online gambling titans persistently pursuing market supremacy in the US
** online gambling industry's rapid expansion, particularly in the US, raises critical questions about the inconsistencies in regulatory frameworks across different jurisdictions. The enforcement landscape between countries like the US, UK, and Europe shows a significant disparity. Companies such as Flutter and Entain, which have rectified potentially harmful practices in the UK, are still employing these same approaches in the relatively unregulated US market.
This scenario opens up many ambiguous questions. For instance, should there be a global uniform standard for responsible gaming? Although this idea seems appealing, it presents numerous challenges given the varying intensities in the application of regulations across countries and states. However, the need to address problem gambling from a corporate perspective is undeniable. A recent Reuters report raises several intriguing questions regarding the practices employed by these companies that are deemed too risky for the UK market but continue to be used in the thriving US online gambling industry.
The question remains: how can the industry ensure that the race to capitalize on this rapidly growing sector does not obscure the need for robust, uniform, and effective regulations that prioritize consumer protection? Answering this question requires careful consideration, collaboration among stakeholders, and a commitment to prioritizing client well-being over profits. The stakes are high, and the time for action is now.
What the Reuters Report Says
The Reuters special report highlighted that Flutter and Entain are using aggressive tactics in the US market, which they had abandoned in the UK due to regulatory concerns. The focus of the report is on the differences in regulatory environments between the US and the UK, showing how these companies have not implemented the same safeguards in the US that they have in the UK. This includes practices such as VIP programs and high bet limits that can lead to problem gambling.
Regulatory Differences and Corporate Practices
In the UK, stricter regulations led to the reduction of certain practices to protect players, which are still used in the US. The report discusses specific case studies, including instances of individuals who lost large sums of money through gambling on platforms like FanDuel. It also examines how these companies justify their different approaches in the US and Britain, as well as the potential damage being caused to US players.
For example, in a 2018 case, the UK subsidiary of online gambling giant Flutter was penalized by UK regulators due to inadequate oversight. A director of an animal shelter had diverted funds from his workplace to finance his compulsive gambling habits, resulting in losses that exceeded half a million dollars over four years, as reported by the charity where he worked. The gambling regulatory authority imposed a fine of approximately $2.8 million for failing to adequately protect customers from unregulated gambling and for not preventing the use of diverted funds.
Peter Jackson, Flutter's CEO, publicly expressed regret for not intervening, stating, "We have a responsibility to intervene when our customers show signs of problem gambling." It is also noteworthy that FanDuel and BetMGM, two major players in the US online gaming industry, collectively account for approximately 50% of the country's liquid revenues in this sector. Flutter, the parent company of FanDuel, was questioned about its practices in the US, which were identified as potentially harmful in the UK. In response, Peter Jackson assured that Flutter is committed to maintaining high standards of customer protection in all operational markets.
Case Studies
Jackson's client in the United States, however, fell deeper into an uncontrolled gambling spiral, betting millions of dollars of stolen money through the FanDuel brand of Flutter in the US. In another instance, Amit Patel, who was then the interim financial manager of the Jacksonville Jaguars football team, transferred $20 million of his employer's money to his FanDuel account between 2019 and early 2023. He subsequently lost most of these diverted funds, according to court records. Both Patel and the animal shelter chief had admitted to committing fraud.
Upcoming Event: SiGMA Eastern European Conference, sponsored by Soft2Bet
In other news, the SiGMA Eastern European Conference, sponsored by Soft2Bet, is set to take place in Budapest from September 2 to 4.
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- Given the discrepancies in regulatory frameworks across different jurisdictions, particularly the UK and the US, is there a need for global uniform standards in finance, business, technology, and casino-and-gambling industries to ensure responsible gaming practices?
- Despite facing regulatory consequences for harmful practices in the UK, companies like Flutter and Entain continue to employ similar strategies in the relatively unregulated US market, raising questions about their corporate commitment to consumer protection in the technology-driven business of online gambling.
