The UK Gambling Commission (UKGC) has launched a consultation on proposed changes to the rules covering VIP promotions and high value customers.

With the Gambling-Related Harm All Party Parliamentary Group (APPG) now calling for a ban on all VIP schemes, along with a blanket ban on advertising and other draconian restrictions, the UKGC has challenged operators to make faster progress in raising standards regarding VIP incentives, responsible product and game design, and online advertising.

According to the Commission, the incentivisation of high value customers poses two key regulatory challenges:

1. HVCs are more heavily engaged gamblers in terms of their gambling spend, the frequency with which they gamble, or both. Heavily engaged gamblers are at greater risk of gambling-related harm.

2. The disproportionate financial value of HVCs to licensees means regulatory compliance can conflict with short-term commercial objectives.

Today, the Commission published a report on the progress made by the industry so far, and setting out the next steps. It says the proposed changes to the Licence Codes and Conditions of Practice (LCCP) are aimed at focusing operators’ attention on making gambling fairer, safer and crime free when transacting with high value customers.

Got views on this subject? Take part in the consultation here. 

AYO.NEWS says:

With high value customers being so critical to the current business model of many operators, we’re sure the UKGC will hear a lot of arguments against more restrictions. But, with such strong political and mainstream media support for action against the gambling industry, it really does seem like it’s almost the end of the road for VIP incentives in the UK. 

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

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Sports betting operator ATG has been warned by the Swedish Consumer Ombudsman over self-exclusion failures. 

Konsumentverket (KO) has scolded AB Trav och Galopp (ATG) for sending direct marketing messages to 77 people who had registered with Sweden’s Spelpaus self-exclusion service, and for sending a further 1,900 marketing messages to people who had opted not to receive direct marketing.

Additionally, KO warned ATG for failing to include the appropriate age requirements on certain advertisements. 

Though KO has only issued warnings, it has made it clear that any subsequent failure to comply with the strict self-exclusion regulations will lead to a SEK3 million (approx. €285,000) fine, and further age requirement failings will land it a SEK1.5 million penalty. 

KO has been investigating ATG since February, when it received complaints about marketing from individuals who had self-excluded, and a complaint about missing age restrictions from fellow gambling operator Kindred Group. 

In response ATG has said it accepts KO’s decisions, and that the messages sent out were not marketing, but rather account information, and had been sent by mistake. It also explained that age notifications were only missing from messages that were sent to players who had already been verified as of legal age. 

AYO.NEWS says:

ATG getting away with yet another failure is sure to make other Swedish-licensed operators roll their eyes, with many feeling the former betting monopoly gets special treatment from the authorities.

In December 2019, ATG got away with a mere slap on the wrist after offering betting on unregistered horse racing, and in March 2020 the operator dodged a fine after offering illegal bonuses to several customers. 

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

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Major online sports betting operator Betway has withdrawn markets relating to player transfers.

The move coincides with yesterday’s resumption of the English Premier League (EPL), following its suspension due to the COVID-19 crisis. Betway says its decision to stop offering odds on the movement of players via ‘football transfer’ or ‘player next club’ markets, will help improve responsible gambling and integrity. 

Betway’s action follows two high-profile incidents involving England international footballers this year. In March, Daniel Sturridge was suspended from all football for four months after it emerged he had divulged inside information about a possible transfer. While in May, Kieran Trippier also landed in hot water, being charged with misconduct by the Football Association (FA), for allegedly passing on insider information.

Explaining its decision Betway said it believes “betting on football should be about what happens on the pitch”, and that it is happy to see markets with so many grey areas shut down. The company also called on other operators to follow its lead. 

AYO.NEWS says:

With UK gambling under an unprecedented level of scrutiny, and powerful forces now calling for a complete advertising ban along with other draconian restrictions, Betway’s pre-emptive action to avoid more negative publicity is probably a smart move. Of course, whether other operators will follow suit remains to be seen.

Staying with Betway, earlier this week the operator announced a partnership with esports production company Beyond the Summit, and its sponsorship of CS_Summit 6. 

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

All original content featured on this site is © Pentagon Digital Limited, 2020

Mark Karpeles, former CEO of the infamous and now defunct Mt. Gox crypto exchange, will have to face a 2014 lawsuit alleging fraud. 

Karpele’s legal team had requested a summary judgment, but that was dismissed earlier this week by US District Court Judge Gary Feinerman. 

The judge rejected Karpele’s assertion that the case’s sole remaining plaintiff, Gregory Greene, had altered his arguments and added many new allegations, concluding that Greene had merely “added detail with the aid of discovery.” 

Greene lost 42,9 Bitcoin (BTC) when Mt. Gox collapsed in early 2014, and alleges that Karpeles falsely represented how secure users’ funds were with the exchange. He alleges that Mt. Gox’s terms of service promised the platform would provide secure custody for clients’ assets, and allow them to “safely and quickly” bull, sell, trade and withdraw. 

However, Karpele has responded by saying that when Greene opened his account in early 2012, Mt. Gox didn’t even have any terms of service. 

At the time of Mt. Gox’s collapse, Greene’s BTC would have been worth around USD $26,000, but at today’s prices it would be worth nearly $404,000. 

On 14 March 2019, Karpeles was sentenced to 30 months in prison, suspended for 4 years, for falsifying data to inflate Mt. Gox’s holdings by $33.5M. He was however found not guilty of other charges including embezzlement and aggravated breach of trust. 

AYO.NEWS says:

The whole Mt. Gox fiasco is surely one of the lowest points in crypto history, and it seems rather desperate to argue the exchange had no terms of service as a defence. If Greene’s case is successful, it could well open the floodgates for more claims. 

Staying with crypto crime, yesterday we reported that Centra Tech founder Robert Farkas has pleaded guilty to a $25M ICO scam, and is facing up to 87 months in jail and a $250K fine. 

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

All original content featured on this site is © Pentagon Digital Limited, 2020

Curaçao-based esports betting operator Cyber.Bet has joined the Esports Integrity Commission (ESIC) as an anti-corruption supporter. 

Cyber.Bet currently offers esports betting in three languages and hosts esports events across Asia, Europe, and Latin America. Its partnership with ESIC will see the bookmaker provide information to help monitor and investigate possible integrity breaches. 

Discussing the news a Cyber.Bet representative said:

“Joining the Esports Integrity Commission is another big step for Cyber.Bet to become one of the most reliable and respectful esports bookmakers. For us, it is not only an honor but also a very important collaboration with such an experienced and reputable organization.

“Since we are not just a bookmaker but a part of big esports community and also tournament organizers, we are deeply interested in keeping our events and the esports industry clean from match fixing and other undesirable factors.”

While Commissioner of the Esports Integrity Commission, Ian Smith, added:

“It is an honour to welcome Cyber.bet as an Anti-Corruption Supporter of ESIC. By joining ESIC as an Anti-Corruption Supporter, Cyber.bet has displayed its commitment to playing its part in maintaining the integrity of esports.

“Cyber.bet joins a long list of Anti-Corruption Supporters who together make it easier for ESIC to investigate suspicious betting activity, assisting in our mission to fight cheating and betting fraud in the esports industry. We look forward to working with Cyber.bet to continue to protect the integrity of esports.”

ESIC is building an extensive network of partners across the esports industry, with both specialist esports-only, and traditional bookmakers joining up to help stamp out corruption. Other partners of the commission include Betway, BLAST, LOOT.BET, Midnite, Parimatch, Rivalry, Sky Bet, and Unikrn. 

AYO.NEWS says:

Well done to Cyber.Bet for joining the good fight! With esports betting seeing phenomenal growth, it is imperative that operators and bodies like ESIC work together to stamp out corruption before it gets the chance to reach the levels seen in some traditional sports, like tennis. 

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

All original content featured on this site is © Pentagon Digital Limited, 2020

Disgraced founder of crypto firm Centra Tech, Robert Farkas, pleaded guilty to a $25M ICO scam in a Manhattan federal court on Tuesday. 

Farkas was accused of conspiring to commit securities and wire fraud, and will likely be sentenced to between 70 and 87 months in jail and a fine of up to $250,000. District Judge Lorna G. Schofield will hand Farkas his specific sentence at a date to be determined.

Miami-based Cetra Tech was run by Farkas and co-founders Sohrab Sharma and Raymond Trapani – both of whom are awaiting trials set for November this year. 

In an official statement, Craig Stewart, from the US Attorney’s Office, Southern District of New York, said:

“Farkas and his co-conspirators duped ICO investors into investing digital currency worth millions of dollars based on fictitious claims about their company, including misrepresentations relating to its purported digital technologies and its relationships with legitimate businesses in the financial services sector.  Whether in the context of traditional equity IPOs or newer cryptocurrency-related ICOs, raising capital through lies and deceit is a crime.”

Centra Tech: misrepresented facts and lied from the start

Authorities say Centra Tech’s business model was based on misrepresented facts and lies about the core team members, and that its ‘Centra Card’ Visa and Mastercard project was a fraud – with the company never having any partnerships or licenses from either of the global payment companies. 

Apparently the trio even created a fantasy CEO, named ‘Michael Edwards.’ The fictitious CEO was said to have graduated from Harvard University with a Master’s in business administration, and to have two decades of banking experience under his belt. 

As if all that wasn’t enough, Centra Tech also fraudulently claimed to possess money transmitter licenses in no less than 38 states. 

Fraudulent ICO endorsed by celebrities

The lies were designed to dupe investors to participate in the firm’s initial coin offering (ICO), which ran from July to October 2017, and was backed by high-profile celebrities including Floyd Mayweather and DJ Khaled – both of whom were later charged for unlawfully promoting crypto coin offerings without making it clear they had been paid to do so. 

Mayweather, who was also involved with two other ICOs, was forced to cough up $300,000 in disgorgement, a $300,000 fine, and around $15,000 in prejudgement interest. Whole DJ Khaled was made to pay $50,000, plus a $100,000 fine, and $3,000 in prejudgment interest. 

The investigation into Centra Tech involved the US Department of Justice’s Securities and Commodities Fraud Task Force, the US Securities and Exchange Commission, and the Federal Bureau of Investigation (FBI). 

AYO.NEWS says:

Slowly but surely US authorities are catching up with the cowboys that gave the ICO scene such a bad name a few years ago. Those who brazenly thought they were above the law are now going to be spending a lot of time looking at their cell walls. Unfortunately, the damage these crooks did to the industry’s reputation will take a long time to repair. 

Staying with crypto crime, as we reported last month, Seychelles-based cryptocurrency derivatives exchange BitMEX, and its executives, are facing a lawsuit for alleged racketeering, money laundering, wire fraud, and unlicensed money transmission. 

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

All original content featured on this site is © Pentagon Digital Limited, 2020