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Op-Ed Commentary onToday's News Paul Jason, CEO, PublicGaming Research Institute (PGRI) Monday, February 5, 2018

Thankfully, gaming commissions and regulators are reigning in the destructive activities of illegal online gaming operators and “secondary” lotteries.

Sweden to open its market up to a multiple-licensed-operator model

U.S. States prepare a Supreme Court ruling that turns regulatory control of sports-betting over to the states.

Tribal Gaming interests try to prevent U.S. states from expanding the states’ games-of-chance footprint.

"We are better than the illegals!"

UK Gambling Commission warns Online firms to take immediate action against unfair terms and conditions

Swedish online market to be taxed at 18 per cent

These three headlines in today’s Report reflect the long-term trends in how the competitive landscape in the games-of-chance market-place is evolving. In one, the director of the Staatliche Toto-Lotto in Germany explains why secondary lotteries are a blight on society that expropriates money from charitable causes and puts it into the pockets of a small handful of private shareholders. "Every euro that drains into dark canals is missing from the state … the illegal providers are always looking for new loopholes and do not care about the legal regulations.”

 Thankfully, gaming commissions, regulatory agencies, and agents of law enforcement are fighting back. The UK Gambling Commission is admonishing online gambling operators to clean up their act. In past weeks, online operators were told to cease and desist with false or misleading advertising. Now they are being told to comply with consumer protection law as applies to the ways that terms and conditions must not harm consumers, and promotions and sign-up deals that entice new players cannot be predatory. The Gambling Commission is also calling for views from consumers, gambling businesses, stakeholders and members of the public on proposed changes to regulations relating to marketing and advertising, unfair terms, and complaints and disputes. 

But then … Sweden is moving from a highly controlled market-place to a liberalized multi-licensed-operator model. It would appear that the illegal underground gambling market has grown in Sweden to a point where prohibition became problematic and so Sweden policy-makers decided to apply a regulate-and-tax regime to bring the games-of-chance market under control.

 I would respectfully point out that there are ways to prevent online gambling operators from invading your market-place. It does require a clarity of thinking as regards to the issue of controlling the use of the internet. There are some, for instance, who protest that the government has no business controlling the internet, or preventing the consumer from accessing whatever websites they choose, or gambling on whatever website they choose. Of course, this civil libertarian ideology comports perfectly with illegal online operators who also do not want the government to control access to their websites. It is not my place to proscribe regulatory policy. It is my place to point out that the government can and should exercise its right to control the illegal use of the internet, to protect the consumer from illegal operators, and to prevent the internet from being used to enable commerce of illegal goods and services - I don’t think anyone would propose that illegal drugs like heroin or child pornography or weaponry should be freely transacted over the internet. Laws that protect society from Illegal use of the internet can and should be enforced.

Americans to Wager More than $4.6 Billion Illegally on Super Bowl 52

Less than 3% of Super Bowl wagers will be in the legal regulated market!

How states are gambling on N.J.'s sports betting suit

The U.S. sports-betting market is an example of an underground market gone completely out-of-control. Clearly it is time to regulate and tax. Everyone seems to agree, even the major sports franchises and associations (though at least one of them is trying to tie legalization to carving out a profit-share for themselves). In anticipation of a Supreme Court decision that removes the federal prohibition of sports-betting, U.S. states are moving quickly to create the legislation and regulatory frameworks that will enable a fast start. It is still uncertain how the Court will rule. Many expect a 5 to 4 decision. But most also think it looks favorable for the removal of federal prohibition against sports-betting.

 U.S. state lotteries should make sure they have a place at the table. The idea, as manifest in government lottery operations that offer sports betting in other markets around the world: sports-betting does not yield the highest margins or even profits. It does, however, connect the Lottery operator with a very large, growing, and coveted demographic profile of young next-generation players. Do sports-betting players migrate to Lottery? I do not know of data that speaks to this question. I am told that the young, actively engaged and passionate sports-betting player may not be a good prospect for switching to Lottery. But what about the thirty-something who may have been an avid sports-betting player when she/he was younger but now has a family, financial obligations and most importantly, much less discretionary time to spend? It’s important for Lottery to be where the players are and a large portion of next-gen gamers are into sports-betting.

 Sports betting bills have been filed in some 20 states, and some will come into effect immediately upon a go-ahead ruling from the Supreme Court. This article describes how some of the states intend to regulate sports-betting.

  Arizona Legislator pulls gambling bill after Tribes put the brakes on state's lottery expansion

Florida Lawmakers roll the dice again on a gambling plan

There’s not one but two stories about Tribal Gaming opposition to states entering new games-of-chance categories. The Tribes have what are called “Compacts” or agreements to share profits from their casino gambling operations with the state. Of course, that is as it should be. The players who are pouring all the profits into Tribal Casinos come from the state contiguous to the Tribal land that hosts the casinos. States want to expand state-operated gaming. Tribes want to limit state-operated gaming because it competes with the Tribal gaming casinos. The argument is interesting because the judicial process to resolve these disputes is not entirely clear.