March 18, 2024

Could a gambling “error” cost you March Madness?

The 2024 NCAA men’s and women’s basketball tournaments are here. That means it’s time to fill out a bracket, to suddenly become the biggest fan of a school you’d never heard of before this week, or to coat your body in team colors before every game (depending on your obsession level, of course). For many Americans, it’s also time to place some bets. This is “the most mainstream betting event of the year,” says David Forman, vice president of research at the American Gaming Association (AGA). “It used to be office pools and squares contests.” Now, with the explosion in legalized gambling across the US, he says, “people in almost 40 states have the ability to bet on the tournament legally, and we think they’re going to bet about $2.7 billion on the men’s and women’s tournaments.” If that estimate has you staggering, you obviously don’t watch all that much live sports. Because if you did, you would have already heard from a slew of celebrities, like Jamie Foxx and Rob Gronkowski, selling you on the virtues of major sports books like BetMGM, FanDuel, and DraftKings. You also must’ve missed the headlines around the Super Bowl last month, when the AGA estimated that 67.8 million Americans would bet roughly $23.1 billion. Sports betting is bigger than ever, and 2023 was the biggest year yet. But as more states legalize gambling, effective regulation hasn’t always kept pace. And it’s left some bettors wondering whether their bet will be honored. One of the reasons March Madness is such a big-time event for sports betting is the number of games being played — sometimes at the same time. In just the first four days of the tournament, there will be 48 games. “The thing that makes it very bettable is the structure of the tournament,” says Jack Andrews, co-founder of Unabated Sports, a subscription service that purports to help sports bettors increase their chances of winning. “On the East Coast, the tournament starts at noon on Thursday [March 21]. And then you have game after game after game after game after game. It’s basically a betting bonanza for sports bettors from noon to midnight.” In-game betting and prop bets are other forms of wagering that are very popular during the tournament, “especially betting the over/unders,” says David Vinturella, an instructor at the University of Nevada Las Vegas who developed and taught the school’s first ever semester-long course in sports betting this year and who previously worked for a major sports book. He explains over/under bets like this: Betting the over is wagering that a team will score more than sports books’ predicted figure. Betting the under is the opposite. Another well-liked prop bet Andrews describes is betting on the first team to score 15 points. “That is hugely popular in Vegas,” he says. “That’s not really betting on the game, you know — instead you’re just betting on which team gets off to a hot start.” With millions of people expected to place bets with sports books throughout the tournament, can bettors be sure they’ll be paid out if their long-shot bet wins big? The answer to that question was a bit murky in the days before legal sports betting, when offshore sports books were the only game in town, says Andrews. “That’s the difference between the US and offshore sports books. If you have a problem offshore, the offshore sports book says, ‘I’m judge, jury, and executioner, and you’re out.’ Whereas in the states with regulated sports betting, [regulators] are supposed to make sure it’s a fair bet.” Still, there have been stories recently about sports books in the US voiding bets that would’ve paid out big to bettors. The sports books use a clause in the fine print of their regulations saying that if there’s an obvious error with the odds in the bet (a.k.a. “palpable error”), they can cancel your bet. Critics say this is unfair because the sports books have multiple chances to prevent a soon-to-be-voided bet from ever happening. “The bet is offered by the sports book, the bettor offers a wager to the sports book, and then the sports book accepts the wager,” says Andrews. “They had three chances to stop the bet from ever happening.” Vinturella says that voided bets definitely happen, but that they are rare. “The process of getting a license and securing the license for a mobile sports betting company is not easy or cheap. So sports books don’t want to do anything that would jeopardize that license.” Andrews agrees that most bettors will never have an issue with a sports book over a palpable error. “Ninety-nine percent of the time, sports books just eat the loss,” he says. But Andrews thinks regulators often have a “pro-operator” approach because “they’re funded by the operators,” and “they don’t want DraftKings to lose $1 billion because of something that should have never been out there.” That’s why regulators should have clear sets of rules for determining what is and isn’t a clear mistake. A good example is New Jersey, where the Division of Gaming Enforcement has a two-step process for deciding whether the error was palpable. Step one: Was the bet legal to begin with? If so, good. If not, the bet doesn’t count. Step two: Was there a risk of losing? If so, the wager stands. If there’s no risk, then the bet is voided because it must’ve been a mistake. It’s that sort of easy-to-follow process that will let bettors trust regulators and confidently participate in the fast-growing billion-dollar industry — ultimately benefiting the sports books, too.

National Lottery operator had borrowed millions from Kremlin-owned banks

The company behind the national lottery was borrowing millions from Kremlin-owned banks when it won the UK’s largest public-sector contract, the Guardian can reveal.

Russia’s two largest lenders, VTB and Sberbank, were part of a syndicate that agreed to lend up to €640m (£545m) to Allwyn in 2020, two years before the pan-European gaming specialist was named the “preferred bidder” for the £6.5bn lottery contract.

While Allwyn repaid the portion of the loan attributable to the two Russian banks in response to the invasion of Ukraine, the funds appear to have helped support the group during the time it was in the costly process of bidding for the lottery.

Loans from the Kremlin-owned Sberbank and VTB, extended via European subsidiaries in the Czech Republic and Germany respectively, remained in place for nearly a month after both lenders were placed under sanctions by the UK government.

Allwyn repaid the debts in late March 2022, after the Gambling Commission had chosen the company to run the lottery, ahead of the incumbent operator, Camelot, and a bid from the media tycoon Richard Desmond.

There is no suggestion that Allwyn, ultimately owned by the Czech billionaire Karel Komárek, was in breach of sanctions or that there was any Russian influence over the bid. There is also no evidence to indicate the Russian loans were used to finance the bid for the lottery directly.

Allwyn said it informed the Gambling Commission about the loans and its intention to repay them on 28 February, four days after VTB was placed under sanctions by the UK, and that it followed Treasury sanctions guidance.

But the loans raise questions about whether MPs were given the information they needed during select committee sessions scrutinising Komárek’s business links to Russia.

The Labour MP Clive Efford, a member of the select committee for culture, media and sport, said he could not understand why the Gambling Commission did not mention the loans during an evidence session in June 2022.

“It is unacceptable that the commission chose not to inform us that it knew Allwyn had loans from two banks linked to the Russian state at the time that they selected it as their preferred bidder for the UK lottery,” said Efford.

“From this evidence it is clear that the Gambling Commission failed to give full and frank answers when questioned about what it knew of Allwyn’s links to Putin’s Russia.”

The committee is expected to question the Gambling Commission again in April.

The Conservative MP Iain Duncan Smith, the vice-chair of the all party parliamentary group on gambling-related harm, also questioned why the loans had not come to light previously.

He said: “There may well have been nothing concerning about this lending but if so, why were MPs and the public not told about it?

“A public sector contract of this value and importance should be subject to the utmost transparency requirements. The Gambling Commission must come forward with an urgent explanation.”

The previously unreported relationship between Allwyn and Kremlin-owned banks emerged thanks to analysis of freely available corporate records in the Czech Republic, where Komárek built his fortune in the post-Soviet era.

Despite Komárek’s public condemnation of Vladimir Putin’s “brutal” invasion of Ukraine, Allwyn has struggled to shake off concern among MPs about his Russsian links.

Questions have focused on a gas storage facility in the Czech Republic, that was jointly owned by Komárek’s holding company, KKCG, and Kremlin-owned Gazprom, until February.

In June 2022, the Gambling Commission told MPs on the culture committee that it was not concerned by the Gazprom link.

Loans from Sberbank and VTB, arranged in December 2020, financed the wider Allwyn group, which owns lotteries and gambling businesses across Europe.

The group controls UK-based Allwyn Entertainment Ltd, which began operating the lottery in February after a highly competitive bidding war.

The Gambling Commission officially launched the competition in August 2020, beginning a costly battle that saw Allwyn and rival bidders spend millions on consultants, lawyers, boardroom veterans and PR executives to support their bids for a contract projected to be worth £6.5bn in revenues over 10 years.

The loans were originally secured by Sazka Group Financing, a division of Sazka Group, which rebranded as Allwyn International in May 2022. Sazka Group Financing’s 2021 accounts state that the group “responded to the sanctions imposed by European Union member states on Russia regarding the Russian banking sector.”

“The entire part of the loan attributable to VTB and Sberbank” was repaid on 22 March and 25 March 2022.

The UK had placed VTB under sanctions nearly a month earlier on 24 February, while Sberbank was added to the UK’s sanctions list on 1 March.

Four days after VTB was put under sanctions, KKCG informed the Gambling Commission of the loans and that it planned to terminate the agreement.

On 15 March, when it was named the Gambling Commission’s preferred bidder, the loans had not yet been repaid.

Accounts for the wider Sazka Group refer to an early loan repayment in March 2022, recorded as close to €60m.

The figure represents about 14% of the €450m that Sazka Group Financing has borrowed from the syndicate at the end of 2020 and 3% of its external debt.

In October 2021, more than a year after the lottery licence competition began but before the decision to award the licence to Allwyn, the company agreed a separate £380m credit facility to fund its investment in the lottery, although it said the company was not reliant on external funds for the bid itself.

A spokesperson for Allwyn said it had “never borrowed from any banks in violation of sanctions restrictions” and that the 2021 facility “did not include funds from any Russian banks”.

Separately, said Allwyn, “as soon as Russia invaded Ukraine, and before being named by the Gambling Commission as the preferred applicant…Allwyn and its legal advisers initiated the process to repay borrowings provided by the European arms of VTB (based in Frankfurt, Germany) and Sberbank (based in Prague, Czechia) as part of [an earlier] broad syndicated bank financing in 2020.

“Allwyn promptly informed the Gambling Commission, and this process was done in full accordance with the wind down guidance published by HM Treasury.

“By 25 March 2022, only one month after the invasion of Ukraine, Allwyn had repaid all amounts owed to VTB and Sberbank.

“Allwyn has repeatedly expressed its horror at Russia’s invasion,” said the spokesperson, adding that any suggestion Russia had a role in Allwyn’s bid for the lottery or any influence over the company would be “an unjustified smear”.

The Gambling Commission said it had “required all applicants to declare any and all sources of funding that were to be used for both their application or for the running of the national lottery.

“We were – and still are – satisfied that no sanctioned entities are involved in funding Allwyn.”

March 08, 2024

Google and Twitch face heavy penalties over illegal online gambling advertising

The Italian Communication Authority (Agcom) has issued significant fines to Google and Twitch after the two companies were found to be in breach of rules preventing advertisements for online gambling in progammes targeting Italian audiences.

The legislation was introduced on 5 December last year.

Google Ireland Ltd (YouTube) was fined a total of €2,250,000 while Twitch Interactive Germany GmbH received a fine of €900,000.

The Authority said Google and Twitch were held responsible as “owners of the means of video dissemination published by third parties with whom they had specific commercial partnership contracts”. It is the third time that Google has been in breach of the rules.

According to article 6 of the Digital Services Act, providers of hosting services are not liable for information stored on their services on condition that they do not have actual knowledge of the illegal content or take action to remove or disable it once they become awate.

In both cases, Agcom considered that the platform providers had actual knowledge of the illegal content. The knowledge was inferred from the terms of the commercial partnership between the platforms and the concerned channels editors.

March 05, 2024

Spanish Police Smash Sports Betting Fraud Syndicate

The Spanish National Police, in collaboration with Europol, Interpol, and the Spanish Tax Agency, arrested 53 individuals involved in a criminal organization responsible for manipulating sports events. The investigation, conducted from 29th January to 1st February, revealed that the syndicate orchestrated match-fixing schemes in football, tennis, and table tennis across more than 20 nations, including Romania, Bulgaria, Ukraine, Russia, and Bolivia. The suspects, known as “betting mules,” played a crucial role in facilitating the criminal network’s operations by selling their personal information and betting platform account credentials.

The arrested individuals were part of a sophisticated criminal network that controlled over 1,500 betting accounts and generated approximately €2 million in winnings. The syndicate’s leaders utilized advanced technology to manipulate live streams by intercepting satellite signals and gaining access to live signals before betting houses. This unprecedented advantage allowed them to place substantial winning bets with the pre-knowledge of predetermined outcomes.

Moreover, the fraudulent organization devised a complex system to launder the proceeds obtained from their illegal gambling activities, further obscuring their tracks and making it challenging for authorities to trace the illicit funds.

This operation marks the second phase of a broader investigation that began in 2020. The initial phase led to the arrest of 22 individuals, including the leaders of the criminal organization. The subsequent phase, which unfolded earlier this year, exposed the extent of the syndicate’s activities and led to the apprehension of an additional 53 suspects.

It comes as no surprise that football and tennis were the primary targets of the criminal network. According to the International Betting Integrity Association (IBIA), these two sports generated the highest number of suspicious alerts in 2023. The syndicate capitalizing on these popular sports underscores the need for stringent measures to protect the integrity of sporting events and ensure fair play.

The successful crackdown on this sports betting fraud syndicate demonstrates the efficacy of international collaboration among law enforcement agencies. Europol and Interpol played vital roles in supporting the Spanish National Police in their investigation, highlighting the importance of cross-border cooperation in combating transnational organized crime.

This case highlights the evolving nature of sports betting fraud and the need for continuous adaptation by law enforcement agencies. As criminals employ increasingly sophisticated techniques, authorities must stay ahead of the game by investing in advanced technology and intelligence capabilities.

February 07, 2024

DraftKings Sues Former Executive Accusing Them Of Stealing Company Secrets

DraftKings has filed a lawsuit against its former head of VIP operations. The legal battle between DraftKings and its former employee has gained significant attention in the industry.

DraftKings alleges that its former head of VIP operations, whose name has not been disclosed publicly, engaged in a series of actions that violated his contractual obligations and harmed the company’s reputation. The specific allegations include:

1. Unauthorized Access to Sensitive Data: According to the lawsuit, the former head of VIP operations gained unauthorized access to sensitive customer data, including personal information and betting patterns. DraftKings claims that this breach of trust poses significant risks to its customers and undermines the integrity of its operations.

“We take the privacy and security of our customers’ information extremely seriously. Any unauthorized access to confidential data is a breach of trust and will not be tolerated,” said a spokesperson for DraftKings.
2. Misuse of Insider Information: DraftKings further alleges that the former employee exploited his position to gain access to insider information, which he then used for personal gain. This alleged misconduct raises concerns about the fairness and transparency of DraftKings’ operations.

3. Violation of Non-Compete Agreement: Additionally, DraftKings claims that the former head of VIP operations violated the non-compete agreement he had signed, which prohibits him from working for a direct competitor within a specified period after leaving the company. DraftKings argues that this violation has caused significant harm to its business.

To protect its interests and seek appropriate legal remedies, DraftKings has filed a lawsuit against its former head of VIP operations. The company is seeking damages for the harm caused to its business, as well as injunctive relief to prevent further misuse of confidential information.
 “We are committed to upholding the highest standards of integrity and professionalism. This lawsuit reflects our dedication to holding individuals accountable for their actions,” stated a representative from DraftKings.
The outcome of this legal battle could have significant implications for DraftKings and the online sports betting industry as a whole. Here are a few potential scenarios that could arise from the lawsuit:

1. Reputation Damage: If the allegations against the former head of VIP operations are proven true, DraftKings’ reputation could be adversely affected. Customers may question the platform’s security measures and hesitate to trust their personal information with the company.

2. Legal Precedent: The court’s decision in this case could set a legal precedent for similar situations in the future. It may establish guidelines for companies to protect their sensitive data and enforce non-compete agreements effectively.

3. Customer Confidence: DraftKings’ response to the alleged misconduct will be crucial in maintaining customer confidence. Customers will closely observe how the company handles the situation and whether it takes appropriate measures to ensure data security and prevent any future breaches.

As of now, the former head of VIP operations has not publicly responded to the lawsuit. It is expected that he will defend himself against the allegations, presenting his side of the story to the court.

January 02, 2024

Lula signs Brazil Sports Betting Bill into federal law

President Luiz Inácio ‘Lula’ da Silva has signed Bill PL3626/23 into law, which will establish the regulatory framework for Brazil to launch its federal sports betting marketplace.

Authorised by Lula on Saturday, December 30, the president’s endorsement completes the legislative process, steering clear of the 2022 impasse when former President Jair Bolsonaro withheld federal sign-off of sports betting.

The Workers’ Party (PT) government revised Bill PL3626/23, which underwent federal evaluation by Brazil’s Senate Committees starting in September. The evaluation process led to over 100 amendments being authorised by the Committees to secure federal approval for the bill.

Despite the amendments, the Senate faced unresolved disputes regarding the authorization of online casino operations, contested by Senators from the Liberal Party. Consequently, the bill was returned to the Chamber of Deputies for a decisive vote on the remaining amendments, casting uncertainty on its legislative future.

On December 22, in the Chamber of Deputies’ final session, 261 members voted for the bill (120 against), endorsing the legislative framework for online casino games.

As published in a special edition of the government’s ‘Diário Oficial da União‘ on December 30, Lula signed Bill PL3626/23 into law, introducing a new regulatory regime for sports betting, commonly referred to as ‘Bets.’

The federal framework is in line with the PT government’s objective to enhance state revenues, with projections indicating that a regulated sports betting market could generate at least R$ 10 billion for public services.

However, during its federal endorsement, Lula imposed vetoes on ‘certain aspects’ of the bill, most notably concerning the tax exemption for betting prizes up to R$ 2,112 (€450). This move, recommended by the Ministry of Finance, was based on the principle of ‘tax equality,’ deemed essential as Brazil’s sports betting market evolves.

The presidential tax vetoes are now pending further examination by the National Congress, where they can be sustained or overruled.

The Senate’s Economic Affairs Commission (CAE) proposals for fiscal and tax structures have been maintained. Licensed operators in Brazil’s federal market will face a 12% tax, whereas player prizes will be taxed at 15%.

To obtain a federal license valid for five years, businesses must pay BRL 30 million (approximately €5.5 million). This license allows the operation of up to three brands. Eligibility is restricted to firms incorporated under Brazilian law with headquarters in the country, and they must appoint a legal guardian domiciled in Brazil.

Revenue from the Bets regime will be allocated to various sectors: 36% to sports ministries and committees, 28% to tourism, 13.6% to public safety, and 10% each to education and social security. Health will receive 1%, civil society entities 0.5%, the Police Federal Equipment and Operation Fund 0.5%, and the Brazilian Agency for Industrial Development 0.4%.

2024’s agenda will see the Ministry of Finance publishing regulations to initiate Brazil’s federal sports betting market. Outstanding responsibilities will include establishing a ‘dedicated market supervisor’ to oversee standards, conduct, and consumer protection in Brazil’s new gambling sector.

Prior to Lula’s authorisation, the Ministry reported that 134 businesses had expressed interest in joining Brazil’s impending online gambling market by submitting their pre-market ordinance measures.

December 01, 2023

Victoria government told to copy primetime ban on gambling advertising

The Public Accounts and Estimates Committee (PAEC) of the Australian state of  Victoria has called for stricter regulations on gambling advertising.

The public body has recommended that its state government align with South Australia’s policy, which bans gambling adverts on TV from 4pm to 7:30pm. The recommendation forms part of the PAEC report, following an eight-month review of three Auditor-General reports, focuses on gambling and liquor regulation in Victoria.

The report, with 96 findings and 61 recommendations, was influenced by public submissions, hearings, site visits, and a youth roundtable.

“Our report’s 96 findings and 61 recommendations have been informed by 54 public submissions, three days of public hearings, a Geelong site visit and a youth roundtable,” commented Committee Chair Sarah Connolly.

The report cited a 2021 Australian Communications and Media Authority-commissioned study that found an “average of 948 gambling ads were broadcast daily on free-to-air TV and an average of 148 gambling ads were broadcast between 6.00pm–8.30pm every weeknight”.

In addition, the report stated that “between May 2022 and April 2023, more than one million gambling ads aired on free-to-air television and radio across Australia, the ‘clear majority’ being from online wagering companies”.

Connolly noted: “More appropriate regulations and safeguards are needed to protect Victorians, especially our children and young people.”

A group of young people who shared their lived experiences with gambling and alcohol during an event at Parliament House in August were also present in Parliament for the tabling of the report earlier this week.

The report has also asked the government to consider reducing the total number of electronic gaming machines across the state and updating the gambling and alcohol-related harms education resources for students.

The PAEC has also recommended that any venue that wishes to increase the number of EGMs it has must prove that it will provide a “net economic and social benefit” to the community.

It has also been recommended that the Victorian Gambling and Casino Control Commission establish a regular consultation with the local government regarding the current gambling regulations in the state and any measures that could be taken to reduce gambling harm.

The Victorian government has been asked to review daily, weekly and annual gambling loss limits as well, including examining frameworks present in Norway, Sweden, Finland and Tasmania.

November 23, 2023

Brazilian Senate Committee Approves Sports Betting Tax Bill

Brazil’s Senate’s Committee on Economic Affairs (CAE) greenlit a proposal on November 22 to regulate and tax the burgeoning market of online sports betting and casinos in the country.
 
The approved bill lays out regulations governing the operations of betting houses in the country. It proposes a 12% tax on companies operating in the sector and a 15% tax on the winnings accrued by bettors – a rate slightly lower than what the Ministry of Finance had initially suggested.

The committee also passed a request for an expedited vote on the proposal, already approved by the Chamber of Deputies, to be scheduled in the main plenary session of the Senate. Senate President Rodrigo Pacheco had hinted on November 21 that the bill could be on the agenda for this Wednesday’s session.

Senator Angelo Coronel, the bill’s rapporteur, expressed optimism about a plenary vote happening next week rather than the current week.

The proposed regulations are intended to cover fixed-odds bets on real sporting events and online gaming events such as casinos. The Ministry of Finance sees this initiative as a key revenue stream for the Union in the coming year, aligning with its broader goal of achieving a fiscal deficit of zero by 2024 without increasing public debt.

The proposed legislation focuses on regulating the online sports betting and casino sector, outlining key facets for operational compliance. The authorization process for online betting companies involves a thorough evaluation by the Ministry of Finance, considering documentation, company reputation, and technical and financial capacity.

To ensure local involvement, the rapporteur recommends that at least 20% of a company’s social capital be held by a Brazilian citizen. Those associated with betting houses will be barred from engaging in football corporations, sports organizations, financial institutions, or payment processors handling bets.

For accreditation, companies must pay a licensing fee of up to BRL30 million ($6.1 million) in Brazil, valid for three commercial brands over five years.

Restrictions on participation extend to individuals under 18, betting house personnel, public officials, and those diagnosed with gambling addiction. Facial recognition technology will be mandated for player identification. Oversight will fall under the Ministry of Finance, with penalties ranging from warnings to fines based on revenue percentages. The legislation emphasizes security measures, auditable systems, and actions against money laundering and terrorism financing.

November 14, 2023

Australia: Credit Card Use For All Gambling To Be Banned

New laws have been passed in the Australian House of Representatives on Tuesday to extend the ban on credit card use for online gambling. The ban, which was previously limited to physical gambling locations such as casinos, will now encompass websites and gambling apps. The legislation aims to address concerns raised by a joint inquiry into gambling reform and has received bipartisan support.

In recent years, there has been a growing concern about the impact of gambling addiction on individuals and their families. The accessibility and convenience of online gambling platforms has led to lawmakers calling for stricter regulations. The joint inquiry into gambling reform, established under the previous Morrison government, made several recommendations to address these concerns. One of the key recommendations was the extension of the existing ban on credit card use at physical gambling venues to also include online platforms.

The new laws passed by the House of Representatives seek to extend the ban on credit card use for gambling to online platforms. This means that punters will no longer be able to use their credit cards to place bets on websites or through gambling apps. The ban also includes digital currencies such as cryptocurrency, closing any potential loopholes that may have allowed for alternative forms of payment.

To ensure compliance with the ban on credit card use, the legislation empowers the media watchdog to enforce the new laws. Companies that fail to enforce the ban could face substantial fines, with penalties exceeding $234,000. This strict enforcement mechanism aims to deter gambling operators from disregarding the ban and to create a safer gambling environment for consumers.

Recognizing the need for a transitional period, the legislation allows for a six-month window for banks and gambling companies to implement the necessary changes. This timeframe enables these entities to adjust their systems and processes to comply with the ban on credit card use. During this period, clear guidelines and support will be provided to ensure a smooth transition and minimize disruption for both operators and consumers.

The extension of the credit card ban to online gambling platforms has significant implications for consumers. By removing the option to use credit cards for gambling, the legislation aims to prevent individuals from accumulating excessive debt and protect vulnerable individuals from falling into gambling addiction. It promotes responsible gambling practices by encouraging punters to only use funds they actually have available, rather than relying on credit.

The new laws also have implications for gambling operators, who will need to adapt their payment systems to comply with the credit card ban. This may involve implementing new payment methods that exclude credit cards or partnering with alternative payment providers to offer secure and responsible gambling options. While these changes may require initial investment and adjustment, operators have the opportunity to enhance their reputation as responsible providers and attract a more conscientious customer base.

The passing of the new gambling reform laws in the House of Representatives has generally been well-received by the public, who view it as a positive step towards curbing gambling addiction. However, there has been some opposition and attempts to amend the legislation by the opposition and crossbenchers. Despite these efforts, the laws were passed with bipartisan support, indicating a broad consensus on the need for stronger regulations in the gambling industry.

Amazon Sued Over Claim That It Offers Illegal Casino Apps

e-commerce giant Amazon, is facing a proposed consumer class-action lawsuit accusing the company of operating an “illegal internet gambling enterprise.”

The lawsuit, filed by a Nevada resident who claims to have been addicted to illegal online slot games, alleges that Amazon distributed over 30 illegal casino-style apps to consumers, thereby engaging in a “dangerous partnership” with virtual casinos. The complaint cites a 2018 U.S. appeals court ruling that declared “social casino” apps illegal under Washington state gambling law. This case is just one among many targeting online gambling platforms.

According to the lawsuit, Amazon and social casinos have found a way to bring slot machines into the homes of consumers throughout the United States, operating 24/7, 365 days a year. The games in question are free to play and do not offer cash payouts. Instead, users can win virtual chips and are encouraged to buy more to continue playing. However, despite the knowledge that social casinos are deemed illegal, Amazon allegedly maintains a 30% financial interest in these apps by brokering slot machine games, driving customers to them, and acting as the bank.

Social casino apps has led to a series of legal challenges and debates surrounding their classification and regulation. In 2022, a California federal judge ruled that Apple, Meta (formerly Facebook), and Google could be held liable for processing payments related to virtual chips used in social casino apps. This decision has sparked appeals from these tech giants, with the cases still pending in the 9th U.S. Circuit Court of Appeals. The outcome of these appeals will have significant implications for the future of the online gambling industry.

The class-action lawsuit against Amazon seeks damages, restitution, and other court orders on behalf of “tens of thousands of consumers.” The plaintiffs’ law firm, Edelson, has a track record of securing substantial settlements in similar litigation related to virtual casino apps. Todd Logan, who leads Edelson’s gambling practice, expressed his anticipation for trying the case before a jury of Amazon’s peers. The outcome of this lawsuit may set a precedent for future legal battles involving online gambling platforms and their partnerships.