China’s state-run lottery operations reported their third straight month of falling sales as the country’s new rules on so-called ‘high-flight, quick-open game awards’ take their toll.

On Tuesday, China’s Ministry of Finance reported that April’s overall lottery sales totaled RMB36b (US$5.2b), a 13.7% decline from April 2018’s result (albeit a modest improvement from March’s result). For the year-to-date, lottery sales are down 2.5% year-on-year to RMB142.3b.

Both the sports lottery and welfare lottery suffered declines in April. The sports lottery maintained its new status as the dominant option, even as its sales fell 10.4% to RMB19.7b. Welfare lottery sales fell harder, down 17.4% to just under RMB16.3b.

For the year-to-date, sports lottery sales are up 4.1% year-on-year to RMB77b, while the welfare lottery is down 9.2% to RMB65.3b.

The debate over whether or not loot boxes are a form of gambling might still not be decided, but it’s certainly starting to affect bottom lines. Nintendo, a company not often though of when it comes to microtransactions and aggressive monetization, has announced they will be ending support for Animal Crossing: Pocket Camp and Fire Emblem Heroes in Belgium.

The two games offer Leaf tickets and Orbs respectively, which can be cashed in for loot box type rewards. This runs contrary to a Belgian law, passed in 2018, which prohibits any type of loot box mechanic, with a possible penalty of €800,000 ($893,000) and five years in prison.

Nintendo also revealed in the announcement that they would not launch similar monetization strategies in Belgium, but didn’t make any promises to hold back in the rest of the world.

The debate over the real nature of loot boxes has raged for some time now, with video game companies’ eager to say they aren’t and protect their income source. Notably, Ireland has sided with the companies, saying that the rewards of a loot box were not financial, and fell under law as a normal product..

The debate over whether or not loot boxes are a form of gambling might still not be decided, but it’s certainly starting to affect bottom lines. Nintendo, a company not often though of when it comes to microtransactions and aggressive monetization, has announced they will be ending support for Animal Crossing: Pocket Camp and Fire Emblem Heroes in Belgium.

The two games offer Leaf tickets and Orbs respectively, which can be cashed in for loot box type rewards. This runs contrary to a Belgian law, passed in 2018, which prohibits any type of loot box mechanic, with a possible penalty of €800,000 ($893,000) and five years in prison.

Nintendo also revealed in the announcement that they would not launch similar monetization strategies in Belgium, but didn’t make any promises to hold back in the rest of the world.

The debate over the real nature of loot boxes has raged for some time now, with video game companies’ eager to say they aren’t and protect their income source. Notably, Ireland has sided with the companies, saying that the rewards of a loot box were not financial, and fell under law as a normal product..

The intense competition for a Japanese integrated resort (IR) license looks like it might be starting to push some players into making concessions. On May 21, Mitsuaki Kiriyama, vice president of Bloomberry Resorts Japan Inc, told GGRAsia that his company is no longer considering an Osaka resort.

The decision appears to be influenced by the intense bidding process created by Osaka’s request-for-concept (RFC) process. As the major players vying for a license have to make big, expensive promises to the city, it’s starting to price out what Bloomberry is expecting will be a reasonable price point to come in and make a profit.

That competition is expected to force operators to promise at least a $8.5 billion resort plan. Kiriyama told the outlet that his company is looking for a much lower price point of around $2 billion to $3 billion. That strict budget is keeping them on the sidelines for the moment.

“We have not yet decided which location is best. That is still under research,” he said. He cited the uncertainty of taxation and junket regulations, but asserted that Bloomberry’s preference is to be near one of the bigger cities, leaving Tokyo or Yokohama as options.

The trade war between the U.S. and China looks to be ratcheting up even further, with tarrifs increasing, negotiations souring, and the markets reacting badly.  The effects of the trade war will be vast, but may affect the fortunes of Chinese VIP gamblers more than most, raising concerns about Macau’s forecast.

Luiz Lam, the director of the Association of Gaming and Entertainment Promoters, told GGRAsia that he expects Chinese VIPs to increasingly stay at home for the rest of the year, possibly only returning around the Chinese New Year in 2020. “In these coming months, I will even find it acceptable if the VIP GGR [gross gaming revenue] only falls by low single-digits,” he told the outlet.

“Even if a gambler still comes here to play now, we will question if he has enough money to pay back,” he said, reflecting the difficulty that Chinese VIP, many of whom are manufacturers, are having with their lines of credit.

Analysts at Morgan Stanley agree with that sentiment. Although Macau has recovered slightly as a result of Labour Day, it simply won’t last. “Unfortunately none of the operators or junkets is showing confidence that VIP trends or demand are organically improving, despite investors’ hopes and positive macro leading indicators,” the firm wrote in a recent publication.

The US gaming industry wants to put together a $65-billion development pipeline that would see the construction of new casinos and resorts across Asia. The plan is an ambitious one and looks really attractive on paper, but that’s where its glory ends. Union Gaming analysts believe that the plan is complete overkill and that the rate of economic growth in the region doesn’t warrant an investment of that magnitude.

According to a memo published by the brokerage yesterday, “We estimate the Asian gaming development pipeline currently exceeds US$65 billion. Approximately two-thirds of this pipeline is in existing gaming jurisdictions, while the remaining one-third is in a solitary, green-field jurisdiction (Japan).”

The Union Gaming analysts, Grant Govertsen and John DeCree, added, “Given the scale of the pipeline relative to the earnings before interest, taxation, depreciation and amortisation (EBITDA) required to justify it, we think – for the first time in Asia – the amount of new supply is simply too much over too short a period.”

The result of such a lofty endeavor would be catastrophic. Returns for everyone involved would be much lower than expected and the failure of certain projects, as a result of a lack of a decent return, would cause entire companies – and possibly communities – to fail. If the casino industry wants expanded growth in Asia, they should consider spreading the plan out over 15 years, not the five years currently being considered, assert the analysts.

Illegal gambling in Malaysia has come under attack. The country’s law enforcement offices have stepped up their efforts to rid the streets of the activity, helping the legal gambling houses to enjoy better success. The efforts are just getting underway and more action is expected as police momentum builds.

According to The Edge Markets, the Ministry of Finance, Bank Negara Malaysia, the Malaysian Communication and Multimedia Commission and local police departments have been meeting with high-ranking members of the country’s government and gambling operators recently to discuss how to combat illegal gambling. According to one of the operators who attended, the country is “seriously looking into changing gaming laws” that will lead to even greater efforts to eradicate Malaysia of illegal gambling.

The unidentified operator added, “It is an ongoing process when it comes to looking at changing the laws. This has been looked at since 2017 but engagement with the industry and work have been expedited in recent months. Eventually, when everything is finalised, the government is looking at a timeline of as early as next year,”

Law enforcement is primarily going to start going after so-called illegal number forecast operators (NFO). An NFO is essentially the same thing as a multi-number lottery. According to some studies, the illegal NFO market is about two to three times larger than the legal market, but has seen a decline already this year thanks to the work of law enforcement and government agencies.

As the debate, as well as the lawsuits, still rages regarding the US Department of Justice’s (DOJ) decision to change its stance on the Federal Wire Act, two states have taken a preemptive move to prevent the department from trying to come after them for their legal online gaming activities. Both Ohio and Nevada are rewriting their respective legislation to change how online gambling is worded in hopes that this could stave off any DOJ attack.

The DOJ had stated, almost nine years ago, that the Wire Act only applied to online sports gambling. As it related to the topic, the legislation prohibited any sports gambling activity that involved interstate transactions, such as a sportsbook in one state accepting bets from a gambler in another state. However, for reasons that are still not clear, the DOJ changed its opinion earlier this year to say that all forms of online gambling are illegal per the Wire Act.

Ohio has decided to not use the words “mobile” or “online” as it works on legislation that would allow online sports gambling. Instead, according to Representative Dave Greenspan, “The reason we went with that language, versus ‘mobile’ and ‘online,’ is, once again, ‘devices,’ ‘personal devices,’ and ‘software’ are broad terms. We don’t know 5-10 years from now what the technology may be, what the delivery system of the product may look like. So we want to provide a broad context by using those phrases: devices, personal devices, and software. It is a catch-all so anything new that becomes available falls under this definition. If we use the more narrow definition of mobile/online, a device might not fall under that definition. I wanted to make you aware that the Wire Act is a concern as it relates to interstate gambling, interstate sports wagering. The lottery commission, as they currently operate, is on a closed-loop system, effectively an intranet. There are ways that we can offer a platform in Ohio that would meet the requirements of the Wire Act.”

Nevada is working on legislation that would regulate mobile sports gambling as if it were a slot machine. This way, according to lawmakers, it won’t be considered online gambling. The chair of the Nevada Gaming Control Board, Sandra Douglass Morgan, explains, “This bill no longer considers mobile gaming as a unique and separate gaming category. It simply adds mobile gaming to the definition of a gaming device, which would regulate mobile gaming just as any other game devices in the state. There are currently five companies with a mobile gaming license, and this bill would grandfather [in] those companies.”

Macau VIP revenue is dropping. This is causing a number of analysts to re-evaluate their position on the major casino operators and to revise their views of the operators’ futures. John DeCree of brokerage Union Gaming is one of these and he sees an even larger contraction coming for Macau than what many had previously expected. As a result, he trimmed expectations of the city’s US-based operators.

DeCree said in analysis this past Monday that there will be a contraction of 15% in Macau’s VIP revenue this year, compared to the previously-predicted 8%. Mass-market gaming will pick up, however, growing by about 10% over last year. Gross gaming revenue (GGR), due to the changes in the market, will shrink 2% instead of the growth of 1% that analysts had previously forecast.

This led DeCree to assert, We highlighted a confluence of factors driving our lower VIP forecast, including the threat from new regional APAC casinos, softer China macroeconomic trends resulting from US/China trade war, Macau’s VIP smoking ban, junket maturity, including the transition of mature junkets to principal roles, and local politics.” He added, “Collectively, these items paint a more cautious outlook for VIP over the coming quarters.”

The analyst has dropped his price estimates for Wynn Resorts, MGM International and Las Vegas Sands. Sands is now priced at $78, down from a previous $80. DeCree explains, “LVS has significant growth capital being deployed in high-return markets like Macau and Singapore and continues to be a cash flow machine, making a low-$60 entry price quite attractive for LVS today, especially for longer-term investors.”

It could have been worse, so Dave Oancea should be thankful and learn a lesson. The man better known as “Vegas Dave” won’t be going to jail after being found guilty of stealing social security numbers to create false casino accounts and hide his winnings. He could have, in theory, been put away for 95 years, but won’t serve any time. He will, however, be banned from sportsbooks in Nevada for the next three years.

Just over two years ago, Vegas Dave was indicted on 19 felony counts of stealing social security numbers, as well as using fake numbers, to open betting accounts at two sportsbooks – those at Wynn Las Vegas and Westgate Las Vegas. Those accounts placed wagers worth a total of $3.5 million. As any spineless criminal does, he pleaded not guilty of the charges and waited for the saga to play out.

After wrangling over the case in court, where Oancea was represented by high-priced celebrity lawyers, prosecutors and the defense team struck a plea deal that was signed off on by the judge, US District Judge Jennifer Dorsey. Dorsey sentenced Oancea to three years of probation, 150 hours of community service and gambling counseling addiction, as well as the sportsbook ban.

To Oancea, the case was just another bet, a wager that he didn’t take seriously. He said after the judge’s decision was announced, “I bet on myself and decided … to stand up for my constitutional rights and to defend my freedom and innocence. Today, I walked out of the federal courtroom a free man with zero felonies and zero prison time.”

Illegal gambling is beginning to find itself in a very precarious position around the world. Countries are cracking down on the activity, finally realizing that they are both facilitating dangerous situations for their residents, as well as losing out on millions of dollars in potential revenue. This crackdown is just getting fired up and there is still a lot to be seen, but the signs are there. The latest example of the global attention being given to the activity comes out of Malta, where the Malta Gaming Authority (MGA) is now going to work hand-in-hand with local law enforcement to push out illegal gambling on the Mediterranean island nation.

The MGA has signed a memorandum of understanding (MOU) with the Malta Police to help eradicate the problem. Malta has already undertaken several initiatives to weed out the criminals in order to recuperate the lost tax revenue, and the new agreement will take the actions a step further. Both the MGA and the police will actively exchange information and increase the level of cooperation between the two entities.

The commissioner of the Maltese Police, Lawrence Cutajar, states, “In an ever-changing complex world, policing has become more challenging, necessitating the establishment of solid partnerships with other government agencies and NGOs as well as with society in general, this in order to ensure effective law enforcement throughout.

“The signing of this MOU with the MGA is one in a string of initiatives which the Malta Police Force under my charge has embarked upon over the past months, aimed at combating criminality in general, whilst it goes to show our strong commitment to tackling two of the most challenging crime categories, namely financial and computer-related crime.”

The United States Copyright Office has issued Dr. Craig Steven Wright a the copyright registration for the original Bitcoin whitepaper, which Dr. Wright originally posted online in 2008 under the pseudonym Satoshi Nakamoto.

The copyright registration was issued after the examiner at the U.S. Copyright Office was aware that the Bitcoin white paper was a “famous work” with questions about who was Satoshi Nakamoto, and only after Dr. Wright confirmed he was author of the seminal paper which started the Bitcoin revolution.

In addition to the original Bitcoin whitepaper, the U.S. Copyright Office also issued Dr. Wright a copyright registration for most of the original Bitcoin code (version 0.1 of the Bitcoin client software) which he authored.

The U.S. copyright registration certificates are: