Betting Business Bulletin 8th January 2017
Commission action heralds tough year for gambling operators
Gambling companies are confronted by a tough 2018 from a regulatory point of view and the bad news has started early with five online casino operators facing a possible licence review by the Gambling Commission.
They are among 17 firms being investigated owing to concerns about the sector’s approach to anti-money laundering and social responsibility.
The industry regulator has written to all online casino operators about their concerns following a review of how well operators are meeting their obligations.
A licence review is one of the strongest sanctions the Gambling Commission can use, giving it powers to impose a financial penalty and suspending or even ultimately withdrawing an operator’s licence.
None of the operators under threat has been named by the regulator.
Outgoing commission chief executive Sarah Harrison said: “The Gambling Commission’s new strategy sets out our vision for a fairer and safer gambling market. The action we are taking to examine online casino operators’ compliance with money laundering and customer interaction requirements is just one example of how we will be relentless in turning that vision into reality.”
The commission is already carrying out a wider review of online gambling, while the industry is also waiting to hear what action the Competition and Markets Authority plans to take over operators’ terms and conditions and other practices that have come under fire.
Scientific Games completes NYX acquisition
Having had the odd bump in the road on the way, Scientific Games completed its acquisition of OpenBet’s owners NYX Gaming on Friday.
Legal action had swirled around the CAD$775 million (£460.5m/€519.5m) deal until William Hill dropped their opposition in December.
Scientific Games chief executive Kevin Sheehan said: “Today, Scientific Games moves forward as a leading digital provider of sports betting, iGaming and iLottery technologies, platforms, content, products and services.
“As we look to 2018, we are truly excited by the opportunities that this acquisition presents to us.”
Those opportunities might include the possibility of more widespread legalised sports betting in the United States, depending on the US Supreme Court’s verdict on the legal challenge to the 1992 Professional and Amateur Sports Protection Act (PASPA), which is expected by the summer.
In 2016 William Hill and Sky Bet teamed up to invest £100 million in NYX after NYX had bought betting-industry software provider OpenBet for £270m.
When it was announced in September that NYX had accepted a bid from Las Vegas-based Scientific Games, William Hill said they would block the deal and in turn NYX and Scientific Games launched legal action against the British company.
That was dropped once William Hill announced they had reached agreement with Scientific Games to unconditionally support the acquisition.
GBI accepts Israel settlement
The Israeli government is to pay nearly £5 million to the company responsible for distributing British and Irish racing to overseas betting operators after a ban on gambling on the sport came into force there on New Year’s Day.
GBI Racing, the joint venture between Racing UK and At The Races, had a contract with the Israel Sports Betting Board that was due to run until August, but its business there has been halted as part of a wider campaign against gambling.
The Israeli Ministry of Finance, which closed the operation of betting on horseracing from Monday, has secured an approval to pay a settlement of 23m shekels (roughly £4.9m), GBI has revealed.
Betting on racing in Israel was launched only in 2013 but the country quickly became one of GBI’s top five territories with revenues believed to be around £4m a year.
A GBI spokesperson said: “GBI Racing quickly established Israel as a key market. It’s a partnership that has delivered substantial revenues and funding to UK and Irish racecourses, as well as for sports and government good causes in Israel, but we have accepted the ministry’s decision and the political will to close the operation.”
It was reported last year that GBI was seeking up to 200 million shekels (around £43m) in compensation.
The spokesperson added: “We believe it is a fair settlement, given the circumstances.”
GBI will look to replace the missing revenues from existing and new markets, with the company “excited” about opportunities in Italy and Africa.
What’s happening this week
Monday marks the start of a new era at Paddy Power Betfair as Peter Jackson takes over from Breon Corcoran as chief executive of the gambling giant.
Jackson – whose last job was as chief executive of payment processing company Worldpay UK – has a hard act to follow, as was illustrated last year on the day it was announced that Corcoran was leaving, with the firm’s share price falling by more than eight per cent at one point.
However, Jackson does have experience of the gambling industry, having served as a director of Betfair from 2013 and then Paddy Power Betfair following their merger.