Hot copy: Stories that caught our eye this week from around the sector
Everything’s bigger in Texas… Except gaming
The Houston Chronicle turned our attention towards the Texan gambling industry this week, as it pointed out that Democrat Beto O’Rourke is “inclined to support” the expansion of casino gaming and sports betting in the Lone Star State if he is elected as its governor.
At a press conference in Dallas, O’Rourke addressed the issue publicly for the first time, explaining that Texans are already crossing state lines to gamble, leaving the state unable to collect its rightful gaming taxes on the activity.
“From listening to Texans across the state, it’s one, a very popular proposal, and two, it would also help us address some of the challenges we have in reducing inflation and property taxes in the state,” O’Rourke said at the press conference.
Apparently, the politician has also expressed his support for legalising cannabis in the state, which alongside an expanded gaming market would allow Texas to reduce its reliance on property taxes to fund government coffers.
The Chronicle was mindful not to get our hopes up too soon, though, as it clarified that the Texas Constitution prohibits the expansion of gambling, a provision that current Gov. Greg Abbott has supported and defended in the past.
Pro-gambling politicians in the state would have to make up two thirds of the House and Senate in order to support putting a measure to change that on the ballot.
This won’t be happening any time soon, however, after Texas Lt. Gov. Dan Patrick said in February that there was no chance the state’s senate would expand gambling options this year. “It’s not even an issue that’s going to see the light of day this session,” he said.
The crypto casino conundrum
NBC News made a splash recently with a feature on crypto casinos targeting US customers from outside the country.
It claimed that internationally registered crypto casinos are sidestepping a lack of iGaming regulation in the US to operate and advertise “with near impunity”, offering customers a frictionless way to start gambling with few background checks taking place.
“This segment has exploded in a very short amount of time, and as a decentralised system, it makes it even more difficult to figure out how to go after them,” American Gaming Association VP of government relations Alex Costello told NBC.
“We are a highly regulated industry for good reason: anti-money-laundering concerns, responsible gaming concerns,” he explained.
On the topic of responsible gambling safeguards, one anonymous gambling addict told NBC: “I’d done everything I could locally to stop myself from doing it, and all of a sudden there was this Hail Mary. [With crypto casinos] I could self-exclude 20 times and it wouldn’t make any difference, because you can just go back and make another account.”
The author of the article thinks this lack of background checks and responsibility has helped contribute to the offshore crypto casino boom, which has seen some 70 iGaming sites offering the blockchain-based payment methods, leading to an unregulated industry worth upwards of $10bn per year.
Further, the brands are advertising in places you might not expect them – from video platforms like Twitch and YouTube to the websites of US media companies, including Orlando Magazine, Men’s Journal and TheStreet.com.
While the sites these platforms link to explicitly prohibit US customers, NBC reported that they employ little or no effort to identify user locations. According to Costello, the AGA has raised the alarm with the US government but has had a lacklustre response.
“Unfortunately federal law enforcement are a bit hamstrung, because these folks are obviously not regulated, not registered in the United States, and often not based in the United States, which often doesn’t allow for an easy prosecution,” he said.
Times to say boo-to-Nanny
British Conservative MP Craig Whittaker took to The Times this week to decry what he described as the ‘nanny state’ insistence on introducing affordability checks on UK gambling customers.
“The idea of bureaucrats snooping on punters’ bank statements and payslips fills me with dread,” Whittaker said. “It’s a step too far, and it reeks of arrogance and nanny state behaviour.”
The thinkpiece cites a survey of British punters undertaken for Racing TV, which found that 95% of customers would not be willing to allow bookies to carry out affordability checks on them, while 85% said they felt the checks would drive customers towards the black market.
“That would be entirely counter-productive, undermining all the progress we have made to reduce problem gambling, and it would put jobs and investment in the UK at risk,” Whittaker argued.
Using examples such as Norway’s stake restrictions and affordability checks, he argued that an increase in the use of unlicensed operators as a result of over-regulation is already evident.
In Norway, he said: “Customers flocked to the black market, which now accounts for over 66% of all money staked.”
If something similar were to happen in Britain, he argued, the results could be “catastrophic”.
“With over 12,000 people employed by the regulated betting and gaming industry in Yorkshire and The Humber alone, not to mention the millions of pounds in taxes that would be lost to our public services, there’s too much at stake.
“I welcome the forthcoming Gambling Review. The laws on gambling are outdated and it’s right that we bring in new regulations that reflect the new digital landscape.
“But targeting millions of people who bet for fun and undermining a much loved sport into the bargain isn’t the answer,” Whittaker concluded.