Fast Offshore brings you the top news from Gambling, Fintech, and Crypto in September 2023.
Australia introduces pre-verification for iGaming
pre-verification requirements for online gambling with licensed operators. Players must verify their age and identity before depositing funds, effectively replacing the previous 72-hour verification window. This move aims to curb underage gambling, prevent self-excluded players from accessing gambling websites, and address money laundering and terrorism financing risks.
Responsible Wagering Australia (RWA) has applauded this initiative, highlighting that their members already verify over 90% of customers’ identities and ages instantly. The pre-verification system allows operators to promote safer gambling tools, including setting deposit limits during registration.
These measures are part of a broader strategy to combat gambling harm in Australia. Credit card use for online wagering has been banned, mirroring similar restrictions at land-based facilities. Evidence-based taglines have replaced “Gamble Responsibly,” and national training standards have been established for sector employees. Additionally, consumers can utilize the BetStop national self-exclusion register to exclude themselves from gambling with all Australian licensees for various durations.
The overall goal is to enhance consumer protection and ensure that online gambling remains a safe and responsible form of entertainment in Australia, with a focus on consistency across all forms of gambling.
Indian iGaming tax enters into force amid opposition
The Indian iGaming industry is facing intense criticism over the impending introduction of a 28% tax set to take effect on October 1st. The Goods and Services Tax (GST) Council’s decision has sparked backlash from over a hundred gaming companies and financial entities, who view this tax as a severe threat to the sector’s survival.
Despite pleas from industry stakeholders, the GST Council remains firm in its commitment to the 28% tax rate, with a promise to review it six months after implementation. The tax will be based on the total value of wagers placed in online gaming, casinos, and horse racing.
India’s Finance Minister, Nirmala Sitharaman, has stated that the tax aims to eliminate the distinction between ‘games of skill’ and ‘games of chance,’ rather than sabotage the sector.
The Indian online gaming industry, valued at approximately $1.5 billion, is one of the country’s fastest-growing consumer internet sectors. The government has also mandated that foreign online gaming companies operating in India register locally and designate representatives for taxation on customer funds, with non-compliance leading to blockades.
Despite opposition, the government argues that the tax is justified, as companies have paid minimal taxes on fees from real money games. However, this move has caused concerns about its impact on the industry’s growth, leading to layoffs, reduced hiring, and uncertainty in the Indian gaming market.
Industry self-regulation is “completely failing” say researchers
A study conducted by researchers at the University of Bristol has raised serious concerns about the self-regulation of advertising within the English Premier League (EPL) and the broader gambling industry. The study, which analyzed advertising during the opening weekend of the EPL season in August, revealed that self-regulation is “completely failing.”
The researchers found that a staggering 92% of the 391 content marketing ads from gambling brands breached advertising regulations by not being clearly identifiable as such. The CAP Code requires marketing communications to be “obviously identifiable.” Over four days, the study identified a total of 10,999 gambling messages across TV, radio, and social media channels, with 6,966 of these messages recorded during live match broadcasts on Sky Sports and TNT Sports.
The study also highlighted that only a small fraction of these messages included gambling harm reduction (20.6%) or age warnings (18.7%). The researchers emphasized the saturation of gambling messages in the UK media and social media coverage during Premier League weekends.
Co-lead researcher Dr. Raffaello Rossi stressed the need to strengthen regulations to protect consumers, especially children, who are vulnerable to such advertising.
While the researchers called for comprehensive legislation to regulate gambling messages across all platforms, the Betting and Gaming Council (BGC), a UK gambling trade body, criticized the research, claiming it misunderstood advertising regulation. The BGC argued that 20% of all current TV and radio advertising focuses on safer gambling messaging and has extended to digital channels.
iGaming legalisation in Thailand, incoming
Thailand is expected to legalize casino gambling within the next three years, drawing significant interest from international and regional operators. The outcome depends on the regulatory framework and partnerships between foreign gaming companies and Thai entities.
Despite opposition and political turmoil, experts believe that Thailand’s potential as a gaming jurisdiction is immense, driven by its status as a business hub and tourist destination. The government’s need to generate revenue and changing public sentiment in favor of casino legalization are also factors.
Operators like Hard Rock International and Las Vegas Sands have expressed interest in multi-billion-dollar integrated resorts (IRs) in Thailand. The parliamentary study suggests up to five entertainment complexes, similar to those in Singapore and Macau, aimed at boosting tourism and revenue. These complexes would include casinos, hotels, shopping, convention facilities, and potentially sports betting and online gaming.
While Thailand’s potential is significant, there are challenges, including the need for a regulatory structure that aligns with Western standards and stringent anti-corruption measures. Some operators may be cautious due to the political instability in the country.
However, there is optimism that Thailand’s casino legalization process won’t resemble Japan’s protracted and complicated journey, as initial investments in Thai IRs are estimated at around $800 million, and experts believe the process can be completed within 36 months.
Thailand’s move into the casino industry could also impact Asia’s junket promoters, providing an alternative to Macau amid recent Chinese reforms and crackdowns. Despite uncertainties, there is a consensus that Thai casinos have the potential to thrive, bolstered by the country’s attractiveness as a tourist destination.
Global payments revenue soars
Global payments revenue has experienced double-digit growth for the second consecutive year, reaching a record high of over $2.2 trillion in 2022, according to the latest McKinsey Global Payments Report. Payments revenue encompasses income generated by businesses and financial institutions from various fund transfer transactions, including payments for goods and services, money transfers, processing fees, and related financial services.
The report, which covers more than 25 types of payments used in 47 countries, highlights the shift from cash to digital payments, with cash usage dropping by nearly four percent worldwide in 2022. Electronic transactions have grown almost three times faster than all other payment methods combined over the last five years.
Notably, cross-border payments revenue experienced a substantial surge, reaching approximately $240 billion, driven by a 13 percent increase in cross-border payment activity.
The report predicts that future revenue growth will be driven by innovations in instant payments and the increasing use of digital wallets, with instant payments considered a significant factor in the decline of cash usage.
Furthermore, the report introduces the concept of a “Decoupled Era” in the payments industry, where payments become increasingly independent of traditional accounts and fixed repositories of value. This era is expected to prioritize convenience, affordability, and security, relying heavily on technology such as platform-as-a-service models and generative AI.
Overall, the payments industry is evolving rapidly, with significant growth potential driven by digitalization and changing consumer preferences.
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