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The government of Norway has taken further steps to try and protect the nation’s gambling monopoly with new restrictions on gambling advertising by offshore operators.

The newly approved legislation gives the Norwegian Media Authority powers to combat advertising by unlicensed online gaming operators, both on TV and the internet.

The new powers allow the Media Authority to stop unlicensed gambling advertising from being broadcast into Norway by foreign satellite TV channels and impose a requirement on telecoms providers to display an illegal gambling warning message to Norwegian consumers who attempt to access offshore websites.

“I am very pleased that parliament has approved the Government’s proposal to provide the Media Authority with new tools to stop advertising for gambling that is not authorized in Norway,” said the Minister of Culture and Gender Equality Abid Q. Raja.

“So far we have not had the necessary tools to enforce the advertising ban on foreign players. But with this provision, the Media Authority is empowered to impose a duty on internet owners and distributors to prevent access to advertising for illegal gambling.”

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Under Norwegian law, most forms of gambling are offered by monopoly operator Norsk Tipping, with the exception of horse race betting, which is a monopoly held by Rikstoto. Yet despite their illegality, offshore gambling sites continue to be popular among Norwegian consumers.

The Norwegian government says that the new advertising restrictions will help to better protect problem gamblers.

New York-listed supplier International Game Technology (IGT) has reported an 18 per cent fall in revenue to $940.2m for the first quarter of 2020, as results were affected by COVID-19 related lockdowns in March.

The company said that the global closure of casinos and gaming halls and widespread mobility restrictions significantly hindered gaming service revenue generation during the quarter, while lottery service revenue was lower due to reduced traffic to points of sale.

“After a solid start in the first two months of the year, we quickly shifted our focus to the global COVID-19 health crisis in March,” said IGT CEO Marco Sala. “The safety and well-being of our people, customers, and communities have been our highest priority since day one.

“We implemented robust business continuity plans and maintain service levels at our normal, high standards. I am grateful for the passion and perseverance the entire IGT team has demonstrated during these unprecedented times and I am confident IGT is well positioned to emerge from the crisis a stronger, even more competitive organization.”

Q1 2020 Revenue Comparison (US$)

Q1 2020 Q1 2019 % Change
North America Gaming & Interactive 196m 240m (18%)
North America Lottery 251m 296m (15%)
International 164m 172m (1%)
Italy 329m 437m (25%)
TOTAL 940m 1,145m (18%)
Revenue from North America Gaming & Interactive declined by 18 per cent year-on-year to $196m as casino closures impacted gaming terminal revenue, while North America Lottery revenue fell by 15 per cent to $251m as results were hit by mobility restrictions implemented in March and the closure of video lottery terminal (VLT) venues.

International revenue was down 1 per cent at $164m, while revenue from Italy declined by 25 per cent to $329m following decreases in lottery and gaming service revenue as a result of the effects of the coronavirus pandemic, although interactive wagers were up 20 per cent.

Total operating expenses increased by 18 per cent to $1.14bn after including a non-cash goodwill impairment charge of $296m, reducing the carrying value of the International and North America Gaming & Interactive segments, driven by lower near-term forecasts as a result of COVID-19.

As a result, the company recorded an operating loss of $197.3m for the quarter, compared to operating income of $178.2m a year ago. Following a reduction in non-operating expenses by 25 per cent to $33.7m, IGT posted a net loss of $234.1m, compared to net income of $80.5m in Q1 2019.

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Q1 2020 Results Comparison (US$)

Q1 2020 Q1 2019
Revenue 940.2m 1,144.9m
Cost of Services (521.8m) (595.3m)
Cost of Product Sales (91.1m) (100.2m)
Selling, General and Administrative (163.6m) (201.8m)
Research and Development (60.7m) (66.1m)
Goodwill Impairment (296.0m) —
Other Operating Expense, Net (4.2m) (3.3m)
Operating Income/(Loss) (197.3m) 178.2m
Total Non-Operating Expenses (33.7m) (45.0m)
Provision for Income Taxes 3.1m 52.7m
Net Income/(Loss) (234.1m) 80.5m
Net Income Attributable to Non-Controlling Interests (14.2m) (40.2m)
Net Income/(Loss) Attributable to IGT (248.3m 40.3m
Basic EPS (1.21) 0.20
“We’ve taken swift actions across all non-essential costs and are now switching our focus to structural cost savings initiatives,” said IGT chief financial officer Max Chiara. “At the same time, we have adopted strict measures to preserve liquidity in the current environment.

“Given the uncertainty created by COVID-19, we are withdrawing our previous financial outlook for 2020, but we are confident that with $2.2bn of liquidity, we are geared with sound financial flexibility to weather the storm caused by the COVID-19 pandemic.”

IGT added that about $500m in cost savings and capital spending avoidance have been identified to help mitigate the impact of COVID-19. These actions include temporary, company-wide salary reductions, furloughs and a hiring freeze, as well as significant reductions in discretionary costs such as marketing, travel and outside services

As at 31 March the company held liquidity totaling $2.2bn, comprised of $1.5bn in unrestricted cash and $743m available under revolving credit facilities.

Shares in International Game Technology plc (NSQ:IGT) closed up 8.62 per cent at $6.93 per share in New York Friday.

With the United Kingdom beginning to relax its lockdown restrictions and new research showing an overall fall in gambling participation during the lockdown, the Gambling Commission has today introduced new restrictions on the regulated industry.

The new guidance follows the Commission publishing data showing the impact that COVID-19 is having on consumers and the industry so far.

This data shows that 0.2 per cent of UK adults have started gambling for the first time during the lockdown, compared to 1.8 per cent who have stopped gambling altogether. More people have also reduced the amount of money spent on gambling than those that have increased spending, with the same true for the amount of time spent gambling.

The Gambling Commissions says that while there is no evidence to suggest an increase in problem gambling, the shift in the market as a result of COVID-19 shows an increase in the use of certain gambling products such as online slots, poker, casino gaming and virtual sports.

This can be explained by the lack of sporting events to bet on, which has resulted in players switching their spend to other gambling products, including the National Lottery.

One of the factors driving the new restrictions appears to be the longer play sessions reported by a minority of players, which could be explained by the switch to more time-consuming games such as online poker and virtual sports.

The new guidance includes additional affordability checks, blocking customers from changing their mind about making withdrawals, and restrictions on bonus offers, with online operators expected to introduce them as soon as possible and for the duration of the lockdown.

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“Operators must use the data they hold to protect their customers and now, more than ever, it’s vital that online operators really know their customers by monitoring how long they are playing for and understanding how financial uncertainty is impacting them and what they can afford to gamble with,” said UKGV chief executive Neil McArthur.

“To ensure operators do that, we are strengthening our guidance and expect operators to take account of that to prevent bonus offers or inducements being offered to customers who are showing any sign of harm.”

The government’s Minister for Sports, Tourism and Heritage, Nigel Huddleston, said of the new restrictions: “It is vital that people are protected from the threat of gambling related harm and I welcome these latest steps from the Gambling Commission. We will continue to monitor the situation closely and will not hesitate to take further action if required.”

Some of the new rules introduced today will also be subject to a consultation later in the month, ahead of their potential introduction as permanent regulations.

Sweden recently introduced coronavirus-related restrictions on the online gambling industry in response to a perceived increase in risk, which operators say lacks evidence and will serve to drive players to unregulated providers.

Lawmakers in New Jersey have introduced legislation that would provide significant tax breaks to help Atlantic City casinos recover the COVID-19 shutdown.

The bill would temporarily modify taxes and fees relating to casinos’ land-based operations, and also amends the current law on the use of promotional gaming credits.

The bill would waive the annual license fee of $500 on each slot machine from July 1, 2020 through June 30, 2021, and directs the Division of Gaming Enforcement (DGE) to distribute any surplus funds and overpayments held in the Casino Control Fund to each casino in proportion to the licensee’s share of the surplus or overpayment.

Taxes levied on a licensee’s gross revenue would be reduced on a sliding scale, with no revenue tax or investment alternative tax applicable on gross monthly revenue that is 25 per cent lower than the same calendar month immediately prior to March 1, 2020.

Monthly revenue of between 25 per cent and 49 per cent of pre-crisis levels would be subject to revenue and investment alternative taxes calculated at 25 per cent of the amount normally due, rising to 50 per cent on revenue that is 50-74 per cent lower. Revenue of 75-99 per cent of pre-crisis levels would be taxed at 75 per cent of the normal amount due.

To qualify for the revenue and investment alternative tax reductions, licensees must prove to the DGE that the entire amount gained from the reduction has been applied to promptly re-hire former employees and new applicants; to attract tourists, gaming, and hospitality patrons to visit and stay at the casino hotel property; to market and promote events that would draw visitors to the property or Atlantic City; or for other activity deemed by the State Treasurer or the DGE to be beneficial to the return of pre-crisis economic, gaming, and tourism levels to Atlantic City.

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Promotional gaming credits would not have to be declared until they are used by patrons at a slot machine, gaming table, or sports pool in the licensee’s casino or internet gaming system, with licensees eligible for a deduction on gross revenue tax in an amount equal to the promotional credits.

The bill would also waive parking and room taxes for the remainder of the year, and allows certain licensing and other fees to be deferred during the period that the licensee’s casino hotel facility remains closed due to the emergency, and during the six-month period after reopening.

The bill (A4032 / S2400) does not impact tax liabilities on gross revenue from casino simulcasting, internet gaming, or sports wagering.

A second bill also introduced by Assemblyman Louis Greenwald (A4031 / S2398) directs the State Treasurer to make short-term loans available to casino licensees from the Property Tax Relief Fund. This would allow them to make payments due on May 1 and August 1, 2020 to Atlantic City in lieu of property taxes, with the loans available solely for this purpose.

The ministry of interior and sport of the German state of Lower Saxony has issued a prohibition order against an international payment processor which it accuses of facilitating illegal online gambling.
The Lower Saxony ministry has national authority and has been working closely with the interior ministry of Hesse, the state responsible for national licensing, to prevent unlicensed online gaming operators from serving German consumers.
The ministry said Monday that it has prohibited an international payment processor from facilitating illegal gambling transactions in the country, making it the second major payment processor to receive a prohibition order following the initial order issued to an international payment provider in June 2019.
“We expect companies in the financial sector to live up to their responsibilities and to critically review and, if necessary, immediately stop working with companies that practice illegal gambling,” said Boris Pistorius, minister of the interior and sport in Lower Saxony. “They are legally obliged to refrain from making payments in connection with illegal gambling – if they do not, we will take action.”
German law currently allows for online lottery sales and sports betting, while online casino gaming is prohibited with the exception of the state of Schleswig-Holstein, which has its own online gaming legislation.
The Lower Saxony ministry added that payment processors can play an essential role in preventing illegal online gambling and urged all companies active in the German market to comply with the law.
“Payment service providers must finally comply with their legal obligation and prevent payments in connection with illegal gambling,” Pistorius warned, adding that those who fail to comply will be banned from the market.