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Wednesday, October 17, 2018
 
by Andrew Tottenham  

Managing Director, Tottenham & Co

Whilst at this year's Global Gaming Expo I sat in on a talk entitled "Gambling on the Blockchain." It was a fascinating look at how this emergent technology is being used in sectors of the gambling industry. I left the session scratching my head, though, and thinking that the inclusion of Blockchain technology was solving a problem that either did not exist or was not a very large one in the first place and probably didn't warrant the effort.
 
Let me first give a short explanation of blockchain technology. A blockchain is an encrypted distributed ledger that uses a novel approach to verify transactions and add them to the ledger. The most common use of the technology is in cryptocurrencies, although it can be used for anything where a verifiable ledger is needed.  


Short-term thinking is an affliction deep-rooted and almost definitional to the nature of a corporate structure. It presents major challenges across most industries, including the gambling sector.

The emphasis on turning maximum profits in the immediate term and a healthy and continual improvement for shareholders has traditionally come at the expense of almost every other consideration. A clear-cut example of this is the customer service industry's deployment of single-use plastics. The world would be better off without the product and, thankfully, it will be phased out in time.




The Euro News Revue
Andrew says: What country in the world could announce a mandatory reduction in stake but not the date that it will be implemented? Despite the months-ago announcement of a reduction of the maximum bet on FOBTs from £100 to £2, the shambles that is the UK's current government has yet to announce when the change will go into effect. I imagine HM Treasury, who love the tax revenue, are arguing strongly for a date a long way in the future, but the rest of Government is trying to get it implemented as soon as possible.  At the moment, Treasury is winning.
Luke says: This clarification from CAP and BCAP regarding the "normalisation" of gambling in advertising is most welcome, providing as it does a resolution to a handful of issues raised by some members of the public concerning gambling ads. As CAP and BCAP point out, the services being promoted in such ads are both legitimately and legally available, as well as being services which it is possible to use in a responsible manner. For these reasons, as they state, the normalisation of such activities is not a policy concern. They do consider the normalisation of problematic gambling or illegal and underage gambling to be a major policy concern, and gambling ads that cross those lines have and will continue to be ruled out.  
Luke says: Interesting news filtering in from Spain as the Socialist Workers Party's minority administration has struck a budget proposal deal with the Socialists to include further restrictions on gambling advertisements. There's a balance to be struck between the booming gambling industry in Spain, which has just seen its taxes cut, and the need for more responsible regulation in the wake of recent corruption charges. There's been no official confirmation yet, but the national press is reporting plans to more closely regulate advertising standards and treat, as El Pais reported, betting ads "like tobacco (ads)" in terms of more closely guarding vulnerable groups such as children from exposure. Reportedly this may include a ban on daytime broadcasts and/or a ban on using celebrities and sportsmen to promote gambling services.
Luke says: The Stars Group has finally cleared the last significant hurdle to the acquisition of Sky Betting & Gaming now that the investigation into that acquisition by the UK's Competition and Markets Authority has begun. The Stars Group has celebrated the ability to move freely forward with the takeover by announcing a set of new executive management appointments within Sky Betting & Gaming. Stars have always had a bit of a taste for acquisitions, going back at least to their acquisition of Full Tilt, their biggest competitor in the poker world at the time, after the infamous Black Friday. They've always been quick to mop up a decent amount of the competition. This one really is a mammoth merger.
Luke says: A really fascinating interview here with Bettorlogic CEO Andrew Dagnall, who discusses the lessons to be learnt within the gambling industry from entertainment companies such as Netflix and Spotify. The emphasis on customer choice is the first thing that leaps out, and that's fascinating when it comes to the gambling world. The issue of choice seems to relate directly to the question of control, à la responsible gambling, but also to the emergence of interest in skill gaming. Surely in a game of pure luck the act of choosing becomes almost arbitrary? Customers have a choice of games, but little choice in-game. Sports books are a little further ahead on this issue, in a way, with the introduction of real-time betting adjustments, which at least give the appearance of a greater skill factor. Dagnall doesn't explore that element here, however, preferring to discuss the significance of recommendation engines and user data.
Luke says: As this article sensibly points out, the market share for operators marketing to Swedish customers without permission was a staggering 73% in the first quarter of this year, and the legal reforms - which have, it's interesting to note, paved the way for the licence process - are both welcome and long overdue. Sweden reports that 55 applications have been received from operators looking to start legally offering bets on January 1. The regulation exempting gambling services that provide a public benefit from the profit-based 18% tax imposed on new licensees is also of great interest. It will be interesting to discover exactly what will qualify as sufficient public benefit to avoid these taxes, since this theoretically could allow more charitably-minded gambling entities to prosper.  
Andrew says: Paul Fox, CEO of online sports betting company LeTou, wants to make a real difference for problem gamblers, a laudable endeavour. Mr Fox believes that problem gamblers can ban themselves from one online gambling site and easily open an account on another. This is true. Gamban will help cut down the number of sites available, but only those sites that sign up for the service. The straightforward proposal from Paul Fox is that banks should use the 7995 code attached to all online credit and debit card transactions, which could automatically be blocked by the banks. This would mean a customer couldn't deposit into a gambling account. Over a decade ago, as Chair of an online gambling industry group and with significant political support, I tried and failed to get banks to block gambling transactions from those who are underage, since banks know the age of their customers. So in this instance I don't think they are going to play ball. Banks do not want to be in the policing business nor in a position where they have to accept any more liability than they do already. A shame, because it is a nice idea.
Andrew says: Easton Pharmaceuticals is apparently on the short list to acquire the debt-laden Club Hotel Casino Loutraki in Greece. You may remember that Loutraki is on life support and was recently closed for a few days for non-payment of gaming taxes - and, also, that the company had not been paying its employees on time. The proposed Hellinikon project and the move of the existing Mont Parnes casino to a more accessible location near the centre of Athens is likely to be the death knell for Loutraki, if it doesn't die sooner. So why the interest from publicly listed Easton? A quick look at their 2017 financials shows total revenues of $245 thousand, net tangible assets of minus $625 thousand, and a current share price of $0.015. There's your answer!
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