Virtual Gaming Worlds, which operates some of the most prevalent sweepstake casinos, has hit back over allegations that it is breaching gaming laws.
As reported by the Financial Review, Laurence Escalante, the owner of the group, rejected the notion last week from the AGA that took issue with the regulatory framework around sweepstake casinos.
Recently writing for Vixio Regulatory Intelligence, the body emphasised that sweepstake casinos are incredibly similar to that of regular casinos. However, in most circumstances, these firms operate under a far less intense regulatory environment.
According to the AGA, sweepstakes avoid regulations and licensing through a dual-currency system, however, they do still ‘look and play like an online casino’. It warned that ‘the ‘opaque nature’ could also significantly elevate the risk of bad actors having an opportunity for illegal activity.
The AGA stated: “The lack of regulatory oversight presents many risks for consumers as well as the integrity and economic benefits of the legal gaming market through investment and tax contributions. These sweepstakes-based operators have weak (if any) responsible gaming protocols and few, if any, self-exclusion processes.”
However, Escalante cited the importance of the firm’s financial crime controls as being vital when it comes to the sector, as he described them as ‘the best in class’.
It comes amidst the growth of the appetite for the sector amongst operators and those looking to engage with North American players.
Speaking at the SBC Summit North America, Mark Balestra, US Special Counsel at Segev LLP, revealed that the group has had ‘overwhelming requests’ from clients to grow into the sweepstake space.
Nonetheless, whilst ‘a few businesses are thriving’ in Balestra’s view, he added that ‘we are now seeing a flood of industry entrants’. He believes one of the challenges lies in supporting these newcomers in understanding the nuances around legal framework in the sweepstake sector.
He revealed that there are businesses tapping into sweepstakes as a promotional tool, citing the example of McDonald’s Monopoly as one of the most successful and engaging sweepstake games.
Placing a closer analysis on the role of social casinos in the market, he added: “There are a number of things that distinguish traditional and non-traditional sweepstakes.
“When I say non-traditional, I mean the social casino. But the main one is that with traditional sweepstakes, they’re only promotional tools. Whereas with social casinos, they are the primary offering. They are the central profit centre.
“So why do they fall into a grey area? I mean, I’m sure we’ve all heard that it’s not black and white, and it’s a grey area of law where they kind of operate. And this is because the sweepstakes laws were intended to allow businesses to offer these promotions.”
This was also recently echoed by the desires of Catena Media as the group stated it is one of the ‘fastest growing verticals’ in the sector.
CEO Manuel Stan also outlined that he feels the sector is only going to continue in its trajectory of growth.
He stated: “Our products are focused on growing the sweeps vertical. I think it’s twofold. Right now, we see that generally overall in the industry being one of the fastest-growing verticals and we capitalise on it. But also, we position ourselves for post-regulation in the bigger states in the US, where we will be able to have built our databases around our brands to capitalise when the likes of California and Texas will be regulating.”
Betting and Gaming Council CEO Grainne Hurst has stated that she will focus on delivering “stability, growth and diversity” across the UK gambling industry as white paper proposals are implemented.
Hurst’s comments come as she officially becomes the new CEO of the BGC after being confirmed for the role in April, joining the organisation from Entain where she had been Group Corporate Affairs Director since March 2018.
Her appointment was also part of a wider restructuring of the BGC’s senior leadership, with former CEO Michael Dugher becoming Chair after Brigid Simmonds stepped down from the position in April.
Making her first comments as BGC CEO, Hurst committed to delivering the white paper to help bring stability, growth and diversity to the UK gambling sector.
“I’m absolutely delighted to get started as CEO of the Betting and Gaming Council, the industry champion for so many iconic brands, at home in the UK and around the world,” Hurst said.
“This is a crucial time for the BGC’s diverse and growing membership, which supports 110,000 jobs and caters to millions of customers who enjoy a bet each month in the UK. There is a huge amount of work ahead of us, not least delivering and implementing the outstanding proposals outlined in last year’s White Paper, many of which our members called for.
“That includes a statutory levy to address problem gambling and related harms, an Ombudsman for improved consumer redress, online financial risk checks carefully targeted on those at risk, new stake limits for online slots, a Sports Sponsorship Code, plus mission-critical modernisation proposals for the land-based casino sector.
“While achieving regulatory certainty after a period of so much change is top of my priority list, it is important for our industry to focus on stability, growth and diversity across the sector. That work must be underpinned by strong data and guided throughout by the voice of the everyday consumer.”
Hurst also thanked her predecessor Dugher for his work as CEO, stating: “My huge thanks go to Michael Dugher for his amazing work so far getting the BGC to where it is today, I’m really looking forward to working alongside Michael in his new role as BGC Chair.
“I would also like to thank all of the BGC’s members for their support and, alongside the excellent BGC team, I look forward to championing our world-class members, on hard-pressed high streets, in the land-based sector and online.
“Our members are rightly proud of their vital role in the UK entertainment industry, and the significant part they play supporting the local and national economies through tax and high-value jobs. Millions of us enjoy a bet, in bookmakers, in casinos and online and I look forward to championing everything our members do, for their customers, communities and the country.”
Hurst brings significant betting and gaming sector experience to the BGC having held several senior roles in land-based and online sectors.
At Entain, she led the company’s activities and relationships with the government and the public sector, successfully spearheading the company’s rebrand from GVC. She was also an Entain Foundation board member and helped to create and deliver its global safer gambling strategy, ‘Changing for the Bettor’.
In addition, Hurst has helped to establish the international arm of Global Gaming Women, where she is a board member, overseeing the charity’s expansion to the UK, Europe, Australia and New Zealand.
She was also previously a special advisor to the UK government and studied at King’s College London and Queen Mary University in London.
Commenting on Hurst’s appointment, Dugher added: “On behalf of the entire BGC membership, I’d like to warmly welcome Grainne as she officially starts as CEO. She brings years of experience and knowledge in the regulated industry, together with a bold vision and strategy to refresh and reset the organisation going forward.
“I look forward to working with Grainne in my new role as Chair, and the rest of the outstanding BGC team, as we continue to represent thousands of workers and millions of customers, as well as delivering on our mission to raise standards in safer gambling.”
