Harder Than It Looks
Brazil is learning just how hard it is to shutdown unregulated offshore gambling sites, and its not as easy as flipping a switch.
The Bulletin Board
NEWS: Brazilian regulators: Stopping unregulated gambling can’t be done by flipping a switch.
WEEKEND CATCHUP: Making sense of iCasino’s recent success; Shocker, small businesses like VGTs; Legalizing iCasino Creates Jobs.
VIEWS: Checking in on the great sweepstakes debate.
NEWS: Is international pooling for online poker and DFS returning to Ontario?
AROUND the WATERCOOLER: Let’s give them something to talk about.
STRAY THOUGHTS: Encore Boston Harbor sent 64 poker tables into storage.
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Brazilian Regulator on the Difficulty of Curbing Illegal Gambling
A common question whenever the black market is discussed is, “Why doesn’t the government just block these sites?”
Well, consider this from Brazil, a country that is attempting to do just that and block more than 5,000 illegal online gambling sites: “Anatel does not have a red button that takes websites offline,” Carlos Baigorri, the president of Brazil’s National Telecommunications Agency (Anatel), said (h/t to iGaming Business).
“We notify all telecommunications companies. There are 20,000, roughly, because we are talking about the big ones, but [also] these little ones in the interior of Brazil.
“When you talk about 3,000 websites on 20,000 networks, that is 60 million checks. Today, we cannot guarantee that the blocking is being carried out.
“As things stand today, we are just mopping up ice, and the blockade we have in place is very ineffective,” Baigorri explained to Folha. “They put a hot potato in my lap and I’m telling you, this [limited ability to block sites] is going to be bad for the entire government.”
I’ve previously argued that the answer to the black market isn’t prohibition because it simply can’t be accomplished; it’s out-competing it for the customers you want and letting it have the customers you don’t want in a regulated industry.
Or, as Alun Bowden once tweeted, “The issue nobody ever discusses openly is what segment of money in the black market could EVER be sensibly included in a properly regulated market. Indeed, what % of money that regulation may have forced out should be accommodated?”
Weekend Catchup: iCasino Successes; Small Businesses Like VGTs; Legal iCasino = Jobs
Interesting nugget from the latest EKG Online Casino Monitor: Eilers & Krejcik Gaming (a newsletter sponsor) made an excellent point in its latest Online Casino Monitor (paywall), speculating that the record-setting October 2024 online casino GGR numbers “was driven by OSB players—who had a really good month of October— recycling winnings in online casino at higher than normal rates.”
Small businesses rally behind gray gambling machines in PA: It’s not just offshore online sites that are hard to shutter. If you’ve ever wondered why getting rid of gray-market gambling machines is so hard, here’s your answer courtesy of Play Pennsylvania’s Corey Sharp: “Bensalem business owners have joined forces with Pennsylvania skill games companies to resist the township’s ordinance banning the machines. Together, they put 200 signatures to a petition and turned out in numbers at a town meeting on Monday night to express their views.” Also of note, VGT/VLT/Gray Machines are some of the biggest opponents of legalizing online casino gambling.
Legalizing online casinos creates more jobs than you think: How many jobs can online gambling create? That question came up in the wake of a recent report from Eilers & Krejcik Gaming on the Texas sports betting opportunity. It’s hard to quantify, but one operator, BetMGM, was recently profiled by ROI-NJ.com, where I noticed this nugget: “Employing over 1,500 people, about 800 of whom are based out of our headquarters in Jersey City, we know that the rapid pace of sports betting and iGaming requires top talent across departments such as technology, customer service, marketing, and compliance.”
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The Sweepstakes Files: The Latest Developments
On the most recent New Normal Webinar, Victor Rocha, the Indian Gaming Association Conference Chair, said California tribes will not be taking input from sweepstakes operators: “This is not a dialogue, this is not a discussion – we don’t negotiate with terrorists.”
Rocha was joined by his usual co-host, Jason Giles, who mentioned recent sweepstake launches and said the situation was “getting worse by the week.”
The special guest was former National Indian Gaming Commission (NIGC) Chair Jonadev Chaudhuri, who argued that IGRA might be the antidote to sweepstakes. “If there is gaming occurring on tribal lands that isn’t run by the tribe, that is a violation of IGRA,” Chaudhuri said. “How that applies to sweepstakes is a conversation about what is actually going on.”
Meanwhile, Rush Street Interactive CEO Richard Schwartz said the existence of sweepstakes sites might benefit online casino efforts — something I’ve written about in the past.
Speaking at the Needham Consumer Tech and Ecommerce Virtual Conference (h/t Ryan Butler at Covers.com), Schwartz said states might feel pressed into action given the presence of sweepstakes sportsbooks and casinos: “I think that’s a great reason to jump-start even more efforts on iCasino.”
“We know that when an iCasino is added to legal sports betting states, about three-quarters of the taxes come from iCasino versus sportsbooks,” Schwartz said. “So it’s a very profitable way to raise taxes.”
Finally, as mentioned last week, the NCLGS Model iGaming Legislation recommends prohibiting Sweepstakes. (I still plan to publish a deeper dive into the model legislation this week or next.)
Ontario Court Hears Arguments For and Against P2P Player Pooling
After three days of arguments in front of the provincial Court of Appeal, Ontario’s effort to rejoin the international player pool for online poker and daily fantasy sports is now in the hands of the five-judge panel.
As Covers.com’s Geoff Zochodne reports, when the decision will be handed down is anyone’s guess, and it could be weeks or months away. Regardless of the court's decision, either side could appeal to the Supreme Court of Canada.
The case stems from a query by the Ontario Government, which asked the courts to weigh in on whether licensed Ontario operators can pool their peer-to-peer users (poker and DFS) with player pools outside of Ontario.
The court was asked to answer the following question:
"Would legal online gaming and sports betting remain lawful under the Criminal Code if its users were permitted to participate in games and betting involving individuals outside of Canada?"
Regulation of the market has resulted in most online casino gamblers and sports bettors moving from the gray to the white market. Online poker players have proven more sticky to the larger gray/black market sites because of the lack of liquidity. DFS operators shuttered their sites when Ontario was cut off from the international market following regulation.
Standing in opposition are several government-run lotteries in Canada and the Mohawk Council of Kahnawà:ke (MCK), which has served as a regulatory and licensing body for gray market operators in Ontario and beyond for decades.
Like the hub-and-spoke debate in the US, the crux of the debate is where a bet takes place: at the server, where the bettor is located, or both?
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Around the Watercooler
Social media conversations, rumors, and gossip.
Interesting thought from Underdog Fantasy’s Vice President of VIP, Dillon Borgida:
I largely agree with this take, and it’s something I have noticed in quite a few places. The communities that form around different activities are separate from the activity itself for several reasons ranging from privacy to niche communities within the larger community.
Basically, give the customer SOMETHING to talk about, not the place to talk about something.
Stray Thoughts
A Facebook memory from 2016:
“Looking through the Wynn Everett project, it will have a 91-table poker room. By comparison, Borgata has 82, Bellagio 40, and Foxwoods has 97 cash game tables.”
So, how many poker tables does Encore Boston Harbor (the Wynn Everett project) possess?
In 2019, it opened with 88 poker tables
It currently has… Drumroll………………………………. 24