A lottery technology firm is telling the state of Ohio that it should look very closely at the sports betting market in Tennessee when crafting its legislation, but many of its comments aren’t accurate. At last week’s hearing in front of the Ohio Senate Select Committee on Gaming, Tara Jones, director of government relations for Intralot, which powers the Ohio Lottery, told policymakers that large parts of the Tennessee model should be implemented in the Buckeye State. “One recent example of a different way to examine the previous models is to look at how Tennessee is structured,” she said in testimony. “I am not here to say Tennessee got everything right, but I am here to say that what they came up with is worthy of your time and consideration. ”Jones highlighted Tennessee’s 20% tax rate on adjusted gross income and a regulation mandating a minimum 10% hold by an operator in aggregate over the course of a 12-month period. Tennessee’s “capped payout” requirement was the first of its kind in the U. S. Sportsbooks typically hold 5-7% of the handle in the form of revenue Fantasy 5.
The 10% minimum in Tennessee was tinkered with extensively during the process of crafting the regulations, with a 15% hold originally floated. Intralot claims “no one” is moving from offshore to regulated market“Tennessee decided to get the most out of their charged tax by fixing their hold,” Jones said. “Consequently, by taking this approach, the state understands that this is no longer about curing illegal play because no one is changing their offshore accounts to do business with state sportsbooks. The TN model shows us that primarily, those playing, are those that want to do so for fun
The players going offshore, for the most part, are going to continue to do so. ”Those comments go against recent research from the American Gaming Association. While the AGA found that illegal offshore operators saw a 3% increase in spending in states with legal sports betting, those gains are far outpaced by the sustained growth of the legal market. “Bettors overwhelmingly prefer legal operators, with 74% saying it is important to only bet through legal providers,” the AGA said. “Despite this, 52% of sports bettors participated in the illegal market in 2019. The study found that illegal sports betting is driven largely by confusion about online operators
More than half (55%) of consumers who placed most of their wagers with illegal operators believed they bet legally. ”The slow pace of consumer awareness is not surprising. Regulated mobile sportsbooks outside of Nevada, which long had a U. S. monopoly, are less than three years old, so it’s still the very early days of legal sports betting in the U
S. It takes time for people to shift from offshore unregulated books to regulated ones. Tennessee kicked off sports betting on Nov. 1, 2020, so its market is still super young. As for the motivation behind the Tennessee Lottery putting a capped payout in place, regulators said it was done primarily for the purpose of maintaining a competitive market among rival bookmakers, rather than trying to maximize the state’s take. The capped payout came through the regulations, rather than from the 2019 Sports Gaming Act, which put in place the structure for the industry and revenue from it
OH and TN are apples to oranges“The 20% on all GGR that at the beginning was said to be too high a number to make for a profitable industry is now no longer an issue,” Jones said of the tax rate. “In fact, that percentage has done nothing by way of holding back a flourishing industry for sports gaming in Tennessee. ”A big part of the reason why operators in Tennessee have no problems with the 20% tax and a $750,000 annual licensing fee is that they don’t have to enter into commercial partnership with a brick-and-mortar casino, as they would likely have to do in Ohio. Those deals are expensive. It’s very hard to compare a gaming market like Ohio’s with the one in Tennessee, which has no casinos or racetracks of any kind. “By looking at the success in Tennessee, it proves to other states the need to set mandates and have higher tax rates on operators,” Jones said. “Tennessee however should have taken more for itself in terms of state tax and it should have included retailers, who have suffered from the COVID pandemic. We expect Tennessee and other states, to cure these oversites [sic] at some point in the future. ”That’s a misreading of the 2019 legislative process in Tennessee, where a retail component for sports betting was said to be off the table if policymakers wanted to avoid a veto from Gov
Bill Lee. The governor indicated he doesn’t want any additional expansion of sports betting during his tenure. It’s unclear if Tennessee will ever move to give lottery retail locations an opportunity to offer a sports betting product. That seems unlikely anytime soon, and it would be fought tooth and nail by the existing sportsbooks
As for lottery retailers in Tennessee suffering during the pandemic: According to an annual report, the final quarter of the 2019-20 fiscal year last April-June was a record-breaking quarter for lottery revenue. Tennessee’s lottery has done well during COVID.. Intralot Systems and Software Intralot is the leading supplier of integrated gaming and transaction processing systems, innovative game content, sports betting management and interactive gaming services to state- licensed gaming organizations worldwide
It's broad portfolio of products and services, it's know-how of Lottery, Betting, Racing & Video Lottery operations and it's leading-edge technology give INTRALOT a competitive advantage which contributes directly to customers’ efficiency, profitability and growth. INTRALOT Interactive takes part in all major international gaming events and plays an active role in the gaming community while contributing decisively to the future development of the sector. Postal Address 64 Kifissias Ave. & 3Premetis Str. Athens 15125Greece Related Articles on GIIntralot CEO comments on €147.6m loan facility agreement during AGMIntralot reports 9% increase in Q1 2021 revenue Intralot subsidiary launches Nederlandse Loterij solution Intralot estimates 2020 EBITDA to fall by up to €28m as result of pandemic INTRALOT Inc
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Speaking on behalf of the lottery company, Tara Jones told the Ohio Senate Select Committee on Gaming that there should be a 40% tax rate on operators and no more than a 90% payout going back to customers. “We have factual data on which models work best for the states and those which do not, like West Virginia and New Jersey, where out-of-state operators are collecting up to five to eight times the amount of revenue the state is,” Jones said. “And the state receives little or no further economic benefit. This is due in part to a low tax rate and an un-mandated handle that has been legislatively set. An 8-10 percent tax rate in these instances is way too low. ”Jones pointed to Tennessee’s model, which includes a 20% tax rate and a mandated hold of 10%, as a state that’s doing it right. But, according to Jones, not right enough. “A 20% tax rate is great, as that is one of the industry’s highest tax rates right now, but this is a state’s game, this is to make money for the state, so the state should really, in Intralot’s eyes, at a minimum, be asking for a 40% tax rate,” she said. “The state needs to be making the money here. ”Claims “no one” is leaving their offshore accounts Jones also contended that in states where there is massive competition, such as in New Jersey, nothing is being done to stem the tide of illegal, black market sports betting. [Editor’s note: In fact, a study by the American Gaming Association that was released last year did estimate that in 2019, average spending on illegal bookies was down 25% and average spending on legal digital platforms was up 12%. ] “The state understands it is no longer about curing illegal play, because no one is changing their offshore accounts to do business with state-run sportsbooks anyways,” she said Triple Twist.
She later added that “there is no proven case currently that [shows] folks are moving off the black market in any state-mandated model, so the state needs to make the most that it can off of that revenue, and that’s where a mandated hold will definitely come into play. ”Jones said if Intralot were to get Ohio’s business, it would run an “omnichannel” model that offers sports wagering at existing lottery locations, casinos and racinos, and via mobile. “The state would use an all-inclusive approach by providing a sports betting license to both the Ohio Casino Control Commission and the Ohio Lottery Commission,” Jones said. “The legislators use their capacity to mandate hold and taxes as a means of maximizing the revenue for the opportunity for the state of Ohio. ”Bars want in on the action Another speaker, Andrew Herf of the Ohio Licensed Beverage Association, more or less sided with Jones’ desire to have the lottery overseeing the whole ball of wax, as he would like to see lottery-run sports betting on existing lottery machines inside of bars and restaurants. Herf brought up an obvious point: Why would someone use a lottery machine at a bar when they could just use the app on their phone?“The answer to that is not everyone is going to download the app,” Herf said. “When someone places a bet at a bar, they’re more inclined to watch the whole game, order another beer, order chicken wings. That helps the bar. ”Also speaking at the now-weekly hearing was Steven Jarmuz, representing Caesars Entertainment, and Elizabeth Suever, the vice president of government relations for Bally’s. Both hit on the main talking points for the casino industry, insisting that the best way forward for Ohio involves a competitive environment with three skins per casino or racino, with remote registration for mobile wagering and betting allowed on all sports, including college games. The Ohio Senate Select Committee on Gaming meets again next Wednesday at 4 p.m.
Image source: Shutterstock Intralot Group’s new strategic vision was presented to investors by Chairman and CEO Sokratis Kokkalis at the firm’s Annual General Meeting (AGM) on June 29. The technology group’s business priority is, he told investors, to bolster and accelerate all its North American units, services and customer contracts. Kokkalis also commented on better than anticipated results for its 2021 trading, despite ongoing COVID-19 challenges
The CEO noted that there had been a much-needed period of trading stability following significant year-on-year transitions for the company, which had been affected by the loss of its main technology contract in Turkey. He told investors: “Group’s results for the first quarter were extremely good and we expect that the results for the second quarter will be just as good and according to the business plan, providing us the opportunity to strengthen its position in strategic markets through the utilization of our technology and experience in the gaming industry. ”Underlining the continued transformation of the firm, Kokkalis confirmed that Intralot had re-negotiated its fiscal duties, transferring its 2021 unsecured debt payments to a 2024 lock-up agreement. The firm has also secured a new loan facility arrangement worth €147.6m ($175.46m) to support its liquidity to fund North American projects
The firm further noted that its financing will be safeguarded as “participation limits will be reached for the agreement with bondholders to be executed in a consensual manner, without recoursing to court proceedings”. Q1 trading results outlined the company’s North America ‘Intralot Inc’ unit as the technology group’s new top-line growth driver, achieving an 81% upturn in EBITDA, significantly outpacing its established European performance. The CEO concluded: “Our main priority is now our subsidiary in North America, which has brought the best results to the group and participates in its debt restructuring, as well as the exploitation of opportunities in other developed markets where the group has comparative advantages leveraging in our experience and new product portfolio. “Finally, I would like to thank our employees and all partners for their resilience and perseverance, in order to reach an agreement with the bond holders. ”
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