Under the influencer

The Guardian introduced us to a new study from Australia this week, which showed that children as young as 12 may be encouraged to gamble by celebrities and influencers promoting betting brands online.

The study was funded by the Australian Research Council and directly surveyed children to better understand their views on the rapidly growing world of online gambling influencers.

Many of the children surveyed noted that influencers often have young, impressionable audiences who could easily be drawn in by the promise of a luxury lifestyle, apparently funded by gambling winnings.

“They’re acting like they’re just gambling, but they’re getting paid. It’s all set up for them. It’s not at all like what real gambling is like, so it’s kind of like tricking you into wanting to do it,” said one 16-year-old girl in response to the survey.

Other children and teenagers quoted in the article suggested it was irresponsible for influencers to partner with gambling brands, given that they have limited knowledge and control of who their audience is – with young people often among the ranks of their followers.

According to one of the study authors, Professor Samanthat Thomas, Australia’s government should take the concerns of the quoted children seriously in order to prevent the next generation suffering gambling-related harms.

“It was disheartening to hear young people say they were sceptical about government action because of the gambling industry’s political influence,” she said.

And with children as young as 12-years-old saying things like: “If my idol, my favourite YouTuber, Instagrammer, TikToker is gambling maybe I should give it a try,” it’s easy to see why many believe this phenomenon is a significant cause for concern.

With quotes like the above coming from survey respondents so young, it seems Australia’s gambling regulators, like others around the rest of the world, should be listening intently and thinking about how to make the protection of children their number one priority.

Look North

Technology news website The Register this week brought us a surprising story from perhaps the world’s most mysterious country, North Korea.

According to the article, the latest money-making scheme being peddled by government-backed criminals in the country is the renting out of “malware-laden gambling websites as-a-service”.

South Korea’s National Intelligence Service (NIS), which has been investigating the phenomenon, suggested that for around $5,000 per month, one can rent a ready-built gambling operation built in North Korea and laden with malware ready to steal the personal and banking data of any customers who use it.

Reports allege that the operation is being driven by North Korea’s secretive “Office 39”, believed to be one of the country’s money-making machines helping to provide foreign currency to its government through a combination of legal and illegal activities.

Details of Chinese nationals are gathered through the malicious websites, while the North Korean operatives behind them pose as Chinese IT workers to get around UN sanctions prohibiting companies from working with North Korean workers.

South Korea’s NIS said whoever runs the scam has made billions of dollars in profit from it.

For players in China’s black market, scams like these represent another compelling reason to introduce a regulatory framework for online gambling.

Whether the revelation is taken seriously enough to bring about actual change, however, remains to be seen.

Chau’s house of cards keeps falling

Two businesses associated with now-jailed junket operator Alvin Chau are at risk of being delisted in Hong Kong, according to an article in Bloomberg.

Hong Kong’s Securities and Futures Commission has halted the trading of shares in LET Group Holdings and Summit Ascent Holdings, two firms linked to Chau, because of concerns about a $116m sale of assets which took place in Russia.

According to Bloomberg, the two companies did not comply with rules requiring shareholder approval for the deal.

The securities regulator asked both companies to address its concerns earlier this week, it said, but has received no response.

According to a report in industry publication GGRAsia, the asset that was sold is thought to be the gaming licence holder of the Tigre de Cristal casino in eastern Russia.

The warning leaves the two businesses in limbo after what has already been a tumultuous period.

After a raft of executive resignations at Summit Ascent, the business has currently been left with just one board member, chief executive Andrew Lo.

Elsewhere at LET, which holds a nearly 70% stake in Summit Ascent, things don’t look much better, as the aforementioned sale allegedly leaves both businesses without sufficient assets to warrant their continued listing in Hong Kong, according to the regulator.

While the companies may have made some quick cash through their latest asset sale, it seems they are now just two more examples of collateral damage as the house of cards of Alvin Chau’s business empire continues to crumble.

And given that there are 17 years left on the disgraced junket operator’s jail sentence, it seems unlikely there will be much Chau can do about it.

Mac-how much?!

Vegas Slots Online took us back into the murky world of Macau’s junket operators this week, as it reported on new details from the case of so-called Macau “Kingpin” Alvin Chau.

Chau was sentenced to 18 years in prison in early 2023, for alleged criminal association and illegal gambling taking place through junket operator Suncity Group.

According to Vegas Slots Online, new information published in China shows that Suncity Group generated jaw-dropping proceeds totalling $42bn from customers in mainland China, in the period between 2015 and 2019.

Of the total, Chau allegedly pocketed upwards of $1.2bn, as the scale and sophistication of his operations were revealed to be even greater than previously understood.

Suncity generated revenue through individual shareholder agents, who were obliged to buy shares in the business worth over $600,000 and then hit a monthly revenue target of $6.4m from their customers.

According to reports, Suncity successfully recruited 283 Chinese shareholder agents, who encouraged VIP customers to bet either online through Suncity’s gambling platform in the Philippines and other countries, or in-person at Suncity casinos in Macau.

In order to keep its operations under the radar, Suncity allegedly used “illicit channels like underground banks for taking in and settling gambling funds.”

The group also offered services and technical support in China, including gambler management and marketing firms, which “helped conceal the entire criminal network,” according to the Macau Daily Times.

As more details of the scheme came to light last year, Macau’s appeals court tripled the damages that Chau and other defendants owe to Macau’s government, to more than $3bn.

According to reports, Chau and other defendants have made independent applications to Macau’s final appeals court and continue to await a final judgement on their sentences.

Whatever happens next, it seems certain that Suncity’s operations – and the “Kingpin” at the centre of them – are officially gone for good.

Goldman not looking so shiny

Bloomberg this week brought us the story of Ian Dodd, a former global head of recruiting for Goldman Sachs, who is suing the bank for more than £1m in a case relating to his “chaotic” former work environment.

Dodd claims in his lawsuit that the demands of his former role led to the development of a major depressive disorder and heart problems, which eventually led to a “devastating” impact on his finances, including being forced to sell his home.

The case consists of a personal injury claim for “physical and pschiatric injuries,” and is set to go to trial at the beginning of 2025.

Dodd’s lawyers claim that “his onerous workload and the associated stress and uncertainty that he faced when working unreasonable and excessive hours, together with the failure of the defendant’s senior leadership partners to provide him with adequate support, culminated in him wanting to take his own life.”

Dodd was said to work upwards of 80 hours per week in his role, amid other accusations levelled at Goldman for its “inhumane” working conditions, which often see junior bankers working 100 hours per week.

After starting to feel burnt out by the role in April 2019, Dodd received no support in managing his workload, according to the suit.

His lawyers also said that Goldman “allowed an environment of dysfunctional and bullying behavior to flourish,” leading to employees becoming “worn down and emotional”.

In its response, Goldman lawyers appeared unapologetic. “If he felt pressure, it was self-generated; it was not imposed on him. If he did work excessive hours, this was not because it was required or expected of him.”

Who needs enemies with employers like these?

Bet365 under the microscope

The Financial Times this week took a closer look at one of the most famous yet elusive figures in the global online gambling sector, bet365 chief executive Denise Coates.

According to the article’s headline, the bet365 “cash machine” continues to pay out for the media-shy boss, who earned £221m in salary and at least a further £50m in dividends for the year ending March 2023, making her one of the best paid executives anywhere in the world.

Her most recent annual salary took the total paid out to Coates since 2007 to around £2.5bn, the FT pointed out, a sum that “will be dwarfed by the value of her stake of over 50%” in bet365, one of the world’s largest gambling firms, which generated more than £3.4bn in revenue last year.

“Behind the headline numbers,” however, bet365’s future direction is being brought into question by many in the industry, as it approaches an “inflection point” according to Eilers & Krejcik Gaming analyst Alun Bowden.

“It is investing a lot of money to expand in the US as it reshapes the business for the future,” Bowden explained, while Regulus Partner analyst Paul Leyland suggested the company was coming “under pressure for the first time.”

Margins have shrunk dramatically for 365, he argued, from 40% in 2018 to just 9.5% last year.

The article also sets out a detailed history of bet365’s evolution to this point, from its retail-focused beginnings to the decision to sell off its shops and move completely online as far back as 2005.

It also raises questions around the firm’s activities in grey and black markets, like China, which is reported to be one of its largest active markets.

Still, the piece points out that Coates’ mega salary and status as a UK taxpayer puts her among the biggest individual contributors to the country’s public purse, as well as examining the major economic impact bet365 has had on its hometown of Stoke-on-Trent.

Readers are encouraged to explore this article in its entirety to gain additional insights into the inner workings of family-owned bet365’s management processes.

According to the piece, for example, “if Denise wants something then it will happen.” 

With what little we do know about bet365, that’s not really surprising.

The Gambling Commission (UKGC) withheld information from the Financial Times (FT) so as not to undermine public trust in the regulator.

The UKGC declined to reveal the identities of specific companies and individuals amid the newspaper’s explosive investigation into Premier League betting sponsors.

The 31-minute FT documentary focused on the “mystery owners” behind Asia-facing gambling brands that sponsor Premier League clubs as it put the white-label provider model under the microscope.

The exposé claimed to uncover a “global network of shell companies and front organisations” as FT reporters sought to establish a link between white-label providers, Asian betting operators, and SunCity Group, the Asian behemoth founded by Alvin Chau, who is now serving an 18-year prison sentence for operating illegal gambling activities.

The FT felt it had struck gold when it came across a 2014 press release that described white-label provider TGP Europe as “owned by TGP Holdings, part of the SunCity Group”.

Then, in January 2017, a UKGC statement on TGP Europe and Fesuge Limited, the company behind former Watford FC sponsor 138.com, crucially said that both businesses were “part of a single group of companies”.

When probed further by the FT in 2023, the UKGC changed its position. Instead, it said the businesses were owned by separate companies that shared some of the same owners.

The FT then asked the UKGC to identify the individual companies and owners in a freedom of information (FOI) request, but the regulator declined to provide the information.

As part of a longer response, it said: “The public trust that the Commission has robust processes in place to assess operators so that when they use the services provided by an operator, they are confident that there has been sufficient scrutiny of that operator to ensure they are protected.

“If this information were released, it would undermine that confidence.

“We consider that the public interest is better served by withholding this information…”

FT video journalist James Sandy said he was “stunned” by the response.

“The UK’s regulator refused to reveal what it knew about 138.com and TGP Europe’s owners under a freedom of information request because it felt that it would undermine public trust in its ability to do its job,” he added.

However, the full UKGC response to the FT’s FOI request confirms that adhering to data protection protocol was also a key driver behind the regulator’s decision to withhold the identities.

The Commission said that information relating to specific operators and their ultimate ownership is exempt from disclosure under the FOI Act unless it has already been made publicly available.

“Further to this, identifying individuals associated with operators would constitute their personal data,” said the UKGC. “We are therefore unable to provide details of the individual(s) who owns TGP Europe Limited and Fesuge Limited.

“The Data Protection Act 2018 requires the processing of personal data to be fair and lawful. It would be disproportionate for us to publicly disclose these details unless there is a strong public interest in doing so.

“These individuals have a legitimate expectation that their personal details will not be disclosed in the context in which they are held. 

“On balance, there is no legitimate public interest in disclosing this information and it would not be fair to do so,” it added.

Charlie Munger takes a swipe at crypto

Charlie Munger, the vice chairman of Berkshire Hathaway and Warren Buffett’s trusty sidekick, took a shot at the world of cryptocurrencies in a recent Wall Street Journal op-ed, calling for a ban on all things digital and decentralised.

The 99-year-old billionaire compared the crypto industry to a wild and woolly carnival ride, with little regulation and a lot of speculation.

He compared it to mining, where salesmanship is often key to convincing investors to finance digging for precious metals that may not exist.

He called crypto a “gambling contract with a nearly 100% edge for the house,” and suggested the US take a cue from China and put a stop to the madness.

Munger has never been a fan of the crypto world and has been vocal about his dislike for it in the past.

He has compared it to rat poison, a venereal disease, and even an open sewer.

He once stated that he wouldn’t want a crypto executive to marry into his family.

It seems like Munger and crypto are just not meant to be.

Will Chau’s downfall bring Macau to its knees?

Two weeks ago, we mentioned in Hot Copy that gambling promoter Alvin Chau was sentenced to 18 years in the slammer in Macau for charges including illegal gambling, fraud, and involvement in organised crime.

The court ruled in favour of the prosecutors on most charges, but acquitted Chau of money laundering.

The Financial Times argued this week that Chau’s downfall augurs change for Macau’s gambling industry.

“[With the trial] you have a portrait of how Macau gaming actually worked . . . Macau has always been a washing machine” but the case exposes the extent of it, the FT quoted Jorge Menezes, a Macau-based lawyer.

Chau’s illegal empire was found to have had a turnover of $105bn between March 2013 and March 2021.

According to the article, the size of Chau’s “business” reflects the fact that Chinese elite have typically used junkets to channel vast amounts of money out of the country, which enforces strict capital controls.

Moreover, casino executives described the estimate of Chau’s illegal gambling turnover outlined in the judgment as “conservative” and said Chau’s ability to attract the mainland elite to Macau was unmatched in the industry. “You could not avoid dealing with him,” one said.

Chau’s downfall — driven by Beijing’s determination to crush the escape of elite capital through Macau — is set to change the gambling business in the territory, as it would be a challenge to replace the loss of earnings from elite high rollers with mass market or non-gaming revenue.

Show your cards on player safety

The Times reported that British-based gambling companies operating in the US have been asked to let outside experts peek at their safeguards for vulnerable players after receiving criticism for a lack of transparency.

FanDuel, owned by Flutter Entertainment, BetMGM, part-owned by Entain, and DraftKings, are among the companies being questioned about their protection measures for online casino players.

The US National Council on Problem Gambling is curious why these companies have not committed to a third-party assessment and is asking the question: “What are they hiding?”

With digital casino games like poker now available in seven US states, the National Council has evaluated each state’s regulations and found four states – Delaware, Michigan, Nevada and West Virginia – falling short of the minimum standards advised by the council.

The National Council wants iGaming operators to show they meet strict standards, such as those adopted by New Jersey, in all states.

FanDuel, DraftKings, and BetMGM were quick to assure that they adhere to all customer protection and responsible gaming standards in each market they operate in.

But the National Council isn’t convinced: “If they are doing it, it would be very easy to be able to show people,” Keith Whyte, executive director of the industry-funded council, said. “But they don’t,” he added.

These aren’t the droids you’re looking for

It has been impossible to ignore the hype surrounding AI technology in 2023, most of which has been driven by the accessibility – and capabilities – of OpenAI’s ChatGPT software.

The rise in prominence of AI has left many of us – rightly or wrongly – absolutely convinced that the robot revolution is coming, and sooner rather than later.

Many fear sizeable job losses for us mere human beings, and many are right to. But this may not occur at the hands of a power-hungry droid army, despite what Hollywood would have you believe.

For example, Microsoft this week became the latest top-tier tech company to lay off thousands of staff – 10,000 to be precise – according to the New York Times.

This is not because Microsoft offered ChatGPT £26,000 a year to do their jobs for them, but because the company has decided to pivot to more pressing priorities, including investing heavily in AI.

The newspaper said Microsoft and its technology peers had responded to surging customer demand in recent years by “essentially hoarding” technical staff. But with inflation now squeezing budgets, lay-offs have become a necessity for most large-scale companies.

“The reality is you can adjust hiring very quickly, and that is what is going on,” Stifel analyst Brad Reback told the New York Times. “I don’t think this is symptomatic of a bigger issue.”

So there we have it. Brad doesn’t see the robots taking over as a big issue, and neither should you – for now at least.

Macau’s gambling king to swap junkets for jail

Macau gambling bigwig Alvin Chau was sentenced to 18 years in prison for more than 100 charges including organised crime and illegal gaming this week.

BBC News was one of many outlets to report on the development, which saw Chau found guilty in a case that focused on illegal bets in excess of HK$823.7bn, or £85.7bn – so not exactly pocket change.

Chau, who was the chairman and founder of operator Suncity Group, had denied the charges. It was Macau’s biggest operator of junkets, which are organised trips for the wealthy to land-based casinos.

The business arranged for big spenders from China to travel to Macau and gamble in the city’s casinos, where it was legal, and even offered loans to them. It also collected debts for casinos and operated VIP rooms.

Prosecutors accused Chau of leading a criminal syndicate that worked as a middle man for undeclared bets, which allegedly lost the government more than HK$8.26bn in tax income.

The court ruled in favour of the prosecutors on most charges, but acquitted Chau of money laundering. As gamblers well know, you win some and you lose some.

Quit horsing around

ITV News this week reported on a new study that is searching for participants to assess the effect of the drug ketamine and its impact on gambling addiction.

University of Exeter researchers are trying to find out whether ketamine’s effect on human memory can be used to break down the positive reinforcement associated with gambling addiction, while also preventing the urge to gamble.

The study will be conducted by a professor of psychopharmacology to examine both the benefits and side effects of recreational drug use on cognition, mental health and neurobiology.

It will be the first study in the world of its kind, although magic mushrooms have often been analysed in similar circumstances to explore their effect on different neuro conditions.

The experiment will assess people’s memory of money and determine whether those memories can be altered by giving a low dose of ketamine.

Ketamine is an anaesthetic drug that blocks a receptor involved in learning and memory. It is a Class B illegal drug in the UK, but has previously been used to treat both pain and depression, and is even more well known for anesthetising horses.

If this sort of thing sounds right up your alley, you must gamble regularly and be at least 18 years old to participate.