Top Gambling

The top gambling story of 2016

If Amaya Gaming Canada were a hockey team, commentators would say their season was marred by “off-ice distraction.” Although Amaya’s flagship PokerStars brand is making its winnings back on US shores and continuing progress in diversifying beyond its pure poker roots, Amaya’s headlines are dominated by allegations of illegal insider trafficking and attempted acquisitions and privatizations.

Amaya CEO  David Baazov  shocked the market in February by announcing plans to acquire the company and make it private. The following month, Quebec securities regulators filed criminal charges against Baazov, accusing him of running an illegal bribery scheme by providing advance info about Amaya’s deal to a group of individuals that included his brothers Josh / Ofer and Craig Levett, the pair behind the previous fraudulent bet. BetonUSA website.

Following the accusations, Baazov took time off from Amaya before stepping down as CEO in August, with Rafi Ashkenazi taking on the role of chief executive. Amaya later had a public flurry with British bookmaker William Hill about a “merger of all equal shares,” but these plans went to waste after Hills shareholders raised objections.

Baazov then submitted a better takeover offer, a proposal that turned into seriocomic when one of his four financial backers claimed he had never heard of Amaya, while another of the four was proven false. Baazov later clarified that his offer is now supported only by two companies, neither of which have a history of investing in billions of dollars. Inevitably, Baazov officially canceled his offer last week due to “certain shareholder” demands.

THE RISE OF THE PHILIPPINES GAME MARKET The
Philippines, home to much of the online gambling industry facing Asia, experienced dramatic upheaval in the middle of the year when the newly elected President,  Rodrigo Duterte,  used his first cabinet meeting to declare that “online gambling must stop”.

Duterte said his aim was to reduce the impact of gambling on Filipino society, and thus the first blow fell on operators of electronic gambling establishments that were accessible to local residents.

One month after Duterte’s statement, eGames technology provider PhilWeb was forced to cease operations after the Philippine Amusement and Gaming Corporation (PAGCOR) refused to renew the company’s license. However, the 5,000 fired employees found reason to hope after Duterte suggested that PhilWeb’s operations could continue subject to certain conditions.

Since the international online gambling sites licensed by the Cagayan Economic Zone Authority (CEZA) do not take action from Filipinos, they believe it is business as usual. But PAGCOR announced in September that all online gambling operators must apply for a new Philippine Offshore Gambling Operator (POGO) license. The first 35 POGO licenses were issued in December.

The new tough policy on online gambling also featured a multitude of ill-treatment by illegal operators, culminating in the arrest of 1,316 Chinese nationals working without a license for the online operations of the Fontana Jack Lam Casino in Clark Freeport.

Lam’s affair dominated the headlines in December after she was accused of trying to bribe Philippine officials, including the PAGCOR boss, to allow the continuation of her unauthorized online business operations while her POGO license was pending.

Lam, who fled the country not long before Duterte ordered his arrest, was told he could continue his operations if he paid back taxes and submitted to PAGCOR authorities, but Duterte later ordered his gaming property confiscated for not paying taxes.

In the past week, Duterte reversed the script again, reiterating his previous promise that all online gambling must be canceled. Although his latest speech has been interpreted as posing no threat to the new POGO regime, the only thing that is certain is that no one but Duterte really knows what the future holds for the nation’s online industry.

US, ER, REGULATED MARKETS
Only two US states made serious attempts to pass intrastate online gambling laws in 2016, and neither managed to push their bills over the finish line. This marks the third consecutive year of regulated gaming inertia in the US and nearly four years since New Jersey Governor Chris Christie signed his state gambling law into law.

Pennsylvania is closest to legislative success, with the House approving its online casino, poker and daily fantasy sports bill in October. But the Senate chose not to vote on the issue, partly because online is just one component of the omnibus’ size game, some aspects of which are even more divisive than online gambling.

California online poker proponents appear to be making more progress in 2016 than in previous years, but while the state racing industry has finally been bribed to agree, other state stakeholders have proved unwilling as ever to bridge their split.

A late attempt at a California ‘compromise’ would see PokerStars run into a ‘bad actor’ time limit of 10 years. This period was later reduced to five years, but PokerStars, its California partner, and the Poker Players Association stated they would rather see no poker bill passed than see Stars forced to sit on the sidelines, leaving many players wondering why their fate should be. so intertwined with one company.

Token efforts at online gambling legislation were made in New York and Michigan, while Massachusetts policymakers continued to hold meetings where they reached a consensus on the need to hold more meetings on reaching consensus on online gambling.

ESPORTS BET GET A LIVE SKIN
This year saw a significant increase in the public profile of eSports betting, but like the daily fantasy sports of 2015, the press was largely negative. While bona fide bets on the outcome of eSports events are making inroads at traditional bookmakers, it’s a much more controversial ‘skin bet’ category that is making headlines.

In July, eSports game developer Valve Corp officially demanded that third-party sites stop using the Steam marketplace to facilitate betting on skins, aka virtual in-game items, on lottery-style games with random results. It took a while, but major leather betting sites have finally adjusted to Valve’s edict.

Valve, who has long turned a blind eye to the practice of leather betting, experienced a Road to Damascus enlightenment after being hit by a class action lawsuit. The lawsuit was filed by aggrieved players who had been convinced to bet on a leather betting site promoted by several eSports players who failed to disclose their ownership of the site.

The headlines got worse in September when the UK Gambling Commission filed the first legal action against a pair of eSports YouTubers for promoting illegal gambling. The following month, Washington state regulators threatened to take legal action against Valve unless Valve did more to clear skin betting operators from Steam.

The news isn’t all negative, as regular eSports betting against home got a boost in November after data provider Betradar signed a deal with DOJO Madness to provide traditional bookies with eSports betting opportunities. That same month, William Hill US became the first Nevada licensed bookmaker to offer eSports betting and online betting mainstay, Pinnacle announced in December that its eSports stakes had doubled in 2016.

DAILY FANTASY SPORTS COMEDOWN
Like Icarus, the US daily fantasy sports market fell back to earth in 2016. The guaranteed prize pool entry fees dropped at DraftKings and FanDuel, and no company has come close to over-spending on marketing last year, partly because they couldn’t. again buying it.

The two companies kneel inside attorneys dealing with class action lawsuits and pay millions to complete the New York Attorney General’s fraudulent marketing investigation. The company also spent big money on lobbyists to convince state and federal politicians not to impose further restrictions on DFS activity after last fall’s backlash.

After months of rumors, November saw DraftKings and FanDuel announce plans for an “equal strategic merger.” Although the merger will allow companies to cut costs by sharing the legal burden and cutting wages, there are still doubts whether anti-trust regulators will agree to the formation of a company that will completely dominate the US DFS industry.

BITCOIN
2016 was the year Bitcoin really made its presence known in the online gambling sector. Until recently, most bitcoin-friendly online gambling sites tended to be simple binary ‘dice’ games, which still account for a significant volume of the total Bitcoin transaction volume.

In August, the UK Gambling Commission (UKGC) added the phrase “digital currency” to its list of payment methods that online licensees can accept. The UKGC claims this addition is just a formalization of an existing policy, but that recognition still represents Bitcoin’s main advantage, as the only other regulator to date that has officially approved the use of Bitcoin is Curacao.

Within two months, NetBet announced that it was the first UK licensed online betting site to offer Bitcoin payment options. The bigger operators are sure to follow in the new year, and other regulatory bodies will likely adopt the UKGC stance.

Bitcoin is also making further inroads with internationally licensed online gambling sites serving the US market, a trend that will only increase as US authorities continue to pressure fiat currency payment processors to eliminate gambling transactions both in the US and in other international markets.

NEW RUSSIAN REGULATION
The Russian market welcomed its first officially licensed online sports book in February through the Stavok League, which has since been followed by many other bookies. The online transition has been slowed down by the requirement to funnel all online payments via a centralized hub, the registration can be a tedious three-stage process involving ID confirmation at a retail point of sale.

To help direct Russian bettors to these new sites, state telecommunications watchdog Roskomnadzor has blacklisted unofficial gambling domains with the same level of enthusiasm that Russian combat bombers demonstrated when attacking Syrian civilians. In just one week in November, Rodkomnadzor blocked nearly 1,000 domains.

This online crackdown goes beyond actual betting sites to include payment processors, online gambling affiliates, other advertising channels and even the gambling site’s social media accounts. In November, legislators announced plans to increase Roskomnadzor’s ability to automate the mirror site blocking process for previously blocked operators.

Russian licensed bookmakers have also been hit by a series of significant fee and tax increases, leading the industry to complain that legislators don’t understand how the betting business works. While one of these increases was later reduced, Russian bookmakers continue to believe that their industry is being pressed to the point where the regulated market – which still doesn’t offer any indication that it plans to approve a poker or casino product – will not be viable.