Archive for the ‘Regulation’ Category

Harriet Harman Criticial of UK Betting Act

Tuesday, August 21st, 2012

Harriet HarmanGreat Britain’s Labour Party is receiving a lashing concerning it’s relaxing of gambling laws by one of its own – and not just anyone –  it’s very own deputy leader, Harriet Harmen. Harmen’s call to conscious is linked to the dramatic decline of low income areas that have become a feeding ground for predatory betting shops peddling high-stakes gambling machines. Researches recently revealed that the countries citizens lost a combined amount of 1 billion pounds on the fixed odds terminals last year alone. With bets as high as 100 pounds being taken at a rate of every 30 seconds, it becomes less astonishing as to how such a massive debt could accumulate.

The targeting of poorer areas is apparent when researches disclose that areas with more concentrated wealth feature about 5 betting shops per 100,000 people, in contrast to the 12 setting up shop for that same sized segment of lower-income population. What also differs is how the book-makers concentrate on one central area, or a single high street in low income areas, accommodating the ritual of abuse for problem gamblers. This, says Harriet Harman, is what her and her party colleagues did not anticipate and has caused them to rethink their decision to loosen the regulation that would have prevented these issues.

Harman openly admits what she feels to be a failing of her constituents and is readily accepting responsibility, stating, “If we had known then what we know now [about the clustering of betting shops], we wouldn’t have allowed this, because it’s not just ruining the high street, it’s ruining people’s lives. I got the most heartening letters and emails and calls that I’ve ever had in 30 years of being an MP, just saying ‘Please do something about this. It’s ruined my life, it’s ruined my family, it’s really dangerous and the problem is it’s getting worse and that’s why we need the law to be changed so that something can be done about it’.”

When asked how this might shape her parties future approach to policies concerning the gambling industry, Harman went on to add, “Well, I think we were wrong, we have made a mistake and this result is the consequence and we need to do something about it.”

From a lay-persons perspective, it seems somewhat apparent that such betting shops and high-stakes touch screen terminals would primarily attract individuals that would most likely be identified as gambling addicted – especially in contrast to strictly regulated and self-contained casinos that offer a more entertainment and leisure focused experience. Individual who are more inclined to bet casually and only with the disposable income they can afford are going to do so at such an establishment -where they include it into an evening worth of activities such as dinner, a show, a spa treatment, or dancing.

“Popping” into a Betting shop on a high street , and having the ability to make numerous high stake wagers in a very short period of time is catering to a problem gambler’s impulse oriented addiction. But, the ABB, Association of British Bookmakers, defends the strategy behind the location choices of their establishments, saying, “”Like any retailer, betting operators look at footfall, demand, location, rental rates and competitive presence when deciding where to open a new shop. Up to 80% of new shops are opened in vacant units, providing jobs and investment that would otherwise be absent.”

Such economic benefits are not clearly illustrated when such research results by Birmingham University professor Jim Orford paint a much more grim economic picture with an estimated near 300 million pounds are being wagered and lost by individuals who identify themselves as having a degree of problem gambling that negatively effects their careers and relationships.

New Jersey Discussing Constitutionality of Meadowlands Casino

Saturday, July 21st, 2012

New Jersey is not stranger to online gambling. Or, at least New Jersey is not stranger to considering the prospects of online gambling. Falling short of a signature from Governor Chris Christie, online gambling regulatory legislation intended to revitalize Atlantic City, horseracing and New Jersey’s brick ‘n mortar gambling industry as a whole, now appears to be taking a backseat to other plans.

In an attempt to reclaim New Jersey’s position as the premier spot for East Coast gambling, state lawmakers discussed on Thursday the merits of a constitutional amendment that would allow for a casino at the Meadowlands facility in Rutherford.  While advocates believe state residents would welcome such a move, as reported back in April, the idea has been met with strong opposition due to the perceived threat that a Meadowlands casino would pose to Atlantic City’s casino industry.

For over three decades, Atlantic City has been the only place to gamble in New Jersey – though, unfortunately for the Garden State, AC no longer enjoys the distinction of being the only East Coast city to offer legal gambling.  Newer casinos in neighboring states like Pennsylvania and Delaware have provided costly competition to Atlantic City casinos.  As a result, New Jersey finds itself now ranking fourth in the nation in terms of gambling revenue after years of following only Nevada in that category.

While discussing the state’s gambling industry, Sebastian Sinclair, president at Christiansen Capital Advisors, summed things up with, “It’s been a bad decade for New Jersey.

The addition of a Meadowlands casino is seen by many as the best option for attracting back gamblers that have strayed away to neighboring states.

If a casino were to come to the Meadowlands Sports Complex, it would join MetLife Stadium, the Izod Center and the Meadowlands Racetrack.  Advocates argue that a new casino would be the perfect compliment to a football stadium, a basketball arena and a horse racetrack.  In fact, Jeffrey Gural, the new owner of the Meadowlands Racetrack, has come out in strong favor of the idea.  Gural has even suggested that his racetrack’s long-term survival is tied to whether or not a casino comes to the Meadowlands.

One of the major obstacles facing the Meadowlands casino initiative is that Gov. Chris Christie has sided clearly against it.  The Governor has expresses his unwillingness to jeopardize an effort already underway to revitalize Atlantic City’s casino industry by creating dangerous competition within the state.

New Jersey in many ways is dependent on a vital casino industry in Atlantic City.  The casinos in Atlantic City officially generate over 30,000 jobs for the state – and that number dramatically increases when jobs created indirectly by Atlantic City casinos are factored in.

Gov. Christie has supported various state expenditures intended to help restore Atlantic City to its former glory.  One example of this was a multi-million dollar advertising campaign designed to attract gamblers back to New Jersey.  The state also provided hundreds of millions of dollars in tax incentives to help get the Revel casino, a $2.4 billion behemoth, back on track and ultimately completed.

Unfortunately, the Revel has so far disappointed in regards to projected revenues.  One might guess that this could eventually lead Gov. Christie to reconsider his position regarding the Meadowland casino proposal.  Especially when the state budget, adopted just last month, counts on nearly $300 million from casino generated revenues.

That money will need to come from somewhere.  And while at the moment, the Governor and others are firm in their position that Atlantic City casinos should not have to contend with competition from within the state.  If gambling revenues continue to decline in Atlantic City, as they have for the last six years, the Meadowlands casino concept may look more and more attractive.

Back to Drawing Board for Online Poker in Cali

Monday, June 18th, 2012

california-flag-bear2The race to become the first U.S. State to legalize online poker has taken a detour in California. One of the more likely States to be able to sustain a formidable online poker network, California still has some kinks to work out in the legislation – the Internet Gambling Consumer Protection and Public-Private Partnership Act of 2012 (SB1563) – that was introduced earlier this year.

While there is no denying that Californian’s support online poker, the problem in California is that there simply are too many interests. With both private companies and tribal gaming operators seeking a cut of what is estimated to be a $13 Billion industry, generated in annual wagers by California’s 2 million online poker players, it’s been very difficult to make everyone happy.

Trying to make this happen is California Senate Policy Committee Chairman, Roderick Wright, who introduced the current bill on the table, along with Senate President pro tem, Darrell Steinberg. It was Wright who also pulled the bill before it’s first committee hearing scheduled tomorrow, commenting that, “the bill needs more work”.

Largely opposed by California gaming tribes who have exclusive rights to offer gaming on video devices, SB1563 has a lot of language that opens the door for the private market – namely, the California Online Poker Association, whose coalition of 46 casino operators, including the popular Hollywood Park Casino, have been pushing hard for regulation. But Indian tribes, like the Morongo and San Manuel bands of the Mission Indians, are also members of the Coalition, and have been pushing just as hard.

The coalition as a whole has made nearly $8 million in political contributions and gifts to lobbyists in Sacramento. In the last year alone, California casino operators have made over $1.3 million in contributions to the Democratic State Central Committee, which Senator Steinberg will heavily rely on for his campaign to maintain control of the California legislature.

Needless to say, it’s going to be difficult to make everyone happy in California. Perhaps the next draft of SB1563 will do a better job at it.

Bally’s to be Nevada Gaming Board’s First Internet Supplier

Sunday, June 10th, 2012

nevada gaming control boardThe Nevada Gaming Control Board is wasting no time whatsoever in putting the wheels in motion to regulate online gambling. With their recent recommendation of an application submitted by Bally Technologies to provide B2B services to Nevada gambling operators, the Gaming Control Board seems to be playing a very strategic hand in it’s bid to become one of the first State’s to tax and regulate online gambling.

Dependent on two U.S. House bills that would give the Commerce Department the authority to permit U.S. States the right to regulate online gambling activities (other than sports betting), the path to regulation in Nevada looks very promising considering the big players already established here. While California, Florida and Massachusetts are taking similar steps to capitalize on internet betting just as soon as the green light is officially given, Nevada certainly has the most going for it in terms of the likelihood of voter approval.

The recommendation of Bally Technologies to receive an interactive online gaming license by the Nevada Gaming Control Board is just the start of what will likely amount to recommendations of other notable brick ‘n mortar casino brands, such as Caesar’s, Wynn and Boyd Gaming. The only big name likely to not show up is Sands, whose controversial owner, Sheldon Adelson, has openly opposed online gambling regulation, as he claims it foster underage gambling. While it’s painfully clear that Adelson is simply trying to protect his brick ‘n mortar interests, that’s another story for another time.

The Nevada Gaming Commission will be reviewing the Board’s recommendation of Bally Technologies on Thursday, June 21, after which a final decision will be made. When all is said and done, Bally would be licensed to supply casino operators with an open architecture software platform that will give operators custom options in building their own unique gaming package. Designed for mobile online gambling integration as well, Bally’s iGaming platform already offers their most popular games (available through iTunes), and via a recent partnership with the OnGame Network, Bally will be pooled together with what will arguably be one of the largest online poker networks around.

Again, all of this weighs on getting the necessary federal laws passed to further clarify the Wire Act. But if and when that time comes, Bally Technologies will undoubtedly be holding a strong hand dealt by the Nevada Gaming Control Board.

Online Gambling Regs on the Table in Illinois

Wednesday, May 16th, 2012

Add the State of Illinois to a growing ledger of U.S. States considering the prospects of legalizing online gambling to one extent or another. With just over two weeks before a scheduled adjournment at the end of May, and amidst debate over Medicaid and pension reforms, Chicago Democrat and Illinois Senate President, John Cullerton, has introduced legislation to create a Division of Internet Gaming within the Illinois State Lottery. Not going so far to introduce legislation to regulate online casinos, per say, Cullerton said his goal is to make Illinois nimble enough to adjust to the reality of online gambling and position itself to capture the widest audience possible before federal regulation is implemented.

Cullerton, like several other State politicians, believes there is great value in being one of the first State’s to regulate online gambling. First, Cullerton believes that the sooner Illinois establishes itself in the iGaming industry, the more advantage it will have for long-term success and making a stake at what could be hundreds of millions of dollars. As first reported by CBS News, in his letter to Governor Pat Quinn and other legislators, Cullerton said, “The state could organize the first major poker pool, garner worldwide popularity, and position itself as a hub for multi-state and international iGaming”.

Secondly, Cullerton believes that it is imperative to pass regulations before the federal government takes the lead. Currently, there is legislation pending in the U.S. Senate that, if passed, could preclude State’s from reaping financial benefits if motions are not already underway if and when a federal law to regulate online gambling is passed.

While Cullerton has support from some of his colleagues, like Illinois Senate Gaming Committee Chairman, Terry Link – who cited Cullerton’s legsilation as having “unlimited potential” that would not cut into business – others, like Senate Minority Leader Christine Radogno, have expressed caution rushing into a vote on Cullerton’s proposal. Nor does Governor Quinn appear too keen on the idea of expanding gambling – in any form, at that. Having already expressed opposition to a proposal that would expand casino gambling and permit racetracks to offer slot machines, Governor Quinn’s office openly stated they will not take a position on Cullerton’s proposal so as not to distract from more pressing issues – namely, health care and public employee pensions.

Despite Cullerton’s pressing, his proposal will very likely have to wait until the Senate commences once again. Whether or not this “delay” will put Illinois at a disadvantage in the long-term remains to be seen. In the meantime, Cullerton can rest assured that the Illinois State Lottery is liking this whole internet thing. Since March of this year, when online lottery sales went live in Illinois  for the first time, the State has brought in almost $2 million in online sales alone.

Maryland’s Prohibition Excludes Fantasy Sports

Thursday, April 12th, 2012

Not long after leading a charge to shut down the largest online poker site in the world, Poker Stars, lawmakers in Maryland passed a bill that exempts fantasy sports from gambling prohibitions just as the 2012 major league baseball season gets underway.  Now players in Maryland can legally collect the prize money that comes along with winning a fantasy sports league.

The bill’s sponsor, Del. John Olszewski Jr., D-Baltimore County, was unsuccessful in two previous attempts to pass this legislation.  To ensure better results on his third attempt, Olszewski relied on help from the fantasy sports industry.  The critical challenge was to educate members of the legislature on how prevalent fantasy sports are in today’s society.

For anyone unfamiliar with fantasy sports, the game allows players to act as team owners by utilizing a draft to select actual athletes from a given sport in order to build a team.  After determining their team’s roster via the draft, players compete with one another in a fantasy league.  The competition is based on statistics generated each week by the actual athletes, and the objective is to end the season with the best collection of statistics of all the teams in the league.

Selecting players during the draft that will generate strong statistics over the course of a season is considered to be a skill.  It is on this basis that Maryland’s Department of Legislative Services ultimately determined that fantasy sports should not be deemed as gambling.

While it makes sense that the Department of Legislative Services came to this conclusion, it is difficult to understand how games like poker can be classified as gambling when the level of skill required to be dominant is considered by many to be higher than that required in fantasy sports.

One might argue that because participating in fantasy sports leagues is so widely thought of as harmless fun, it is easier for lawmakers to exempt fantasy sports from gambling prohibitions. What do you think?

Online Gambling Legislation Nixed in D.C.

Wednesday, February 1st, 2012

If there is any signal that legalizing online gambling in the United States on a federal level is going to be an uphill battle, it would most certainly be the recent turn of events in District of Columbia. At one time appearing to be a shoe-in for regulation, D.C. has lost its bid to become the first in America to offer legalized online poker and casino bets.

Granted, the process of getting legislation passed in D.C. wasn’t necessarily a due process. In fact, two of the three council members who voted to repeal the legislation that would have effectively given the D.C. Lottery a $38 million contract with Greek lottery vendor, Intralot, said it wasn’t so much an objection to online gambling in principle, but rather, an objection to the approval process and lack of transparency thereof.

Indeed, the contract that was made with Intralot was amended at a later date, effectively giving Intralot a greenlight to develop an online casino and poker software platform for D.C. residents. Following a Washington Times report, highlighting several irregularities of how the bill was changed, D.C. Inspector General, Charles Willoughby, was urged to took a closer look at the contract. And while all parties were cleared of illegal wrongdoing, Mr. Willoughby did concede the contractual process was irregular.

Committee on Finance and Revenue Chairman, David Catania, said that considering the “poisoned climate” of the D.C. governmental office and recent guilty plea of former Council seat member, Harry Thomas Jr., it would be a huge mistake to open the floodgates to an industry prone to money laundering and organized criminal activities if placed in the wrong hands given inadequate oversight.

While the original bill’s sponsor, Michael Brown, said he would make a bid to gather six votes needed to repeal the repeal, so to speak, it is very unlikely he will succeed. What’s most likely is that the repeal will be approved by the full council and that neither Washington D.C. nor the federal government for that matter will be passing any definitive legislation to regulate online gambling any time soon.

Ireland Working on Online Gambling Tax

Thursday, November 10th, 2011

ireland-in-europeThe government of Ireland is working on legislation to tax online gambling bets placed in the Emerald Isle. It is an attempt to recoup revenue that is currently going overseas. Michael Noonan, the Minister for Finance, says that work is ongoing on the legislation, but is hopeful that something will be completed this year.

The hardest part is figuring out how to capture that revenue. When Irish citizens wager at online casinos, sports books and poker rooms that are located overseas, the transactions are processed overseas under the jurisdiction of a foreign government, out of the authority of Ireland. Taxing those transactions would be difficult for Ireland.

One way Noonan plans to bring in revenue from transactions with foreign companies is through licensing. The legislation being crafted would require any online gambling website to obtain a license from Ireland if they are going to accept bets from Irish customers. In addition, the companies would have to pay a duty on any bets placed by Irish citizens. The amount of duty is not yet known. A lowering of local betting duties from 2% to 1% is partially blamed for gambling revenue in Ireland dropping from €54 million in 2007 to €30 million in 2010.

Every country faces the same problem as Ireland. Due to the borderless nature of the Internet, people can gamble online at a website located anywhere in the world. If the website is located in the country, that government can tax the transaction, but that is difficult to do if the company is located overseas. Noonan is hopeful that the legislation will make major strides toward correcting that problem.

Online Betting Coming to Iowa

Wednesday, November 9th, 2011

Iowa-mapSoon Iowa residents will be able to bet on horse racing online for the first time. On Thursday, the Iowa Racing and Gaming Commission is expected to approve new online gambling regulations that were passed by the legislature in the last session. Those regulations allow “advance deposit wagering,” which lets gamblers place a bet on horse races if they are not at the track either through telephone or the Internet. In order to place the bet, the person must have already placed a deposit into a betting account.

Insiders say that there are enough votes in the commission for the regulation to be enacted. If so, advance wagering for horse racing could begin on January 1. The change is intended to make horse race betting more accessible. Jack Ketterer, the administrator of the Iowa Racing and Gaming Commission, said that the new procedure is “for people throughout the state who would like to bet on Prairie Meadows races, but who really have no way of doing so” without making a trip to the track. Many of the details still need to be worked out, such as the framework for the depositing. The commission enlisted the help of a California-based consulting firm to help with the depositing.

Many are skeptical of the plan. Mitch Henry, who heads a group called No Casino Iowa, said that allowing online betting for horse races will see an initial increase in profit, but only because “anytime something can be done online – be it legal or illegal – it will encourage folks who are compulsive gamblers.”

ISPS Should Not Police Online Gambling

Tuesday, November 8th, 2011

australia_worldThe trade group for Australia’s national internet industry told the government that internet service providers (ISPs) should not be charged with policing online gambling. The Internet Industry Association (IIA) submitted a report to parliament recommending that the regulation and restriction be done at the point of access.

Parliament recently called for a review of the Interactive Gambling Act of 2011 to see how it can be made more effective. The law does not ban Australian citizens from playing casino games online, but it does ban online gambling sites from operating in Australia. The law tasks the ISPs with monitoring the activity to make sure no gambling sites break the law. According to the IIA, that places an unfair burden on the Internet industry and is not even effective.

In the statement, the IIA says that they believe “that the point of consumption, that is, the end user’s device, is the only effective and technically feasible way of controlling access to the Internet.” The IIA also points out that there is no realistic way of protecting minors and other Australians from playing at online gambling websites located overseas. For that reason, instead of prohibition, the IIA recommends federal regulation, where companies can obtain licenses to legally operate in the country.

“Australian online gamblers who participate at offshore sites forego the protection of Australian law and harm minimization requirements when they use offshore gambling providers,” the report said. While some politicians, such as Senator Nick Xenophon, are pushing for a full prohibition of online gambling, others support liberalizing the market and regulating it federally.