Flop Gear
Jeremy Clarkson, the 63-year-old motoring enthusiast famous for once punching a BBC producer (and Piers Morgan, to his credit) in the face, proved himself once again to have his finger on the pulse of popular culture this week, as he took to The Times to insist “gambling just doesn’t feel right without a wad of cash.”
After complaining that his exclusive Oxfordshire hometown of Chipping Norton had recently welcomed an influx of “800 million” new residents (citation needed), he went on to bemoan the impact this had had on his formerly quaint, traditional high street.
Gone were the butcher, baker, and candlestick maker, he cried, replaced by five (yes, FIVE) so-called ‘supermarkets’ – which one supposes he determined were probably something like Harrod’s, but for poor people.
Worse still than that, he said, was that as he popped along to his local retail bookmaker to place a bet on this year’s Grand National, he was shocked to discover that it too had been closed down.
Curse the 800 million new residents of Chipping Norton and their so-called supermarkets, he wept, for they are also responsible for the death of retail sports betting!
After finding the bookies was closed, “what to do?” he asked. “You can’t watch horse racing if you don’t have a bet on, because it would be more interesting to watch a television that’s not plugged in.
“And you can’t not bet on the National. So I had to come home, get modern, and fire up the internet.”
After placing an each way bet on a reasonably sensible nag at 16/1, Clarkson set about trying to calculate what his winnings were, after the horse romped home in fifth.
And after discovering he had in fact lost £30 on his ‘win’, he found the experience to be a markedly disappointing one.
Clarkson longs for the days where cash was king, he writes, when he could drive home from a successful day at the races, sitting on a wad stuffed into the back pocket of his ill-fitting jeans.
That, he argued, is “what’s missing from online gambling sites. You have wins and you have losses and all that changes is the number at the top of the page. I don’t want that. I want the olden days back. I want a wad. And some shops where I can spend it.”
I’m sure readers will join us in sparing a moment’s thought for the multi-millionaire in these most trying of times.
PointsBet up for half a billion?
The New York Post this week offered us a closer look at PointsBet’s potential sell-off of its US division.
Difficult market conditions in New York’s sports betting sector, including its 51% tax rate, combined with a tech bubble which “had a mini pop when Silicon Valley Bank ceased operations,” have led to sportsbooks in the US to try and get out of debt and into the black as quickly as possible, the article suggested.
PointsBet, in turn, has made its ambitions clear regarding how it plans to do that, by putting itself up for sale.
The questions remain, however: who could buy the business, and how much for?
As for the first question, the Post was keen to rule out a few options.
Fanatics looked at one time like a possible suitor for the business, but since investing in sportsbook technology through Amelco, can be more or less dropped out of the race.
Depending on the price, it suggested, Bally’s could be a possible buyer, and DraftKings will certainly be paying attention one way or another, given its history of buying up its competitors.
With regards to the second question, the Post reckons PointsBet could be put up for sale for a cool half-billion, given its roster of impressive assets.
Chris Grove of Acies Investments points out that: “PointsBet represents an attractive opportunity to acquire a proven operational team, a proprietary technology stack, existing market share and user base,” as well as “market access across several supply-constrained states like New York and Michigan.
“The more of those boxes a potential acquirer needs to check, the more valuable PointsBet becomes,” he concluded.
The Post compared PointsBet to a similar attempted sell off, when casino giant Wynn tried to offload its online betting division, which also had access to the Michigan and New York markets.
The asking price on that business was $500m, it said, although a sale never came to be.
“North of WynnBet’s half-a-billion dollar asking price is likely the best launching point for PointsBet.”
After Sam Swannell told analysts today that the firm would seek to create the greatest possible shareholder value through any potential sale, one can’t help but think that half a billion dollars would go down pretty nicely.
Millionaire loses Star Sports suit
The Daily Mail this week told the story of millionaire high-roller Scott O’Brien, who tried to sue London-based bookmaker Star Sports after claiming they should’ve protected him from his gambling addiction as he lost more than £100,000.
O’Brien sold his paper recycling business, Pulp Friction, for £9m in 2012, after which time his gambling habit spiralled out of control, he told the court.
At one point, he even stashed £1m in cash at the bottom of his wardrobe.
Despite losing nearly £100,000 at Star Sports, the operator founded by Ben Keith of Twitter Gambling fame, a judge dismissed O’Brien’s claims that he informed the staff of his gambling problem when he first visited their Mayfair shop.
O’Brien insisted he told an employee he was a “compulsive gambler” and asked her not to tell his ex-wife.
But defence barrister Christopher Gillespie argued that O’Brien’s addiction confession was “nonsense” and that staff had no reason to suspect he was in deep trouble after he portrayed himself as a successful businessman with a luxury lifestyle.
Although O’Brien claimed to have a gambling problem, the judge found no evidence to support this when he first visited Star Sports.
In fact, staff had no inkling he might be overstepping himself until his losses hit their “internal trigger point of £40,000” on his last day of betting.
In the end, the judge ruled O’Brien did not inform staff that he had a gambling problem, meaning he lost his court claim as well as his fortune.
Conservative MP Scott Benton has been caught offering to leak confidential policy documents and lobby ministers on behalf of the gambling industry.
As revealed in an undercover exclusive investigation by The Times, the MP for Blackpool South violated the rules prohibiting MPs from lobbying in return for payment and disregarded new restrictions for politicians on providing parliamentary advice.
During the undercover sting, Benton believed he was liaising with two representatives from Tahr Partners, a fake British-Indian family office that feigned interest in investing in the betting and gaming sector.
During a meeting at a central London hotel last month, Benton detailed his willingness to leverage his position to aid their business and attempt to dilute proposed gambling reforms.
Specifically, he guaranteed that he could leak the forthcoming white paper on gambling reforms to the company at least 48 hours before its public release.
This would potentially enable them to capitalise on market-sensitive information, as the results of the review could have a substantial impact on the price of gambling stocks.
He also offered to submit parliamentary questions on behalf of the industry and bragged about “easy access to ministers”.
Scott Benton appeared willing to break multiple parliamentary rules when he met to discuss a job advising a fake investment fund. But I understand tthe Tories have tonight decided NOT to remove the whip (as Labour are calling for) at this stage https://t.co/wDg3ZBE3l9 pic.twitter.com/qDS3VavwHy
— Billy Kenber (@billykenber) April 5, 2023
Finally, Benton said he could “call in favours” from colleagues who would be glad to support the fake company’s interests, and even offered to put on a dinner at the House of Commons.
For years, MPs have been banned from acting as paid lobbyists or accepting money to raise issues with ministers or ask questions in Parliament on behalf of clients.
Benton’s proposed actions would constitute a breach of both the longstanding rules against “paid advocacy” and the new restrictions on providing parliamentary advice.
Benton has since had the Tory party whip suspended while an investigation is underway.
The Times said this incident highlights the extensive lobbying campaign led by betting companies in Westminster, which has seen more than £180,000 spent on corporate hospitality for dozens of MPs since 2021 in a bid to sway the review in their favour.
The government’s long-awaited white paper is now expected to be published after the Easter recess, having initially been launched in 2020 when Boris Johnson was PM.
To carry out its investigation, The Times set up a fake company, complete with a logo, website, and office addresses in London and Chennai.
Elsewhere, The Sun has leaked further details from the yet-to-be-published review after it claimed to have gained access to cabinet documents.
The tabloid suggests the previously mooted £2 limit per spin for online casino will only apply to those under the age of 25.
ChatGPT? Not for me
“Chatbots are bullshit engines built to say things with incontrovertible certainty and a complete lack of expertise,” argued Business Insider senior correspondent Adam Rogers this week.
It was refreshing to hear the other side of the story after months of chatter around how AI-based programmes like ChatGPT are going to revolutionise our lives, whether we like it or not.
And there is no lack of recent, high-profile examples to back up Rogers’ hypothesis.
With OpenAI’s ChatGPT storming ahead as the most popular chatbot on the scene, industry giants like Google and Microsoft are getting keener to throw their hats into the ring.
While both businesses certainly have the technological chops to launch AI-based programmes to the public, it has previously been reported that they are reluctant to do so while the technology is still so prone to making mistakes.
And indeed, their fears have in many ways been realised, just as Rogers points out.
An ad last week for Google’s chatbot, Bard, showed it getting an answer to a question wrong. After the mistake was picked up by the public, Google owner Alphabet’s share price took a 9% hammering, wiping billions of dollars in value off the company’s market cap.
Microsoft-owned Bing’s chatbot, Sydney, also gave less-than-accurate information during its open demonstration recently.
The reason for that is that large language models do not possess true intelligence, but are able to predict the likelihood of something being correct. If its accuracy is likely enough, information will be used in response to queries and presented as the truth.
“Google’s own AI researchers had warned the company that chatbots would be ‘stochastic parrots’ (likely to squawk things that are wrong, stupid, or offensive) and ‘prone to hallucinating’ (liable to just make stuff up),” according to Rogers.
Naturally, all this brings about new dangers in the realm of disinformation.
In a tale with many twists and turns, meandering through scientific experiments, psychology, philosophy, and quite a lot of swearing, Rogers goes on to explain why people are likely to become increasingly inclined to believe what the bots tell them – whether they’re right or wrong.
NY ad ban bill spreads fear among gambling investors
The Times shone some light on the impact of a new legislative bill introduced in New York last week after congressman Paul Tonko put forward a potential ban on all sports betting advertising in the state and across the US.
The Betting on our Future Act is modelled on the Federal Cigarette Labelling and Advertising Act, the piece explained, and was revealed just as the US sports betting industry was gearing up for the biggest event on its calendar, the Super Bowl.
The bill – whether it is passed in New York or not – should serve as “something as a warning sign to the industry,” according to Goodbody gaming and leisure analyst David Brohan.
While a total ban on TV, radio and internet advertising would be “damaging to market growth in the still nascent US market,” Brohan conceded that big operators with established brands would be insulated against its worst effects.
Indeed, it doesn’t take an especially vivid imagination to envisage a situation where such a ban would make it utterly impossible for smaller brands to have a hope at challenging market leaders like FanDuel, DraftKings, Caesars and BetMGM.
Following the news, the piece pointed out that FanDuel owner Flutter Entertainment’s shares slid by 2.8%, while Entain fell by 2.7% – though that was in part due to MGM’s recent assertion that it would not make another attempt to acquire the London-listed gambling giant.
Making for particularly interesting reading was the comments section of the article.
Commenter Ian Wylie pondered: “MGM could just be trying to lower Entain’s share price ready to swoop,” while Sean Thornton took a more antagonistic approach, suggesting the gambling firms should: “Cry me a river.”
Times user cbailey pragmatically suggested we should “Bring in this law in the UK and tax gambling profits at 95%,” while Philip Levy, ever the optimist, dusted off his crystal ball to suggest: “I bet the share prices bounce back.”
And they say that nuance is dead.
TikTok trials gambling ads as Sportsbet targets Rihanna super fans
The Guardian revealed that Flutter-owned online gambling brand Sportsbet is using TikTok to target young women with advertising in an attempt to broaden its predominantly male client base.
The operator has been allowed to target Australian users on the social media platform – which currently bans all gambling promotions – as part of a strictly controlled trial, revealed the newspaper.
And shortly before the Super Bowl took place last week, Sportsbet took advantage of its new permissions, publishing a video ad drawing attention to “novelty bet” markets on Rihanna’s half-time performance.
Bets on such thrilling outcomes as what outfit Rihanna would wear during her performance, what props she would use and how long she would sing for were all included in Sportsbet’s showcase.
In another boon for sports bettors everywhere, users were also encouraged to wager on what colour liquid would be poured on the winning coach after the match.
NB: Why stop there? Why can’t we bet on what colour laces a particular sportsperson will use to tie their boots, or whether the team captain will appear bearded or clean shaven? Anyone fancy a punt on how many players will mess up the words to the national anthem?
According to the article, Sportsbet has published other videos featuring Sydney-based influencer Luisa Dal Din. One video used the caption: “Me pretending I know horse racing to impress my crush.”
Ah, gambling companies. When will you learn? Is the best way to increase female participation in horse racing betting really to suggest that women don’t understand it, and that they would only bother trying in order to secure the approval of a man?
Advertising expert and swearing enthusiast Toby Ralph said Sportsbet was “finding new markets. [Young women] who couldn’t give a shit about the merits of the Chiefs or the Eagles can be induced to pony up cash by connecting to a bet on Rihanna, and suggesting that the tribe they want to join is crazy for it,” he said.
As for the million dollar question, he answered that too: “Does this lead to ethical concerns? No. From an advertising perspective, if it’s legal, they will go all in.”
Perhaps nuance is dead, after all…
Bet365 owners Denise, John and Peter Coates have been knocked off The Times Tax List top spot for the first time since 2019.
Despite contributing some £460.2m to the UK’s public purse in 2022, the gambling dynasty was pushed to second place in the 2023 Tax List, behind Moscow-born owner of XTX Markets Alex Gerko.
Gerko headed the list for the very first time after contributing £487.4m in taxes during the latest financial year.
The Coates’ tax contribution was down 4.5% on the previous year’s Tax List, when they contributed £481.7m, and 19.7% down on the £573m they contributed in 2021’s rankings.
Bet365 reported a 2.3% increase in full-year revenue to £2.85bn for the 52-week period ending 27 March 2022, although profit from gambling operations decreased by 88%.
The 2023 figure still leaves a serious gulf between the Coates and the UK’s next largest taxpayers, with Speedo owner Stephen Rubin and family contributing £392.2m in third place, and hedge fund manager Sir Chris Hohn contributing £263m in fourth.
The fifth position on the list was taken by another UK-based gambling industry success story as Betfred owners Fred and Peter Done contributed £136.8m in taxes.
Other notable contributions from the world of iGaming include major Evolution shareholders Ian and Richard Livingstone, the property mogul brothers who also own a string of luxury hotels.
They contributed £104m to the public purse and were a new entry on The Times’ Tax List this year at position number 10.
The pair were reported to hold a 16.4% share in the Swedish live casino giant in 2020 before selling off a significant portion of their stake.
Today, Richard Livingstone holds around 4.2 million shares in the business, or 1.95% of its total shares. At its current valuation of SEK1,167, that leaves the property tycoon’s remaining stake in Evolution worth some SEK4.89bn (€433.6m).
Elsewhere, the Tax List includes career bookie Will Roseff, who helped get bet365 up and running and retains a 6.7% stake in the business.
Roseff contributed £32.9m in taxes this year, putting him in 41st position of the UK’s biggest taxpayers.
According to industry association the Betting and Gaming Council, the UK’s gambling industry supports 110,000 jobs in the country while contributing £7.1bn to the economy and generating £4.2bn in taxes for the Treasury annually.
Will they, won’t they?
According to an article in Seeking Alpha, MGM Resorts International is once again considering an acquisition of gambling industry behemoth and its joint venture partner in BetMGM, Entain.
In January 2021, MGM made a bid for Entain worth around $11bn, which Entain rejected stating that the offer “significantly” undervalued the company. Currently, Entain’s market cap is around £8.3bn.
Now, according to Seeking Alpha, MGM once again has an increased interest in acquiring Entain, and may seek to take over either the entire business or just its North American operations.
Will Hershey, co-founder of Roundhill Investment, reportedly added some weight to the rumours, suggesting there is a “high likelihoold” of MGM re-engaging in takeover discussions with Entain with a view to gaining full control of BetMGM.
The 50/50 JV holds a significant market share across US sports betting and iGaming markets, and is considered to be one of a handful of key players expected to go the distance as an increasing number of smaller operators begin to pull out of the market.
Hershey added that MGM had signalled its interest in operating online gambling outside the US when it bought LeoVegas in a $604m deal earlier this year.
While it remains to be seen how big an offer MGM would have to make to convince Entain to sell up, gaining full control of BetMGM would be one thorn removed from the lion’s paw.
UK government gets its Act together
The Times this week reported that after months of political turmoil and delays, the review of the Gambling Act has risen back to the top of the UK government’s agenda.
According to the newspaper, Prime Minister Rishi Sunak intends to move ahead with plans to curb online gambling amid concerns about the number of people who are becoming addicted.
Stake limits are once again back on the menu, as The Times revealed that the government is planning to introduce maximum stakes for online slot machines of between £2 and £5, with people able to make bigger bets only if they can afford to.
Moreover, gamblers will be subject to “non-intrusive” checks on their finances to ensure they are not racking up unsustainable losses, while the government also wants to introduce more robust age verification to ensure that under-18s cannot partake in any form of gambling.
However, The Times revealed that the government is expected to drop plans to ban free bets and VIP packages, while also axing plans to ban gambling companies from sponsoring football shirts for Premier League clubs, favouring a voluntary approach instead.
Curiously, plans to relax regulations on brick-and-mortar casinos have also been brought up again, with the land-based sector to be granted rights to install more machines on their premises and extend credit to wealthy foreign customers.
Some government figures are said to be pushing for a release of the white paper before Christmas, while others suggested it is likely to take longer than that.
A source close to Michelle Donelan, the secretary for digital, culture, media and sport, told The Times: “This is an issue close to Michelle’s heart – she knows too well the devastating impact that problem gambling can have on people’s lives, but also wants to make sure that the balance is right and that protecting the most vulnerable is the top priority.”
Whatever ends up in the final version of the Gambling Act review, firms in the UK will be glad to finally get some clarity on the rules going forward, after a long and frustrating period of uncertainty.
Vegas continues to bounce back
As shown in an article from The Nevada Independent, gambling revenue in the state is back on the up-and-up as Sin City looks set to smash the record figures set in 2021 this year.
October marked the 20th consecutive month of Nevada operators generating over $1bn in gambling revenue, according to figures from the state’s Gaming Control Board.
Total gambling revenue for the first 10 months of 2022 sits at $12.3bn – not far from the record $13.4bn recorded for the entirety of 2021.
Strip casinos have recorded $6.8bn of the figure, while Michael Lawton, the control board’s senior economic analyst, said the combined markets outside of the Strip, which saw revenue grow 10.6%, were the catalyst for a significant year-on-year statewide revenue increase in October.
“This represents the largest increase recorded by these markets since February,” Lawton said. “The combined markets have now recorded increases year-over-year in three consecutive months after experiencing four successive (monthly) decreases.”
Casinos in downtown Las Vegas also combined for a single-month gambling revenue record in October of $90.5m, a 19% increase. As of October, revenues in downtown casinos are 6.3% ahead of 2021’s single-year record of $842.2 million.
One catalyst for Nevada’s gambling growth has been an increase in the number of visitors in October. During the month, more than 3.6 million people visited Las Vegas, a 7.3% increase over October 2021, while convention attendance was around 4.2 million, the highest monthly total this year.
Sports betting was also on the up, with Nevada sportsbooks recording revenue of $56.9m in October, up 17.7%. Some 67% of the $921m wagered in Nevada during the month took place on mobile.
Operators in Nevada will certainly now be hoping that the growth happening in Vegas stays in Vegas.
The kids aren’t alright
The Times this week put its focus on the prevalence of gambling-related harm among minors, as it quoted from Gambling Commission data showing 3.5% of children aged 11 to 16 (one in 29) either struggled with a betting addiction or showed signs of developing one.
This, it suggested, is akin to one child in every secondary school classroom in the UK showing some signs of gambling-related harm.
Under Gambling Commission definitions, problem gamblers were defined as children who gambled with “negative consequences and a possible loss of control”.
The piece also pointed out that more girls than boys now have a gambling problem, after the proportion with a betting addiction tripled over the past two years.
The Gambling Commission was quick to suggest the finding was not statistically significant, however, and was more likely the result of changes to the questions it asked since last conducting the survey, meaning the latest results were not directly comparable to previous ones.
A total of 0.9% of young girls and 0.7% of young boys were identified as having a gambling problem by the regulator.
The most common forms of gambling undertaken by children – perhaps unsurprisingly – include arcade gaming machines, placing bets for money between friends or family and playing cards for money with friends or family.
In addition, one in 50 children had managed to play lottery games despite the over-18 age limit placed on the products.
According to Henrietta Bowden-Jones, director of the National Problem Gambling Clinic, “There is not enough protection of children when it comes to exposure to gambling cues … adverts on social media or gambling logos and ads when sports are being watched. Gambling has been normalised in an ever-increasing manner over the past 15 years since the implementation of the 2005 Gambling Act.
“[This is] a generation who no longer see gambling as something that belongs to the adult world. It is now seen as a common pastime and within reach due to the internet and to its close links to sport. There is an urgent need to review this exposure in the Gambling Review in order to reverse the process and protect future generations.”
A spokesperson for the Betting and Gaming Council, meanwhile, pointed out that: “Our members take a zero-tolerance approach to betting by children. The most popular forms of betting by children are legal arcade games like penny pusher and claw grab machines, bets between friends and fruit machines – not with our members.”
It’s coming to America
Forbes provided some insight into expected betting activity on the 2022 World Cup in Qatar – the first edition of football’s biggest tournament since the repeal of PASPA in 2018.
According to the article, punters across the globe are expected to lay down bets in excess of $160bn on the tournament – with more than €1bn being wagered on each of its 64 matches.
In fact, the $160bn figure comes from the 2018 World Cup in Russia, and betting trends are only expected to go one way this time round.
Since it is the first World Cup to take place since the repeal of PASPA in the US in 2018, and the subsequent tidal wave of newly regulated markets opening up across the country, an estimated 20.5 million Americans are expected to place a bet on the tournament.
Handle from the US is likely to come in at around $1.8bn across the whole tournament, according to a study published by the American Gaming Association (AGA), making it the most bet-on World Cup in US history.
“It’s a very safe bet to say that this will be the most bet upon soccer event in American betting history,” said Casey Clark, senior vice president at the AGA. “The biggest sporting event in the world is going to attract a bigger handle than it has before.”
At the time of the last World Cup in 2018, bettors could only get in on the action in Nevada, New Jersey and Delaware. Now, punters across some 30 states will have access to regulated sports betting in some form or another.
And the biggest exposure for bookies in the US appears to be punters backing their own team.
While the odds of a victory for the US Men’s National Soccer Team are slim – their best ever result was reaching the semi-finals in 1930 (when the team boasted six British-born players, incidentally) and they failed to qualify for the 2018 tournament in Russia – an unexpected victory could cause havoc for US bookies.
DraftKings is taking bets on the team to win the tournament at 130/1, for example, and would stand to lose a colossal amount if it had to pay out on bets placed at that price.
“The public always bets the United States,” said John Murray, director of the Superbook at Westgate Las Vegas. “As much as I’d love to see them win the tournament, that’s pretty unlikely.”
Indeed.
Gambling with pensions
Responsible investing has come in for a great deal of criticism in 2022. The list of companies and countries that are accused of not being as ESG-friendly as promoted is getting longer by the day.
The Guardian this week reported that Australia’s biggest superannuation funds, which are employer-sponsored retirement accounts, have invested more than A$4.2bn of workers’ retirement savings into the gambling industry, even as part of investment plans that claim to be “socially aware”.
Analysing portfolio holdings disclosures for the most popular investment options offered by the 10 biggest superannuation funds, the newspaper revealed that all funds invest in Aristocrat Leisure, owning a total of at least A$1.67bn worth of shares.
Moreover, the newspaper pointed out that the “socially aware” option of the country’s biggest fund – the AustralianSuper – has invested A$16m in Aristocrat and nearly A$45m in four of the six biggest publicly listed gambling companies in the country.
According to a spokesperson of the fund, AustralianSuper did not exclude particular industries other than tobacco, while the active engagement with the gambling sector would help ensure “high standards of responsible gaming and appropriate governance practices are in place.”
The newspaper also revealed that Australia’s third biggest super fund, Aware, which promises to “invest your super in ways that will do good for your community”, was also a big holder of gambling stocks.
A spokesperson for Aware commented: “We invest across an exceptionally wide and diverse range of industries and the gambling sector is just one of these. Importantly, members with ethical concerns around the gambling sector can choose one of our socially responsible investment options, which have no gambling exposure.”
The retail employee fund, Rest, had meanwhile invested A$400,000 in Australia’s largest slot machine manufacturer Endeavour, despite claiming that their investment scope excludes companies generating more than 5% of their revenue from gambling.
A spokesperson for the fund said Endeavour did not breach the gambling exclusion and outlined that all decisions had been made in the best financial interest of the fund members.
The rise and rise of gambling prevalence in the UK
A quarter of gamblers in the UK increased the amount they played over the last year, according to research published this week by Bloomberg, while almost half of all under-35s now claim to enjoy a flutter.
The research came from the Health, Wealth and Happiness Index by the Centre for Economics and Business Research (Cebr) for life insurance broker LifeSearch.
It showed that across the whole population, 32% of British citizens gamble, with the average gambler aged under 35 spending £43 per month on the activity. Looking to the bigger spenders, 22% of gamblers spend more than £75 per month, while just 8% spend upwards of £100.
Time spent gambling has also increased alongside income, with 58% of people with a household income of £100,000 a year or more saying they gamble. Of those, 45% have increased the amount they gamble over the past year.
LifeSearch CEO Debbie Kennedy expressed concern at the recorded increases, which are taking place alongside the soaring cost of living and rises in inflation.
“Most people have had to adjust their spending to cope with the soaring cost of living, with many feeling they have cut back so much that they have run out of options,” she said.
“That is perhaps why – in desperation – many are turning to gambling to find a ‘quick fix’, with younger people most at risk; under 35s are more likely to gamble in the first place, more likely to have upped their habit in the past year and spend more than other age groups.
“This is a very worrying trend because while gambling may be seen as a magic solution, it is much more likely to make a financial situation worse.”
The fall and fall of Football Index
The Athletic ran a piece on the now-infamous Football Index, which collapsed last year leaving customers out of pocket and parent company BetIndex in administration.
The piece focused on a special debate taking place among British MPs earlier this week, on the impact that Football Index’s collapse caused for their constituents.
A series of parliamentarians described harrowing stories of their constituents’ lives being ruined by the collapse, The Athletic reported, with virtual footballer ‘shares’ worth £120m losing all value in a short space of time.
While those MPs pushed for government money to be used to cover customers’ individual losses, the government representative present at the debate was intransigent on that point.
“We do not think it would be appropriate for the government to use public funds to cover losses to individuals resulting from the collapse of a gambling company,” said Nigel Huddleston MP, parliamentary under-secretary at the Department for Digital, Culture, Media and Sport.
MPs’ calls for compensation fell on deaf ears, with Labour MP Liz Twist explaining how one of her constituents had lost the £13,000 he was saving for a wedding, and Jessica Morden MP saying Football Index “modelled itself as an investment package, and is an utter failure of regulation by the Financial Conduct Authority and the Gambling Commission.”
“Customers felt wrongly assured that their long-term investments in the index were secure,” she concluded.
The Gambling Commission also took its fair share of flak from MPs during the debate.
Conservative MP Aaron Bell issued the most damning indictment of the regulator, stating: “I have long experience of the Gambling Commission, and while I was in that role, it was frequently behind the curve and asleep at the wheel, which is one of the accusations levied at them regarding Football Index.”
It remains to be seen what impact Football Index’s collapse, if any, will have upon the government’s upcoming review of the 2005 Gambling Act.
The rise and fall of DAZN
Earlier this week, The Times published a deep-dive into the history of one of the most talked about potential challenger brands in the sports betting space, streaming service DAZN.
The firm, it explained, was born out of an old brand, Premium TV, which was picked up by Odessa-born business magnate Len Blavatnik for around £25m back in 2007.
A subsequent merger and public listing in the years that ensued were followed by a profit warning which sent the firm’s share price into a downward spiral, the piece explained, after which Blavatnik took the business private again at an eye-watering cost of £700m.
The idea was to create the ‘Netflix of sports’, apparently, shortly after the now-ubiquitous TV and movie streaming service had begun to gain traction in the UK market.
And thus DAZN was born, launching in Austria, Germany, Japan, Switzerland and Italy in the following years.
However, the firm has run into a series of roadblocks since then.
It recently missed out on a chance to acquire BT Sport, and the associated Champions League and Premier League streaming rights that came with it, while also being plagued with other apparent failures including a deal with Mexican boxer Saul “Canelo” Alvarez being cut short, and a streaming deal with Telecom Italia delivering smaller-than-expected revenue contributions.
Now, The Times says: “There is another, bigger shift under way – beyond just streaming. DAZN is quietly creating a broader service that will include news stories, ways to bet on sport, some content that is free to view, and e-commerce and ticketing.
“Shay Segev arrived in 2021 from FTSE 100 gambling giant Entain in a sign of where the company was headed. It is also introducing advertising as part of this.”
The broadsheet also believes the business could be an attractive acquisition target at some point for a firm such as Disney, or could explore another listing on the public market. “Both options seem distant in the current climate,” it stated, however.
Whatever happens, let’s hope the streaming giant’s management team keep their heads in DAZN.
Marcus Boyle has come out swinging in his first public statement as chairman of the Gambling Commission, promising stricter enforcement action against failing licensees.
Boyle was hired last September to replace former chair Bill Moyes, whose tenure was tarnished by the collapse of Football Index. That sorry episode also led to the departure of former CEO Neil McArthur, who was replaced on an interim basis by Andrew Rhodes.
Rhodes has now been handed the position on a permanent basis and the Commission is seeking to step up its enforcement powers to coincide with findings from the UK government’s review of the 2005 Gambling Act.
The UK is already one of Europe’s strictest markets from a regulatory perspective, but Boyle has pledged to clamp down heavily on operators that breach licence conditions on more than one occasion.
Gambling Commission chair Marcus Boyle: “Recent investigations reveal cases with jaw-dropping examples of substantial amounts being taken from individuals who cannot afford to wager such sums.”
Authoring an op-ed for The Times over the weekend, Boyle wrote: “A key area is increasing the impact of sanctions imposed on persistently failing operators. Recent investigations reveal cases with jaw-dropping examples of substantial amounts being taken from individuals who cannot afford to wager such sums.
“Our enforcement has led to operators paying out more than £130m in the past five years, but this clearly is not a sufficient deterrent. Consequently, operators can expect to see cumulative sanction packages, with not only increased financial penalties, but also a suite of sanctions aimed at changing behaviour.”
These will include fines based on a percentage of customer takings, as well as short and long-term suspensions and the addition of significant conditions to UK operating licences.
“We will expect full board oversight and personal accountability through increased personal management gambling licences at strategic and operational levels,” continued Boyle.
“And we will not tolerate an attitude of lowest possible compliance being sufficient. We expect our licence holders to genuinely commit and learn from failings.
“Licences will be withdrawn where standards are not met, meaning that individuals could not hold senior positions in the industry.
“Licence holders should aim for the highest standards,” he added.
The UK government’s review should be published imminently and is expected to result in wide-ranging reform for the regulated sector, including a potential ban on Premier League shirt sponsorships and a stake limit of £2 per spin for online slots.
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.
Camelot to defend its kingdom
The Telegraph appeared to have quite the scoop on Wednesday as it suggested UK National Lottery operator Camelot was set to retain its licence as it had secured the preliminary endorsement of the Gambling Commission.
Apparently Camelot had come up trumps on a scorecard designed to judge the merits of bids in the tender process, alongside competition from Italian lottery giant Sisal, pan-European Allwyn and the largest lottery operator in India, Sugal & Damani.
The Telegraph claimed the Gambling Commission had passed its scorecard to UK Government Culture Secretary Nadine Dorries, who took an admirable stand today by saying she would “probably” withdraw her support for Prime Minister Boris Johnson “if he went out and kicked a dog”, presumably relating to the fallout of West Ham defender Kurt Zouma volleying his poor pet cat last week.
Anyway, the Gambling Commission was quick to rebuke the Telegraph’s claims yesterday, stating that “we are still in the process of evaluation and today’s Daily Telegraph piece is simply based on false and inaccurate information” – that’s them told, then.
US firms prepare for Super-Duper Bowl this weekend
Operators stateside are preparing themselves for the biggest ever Super Bowl on Sunday as the Cincinnati Bengals face down the Los Angeles Rams (thanks, Google).
According to the American Gaming Association, a record 31.4m Americans plan to place a bet on the big fixture, with the best estimates claiming some $7.6bn will be wagered on the main event.
The Rams appear to be slight favourites, with 55% of bettors planning to back the team. More importantly, perhaps, 76% said it was important for them personally to bet through a legal operator – an increase of 11% compared to last year.
“The results are clear: Americans have never been more interested in legal sports wagering,” said Bill Miller, president and CEO of the AGA.
“The growth of legal options across the country not only protects fans and the integrity of games and bets, but also puts illegal operators on notice that their time is limited.”
Playtech in the press again
Rumours abound for Playtech, whose Latin American partner Caliplay is close to completing a SPAC acquisition on the New York Stock Exchange, according to The Times.
Speculators are apparently suggesting that if the business “gets off to a flying start” as a public entity, Playtech could end up converting revenues from its partnership with the operator into a 39% stake in the new business – worth as much as $700m.
Meanwhile, The Guardian went to press on Monday with a denouncement of Playtech’s newly signed five-year deal with the Jockey Club as horseracing increasingly looks to iGaming to top up diminishing revenues.
The result of the deal will be cross-sell opportunities, the piece said, or to put it less gently: “The Jockey Club flogging Playtech some racing-themed wrapping paper for software that mechanically grinds a fixed percentage of turnover from its users”.
The piece argues for stronger distinctions to be drawn between betting and gaming, decrying a blurring of the lines which has led to the cross-promotion of online casino and sports betting products to customers.
The “grubby and cynical” practice should be stopped, according to author Greg Wood, who strongly recommends the government consider “alcohol-style regulation for betting and a tobacco-style regime for gaming” in its ongoing Gambling Act review.