A US District Court has delivered a blow to Telegram, granting an injunction preventing the company from issuing GRAM tokens.

The injunction, which is the latest development in a court case that began in October 2019, was granted in response to a Securities and Exchange Commission request. Justifying its decision, the Court stated:

“The Court finds that the SEC has shown a substantial likelihood of success in proving that  the contracts and understandings at issue, including the sale of 2.9 billion Grams to 175 purchasers in exchange for $1.7 billion, are part of a larger scheme to distribute those Grams into  a secondary public market, which would be supported by Telegram’s ongoing efforts. Considering the economic realities under the Howey test, the Court finds that, in the context of that scheme, the resale of Grams into the secondary public market would be an integral part of the sale of securities without a required registration statement.”

During its 2018 initial coin offering (ICO) for the Telegram Open Network (TON), Telegram raised approximately $1.7 billion. Based on the 1934 Howey Test, the SEC believes the ICO, along with many others, were unregistered securities sales.

Telegram had argued that, because it filed a Form D 506(c) Notice of Exempt Offering of Securities before it began the first round of sales, it did nothing wrong.

However, that argument clearly didn’t cut it with the Court, which noted that because the Gram tokens were clearly intended to reach the secondary market, the sale was not exempt. The Court also dismissed Telegram’s argument that its Gram token would be a commodity once actualised, and fall outside of the jurisdiction of the SEC.

Ordering Telegram to halt delivery of GRAM tokens, the Court stated:

“The Court also finds that the delivery of Grams to the Initial Purchasers, who would resell them into the public market, represents a near certain risk of a future harm, namely the completion of a public distribution of a security without a registration statement.  An injunction, prohibiting the delivery of Grams to the Initial Purchasers and thereby preventing the culmination of this ongoing violation, is appropriate and will be granted.”

AYO.NEWS says:

Earlier this week we reported that finance from initial coin offerings (ICOs) collapsed by more than 95% in 2019, as equity funding and DeFi surged. Given its sheer scale, the Telegram-SEC battle is of crucial importance for the SEC’s crusade against ICOs, and its outcome will likely decide the future of more than one company.

AYO.NEWS says features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited.

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British MP’s have called on online gambling operators to impose a £50 daily betting cap in response to the worsening COVID-19 (coronavirus) crisis.

The call followed reports that some operators are promoting riskier wagers on minor sports, virtual sports and casino products to traditional sports bettors because virtually all mainstream sporting events have been cancelled or postponed.

A cross-party group of MPs have written to the Betting and Gaming Council urging operators to think about the well-being of customers before their own finances.

Labour’s Carolyn Harris, the Conservative’s Ian Duncan Smith, and Scottish National Party’s Ronnie Cowan, said:

“We are deeply concerned that as we go deeper into this crisis, more and more people will turn to online gambling as a distraction. If the industry were to self-impose a daily limit of £50 … it would be a clear demonstration that the industry is willing to act responsibly and do what they can to protect society and peoples’ finances, at this dreadful time.”

With the UK now under lockdown, there are also concerns that people at risk of problem gambling might also be tempted to bet more, including on events they are unfamiliar with. Some experts have gone as far as accusing the gambling industry of trying to capitalise on a national disaster.

AYO.NEWS says:

Despite online operators, especially casinos, doing very well in the initial stage of the outbreak, as sports bettors look for a new fix and millions trapped at home look for distractions, the party is likely to be short-lived.

As the crisis drags on we are likely to see calls go far beyond a daily betting limit. For example, with governments being forced to subsidise millions of wages, it is almost certain many will call on restrictions to stop people spending it on gambling.

And, of course, for those who can’t work and aren’t getting help with wages – like the UK’s millions of self-employed – it’s unlikely many people will have money available to gamble with!

AYO.NEWS says features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited.

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

Danish esports betting solutions provider GameScorekeeper has launched a new athletes age checking service.

With so many esports athletes being under the age of 18, betting operators can easily fall foul of regulations and accidentally offer betting on matches with too many minors involved. But, thanks to GameScorekeeper, operators can now easily check ages using a new service.

According to the company, it was 16-year-old Kyle Giersdorf winning the Fortnite World Cup and Yu “JackeyLove” Wen-Bo being a member of Invictus when it won the League of Legends World Championship, that made it sit up and take notice.

It soon became clear that the number of under-18 esports athletes is increasing, making it more important than ever for betting operators to ensure compliance with age regulations.

As GameScorekeeper’s founder and CEO Felix Klastrup pointed out, in traditional sports like football, it is normally easy to identify which teams include under-18 players, but in esports many teams include a mix of under and over 18s.

The company claims its new service covers over 95% of all CS:GO teams, and says any operator can use the service to manually or automatically suspend bets on teams with a majority of players under 18.

Betway has become the first operator to use the service, with Head of Esports at Betway Group, Adam Savinson, commenting:

“We are committed to providing the widest selection of markets on esports while at the same time ensuring all bets live up to our strict responsible policies and comply with regulation on athletes’ age. The Player Age Service from GameScorekeeper ensures that we can maintain this efficiently.”

Both Sweden and Spain have already introduced regulations banning betting on individual players aged under 18, or on teams whose majority of players are under 18, and more countries are expected to follow suit.

AYO.NEWS says:

This seems like a very handy service given the current state of esports, with mixed age teams. However, moving forwards, as esports betting becomes a major industry, its easy to see how this system could become unworkable, and begs the question as to whether age divisions will need to be introduced in esports?

Staying with GameScorekeeper, just last month we reported the company had entered a partnership with Las Vegas-based gaming solutions supplier Scientific Games.

AYO.NEWS says features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited.

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

On 14 February 2020, ATG notified the Swedish Gaming Inspectorate that it had offered bonuses to several customers even though they had already been awarded a bonus earlier, breaching the rules of the Gaming Act.

According to ATG, the incident occurred during the relocation of servers, when there was a problem with the application indicating which customers had already received a welcome bonus.

In connection with this, around 15 existing customers had been offered the welcome offer several times – though it is not clear how many times customers had actually used the bonuses.

ATG says it takes a serious view of what happened, and will review the procedures that caused the error while moving servers.

The Gaming Inspectorate has said it does not consider this a serious violation as it was for a short time, only affected a few customers, and ATG took prompt action to notify them and revise procedures. Hence it has only issued a warning.

AYO.NEWS says:

Some will say the Swedish Gaming Inspectorate has once again demonstrating double standards in assessing license violations, and that its perfectly clear it is affording Swedish operators much more leeway that those based abroad. Some would say it is as if the Gaming Inspectorate sees its duty as making life difficult for operators that were not part of the old Swedish state-owned monopoly!

Indeed, earlier today we reported the Swedish Gaming Inspectorate had hit Kindred subsidiary Spooniker with a massive €8.88M fine for offering illegal bonuses during summer 2019.

AYO.NEWS says features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited.

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

Gaming giant Kindred has received a warning and penalty of SEK 100 million (€8.88M) from the Swedish Gaming Inspectorate, related to illegal bonus offers in Summer 2019.

In a press release, the Swedish Gaming Inspectorate said the penalty and the warning apply to Kindred’s subsidiary Spooniker, which holds the Swedish licenses for Unibet.se and Mariacasino.se.

In March 2019, it was noted that the company offered several different unauthorized bonuses. According to the Gaming Inspectorate, in May and June 2019 there were further bonus offers that were in violation of the Gaming Act, and the company also offered games not covered by its license.

Kindred responded by saying it had initially made “a different assessment of what is considered to be a bonus and it is these interpretations that the Gaming Inspection has had views on.” The company also noted it had since adopted “a more restrictive interpretation of the law.”

Though the Gaming Inspectorate considers the violations to be serious, since the company has made a correction, and it can be assumed that the company will not violate the rules in the future, it said it considers a warning, together with a penalty fee, to be sufficient.

According to the Swedish Gaming Act, the penalty may not exceed 10 percent of the license holder’s turnover. Given the number of violations and the fact that they relate to both bonus offers and unauthorized lotteries, coupled with Spooniker plc’s high turnover, it has resulted in a relatively high penalty charge.

Kindred will appeal the Gaming Inspectorate’s decision with the aim of obtaining legal guidance on how the legislation should be interpreted. It has emphasised that is believes the Swedish Gaming Act is unclear in areas related to commercial activities, which has created obscurity.

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The Netherlands Gambling Authority (KSA) has reacting with fury over online operators taking advantage of the COVID-19 (coronavirus) crisis to target Dutch customers.

With land-based gaming arcades and casinos in the Netherlands forced to close due to the pandemic, the KSA says it has noticed online operators trying to cash in by offering “corona-free” promotions.

In addition to the illegality of targeting Dutch customers, the KSA also made it clear it found the practice to be “completely objectionable.” In a warning to operators it said:

“The parties that do this, the providers themselves as well as their advertisers, can count on the KSA’s keen interest. Parties that use this type of practice can be assured this will weigh heavily in a possible application for an online gambling license.”

The KSA also warned that the worsening COVID-19 crisis could result in delays to the processing of license applications, trademark applications, change requests, and any ongoing legal proceedings.

A couple of weeks ago, the Dutch government published key regulations of the Remote Gaming Act, as online casino and sports betting moves close to legalisation in the country. After several delays, it was thought that the regulated market would go live on 1 July 2021, though with political processes being severely disrupted, this could well be delayed yet again.

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