September saw casino operator Delta Corp Limited receiving several Goods and Services Tax (GST) shortfall notices, with the company and its affected subsidiaries later filing writ petitions that challenged the said notices. During a hearing this Monday, the Bombay High Court made the decision to instruct the Directorate General of GST Intelligence (DGGI) to not pass a final order. Instead, the final hearing will be left for November 5, 2024.

The first two notices were sent by Hyderabad’s DGGI, and they amount to more than Rs 16,000 crore in total, with the allegations encompassing a time period starting July 2017 up until March 2022. Another notice alleging that tax evasion has been committed was sent by the DGGI of Kolkata in October to a subsidiary of Delta Corp Limited, and this time, the amount addressed was over Rs 6,384 crore.

Delta Corp Limited Used its GGR as the Basis for the Tax Payments

According to Delta Corp Limited’s senior advocate, Harish Salve, the taxes the company and its subsidiaries paid during the periods highlighted in the notices were based on the entities’ Gross Gaming Revenue (GGR). A clarification on what GGR encompasses was also made.

In addition, Harish Salve also pointed out how petitioners have challenged the Central GST Rule 31A of the 2017 legislation, according to which taxation must be based on a bet’s base value as opposed to the GGR. It was emphasised in the filings that this way of taxing gambling companies has been a serious problem for India’s gambling industry. In addition to Rule 31A, the Central GST Act’s section 15(5), along with notifications and circulars that also have to do with the said act, were also challenged, as announced by Justice M.S. Sonak and Justice Bharat P. Deshpande.

The Newest Changes to GST Legislation Bases Tax Rates no the Base Bet Value

Legislation surrounding India’s Goods and Services Tax was put into effect in 2017, and it has since gone through multiple amendments, especially in regards to the way gambling activities have been taxed. The latest changes were made in 2023, which essentially led to an increase of 28% to the GST rate when it comes to all forms of gambling.

Previously, it was only games and gambling activities in general that were luck-based needed to adhere to a GST rate of 28%. Skills of chance, on the other hand, had to pay taxes based on a GST rate of 18%. It is also dictated that the new all-encompassing 28% GST rate will not be based on the GGR of a company, and will instead be affected by the base value of online bets. The government put these changes into effect on October 1, 2023. These changes have been a point of contention among industry players, with many maintaining that their application will be harmful to India’s iGaming sphere.

Over a period spanning from January to August of the current year, the Hellenic Gaming Commission (HGC) reported that Greeks have wagered a total of €22.7 Billion (approximately $24.02 Billion) on various gambling products. This represents a 28% upsurge in turnover compared with the same period in 2022, and most likely, new record highs for the Greek gambling industry to be achieved by the end of 2023.

The independent administrative authority published figures encompassing online gambling, games of chance delivered by the Greek Organisation of Football Prognostics S.A. (OPAP), physical gambling establishments, racetracks, and lotteries. With gambling operators returning 92.5% of the wagers, gamblers lost €1.7 Billion ($1.8 Billion) for the first eight months of 2023.

The expected new highs for 2023 can be predominantly ascribed to the surge in online gambling recorded between January and August. Wagers placed through interactive gambling operators get the lion’s share of the total betting volume, with a €17 Billion turnover (out of €22.7 Billion) in the eight-month period, or nearly 75% of all bets. Online gambling thus scored a 33% increase compared with the same period in 2022.

While the 2019 pre-pandemic figures regarding the total funds spent on gambling stood at €16 Billion, data from 2022 indicated a total wagering volume of €29.2 Billion.

Online Gambling Revenue in Greece Spikes from €2 billion in 2015 to €21.3 Billion in 2022

The combined €2 Billion turnover of HGC-licensed online operators in 2015 pales into insignificance when compared with the 2022 figures that reached €21.3 Billion. The data for 2019 indicated a turnover of €8.5 Billion, and for 2021 – €17.5 Billion.

As per the estimates of the gambling regulator, the gross gaming revenue (GGR), which reflects the difference between the total funds wagered and the amount won by players also shows an upward tendency. It marked a 13% rise to €1.7 Billion compared with the same eight-month period in 2022. The 2023 expectations for the GGR stand at nearly €915 Million.

Despite the overall upward trajectory of the gambling industry in Greece, not all participants profited equally from the recorded progress. Land-based establishments across the country were greatly impacted by Covid-induced closures and high operating costs. As a result, many gamblers gave up the habit of visiting land-based casinos in favor of their online counterparts.

Founded in 1958 as Greece’s national lottery, OPAP S.A. was the country’s state-owned gambling monopoly for several years. Currently, it is a licensed operator having exclusive rights to organize and offer lottery products, sports betting and horse racing. In 2013, the company’s privatization was finalized, with Emma Delta acquiring Greece’s remaining 33% stake.

Governor DeSantis currently has until November 1 to respond to the petition filed by West Flagler Associates, which seeks to review the potential reinstatement of Florida’s 2021 sports betting compact. However, a request was made for the deadline to be extended to December 1, which would give DeSantis an additional 30 days to file his response.

The reasoning cited has to do with how the Solicitor General’s Office of Florida is facing a “particularly heavy workload” in the 14 days to follow. In the formal request, it was also noted that the No Casinos Inc. citizens group, which is in support of West Flagler’s petition, had been granted a 10-day extension to file its amicus brief. An emphasis was also placed on the fact that the Court had made a statement clarifying that entities that needed to respond to the writ were permitted to request such extensions.

Florida’s Sports Betting Case Has Been Tumultuous

At the center of this case is the 2021 compact between the State of Florida and the Seminole Tribe, which features a “hub and spoke” model of operation. The said model entails that the servers in tribal territory would be the “hub” of any online sports bets placed within the state of Florida. Two years later, the approval of this compact has been put into question.

No Casinos Inc. expressed its disapproval of the compact following West Flagler’s writ of certiorari filing, stating that it was “disrespectful” to the state’s constitution and those who supported the implementation of the Florida Amendment 3, which dictates that voters would be those who can authorize gambling operations within the state.

Earlier this October, West Flagler and Bonita-Fort Myers Corporation also requested a stay motion with the aim of preventing the launching of sportsbooks within the state of Florida before the resolution of the case. The petition was later approved. However, the Department of Interior criticized the granting of this request. Solicitor General Elizabeth Prelogar asserted the department’s stance that, due to West Flagler’s failure to make it clear how exactly the mandate would lead to significant harm if it was not stayed, the petition warranted rejection.

The Matter is Urgent According to West Flagler

Following DeSantis’ extension request, West Flagler issued a statement addressing the impact such a delay could have. In it, the situation is described as warranting swift action. A seven-day extension was presented as an alternative.

According to West Flagler, “there is no imminent emergency,” citing the temporary stay motion that the association was granted. In spite of this, the petitioner also argued that there is uncertainty regarding the US Supreme Court’s future proceedings, and that it is also unknown what the Seminole Tribe’s intentions are. According to West Flagler, the Seminole Tribe could make the decision to launch a Florida sports-betting application. West Flagler also expressed its intention to request emergency relief, if necessary, although the association has not taken this action given the mandate’s stay.

Austrian Lotteries (Österreichische Lotterien) has recently faced censure for failure to abide by the Salzburg Youth Act by Spielerhilfe, an independently owned player protection association in Austria. The latter laid the blame on Lotterien for exposing underage players to purchasing instant win gambling products.

Founded in 2019, Spielerhilfe seeks to promote player protection, advice, and media education in the field of gambling. Its members, some being former problem gamblers, aim to provide professional assistance to susceptible groups of society that have fallen victim to gambling addiction. The organization conducted mystery shopping checks on Lotterien’s retail outlets across Salzburg, Upper Austria, and Lower Austria, using children aged between 12 and 14.

Earlier this year in April, Spielerhilfe reported 70 breaches of the minors’ safeguarding policy by Austrian Lotteries, a company owned and operated by Casinos Austria. Subsequently, in July 2023, Austrian Lotteries increased the minimum legal age to purchase instant win products from 16 to 18 years. However, the most recent checks disclosed that nearly 60% of retail stores in the said areas sold scratch cards and various other instant win products to underage customers.

According to the regulations of the 2019 Salzburg Youth Act, underage individuals are prohibited from participating in games of chance. Therefore, Lotterien was charged with violating the law by selling such products to minors. The business failed to communicate to its retail partners to discontinue the practice of selling gambling products to individuals under 18.

To summarise its findings from the current investigation, Spielerhilfe reported 24 breaches of the act and suggested that the Ministry of Finance implement an integrity review of the company’s operations.

Failure to abide by customer verification requirements subjects companies to fines in the range of €250 and €14,600, and up to 4 weeks’ imprisonment for major offences. Businesses that have been convicted more than once of such violations may have their licenses revoked by the Austrian Chamber of Commerce.

Spielerhilfe Chairman, Christoph Holubar, Comments on Österreichische Lotterien’s Failure to Observe Regulations

Spielerhilfe Chairman, Christoph Holubar, spoke at a press conference held on October 18, 2023, about the implications of selling gambling products to underage individuals. He said that Lotterien obviously failed to exercise control over its retail partners, which resulted in selling gambling products to minors in more than half of the test purchases.

Although lottery and instant win products were legally available only to customers aged 18 and above, the company neglected the regulations and acted in violation by focusing on “a vulnerable age group susceptible to gambling addiction.”

The organization’s chairman further underlined the importance of exercising vigorous control over the participation of underage individuals in gambling and recommended integrity checks by the responsible authorities that would assess the company’s age verification procedures.

In a meeting that took place on Tuesday, members of the North Carolina Lottery Commission’s sports betting committee approved 48 sports betting rules that, if passed, will result in pick ‘em-style fantasy sports events not being included within the new legislation’s definition of “fantasy sports.”

Operators are not prohibited from offering daily fantasy sports games to North Carolina-based customers currently. However, the state does not explicitly regulate DFS events. Legislators aim to remedy this and introduce rules that will oversee operations surrounding DFS within North Carolina.

The New Legislation Excludes Prop-Style Bets From Fantasy Sports

Under the proposed regulations, contests “based on proposition wagering” that are similar to the prop bets placed on actual sports events do not fall under the definition of “fantasy sports.” Such contests are considered problematic due to the fact that a given operator’s clients pick over/under selections against the house, as opposed to other players. The rules also single out contests that are luck-based, i.e., where skill or knowledge does not pertain to the event. Games where the choices presented have the player decide if a team (or individual) will “surpass an identified statistical achievement” have also been stated to be an exception.

The new rules have not yet come into effect. Operators can provide feedback until November 1, and North Carolina regulators could introduce changes to the proposed legislation after they review any public comments they receive. Prior to the November deadline, a public hearing will take place on October 27 in Raleigh, North Carolina.

Should the new legislation pass as is, prop-style DFS selections could be considered sports betting. In this case, any company that currently offers these types of events to their clients would need to apply for a sports betting license in order to continue operating within the North Carolina state legally.

Regulators in Multiple US States Have Regulated Prop-Style Fantasy Sports Events

North Carolina is the latest state in the US that has chosen to target pick ‘em-style fantasy sports events, as these types of contests have faced continuous legal pushback throughout the second half of 2023.

In September, multiple fantasy sports operators received cease and desist letters by Louis Trombetta, Executive Director of the Florida Gaming Control Commission. Companies like Underdog and PrizePicks were demanded to stop providing their Florida-based users with opportunities to partake in fantasy sports betting.

October, in particular, was a rough month for companies that offer prop-style DFS games, as it was in early October that New York banned any and all DFS events that bear a resemblance to proposition bets. This legislation was met with criticism from both operators and customers following its proposal, but the complaints were not successful in changing New York legislators’ stance on the matter. The same month also saw the prohibition of pick ‘em fantasy sports events in Michigan after the state’s regulators proposed such a ban this summer.

The Ministry of Foreign Trade and Tourism of Peru (Mincetur) has sanctioned a series of online gaming and betting pieces of legislation aiming to regulate the gambling industry in the country.

The Peruvian government has recently published Supreme Decree No. 005-2023-Mincetur, which endorses the Regulation of Law No. 31557 modified by Law No. 31806, controlling the activity of remote gambling establishments. The comprehensive document describes in detail the technical and regulatory requirements for operators wishing to establish their foothold in the Peruvian gambling market.

The decree will become operative on February 9, 2024, establishing a 120-day deadline for operators to prepare to file their license requests. The applications must be submitted between February 10 and March 10 of next year. Online gambling services providers that fail to comply with this timeframe would be subjected to penalties including fines, criminal prosecution, and exclusion from the Peruvian gambling industry.

According to the newly established gambling laws, native and offshore online gambling operators must pay a 12% levy on their net profits from gaming and betting, effective from April 2024.

Players, on the other hand, will collect the prizes they won in full. To participate in online gaming and betting, they must undergo mandatory account verification procedures ensuring they are of legal gambling age. The supported payment methods will include credit cards and debit cards, among other government-approved processors. Cryptocurrencies, however, will not be among the eligible casino and sports betting banking methods.

The decree further aims to guarantee that remote gaming and betting activities are conducted in a fair, ethical, and transparent environment. Ensuring integrity and equal treatment of all participants in the sector are specifically highlighted. There is a focus on vulnerable groups of society, with minors and individuals who are easily susceptible to gambling’s potential harms at the forefront. The regulatory framework aspires to promote responsible gambling policies preventing problem gambling. Concurrently, the measures serve to thwart money laundering practices.

Juan Carlos Mathews, Minister of Foreign Trade and Tourism, Comments on the New Regulatory Landscape in Peru

Juan Carlos Mathews, Minister of Foreign Trade and Tourism, highlighted that the implementation of these laws represents a key moment in Peru’s gambling history, demonstrating the government’s commitment to ensuring full transparency and financial integrity.

He added that Peru ranked third among the Latin American countries, after Colombia and Argentina, in modifying its gambling regulatory framework and moving toward a properly controlled online environment for both operators and players. The Minister also stated that the collected tax revenue would be utilized for the rejuvenation of tourism and tourist infrastructure, as well as the promotion of sports and various mental health initiatives.

According to the regulatory framework, Mincetur will be the administrative body responsible for monitoring, authorizing, and regulating remote gaming and betting activities in the country.

In early October, the Lagos State Lotteries and Gaming Authority (LSLGA) made a public statement, condemning 43 unlicensed gaming companies for operating within the Lagos state illegitimately and urging Lagos-based gamblers to not place bets at the online operators in question. The entity now faces criticism from industry players.

Lanre Gbajabiamila, Director General of Nigeria’s National Lottery Regulatory Commission (NLRC), issued a statement where it is noted that the LSLGA blacklist sparked confusion in the country’s gambling sector. This warranted a response by the NLRC, as requests for the Nigerian gaming watchdog to clarify the status of the listed gaming operators were made following the blacklist’s publication.

In the public notice, the NRLC clarified that around half of the blacklisted gambling companies were in possession of valid licenses issued by the country’s gaming regulator. The said online operators are Zebet, Betika, Gobet, Msport, Afribet, Bangbet, Betwazobia, Koretbet, 22Bet, Paripesa, Livescorebet, Blavkbet/Betty Bingo, Cloudbet, Hallabet, N1Bet, Konfambet, Scratch2Win, Naijabet, Lottomania, and Millionaire Powerplay. The NLRC continued, expressing regret over the confusion and misconceptions the LSLGA’s publication has potentially led to.

Industry Experts are Worried That The LSLGA’s Actions Could Harm Nigeria’s Gaming Industry

According to industry experts in Nigeria, the blacklist was an insult to the legislation that gave the NLRC the ability to regulate gambling operations within Nigeria. The ruling in question was filed in 2020 by Justice Iniekenimi Oweibo of the Lagos Federal High Court (FHC). Calls were made for Lagos Governor Babajide Sanwo-Olu to force James Maida, the LSLGA’s Chief Executive Officer, to cease such actions. The governor was also urged to address how the LSLGA has harmed the Lagos state’s reputation and how the entity’s actions were harmful to the growth of Nigeria’s gambling industry.

An anonymous gambling entity argued that, according to the National Lottery Act of 2005, licensees who have obtained their permit from the NLRC were clearly permitted to operate within any Nigerian state without needing to be licensed by the state’s own gambling watchdog. They continued, stating that the Lagos gambling regulator’s blacklist of NLRC-licensed entities was groundless. The industry player also condemned the Lagos regulator’s attempt to violate the National Lottery Act, which is still in effect, and described the move as “baffling.”

One of the main goals of the 2005 ruling was to avoid confusion surrounding Nigerian gambling legislation, stated another industry player. The ruling also aimed to ensure that the Nigerian NLRC is the only watchdog that has the power to regulate gambling on a national scale. According to this industry expert, independent state-level regulations “could be confusing for operators and players alike,” while a national regulatory entity would guarantee consistency when it comes to the country’s gambling legislation.

The industry player continued, noting how beneficial Nigeria’s gambling sector could be to the country’s economy. They then criticized the Lagos State for causing “chaos” and confusion on multiple occasions, with actions that could lead to the industry’s growth being stifled, along with its potential being restricted.

Following a police raid in Oklahoma City earlier this week, three were arrested on the grounds of illegal gambling. The authorities acted on a tip that stated there had been suspicious activity inside a business establishment in the city’s Asian District. Aside from the culprits, the law enforcement officials ran into thousands of dollars, illegal gambling equipment, and drugs.

The police officers’ report on the case stated one of the suspects threw a pair of keys while trying to escape. The officials used it to enter the business establishment undercover. Once within the premises, they came across multiple items associated with gambling. Among them were eight slot machines, playing cards, chips, and six mahjong tables. The total amount of confiscated funds was $79,000. In addition to everything listed, the investigators found marijuana and cocaine.

Gary Knight, Master Sergeant at Oklahoma City Police Department, said that police raids after claims of illegal gambling were not an uncommon phenomenon. The officers responded to such tips from the public once in a while, and they were aware of such establishments.

The Executive Director of the Oklahoma Association for Problem and Compulsive Gambling Speaks of Illegal Gambling’s Potential Threats

Wiley Harwell, Executive Director at the Oklahoma Association for Problem and Compulsive Gambling, commented on the recent police raid. He said the situation was intricate, considering there was a sufficient number of legitimate gambling venues in Oklahoma, aside from the lottery, and choosing an unauthorized site over them was rather strange.

He went on to speak about illegal gambling’s potential threats, highlighting there were no regulations in place that would protect players if they decided to gamble at unauthorized locations. They could not be sure of the venue’s integrity and games’ fairness and there was no way to verify them. He also added that all of the tribal casinos in the state of Oklahoma comply with strict gambling regulations. Gamblers would face no issues as far as fair outcomes are concerned.

Under the Tribal-State Compact, Oklahoma’s gambling laws allow gambling at licensed casinos. According to information from the Gaming Compliance Unit of Oklahoma’s Office of Management and Enterprise Services, there are currently 35 gaming compacts with the State of Oklahoma approved and published in the Federal Register.

Oklahoma tribes hold an exclusive gaming compact, enabling them to offer gaming products on the territory of the state. As per legislation, the tribal gaming contributions to the state budget amount to 4% of their revenues. The figure rises to 6%, provided that revenue surpasses $20 million under the ongoing compact. Additionally, the tribes’ gaming compact would enable them to offer sports betting services, once they are added to the list of state-approved gambling products.