Compliance Updates
NeoPollard Interactive and New Hampshire Lottery Prevail Against U.S. Government Appeal in iLottery Case
NeoPollard Interactive LLC, jointly owned by Pollard Banknote Limited and NeoGames S.A., is thrilled with the decision rendered by the First Circuit of the U.S. Court of Appeals on January 20, 2021 that unequivocally reconfirmed that the federal Wire Act is limited to sports betting and, therefore, does not pertain to state-run lotteries. This decision confirms the ruling of the U.S. District Court for the District of New Hampshire in 2019 that was appealed by the U.S. Federal Department of Justice. Overall, this decision is important for the U.S. lottery industry as a whole by alleviating concerns related to the legality of traditional retail or online lottery sales (also known as “iLottery”) which rely on the transmission of lottery data over the Internet.
The Wire Act subjects to criminal liability any person who “knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers.” In 2011, the Department of Justice’s Office of Legal Counsel (“OLC”) concluded that the Wire Act only applied to sports betting. Following that opinion, many lotteries began to offer non-sports gaming products over the Internet, reasonably relying on the OLC’s conclusions that their activities were lawful.
In January 2019, the OLC reversed that prior decision and released a new opinion concluding that the Wire Act extended beyond the sports-betting context to criminalize interstate transmissions of all bets or wagersâthereby overturning the conclusions of the 2011 opinion and threatening to shut down the burgeoning iLottery industry.
Working alongside the New Hampshire Lottery Commission (“New Hampshire Lottery”), NeoPollard Interactive and Pollard Banknote, the New Hampshire Lottery’s iLottery providers, immediately sought a declaratory judgment in federal court that the OLC’s new Wire Act interpretation was based on an incorrect reading of the statute. In June 2019, the U.S. District Court for the District of New Hampshire confirmed that the federal Wire Act applies only to sports-betting activities. The OLC appealed that decision.
In this latest judgement, the First Circuit affirmed the District Court’s June 2019 decision thus restoring the 2011 interpretation that limited the Wire Act to sports betting. By upholding the 2011 interpretation that the Wire Act applies only to bets or wagers on a sporting event or contest, this ruling safeguards the New Hampshire Lottery, NeoPollard Interactive and Pollard Banknote, specifically, and all other iLottery operators, generally, from the threat of unlawful prosecution.
In addition, and equally importantly for other state lotteries, any concerns about the pooling of bets or the transmission of wagers in connection with national and regional multi-state games such as PowerballÂź and Mega Millions, whether through traditional retail or online channels, have been completely eliminated.
“We are very happy with the recent judgement confirming, yet again, the 2011 interpretation of the Wire Act,” said Liz Siver, General Manager, NeoPollard Interactive. “This is a great success for the Lottery industry generally, and iLottery specifically, as it ensures that the sale of both iLottery games and national and regional multi-state games can continue to be strong contributors to lottery sales and the good causes that U.S. lotteries support. In terms of iLottery, we know first-hand the positive effect that these operations have had, not only on state resources, but on player experience as well. The current worldwide pandemic has amplified the importance of this new channel. We look forward to continuing to provide state-of-the-art iLottery products and strategies to lotteries with an increasing array of products within the digital landscape.”
SOURCE NeoPollard Interactive
Compliance Updates
GLI Becomes First Laboratory to be Accredited in MaranhĂŁo, Brazil
Gaming Laboratories International (GLI) has become the first laboratory to achieve accreditation in MaranhĂŁo, Brazil. The accreditation allows GLI to perform tests and certification for the gambling and lottery industry interested in working with lottery and fixed-odds betting operators in the state of MaranhĂŁo.
The milestone is the latest in a series of regulatory achievements for GLI in Brazil. Lottery of the State of MaranhĂŁo is the third jurisdiction in Brazil to accredit laboratories, and GLI is accredited in all and the first to be authorized in all.
Cassiano Pereira Junior, president of MaranhĂŁo Parcerias (Mapa), highlighted the importance of the partnership between the MaranhĂŁo State Lottery (Lotema) and GLI. âEvery day we strive to make Lotema even better, providing greater security for its users. The partnership with GLI is a concrete way of achieving this goal, as its certification laboratories play an important role for the gaming and lottery industry, guaranteeing the conformity, security, and integrity of the products and systems used by Lotema,â Cassiano explained.
âWe are grateful to the Lottery of the State of MaranhĂŁo for granting GLI the laboratory accreditation, becoming the first to be authorized in MaranhĂŁo. It is extremely gratifying to see how Lotema empower themselves by trusting the technical compliance process to provide transparency, integrity, and accountability to all the industry stakeholders through the certification process. The laboratory accreditation is the first step for a successful implementation of the certification based on jurisdictional standards, and the reason why we at GLI take this step very seriously and with great priority every time a new jurisdiction opens. We feel responsible for being part of the solution towards a fast and efficient implementation of regulations, thus supporting further local industry development and sustainable growth. We are grateful to Lotema and excited to be part of its thriving industry,â said Karen Sierra-Hughes, Vice President of Latin America, Caribbean, and Spain.
GLI has been working with regulators, lotteries, and industry stakeholders across the Latin American and Caribbean region for more than 26 years in their efforts toward regulation, sustainable growth, and eradicating illegal gaming. In Brazil, GLI has been side by side with government entities and all industry stakeholders for nearly 20 years, participating in public hearings in the Senate, Chamber of Deputies, and State government level, and in recent years, adding strategic local representation to strengthen their local support.
Compliance Updates
Betano Receives Licence to Operate in Colombia
Kaizen Gaming Colombia, owner of the Betano.co brand, was authorized by Coljuegos to operate online betting in the country. With this new operator, there are now 16 web platforms that have the approval of the entity to market games of chance online.
âWe continue to strengthen the online gaming industry. We hope that, with the entry of this new operator, we can continue to increase transfers for the health of Colombians. At this time, the platform is already operating for the betting public,â said Marco Emilio HincapiĂ©, president of Coljuegos.
The entity is also in the process of authorizing an additional operator called Bingo Casino, which is expected to begin offering bets in the coming weeks.
It is worth mentioning that, by 2024, it is estimated that online betting portals will pay around $419,527 million to Coljuegos for exploitation rights, which represents an increase of 31% compared to the same period in 2023. All of these resources are transferred to the health system.
âWe are seeing that online betting is a sector of the economy that has driven the growth of the countryâs Gross Domestic Product. That is why we are working to make the market even more attractive and to provide more options to bettors,â said the president.
According to financial projections, this new operator is expected to pay Coljuegos around $21.513 billion over the next five years for operating rights and administration costs, resources that can be transferred to subsidize health and scientific research.
Compliance Updates
Chris Christie bets on Texas to approve OSB in 2025
Former New Jersey Governor Chris Christie has backed Texas to legalise online sports betting in the stateâs next legislative session.Â
Christie helped pave the way for sports betting liberalisation across the US by bringing the Supreme Court case that led to the repeal of PASPA.
The case was fought and won by prominent conservative lawyer Ted Olson, who Christie hired to argue the case for states to make their own decisions on sports betting. Olson died last week at the age of 84.
After Missouri became the 39th US state to legalise sports betting in some capacity, attention has quickly turned again to the big three states of Texas, California, and Florida.
âI think it’ll happen in Texas in the next legislative session,â said Christie, speaking to Covers.com. The next session is due to commence in Texas on January 14, 2025.
Christie is less confident about California, however, where competing sports betting ballots failed in 2022 amid a bitter dispute and lobbying war between online operators and local tribes.
California is seen as essential to the future prospects of US sports betting operators, given its size and wealth and dramatic impact on the countryâs total addressable market (TAM).
âI don’t know about California,â said Christie. âThis really takes gubernatorial leadership, and Gavin Newsom has got to decide if this is one of the issues he wants to lead on.
âWithout gubernatorial leadership, the legislature won’t do it because they’re pulled like taffy in too many directions by too many different interests. Without the governor pushing for it, I just don’t think it’ll happen.â
Despite another potential setback in California, Christie has backed sports betting to penetrate pretty much every state eventually.
âI really believe sports betting is inevitable to go just about nationwide, because people in America love their sports, they just do,â he said. âI think it is in the leaguesâ best interests to grow their audience. The government gets some piece of the pie out of that which they enjoy, and the public seems to be pretty happy for the most part.â
Depending on expansion, US sports betting could, in theory, reach every state. It would then become a national issue, but Christie has warned the federal government not to interfere.
âLet the states handle it,â he said. âThe states are doing fine. You haven’t heard of anything awful or irreversible happening since each state has been involved and they should have the ability to decide whether they want gambling or not.
âI don’t think the federal government should have anything to do with it and I don’t think they ever should have. I don’t think they have to be babysitters for the governors of the country.â
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