record amount on the 143rd annual Kentucky Derby thanks in large part to strong online wagering activity.

Lousy weather kept many fans away from the Churchill Downs racetrack this weekend, which culminated in betting favorite Always Dreaming winning the marquee race. The event attracted just over 158k spectators, the seventh largest figure in the race’s illustrious history.

Despite the reduced attendance, all-source wagering on Saturday’s races hit a new record of $209.2m, 8.6% higher than last year’s total and 9% better than 2015’s then-record $194.3m. Wagering on the actual marquee race was up 12% from last year and up 1% from 2015’s tally.

The disparity between on-site attendance and betting volume was mirrored for the broader Derby Week festivities, which saw attendance falling 7% from 2016 to 349k, while all-sources betting handle for Derby Week rose 7% to a new record $285.1m., the online advance deposit wagering site of Churchill Downs Incorporated (CDI), was a significant contributor to 2017’s record-setting performance. TwinSpire’s Derby Day racing handle improved 22% year-on-year to $32.8m, while online wagering on the marquee race was also up 22% to $20.1m.

Wagering interest and the bad weather undoubtedly contributed to NBC’s Saturday afternoon Derby coverage hitting the second-best overnight rating in the past 25 years. NBC enjoyed a 10.5 rating, 12% higher than 2016’s figure.

CDI CEO Bill Carstanjen offered “heartfelt thanks” to Kentucky Derby fans for making the 2017 event “an amazing spectacle, rain or shine.” Carstanjen told investors that the strong wagering activity would likely mean adjusted earnings of between $4m and $6m higher than the sum contributed by 2016’s Derby.

CDI’s recent Q1 2017 earnings report showed similarly opposite trajectories of its online and track-based wagering operations. While track-based revenue was down roughly 10% year-on-year, TwinSpires reported betting handle rising nearly 7% in the three months ending March 31.



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NYX revenue up 213% following “transformational year”

nyx-gaming-transformational-yearOnline gambling technology provider NYX Gaming Group reported record results in 2016 after bolstering its operations via the acquisition of sports betting tech unit OpenBet.

On Tuesday, the Toronto-listed NYX reported revenue of $54.5m in the three months ending December 31, 2016, a 196.6% improvement over the same period last year, while earnings gained 185% to $12.9m.

NYX’s numbers were goosed by the mid-2016 addition of OpenBet, but even discounting OpenBet’s $30.4m contribution, Q4 revenue was up 31.2% year-on-year. Royalty and license revenue rose nearly two-thirds, thanks in part to 2015’s acquisition of software outfits Chartwell Technology and Cryptologic from Canada’s Amaya Gaming and the mid-2016 acquisition of UK gaming content provider Betdigital.

NYX launched 14 new customers on its Open Gaming System (OGS) in Q4, while signing 16 new customer agreements for its OGS and Open Platform System. As of December 31, NYX had 24 customers in the development pipeline waiting to launch, while inking 11 new deals over the first quarter of 2017. NYX’s content division launched 27 new games in Q4.

For 2016 as a whole, revenue shot up 213% to $163.7m. Excluding the OpenBet, Chartwell and Cryptologic additions, revenue still rose a healthy 46.8% while adjusted earnings were up 305% to $42.7m.

Despite the triple-digit revenue rise, NYX reported a net loss of $57.9m in 2016. NYX blamed the shortfall on $19.7m in acquisition and restructuring costs, but also intangible asset impairments of $27.9m and goodwill impairments of $66.1m. These impairments were pinned on NYX’s acquisitions of Chartwell, Cryptologic, Sportech NYX Gaming and Game360.

Choosing to focus on the positive, NYX CEO Matt Davey heralded 2016 as “a transformational year” for his company, whose acquisitions have left it “ideally positioned” to provide content to the regulated gaming market. Davey said NYX’s new operating model “has been delivering an improved cost structure that, combined with our growth strategy, will result in increased operating leverage.”

NYX said it expects Q1’s revenue to come in between $57m and $61m, while earnings are expected to be between $15m and $17m.



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Fantasy sports bill passes Alabama House in narrow vote

The Alabama House has spoken: fantasy sports is a battle of wits and smarts.

Fantasy sports bill sails through Alabama House in a narrow voteBirmingham Business Journal reported that the Alabama House of Representatives has approved a bill that will legalize and regulate fantasy sports betting in the state in a close vote.

Voting 43-38, the House declared that fantasy sports is not dolled-up digital gambling that deserves to be banned. Instead, they recognized that fantasy sport is a game of skills deserved to be played in the state. With the House approval, the bill now moves on to the Senate.

There are at least three bills that have been introduced in Alabama including HB354 aka the Fantasy Sports Act.

The proposed legislation, which was sponsored by Rep. Alan Boothe, would require a fantasy sports operator with more than 5,000 active player accounts to pay an initial registration fee of $85,000, while an operator with fewer than 5,000 active participants would pay an initial $10,000.

A fantasy contest that has not previously operated in Alabama would pay a $5,000 fee.

The measure also said that the taxes to be imposed on fantasy sports operators’ gross revenues is similar to that in Tennessee and the one that has been proposed in Georgia.

House members are reportedly eyeing to impose at least 6 percent tax on fantasy sports revenues for the preceding 12 months. They project that an additional $216,000 will flow through the state’s General Fund if fantasy sports is legalized in the state.

However, it took the members of the House nearly two hours to narrowly pass the bill. According to the report, legislators debated one whether daily fantasy games were primarily skill- or luck-based.

There are at least 11 US states that have legalized DFS at present: Colorado, Indiana, Kansas, Maryland, Massachusetts, Mississippi, Missouri, New York, Tennessee, Virginia, and, most recently, Arkansas.

But as the legal battle for the legalization of DFS across the United States wages on, the Fantasy Sports Trade Association lamented that more than two-thirds of fantasy sports firms have closed, merged or changed focus.



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US targets North Korea’s online gambling operations

us-targets-north-korea-online-gambling-sitesNorth Korea is seeking international investors to back a floating casino operation just as US legislators vow to clamp down on the regime’s online gambling operations.

On Thursday, South Korean media reported that a North Korean website was inviting foreign investors to bet on a proposed cruise ship venture that would ferry customers from the port of Kosong to Russia’s far east and other southeast Asian destinations. The ship would feature “various amenities” including “a casino business.”

North Korea used to have such a casino cruise business, but the South Korean company that operated the 30k-tonne ferry halted operations after a North Korean soldier killed a South Korean tourist visiting North Korea’s Mr. Kumgang special international tourism zone in 2008.

North Korea says investors should be willing to plunge between US$10m and $20m into the cruise business over the next decade. To sweeten its pitch, North Korea says the business will be “guaranteed favorable conditions for economic activities.”

North Korea’s chances of finding deep-pocketed investors are slim, given the country’s perpetual threats to rain down nuclear weapons on its regional neighbors and the United States. The civilized world has responded by imposing harsh financial sanctions against the diplomatically isolated North Korean regime, leaving it starving for hard currency.

North Korea’s recent announcement that it had successfully tested new long-range missile technology prompted the US House Foreign Affairs Committee to propose even tighter restrictions on doing business with the Hermit Kingdom, including targeting the regime’s online gambling operations, which are said to earn over $860m per year.

The new Korea Interdiction and Modernization of Sanctions Act calls for penalties for any individual or organization that “knowingly, directly or indirectly, engaged in, facilitated, or was responsible for the online commercial activities of the Government of North Korea, including online gambling.”

North Korea’s online gambling operations recently made headlines after one of the suspect’s in last month’s assassination of Dear Leader Kim Jong-Un’s casino-loving half-brother in Malaysia was said to have originally arrived in the country to operate online gambling and pornography sites.



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Cyprus doles out more online sports betting licenses

betfair-cyprus-online-sports-betting-licenseGaming regulators in the Republic of Cyprus continue their slow rollout of online sports betting licenses nearly six months after imposing their new online regulatory scheme last November.

On Monday, the National Betting Authority (NBA) confirmed the issuance of two new official online betting licenses to Paddy Power Betfair’s Betfair brand and to Meridian Gaming (CY) Ltd, which operates via the domain in Cyprus.

The two licensees join UK online betting mainstays Bet365’s Cyprus subsidiary, as well as Bet On Alfa Ltd and Gambling Malta Ltd’s Stoiximan brand, as the only other operators currently granted full authorization by the NBA to offer online betting services to Cypriot punters.

The NBA issued eight transitional online betting licenses last November to companies including GVC Holdings’ betting brand Sportingbet and the Tain-powered Winmasters brand. That move followed just one month after the NBA began accepting applications for the new online licenses.

At the same time, the NBA announced that it was blocking around 2,500 gambling domains that had yet to be granted approval to operate locally. Most of these domains featured online casino and poker betting, which remain expressly forbidden under the country’s 2012 gambling legislation.

Under the new licensing regime, approved online sports betting operators pay an effective tax of 13% of gaming revenue – 10% in direct tax, plus 2% to Cypriot sporting bodies and a further 1% to fund responsible gambling initiatives. Licensees also pay annual fees of €30k, although the NBA offers a two-year license for €45k. Operators must also demonstrate guaranteed capital reserves of €500k to be considered worthy of licensing.

The NBA has yet to issue a license to the local operations of Greek betting and lottery operator OPAP, reflecting the current frosty relationship between OPAP and the Cypriot government. Earlier this month, the Cypriot attorney general ordered a police investigation into OPAP’s local operations after the company refused to turn over its financial records so the government could see if it was being screwed over as badly as it suspects.



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PAGCOR chair Andrea Domingo to keynote inaugural ASEAN Gaming Summit

There’s no denying that the Philippines’ thriving gambling industry has seen a lot of changes in the last couple of months.

The local gambling industry has flourished in the past decade, especially the casino sector, which investment bank Credit Suisse forecasts to generate gaming revenue of $6 billion by 2018—making the country one of the top four players in the world. The growth can be partly credited to President Benigno Aquino III’s administration that has worked hard to support the casino industry, which it regards as critical to the economy.

PAGCOR chair Andrea Domingo to keynote inaugural ASEAN Gaming Summit2016 saw the country elect a new president, and it’s someone who’s not from Aquino’s party. Before he won—by a landslide, no less—Rodrigo Duterte got a thumbs down from industry executives because he tends to flip-flop on issues related to gambling.

True to Duterte’s campaign promise, change did happen across all sectors. The gambling industry saw a purge following the new president’s “online gambling must stop” missive, while state regulator Philippine Amusement and Gaming Corporation (PAGCOR) started looking into the activities of the special freeport zones that license Asian-facing online gambling companies.

Since then, the regulator has issued 35 licenses under its Philippine Offshore Gambling Operator (POGO) program as part of its mandate to “operate, authorize and license games of chance, games of cards and games of numbers” in the country.

Now, PAGCOR is in the process of transitioning from its dual role as both regulator and operator of land-based casinos to a purely regulatory function. Its 11 casinos, which operate under the Casino Filipino brand, as well as its eight VIP slot machine clubs and three slots arcades, are expected to be fully privatized by Q3 2017.

What is on the horizon for gambling in the Philippines?

Next week, PAGCOR chair Andrea Domingo will take the stage at the inaugural ASEAN Gaming Summit to discuss the future of land-based electronic gaming and online regulation in the country.

Aside from Domingo, 40 speakers from land-based gaming and 32 speakers from online gambling will talk about the successes and challenges that operators in the Southeast Asian region are facing today.



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