47 PUBLIC GAMING INTERNATIONAL • JANUARY/FEBRUARY 2022 The association wants the government to use a long-established law requiring any company that makes, sells, or ships a gambling device that is sent across state lines to register with the Justice Department, as those in the regulated gaming industry do. Violators of the law, known as the Johnson Act, can be fined up to $5,000 and face up to two years in prison, in addition to forfeiting the machines. “Unfortunately, illegal and unregulated machines continue to skirt the law and put consumers at risk,” said Jessica Feil, AGA’s vice president of government relations and gaming policy counsel. “The AGA and its members are urging the Department to utilize the Johnson Act to investigate and prosecute illegal gaming machine manufacturers. This important step will protect players and, ultimately, root out these pervasive, bad actors.” Commercial and tribal casinos, which must adhere to state and federal laws covering a wide range of procedural and reporting requirements, operate in 41 states. The AGA says machines that take advantage of legal loopholes or openly flout the law are common at bars, convenience stores, and gas stations in many states. Known by various names – including “nudge,” “sweepstakes,” “skill,” or “no-chance” games – the machines function much like casino slots, but do not undergo the testing or regulation required of licensed operators. In addition, according to the AGA, such machines do not meet federal laws regarding anti-money laundering, are not tested or monitored to ensure fairness for consumers, and prey on the most vulnerable consumers, including minors and problem gamblers on self-exclusion lists from regulated casinos. “Gambling outside the purview of regulators is rife with opportunity for money laundering and other activities that nefarious actors hope will go undetected,” says an AGA report released in April. Recent news reports highlight illegal gambling operations across the United States: In October, a Canadian company agreed to pay $3.5 million and permanently stop its California operations, as it settled a lawsuit by the state that accused the company’s “sweepstakes cafes” of unfair competition and false advertising. Also in October, officials in Platte County, Mo., publicly destroyed five machines after the vendor was convicted of a felony promotion of gambling. This week, a representative of a skill-gaming manufacturer took reporters on a tour of what he called illegal casinos in Virginia and said the number of illegal machines has grown substantially since the state legislature banned skill games this summer. The company he represents is pushing to overturn the ban. The Association of Gaming Equipment Manufacturers, which opposes unregulated gaming, notes that such “skill” machines are unlike the highly regulated “skill-based” or “skill-influenced” games available in licensed casinos. Feil said some analysts estimate that tens of thousands of illegal machines operate in some states. Michigan Gaming Control Board warns of unregulated gambling sites Michigan residents who place wagers on unregulated gaming sites may gamble on more than they expected and become victims of identity theft or deposit theft. Henry Williams, executive director of the Michigan Gaming Control Board, warned residents of these sites in a news release Monday. The American Gaming Association (AGA) has announced its next Chairman, Hard Rock International Chairman and Seminole Gaming CEO, Jim Allen North Dakota is now among the states offering regulated sports wagering, joining 28 other states and Washington, DC. AGEM Index of gaming stock prices sees 41% annual growth in 2021 How sports betting is changing the media industry in the US The lines are blurring between US sports betting and media. Broadcasters and publishers have embraced sports betting as a means of revenue and engagement. And ties between the two industries will likely deepen in 2022 with sports betting becoming a vital and growing piece of US sports media. WORLD NEWS Inspired is proud to announce the acquisition of Sportech Lottieries, a subsidiary of Sportech PLC Acquisition expands Inspired’s content reach to new customers and geographies and build out a platform of turnkey lottery/iGaming systems solutions. Concurrently, Inspired and LEIDSA have agreed to a 10-year extension to the lottery systems contract. Upfront purchase price of US$12.5 million. The principal asset of Sportech Lotteries is the lottery systems contract to provide online and retail lottery services, as well as the upcoming launch of Sportech’s iLottery solution, to Loteria Electronica Internacional Dominica S.A. (“LEIDSA”) of the Dominican Republic. The current lottery systems contract with LEIDSA had been scheduled to run until March 9, 2025. Concurrent with closing of the acquisition of Sportech Lotteries, Inspired and LEIDSA extended the lottery systems contract through March 9, 2035. EL debates the Digital Services Act. New tools to enhance the fight against illegal online gambling The upcoming Digital Services Act (DSA) as proposed by the European Commission aims to create a safer digital space in which the fundamental rights of all users of digital services are protected and marks a milestone update in the regulation of Internet in the EU. It foresees a number of provisions that could potentially be beneficial in the lotteries’ fight against illegal online gambling. These include an improved notice-and-action mechanism which would enable all users to notify illegal content online, an introduction of the concept of “trusted flaggers” whose notifications of illegal content would need to be addressed with priority; and enhanced consumer protection and know-yourbusiness-customer requirements. https://www.european-lotteries.org/news/eldebates-digital-services-act The UKGC Seeks Public Input on Its Policies and Procedures The UKGC is seeking feedback in order to assess its principles and ensure transparency for licensed operators, as well as wider stakeholders. The commission is essentially looking for opinions on whether its policies are transparent and current. However, while the agency routinely reaches out for input, this latest initiative is likely tied to increased scrutiny. The UKGC is the target of the All-Party Parliamentary Betting and Gaming Group (APPBGG). The committee has questioned whether it is capable of maintaining its authority. The UK gambling policies on licensing, compliance, and enforcement were last updated in 2017. Policy Change Before Legislation: Importantly, the consultation solicits feedback on the commission’s position on “products which appear to require dual regulation.” This is a concern that regulators have been grappling with after the widespread criticism of Football Index’s licensing application. Our preferred outcome is that this is resolved through legislative change, but it is unlikely to happen before the Gambling Act is concluded. In the absence of change, we propose that we should set out a clear policy position on how we intend to deal with these products,” states the UKGC’s announcement about the consultation.
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