Providence, Rhode Island-based International Game Technology (IGT) has announced that it has extended its contract with the Rhode Island Lottery (RIL) to provide sports betting technology to the state for another three years.

IGT was formerly based in Las Vegas Nevada, but a successful acquisition by GTECH, formed in West Greenwich, Rhode Island, and later merged with Italian lottery giant and online game supplier Lottomatica/Spielo/GTECH saw the company assume its base of operations in the parent company’s home state and relinquish the legendary brand name along with all other acquired assets.

IGT Playsports Tech with William Hill Operations are a Good Match for Rhode Island

The extended contract with RIL will see IGT continue to seamlessly power sports betting in the state through the lottery with its IGT PlaySports solution along with its commercial partner William Hill US.

Bettors inside the state’s borders can continue to use the RIL Sportsbook Rhode Island app as well as access the sportsbooks at Bally’s Tiverton Casino & Hotel and Bally’s Twin River Lincoln Casino Resort.

Bally’s recently introduced a model to the state legislature there to create legislation that would allow the company to offer online casino games statewide via servers located at the two casinos. Online casino games and execution would be managed through the RIL, according to the plan.

Rhode Island Lottery director, Mark Furcolo talked about the extended contract and mentioned how happy the agency has been with the non-lapsed agreement over the last half-decade. He made particular note of William Hill’s operational experience working in concert with the world-class IGT technology.

“IGT recently invested significant resources to enhance our sports betting platform and mobile app […]

,” said the director.

Joe Asher, IGT’s president of Sports Betting commented that Rhode Island was “one of the early adopters [of newly legalized state-level sports betting]

He noted that the state was a pioneer in adapting to it in 2018. Asher said that IGT is happy “to continue driving Rhode Island’s sports betting growth.”

“Rhode Island is home to very loyal sports fans who love following their New England-based teams.” He added inter alia: “Enhancements IGT has made to the Lottery’s sports betting platform and app [will help]

.”

IGT is the exclusive supplier of lottery solutions such as traditional lottery, instant win tickets, video lottery terminals (casino “slots”), and internet lottery games in the state. That contract was recently extended until 2043 guaranteeing IGT exclusive rights to provide those games and services for another 20 years.

IGT Cut Through the Fog of Four Administrations to Clear other Ground

On an unrelated note, IGT recently sued the Department of Justice in US District Court in Rhode Island seeking a final answer one way or another (Declaratory Judgement) on whether the Wire Act of 1961 applied to interstate lottery business or anything else other than sportsbetting. The court declared that it applies only to sportsbetting, which would seem to have opened the door to cross-border online casino games in every state, but the ruling came with a cryptic caveat.

In the Motion for Summary Judgment the court held that “as to the parties now before it, the Wire Act applies only to ‘bets or wagers on any sporting event or contest,’ leaving an unhealed wound on the gaming industry that has been open since the last Bush administration.

For background:

The Bush DOJ said all state-to-state and offshore online gambling not specifically carved out, such as horse race betting in the US, was illegal.

The Obama administration’s Office of Legal Counsel (DoJ) issued an opinion stating that the law only affected sports betting “over the wires”.

The Sessions DOJ under former President Trump reversed that opinion and proceeded with threats of prosecution against lottery operators who sold online products within their own state but whose traffic flowed through servers in other states.

Finally, the Biden administration made its position clear by not defending or prosecuting lawsuits originating in the previous administration. However, the Garland DOJ did attempt to have the recent IGT suit dismissed stating in its filing: “ [The] threat of future prosecutions [is]

”

Earlier IGT Legal Action Could Become Catalyst

Further off the beaten path, it may be of interest that the decision could have facilitated a radical change in the business direction of the world’s biggest lottery company based on total combined wagers. IGT has annual revenue of circa $4.2 billion. As an “end to end” game company it manages about $30 billion in global lottery business each year

Interestingly, the former CEO of IGT’s International Interactive division announced last year that his new firm Games Global Ltd had acquired most of the assets of Microgaming Systems – one of the biggest online gambling companies in the world and players in the game since the 1990s.

A negative outcome in the Rhode Island lawsuit could have given IGT the direction in regulatory compliance they needed to protect existing assets in US internet markets. The positive decision could have given Microgaming (Games Global) and other international and offshore operators an opening to re-enter the US market that they abandoned following the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2016. That law focused on making payment processing a crime to “illegal online casinos” which were never “illegal” in the first place.

However, the law and its “guidance” impedes and punish US financial institutions rather than addressing the legality of online gambling itself. Without cooperation from US payment processors, interstate and offshore online gambling on the operator’s end can only be accomplished in violation of other laws, specifically “money laundering”. This “catch-22” is most likely what has stopped any current offshore operators from promoting their games and casinos in the US market after the ruling by the United States District Court for the District of Rhode Island. Said “Guidance” can be found on the Federal Trade Commission website as well as the Federal Deposit Insurance Corporation’s (FDIC) online portal (.PDF).

There is currently no known legal reason why US-based operators have not taken the leap to launch nationwide online casinos, save that single cryptic caveat: “…as to the parties now before it”.

Source: IGT Extends Sports Betting Contract with the Rhode Island Lottery, iGaming News, April 10, 2023

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With a ruling party super-majority in the Parliament of Hungary, simply pulling the levers of powers should be enough to move any desired legislation through the political process in a normal and legal manner. However, for well over 2,500 days now the government has used that absolute majority to do some things without transparent debate or utilizing other hallmarks of liberal democracy – instead relying on simple decrees to accomplish the State’s business.

That’s not to say that the emergency powers completely constipate the government, as can be seen in the online gambling industry through the lens of the country’s Gambling Act – something Hungary has been “trying to get right” since the Court of Justice of the European Union (CJEU) issued rulings in 2016 and in 2017 which should encourage the government to come into compliance not to infringe the freedom to provide services (Article 56 TFEU) or grant non-competitive concessions.

The Supervisory Authority for Regulatory Affairs (SZTFH) has recently issued a decree implementing minor changes to allow amendments to the country’s Gambling Act to function more fairly or efficiently.

Technical Clarifications, Fees

Operators who wish to offer online sportsbetting there must meet certain financial requirements and prove up at least five years of experience offering licensed online gambling services in a European Economic Area state. Any operator who has offered unlicensed gaming within five years of the dated application will be rejected from consideration for a license.

In an attempt to protect bettors from harm, operators will be able to offer early cashouts on sports betting wins but the operator must warn the player about the immediate gratification of such an action as it could contribute to gambling addiction.

The decree reads: “The gambling operator is obliged to expressly draw the player’s attention to the fact that the use of this function entails an increased risk of excessive gambling and addiction and this information shall appear in the text of promotion in the same font size as the text.”

It continues: “The gambling operator shall also make available to the player on the gambling website the information that the use of that function entails an increased risk of excessive gambling and addiction.”

In order to facilitate early cashouts bettors will now be allowed to have segmented account balances rather than one master balance.

Early cashouts are subject to any regular terms and conditions of other withdrawals.

Recent History of Changes

Early last year, legislation was introduced to help Hungary come into compliance with anti-monopoly measures that should promote a more free and open market as many nearby EU states have done. At the dawn of 2023, several conditions or technical changes were made that could apply to casino operators as well as sports betting providers.

However, none of the changes loosen the hold on remote casino licenses that are still tethered directly to the three main land-based operators. While the CJEU ruled in Unibet’s favor in 2016, ostensibly opening the door to other European online casino operators, the land-based casinos can be declared a priority of national economic interest. This allowed budget items in the 2021 work sessions to grant 35-year extensions to the casino licensees without a public tender process.

The workaround used, according to local democracy watchdogs was to re-allocate the concessions as at least half of the original concession period had come to pass. This was purported to assure the state continuity in revenues for the long term.

A government-connected stakeholder in Las Vegas Casino group is operated by Diamond Játékaszinó Üzemeltető Kft. (LVC Diamond), the most important urban casino operator was originally granted a concession in 2015 that was set to expire in 2024 but now extends to 2056.

Our research does not find any mechanism in legislative accomplishments or decrees that would untether online casino licenses in Hungary from land-based operator licenses so it would appear as if at least one operator is locked in.

The LVC Diamond properties include The Atlantis, Atrium Eurocenter, Corvin Promenade, Sofitel, and Tropicana casinos.

Tax Authority Retaliated Against Operator for Lawsuit

One thing the Unibet lawsuit did accomplish was to tease out a CJEU ruling that recognizes Hungary’s online gambling rules did not allow the taxing authority to take retaliatory actions against other EU-licensed operators as it did in response to Unibet filing suit. Those actions included ordering ISPs to block access to the site and the levying of fines against the operator and its parent company, Kindred Group.

In short, while the process for licensing land-based casinos and thus their tethered counterparts online may not be in line with EU standards, there isn’t much, if anything standing in the way of a Malta Gaming Authority-licensed casino offering services there.

So far, SZTFH has not authorized any foreign operators to offer sports betting with all regulated consumer traffic still flowing through Tippmixpro.hu – operated by the former and still a de facto monopoly of Szerencsejáték Zrt.

Source: Hungary regulator implements new Gambling Act amendments, iGaming Business, March 29, 2023

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