Compliance Updates

PRIZE DEBT: CALLS TO REVIEW GAMBLING REGULATIONS AS CONSUMERS RACK UP MILLIONS ON CREDIT CARDS

Published

2 years ago

November 24, 2021

PRIZE DEBT: CALLS TO REVIEW GAMBLING REGULATIONS AS CONSUMERS RACK UP MILLIONS ON CREDIT CARDS

Reading Time: 3 minutes

^·Consumers spent £117m on credit cards entering prize draws and competitions, which are not currently regulated by the Government, in a bid to win dream prizes⁽¹⁾

^·Promise of a charitable donation makes nearly half of participants more likely to enter

· Jumbo Interactive calls on the UK Government to regulate the growing prize draw and competition market and for a clampdown on credit cards use

The UK Government is being urged to review current gambling regulations, as new research reveals consumers are racking up millions on credit cards entering popular prize draws and competitions.

The research from Jumbo Interactive found consumers spent £117m on credit cards entering prize draws and competitions in the last year, which due to a loophole, are not currently regulated in the same way as lotteries and raffles.

The study found nearly one in 10 people who entered ‘big ticket’ prize draws, offering the chance to win multi-million pound houses or luxury cars, or prize competitions, have ended up in debt as a result^.

Using credit cards to gamble was banned in April 2020, but a loophole in regulation means there are currently no restrictions on commercial prize draw or prize competition companies. For prize draws, this is because they offer “free” entry methods, where it’s possible to play by post for the cost of a postage stamp. Yet, despite this ‘free to enter’ route, an estimated £860m was spent on entries into prize draws in the last year^[iii].

Prize draws and competitions that promise a donation to charity also makes 45% of participants more likely to enter, yet over half of players (57%) admit to not checking how much actually goes to good causes.

Jumbo Interactive is now calling for greater regulation of the growing prize draw and competition market, highlighting significant consumer protection concerns over credit card debt, as well as a lack of transparency around prizes and charity donations from entry fees.

It is also urging consumers to check the T&Cs as there is little enforcement of minimum donation percentage for prize draws and competitions. This compares to regulated society lotteries, which give a minimum of 20% of gross ticket sales and often over 50% to good causes.

Nigel Atkinson, UK General Manager, Jumbo Interactive comments: “A huge amount is being spent on credit cards on prize draws, pushing people into debt – despite the free entry option being the reason they are exempt from oversight. With so much money changing hands, the government needs to look at the proper regulation of prize draws and competitions to better protect consumers.

“For many, the fact that some of the cost of entering prize draws and competitions goes to charity is a big part of why they enter. But it remains easy for companies to bury information in the terms and conditions about how much actually goes to charity. Society lotteries on the other hand have minimum donation rates and help raise funds for a wide range of important causes, large and small. Public trust is crucial for society lotteries to operate successfully, and increased regulation of the prize draw and competition market will offer that consistency and transparency.”

Tony Vick, Chair of The Lotteries Council, adds: “The Lotteries Council is increasingly concerned about the use of prize draws operated by commercial gambling companies which are marketing themselves in a similar way to charity lotteries. Lotteries face a series of legislative hurdles that restrict our ability to grow and raise funds for good causes while prize draws face no limits on how many tickets they can sell, what prizes they can offer, and choose whether and how much to give to any charity. We hope the Government looks at this to ensure a fairer playing field.”

Falling foul of scams has also been an issue for 15% of entrants, including paying money for postage on a prize that never arrives, paying a significant amount of money on phone calls or texts to enter a competition without it being clear that it would cost that much, or winning a prize that turned out to be of less value than advertised.

Notably, 72% of those who enter lotteries, draws or competitions think prize competitions and prize draws should be regulated in the same way as gambling.

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Asia

Uzbekistan Legalises Online Betting and Lotteries

Published

14 hours ago

April 30, 2024

Niji Narayan

Reading Time: 2 minutes

President of Uzbekistan Shavkat Mirziyoyev has signed a decree on April 19 titled “On Measures to Improve the Regulation of the Organization and Conduct of Lotteries and Risk-Based Games in the Republic of Uzbekistan”. The document abolishes the ban starting from January 1, 2025, and introduces a legal framework for the organisation of risk-based games online and betting activities.

The issue of legalising betting activities has been a long-standing topic in Uzbekistan. In December 2019, the president signed a decree to legalise bookmakers, but this decision was revised in April 2022. In April 2023, the head of state instructed the development of a regulatory framework for betting activities.

The National Agency for Advanced Projects (NAAP), the authorised state body for regulating and licensing activities in this sector, provided insights on the necessity of introducing state regulation in the gambling sector in Uzbekistan. The agency emphasised the need to prevent illegal gambling businesses, protect players’ rights and generate additional income for the state budget.

The president’s decree aims to introduce advanced foreign experience and modern technologies in regulating the organisation of risk-based games and lotteries to increase investment attractiveness, tourist potential and attract additional funds to the country.

The measures outlined in the decree include the creation of legal foundations for the legalisation of activities related to risk-based games online, betting activities, and lotteries, implementation of mechanisms to protect citizens’ rights and interests, prevention of gambling addiction and the generation of additional state budget revenue.

Starting from January 1, 2025, a taxation system will be introduced for license holders, where organisers of online games, betting activities and lotteries will pay a turnover tax. This system aims to prevent the concealment of taxable revenue and is expected to generate additional tax revenues for the state budget.

Overall, the implementation of the decree is intended to establish a reliable foundation for the legal regulation of activities related to organising risk-based games online, betting activities and lotteries in Uzbekistan, protect citizens’ interests, combat gambling addiction and provide additional sources of income for the state budget.

Compliance Updates

IAGR & IMGL Open Ticket Sales for 2024 Conference in Rome

Published

2 days ago

April 29, 2024

Alan Campbell

Reading Time: < 1 minute

The International Association of Gaming Regulators (IAGR) has opened registrations for its annual conference, taking place in Rome, Italy, from October 21 to 24.

With the theme Navigating the Future of Gaming Regulation in a Transforming World, this year’s event is a partnership with the International Masters of Gaming Law (IMGL).

“IAGR and IMGL’s Rome conference is a four-day event that brings together regulators, industry thought leaders and experts to share ideas and shape the future of gaming regulation across the world,” the President for the IAGR, Ben Haden, said.

The conference follows last year’s event in Gaborone, Botswana, which brought together the largest number of attendees in IAGR’s history.

“This year, participants can look forward to diving into themes that are at the forefront of the gaming regulation landscape including advancements in technology, the evolving regulatory challenges and strategies for future-proofing the global gaming industry,” Haden said. “In an era where technology is rewriting the rules of our industry, the question isn’t whether to adapt, but how swiftly we can. IAGR 2024 is about coming together as a global community to not only keep pace with change but to drive it.”

Confirmed speakers will be announced from May.

Conference highlights:

Expert-led sessions and panel discussions on the latest in gaming regulation
Joint conference sessions and events with IMGL, providing further networking and knowledge-sharing opportunities
Networking events set in the heart of Rome including an opening reception and gala dinner featuring the International Regulatory Awards ceremony

Early-bird pricing is available until July 31 with super-early bird prices available until May 31. Head to the IAGR website for more details and ticket sales.

Asia

Indonesia Establishes Task Force to Combat Online Gambling

Published

2 days ago

April 29, 2024

Niji Narayan

Reading Time: < 1 minute

Indonesia’s Ministry of Communications and Information Technology (Kominfo) has revealed plans to establish a task force to combat online gambling.

In a statement, Kominfo said the task force would comprise representatives of multiple government agencies including the Financial Services Authority (OJK), Financial Transaction Reports and Analysis Centre (PPATK) and the police.

It will also work with Interpol to combat cross-border cases given the government’s lack of past success in blocking foreign operators.

“Kominfo will oversee the digital space, OJK will manage accounts and PPATK will handle fund flows, and the police will carry out arrest and investigation duties,” said Usman Kansong, the Ministry’s Information and Public Communications Director.

Minister Budi Arie said: “The Ministry has also issued a warning to all social media platforms, cellular operators and internet service providers not to facilitate any form of online gambling promotion. We have done everything within the authority of Kominfo.

“We from the Ministry of Communication and Information are fully determined. At the beginning of the week I gathered all our teams at Kominfo to work together to eradicate online gambling.”