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Future of US Online Gambling: 2025 Framework Revealed

US-legislators-crafting-model-legislation-to-create-pathway-to-legal-igamingIn a pivotal moment for online gambling legislation, stakeholders and legislators are now poised to embrace a comprehensive framework that will shape the future of internet gambling across the United States from 2025 onwards. This initiative was detailed at the recent National Council of Legislators from Gaming States (NCLGS) conference in Pittsburgh.

Drafting the New Framework

Former Florida State Senator Steve Geller played a central role at the NCLGS conference, detailing anticipated components of upcoming legal iGaming legislation and moderating a robust discussion with a diverse panel of regulators and industry stakeholders.

This group vigorously debated the priorities and strategies essential for the successful implementation of the legislation. According to Geller, the proposal suggests a tax rate of 15%-25%, which aligns with the current average of 19% observed across the seven states where online gambling is legal.

The proposed legislation is ambitious, covering a range of critical areas including:

  • Revenue generation
  • Responsible gaming
  • Addressing the cannibalization debate
  • Establishing advertising standards
  • Licensing frameworks
  • Setting age restrictions
  • Enhancing data sharing mechanisms

Timeline for Legislation

Shawn Fluharty, NCLGS president and a West Virginia state representative, announced plans to circulate a draft of this legislation among NCLGS members by August 1st. This will kickstart a 30-day public commentary period. Subsequent revisions will be informed by this feedback, with a final draft expected to be presented at the NCLGS winter meeting in New Orleans from December 12-15.

States Embracing Online Gambling

While nearly 40 states have legalized some form of sports betting following the 2018 Supreme Court decision, only a handful, including West Virginia, Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, and Rhode Island, currently allow comprehensive online gambling. The distinctions between sports betting and casino gaming are significant, as noted by Lee Copella, iGaming compliance director at the Pennsylvania Gaming Control Board. Copella emphasized the more stable and predictable revenue stream from casino gaming compared to the fluctuating nature of sports betting.

Maryland’s Legislative Journey

In Maryland, State Senator Ronald Watson has been a prominent advocate for legalizing online gambling, underscoring the necessity of treating the legislative process akin to a campaign. He highlighted the importance of extensive educational efforts aimed at both legislators and the public. Maryland’s approach involves putting gaming expansion decisions directly to voters, with the next opportunity slated for 2026.

Economic Considerations and Technology Implications

The financial implications of online gambling are significant, with tax revenues from digital gaming outpacing those from sports betting by a substantial margin. This revenue potential is crucial, especially as states begin to feel the economic pinch from depleted COVID relief funds. The importance of technological standards and anti-money laundering measures was also a key focus of the discussions, with David Rebuck, former head of the New Jersey Division of Gaming Enforcement, advocating for high regulatory standards to ensure a secure and reliable gaming environment.

Overcoming the Cannibalization Myth

The debate over the potential cannibalization of physical casinos by online platforms continues, but as Bill Pascrell III of the Princeton Group argued, this concern has been largely debunked by data from states like New Jersey, which shows minimal impact on traditional casino revenues and employment.

Source:

US legislators crafting model legislation to create pathway to legal igaming, igamingbusiness.com, July 22, 2024.

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New Danish Regulations Tackle Gambling Marketing and High-Risk Jurisdictions

Denmark-tightens-marketing-compliance-with-cross-industry-collaboration-Updates-the-FATFs-list-of-high-risk-jurisdictions-Updates-certification-programme-for-betting-and-online-casinoDenmark’s gambling regulatory framework has undergone significant updates to enhance oversight and maintain the integrity of the gambling industry. The Danish Gambling Authority (DGA) has introduced new measures to combat illegal marketing practices, overhauled the certification program for betting and online casinos, and tightened regulations concerning high-risk jurisdictions. These initiatives reflect Denmark’s commitment to promoting responsible gambling and preventing financial crimes.

Stricter Controls on Gambling Marketing

The DGA, in collaboration with the Consumer Ombudsman and the Gambling Advertising Board, has forged a new agreement to intensify efforts against the illegal marketing of gambling services. This agreement aims to streamline actions taken against non-compliance by consolidating resources and information sharing among the three bodies. It establishes clear protocols for forwarding cases and addressing violations, particularly those that mislead or exploit vulnerable groups.

Under the new framework, the Gambling Advertising Board will escalate serious non-compliance issues to the Consumer Ombudsman or the DGA. Conversely, the ombudsman and the DGA will direct complaints regarding breaches of the industry’s code of conduct to the Advertising Board. This ensures a coordinated approach to uphold marketing standards, safeguarding consumers and reinforcing social responsibility within the industry.

Revamped Certification Program for Betting and Online Casino

Effective January 1, 2025, Denmark will implement a new certification program for betting and online casinos, with mandatory adoption by July of the same year. The updated program introduces significant changes to license holders’ and game suppliers’ requirements and responsibilities, such as the handling of game and RNG certifications. It also simplifies the reporting and testing processes, reducing the previous two-month deadline for submitting standard reports to one month.

This update is part of the preparation for the DGA’s introduction of a games register that will manage RNG and game certificates more efficiently. The new standards aim to enhance clarity and compliance in the rapidly evolving gambling landscape.

Enhanced Monitoring of High-Risk Jurisdictions

In line with updates from the Financial Action Task Force (FATF), the DGA has also revised its approach to monitoring high-risk jurisdictions. This includes detailed guidance on enhanced due diligence procedures required for players from countries listed on FATF’s Grey and Black Lists, denoting varying risk levels and recommended actions. This measure is crucial for preventing money laundering and terrorist financing through gambling activities.

Gambling operators are mandated to incorporate these lists into their risk assessments and apply stringent customer due diligence for players from these jurisdictions. This not only complies with international financial security standards but also strengthens the integrity of Denmark’s gambling sector.

Source:

Update to the FATF’s list of high-risk jurisdictions, spillemyndigheden.dk, July 8, 2024.

Consultation on updated certification programme for betting and online casino, spillemyndigheden.dk, July 15, 2024.

Ny aftale skal styrke indsatsen mod spilvirksomheders markedsføring, forbrugerombudsmanden.dk, July 11, 2024.

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Finland’s New Gambling Bill to End Veikkaus Monopoly by 2027

Finland-prepares-for-liberalised-gaming-market-in-2027The Finnish Ministry of the Interior has introduced a draft government proposal to reform the country’s gambling system. This proposal, which aligns with the Government Programme, aims to dismantle Veikkaus Oy’s current monopoly on betting and online casino games and open these markets to competition through a licensing model. The consultation period for this draft legislation ends on August 18, 2024.

Key Changes and Objectives

Under the new proposal, Veikkaus Oy will no longer hold exclusive rights to arrange betting and online slot machine games and casino games. These areas will be opened to competition via a licensing system managed by the Finnish Supervisory Agency. The goal is to reduce gambling-related harm and channel demand toward a regulated gambling system.

Currently, Veikkaus Oy maintains a monopoly over gambling games in Finland, but a substantial portion of online gambling occurs outside this system, involving enterprises not regulated or supervised by national authorities. The new legislation seeks to regulate these activities, ensuring better oversight and consumer protection.

Licensing and Supervision

The proposed act outlines the provisions for licensed gambling and its supervision. To increase regulation and minimize gambling-related harm, enterprises can apply for licenses to operate gambling games in Finland. There will be two types of licenses: exclusive licenses and gambling game licenses. Additionally, the provision of gambling game software will require a specific software license.

Licensing will require payment of an annual supervision fee to the regulatory authority. Lotteries, pools, totalisator betting, physical slot machines, and casino games will remain under exclusive licenses, maintaining Veikkaus’ monopoly over these areas. However, the monopoly and competitive market activities will be separated into different entities within the same group.

The government will decide on the annual compensation Veikkaus pays the state for its exclusive license. The proposed legislation also grants the state owner more flexibility regarding future decisions about Veikkaus Oy’s ownership, including reducing state ownership if deemed beneficial for shareholder value.

Marketing and Player Protection

The draft legislation includes stringent provisions on the marketing and sponsorship of gambling games. Licensed gambling enterprises can advertise within specific restrictions, ensuring moderate volume, scope, visibility, and frequency of marketing efforts. Prohibited marketing tools and practices include collaboration with social media influencers on their accounts and targeting minors or vulnerable persons.

A centralized register for self-imposed gambling bans will be introduced, allowing players to exclude themselves from any gambling games any license holder offers. The act will also govern the registration of gamblers, verification of their identity and residence, age limits for gambling, and the use of gambling accounts.

New Supervisory Agency

A new Finnish Supervisory Agency, operating under the Ministry of Finance, will replace the National Police Board as the regulatory authority. This agency will have extensive powers to regulate the market, including imposing administrative sanctions, prohibiting unlawful activities, rescinding licenses, and conducting test purchases. It will also oversee compliance with anti-money laundering and terrorist financing legislation.

The agency will use network barring and payment blocking to prevent unauthorized gambling and steer demand toward licensed operators. Additionally, the Ministry of Social Affairs and Health, through the Finnish Institute for Health and Welfare, will monitor, study, and assess gambling-related harms.

Implementation Timeline

The government plans a phased implementation of the new system:

  • August 18, 2024: End of the consultation period.
  • Spring 2025: Submission of the government proposal to Parliament.
  • Early 2026: Opening of license applications for operators.
  • End of 2026: Veikkaus’ monopoly on sports betting and online casino games ends, with the company split into separate entities.
  • Early 2027: Suppliers can apply for software licenses, and licensed gambling activities commence.
  • 2028: Requirement for operators to use only locally licensed software providers.

The draft legislation represents a significant shift in Finland’s approach to gambling, aiming to create a more regulated and competitive market. Feedback from industry stakeholders and government departments is being sought to refine the proposals before final submission to Parliament.

Source:

Draft legislation on new gambling system submitted for consultation, intermin.fi, July 3, 2024.

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GambleAware Survey Shows Strong Support for Stricter Gambling Ad Regulations

GambleAware-study-suggests-public-support-for-gambling-advertising-restrictionsA recent survey by GambleAware reveals significant public support for stricter regulations on gambling advertising in the UK. The survey, conducted in collaboration with Ipsos, included responses from 4,207 adults and highlighted the increasing concern over the prevalence and impact of gambling advertisements.

Demand for Increased Regulation

The survey, published on June 27, indicates that almost three-quarters (74%) of British consumers believe gambling advertisements should be regulated on social media, with 72% supporting increased regulation for television adverts. Additionally, 67% of respondents agreed that there are currently too many gambling advertisements and 66% expressed concern about their impact on children. Moreover, 61% of those surveyed opposed the use of gambling logos on football shirts, emphasizing the public’s desire for a change in how gambling is marketed, particularly in sports.

Impact of Gambling Ads on Behavior

The report also sheds light on the direct impact of gambling advertisements on individuals’ gambling behaviors. According to the survey, 24% of respondents who had gambled in the past year took gambling-related actions after seeing an advert. This figure jumps to 79% among those experiencing gambling-related problems, with 54% of this group stating that advertisements make it difficult to reduce their gambling activities. Furthermore, 51% reported that ads make it challenging to watch professional football without feeling the urge to place a bet.

GambleAware’s chief executive Zoë Osmond commented on the findings: “Exposure to gambling advertising normalizes gambling and makes it seem like just ‘harmless fun’ without showing the risks of gambling addiction and harm. This is why we have published our new report, to call on the next government to do more to regulate gambling advertising, particularly around sport where children and young people can see it.”

Proposed Measures for Safer Gambling Advertising

In response to the survey findings, GambleAware has proposed several measures to make gambling advertising safer. These include implementing a pre-watershed ban on broadcast advertising across television, radio, and video on demand. This would expand on the current voluntary whistle-to-whistle ban, covering only 2% of all broadcast gambling ads.

GambleAware also advocates for all advertisements to include independent, evidence-based health warnings with clear signposting to support services. This approach aims to help those needing assistance by directing them to appropriate resources.

Another recommendation is to ban gambling marketing at sports events, including removing sponsorships from sports clothing, merchandise, and stadiums. The Premier League has already agreed to phase out gambling logos on shirts by the 2026-27 season, and GambleAware suggests extending this ban to all sports.

Barriers to Seeking Help for Gambling Problems

Aside from advertising concerns, the report also addresses barriers to seeking help for gambling-related harm. It found that 64% of respondents who had experienced gambling problems had not spoken to anyone about it. The main reasons cited were feelings of shame or guilt (17%) and fear of judgment (13%).

Despite these barriers, the survey reveals that 76% of those who did seek help felt better after doing so, and 63% believed they would have felt better if they had sought help sooner. The primary motivations for seeking support included gambling’s negative impact on mental health (23%), financial issues (22%), and the desire for help to stop gambling (21%).

Source:

GambleAware study suggests public support for gambling advertising restrictions, igamingbusiness.com, June 27, 2024.

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Spain Appoints Urbiola as Dedicated Minister for Federal Gambling Reforms

Spain-appoints-Urbiola-as-‘dedicated-minister-of-federal-gambling-reformsThe Council of Ministers of Spain has appointed Andrés Barragán Urbiola as Secretary General of Consumption and Gaming. In this role, Urbiola will oversee Spain’s ongoing federal overhaul of gambling laws, a directive led by the Ministry of Consumer Affairs. This appointment is part of a broader strategy to strengthen the regulation and safety of Spain’s gambling sector.

Leadership and Legislative Reforms

Pablo Bustinduy, Spain’s Minister of Consumer Affairs and Social Rights, advocated the need for a dedicated minister to oversee gambling reforms. Bustinduy has assumed the remit of gambling reforms from his predecessor, Alberto Garzon, who chose not to serve in Spain’s new ‘progressive left’ coalition government.

Since 2020, under Garzon’s leadership, Spain has undertaken a significant reorganization of its gambling laws, focusing on unified standards and centralized controls for both online and land-based gambling. Key among these reforms was the “Royal Decree on Gambling Advertising,” which reshaped the gambling landscape by banning betting sponsorships and restricting gambling advertisements to late-night hours.

In 2023, Garzon introduced the “Royal Decree on Responsible Gaming Environments,” preparing the Spanish gambling industry for additional changes. These include the implementation of a centralized player registry and the mandatory documentation of risk profiles for younger consumers, particularly those under 25.

Strategic Appointment

Appointing Urbiola as Secretary General of Consumption and Gaming is a strategic move by Spain’s government to continue its rigorous overhaul of gambling laws. Urbiola, who has a strong background in economic policy and financial analysis, was personally selected by Bustinduy to lead the federal reforms for the gambling sector.

Urbiola brings diverse experience from his tenure at the Ministry of Economy, Commerce, and Business, where he played a pivotal role in designing support measures for companies during the pandemic and planning Spain’s Transformation and Resilience Recovery Plan. His expertise in economic strategy and policy development makes him well-suited to navigate the complexities of gambling reform.

Focus on Compliance and Safety

As Secretary General, Urbiola’s primary focus will be on implementing and enhancing the measures laid out in recent decrees. By 2024, he aims to ensure that Spanish gambling operators comply with some of the strictest regulations in Europe. This includes strict adherence to advertising restrictions and robust mechanisms to protect younger and vulnerable consumers from gambling-related harms.

The appointment underscores Spain’s commitment to fostering a safer gambling environment and addressing gambling addiction challenges. It aligns with the new Action Plan on Addictions for 2025-2028, which Bustinduy will lead, focusing on comprehensive strategies to mitigate the risks associated with gambling.

Source:

Spain appoints Urbiola as ‘dedicated minister’ of federal gambling reforms, SBC News, June 25, 2024.

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