Posts Tagged ‘online gambling in new york’

MGM Supports New York Online Gambling Market

Monday, December 1st, 2014

While New York has been on the cusp of legalizing various forms of online casino gambling, and has been one of a handful of states that industry insiders believe will be the next to go live with real money wagering online, the fact of the matter is that the fuel supporting the latest push for legalization in the Empire State is coming from out West.

Let NY Play, is the latest proponent slogan for iGaming in New York. Social media outlets have been fanning the flames through this organization, which is actually coming from none other than MGM Resorts International. MGM is a huge gaming brand based in Las Vegas, Nevada.

So then why all the backing from a casino brand that doesn’t even have a land-based property or a stake in New York?

Well, New York is getting ready to move forward with granting four different licenses to develop online outlets, and while MGM is interested, it has no hand in the game other than possible future interests. MGM has lobbied in the state of New York before – specifically in support of the legalization of online poker.

While Let NY Play is gaining social interest online, MGM surely cannot be embracing the idea that New York will generate enough revenue from the get-go to stimulate the expansion of online gambling a la New Jersey, which is still struggling to generate increased online wagering income even though there are more than a dozen online casinos there.

But wait, in New York it’s about poker specifically. New York is a state that loves poker. MGM knows that New York residents bet as much as $110 million in non-regulated online poker activity. Further believing that NY could generate between $50-80 million in revenue each year, MGM may have designs on the future indeed. This estimate does not consider additional revenue the state would gain from the licensing process itself.

Still, is there something else propelling MGM in its support of NY so much? NY’s neighbor, New Jersey, has come nowhere near earning the revenue it originally predicted it would when gambling online went live over a year ago.

Needless to say, MGM officials are taking the “slow and steady” road, and believe that while there has been a slow start to the industry, the tables will turn eventually. After all, there are online casinos that are not based in the US still taking wagers from US players, and thereby cutting into the market.

Interest by many offshore and European online poker giants to move back into the US market may be the solution to the needed income. But the question remains whether or not US markets such as NY are ready to grant permission for the world’s most successful online poker brands to move in.

The fact that MGM owns half of the Borgata, which hosts the most popular online casino in New Jersey at this time, may be another factor. Perhaps MGM will go live via the Borgata, creating a site related to its New Jersey destination. There are rumblings in the industry that this is a possible outcome in the near future, but New Jersey is not New York.

Whatever MGM’s motives may be entirely, the state of New York is on the verge of legalization, indeed. As casino licensing gets underway, there are sure to be further developments regarding MGM’s support of online poker in New York. Time will tell what they are.

Unintended Effects of UIGEA Encroaching Online Revenue for Horseracing Industry

Wednesday, July 7th, 2010

It looks like more than just online casino operators have some “ish” with the U.S. online gambling ban – Unlawful Internet Gambling Enforcement Act – infamously passed under the Bush administration back in 2005 as part of an attachment to a port security bill. Surprisingly enough, it’s the same folks who would seemingly have benefited from the UIGEA, who are now complaining about, well, it’s ineptness.

Here’s a little background: When the UIGEA was passed, it basically banned all forms of online gambling, except for parimutuel horserace wagering and fantasy sports betting. I know, go figure. How are those any different than other forms of gambling? Anyhow, the only problem was that – despite the carve-outs – there were no guidelines on exactly how financial institutions and online payment processors would successfully go about filtering all of the different types of internet wagering transactions, i.e., online casinos, poker rooms, sportsbooks, bingo, skill games etc.

As a result, credit card companies are now erring on the side of caution and blocking most, if not all transactions that come through online betting websites. There simply is no way to confidently identify which transactions are allowed and which are not. Whereas there was more wiggle room for credit card companies during the last four years, now that the UIGEA has gone into effect (as of this year basically), online betting websites are now experiencing a spike in blocked transactions, some of which are apparently “legal”.

And not that U.S. players are not finding ways to gamble at online casinos (because they are), it’s just simply a big fat mess on the regulatory front. Looking back, Congressman Barney Frank’s labeling of the UIGEA as the “stupidest law ever passed” rings even truer today. So, while Barney Frank and others are working to get the UIGEA overturned and new legislation passed to effectively regulate online gambling, other politicians with interests in parimutuel horserace wagering are looking to pass legislation that would clarify the vagueness of the UIGEA.

Introducing House Representatives Scott Murphy (New York Democrat) and Brett Guthrie (Kentucky Republican). Basically representing the two largest horseracing jurisdictions in America, the pair are teaming up to drum support for the “The Wire Clarification Act”, aka House of Representatives 5599. The legislation, if passed, will apparently provide clarification that the Wire Act (the original bill that apparently made internet gambling transactions illegal, despite the fact that the internet didn’t even exist at the time) is not applicable under regulated activities of the Interstate Horseracing Act.

Now, I don’t know about everyone else, but does it seem strange there is no mention of the UIGEA in this bill? I mean, wasn’t the UIGEA supposed to supersede or at least clarify The Wire Act? It’s as if nobody wants to even touch the UIGEA. Why that is, is well, anybody’s guess. Stepping on toes maybe? Or is this a concession to the overall view that the UIGEA is such a messy bill that will eventually become null and void, and so why bother with it? It definitely makes you wonder.

In the meantime, Congressman Murphy from New York says the $210 million brought in from the Aqueduct Racetrack, Belmont Park and Saratoga Race Course last year, contributed $18.5 million to the New York Racing Association, and that the industry itself is now worth $39 billion, with online wagering making up a “substantial portion” of said revenue.

New York Horseracing Industry, NYRA, Awarded $25 Million Loan to Keep Afloat

Sunday, May 30th, 2010

Another Packed House at New York's Aqueduct Horse Racing Track

Another Packed House at New York's Aqueduct Horse Racing Track

As low an approval rating as New York Governor David Patterson has, at least he has the support of the New York Racing Association, which is pretty happy right now. Well, I’d be pretty happy too if somebody gave me a $25 million loan. That’s right folks. Just when you thought the antiquated horseracing industry was about to die off like it rightfully should, the State of New York has stepped in to give the UIGEA another opportunity to engage one of its carveouts.

In case you are wondering how that might work, the UIGEA permits online horserace betting through State-licensed operators. It is one of the three niche carveouts referred to in the UIGEA as not being an “illegal form of online gambling”, although the UIGEA doesn’t go on to define what those illegal forms even are. Go chew on that. One would think that in order for the New York horseracing industry to stay afloat this time around, it will need to start asserting itself in the highly competitive online marketplace. The only thing is that the NYRA has been doing that for several years! Obviously, it’s not working. Can you say “SNAFU”?

Personally, I am ever so interested to hear what excuse the NYRA has this time around. Before the UIGEA, they were crying bloody murder against online casinos, sportsbooks and poker rooms, saying the New York horserace industry was losing business to illegal online gambling websites. Next, they are going to say it’s all because of the internet. Heck, they might even blame it on Starbucks, citing all the caffeine addicted Wifi users as potential bettors. But hold on just a second. They can bet online while drinking their latte in Starbucks, remember?

Apparently, even with protectionist legislation in its favor to thrive online, the New York horseracing industry can’t help but go downhill. Face it Governor Patterson – it’s a dying industry. Have you been to the racetracks, Governor? Yes, you probably have. You wouldn’t know it, but that’s because you are part of the dying generation that is trying to sustain a dying industry. Those two don’t go hand-in-hand. The truth of the matter is that the NYRA has not even said how they will go about keeping the State’s three largest horseracing tracks (Belmont, Saratoga and Aqueduct) from feigning another shutdown, let alone how they intend to pay back $25 million in tax payer dollars.

At this stage, the only semblance of hope for the New York horseracing industry is the installation of new video lottery terminals, which has apparently been dragging on since 2001(no operator has been named to run the terminals. Big surprise, eh?). In fact, it was the delay of these video terminal installations that prompted Governor Patterson’s office to draw up legislation covering the $25 loan. The State of New York was supposed to subsidize the NYRA if the terminals were not installed by April, 2009. Obviously, that hasn’t been happening. So let’s just give the NYRA a $25 million loan to buy some more time, shall we?

NYRA Chairman, Steven Drucker, certainly doesn’t mind. He had this to say in a recent press release: “The board of directors of the New York Racing Association Incorporated along with its management and dedicated employees are grateful for the State Legislature’s approval last evening of a $25 million loan, which guarantees world-class thoroughbred racing at Belmont Park, Saratoga Race Course and Aqueduct Racetrack…We appreciate the dedication and perseverance of Governor David Paterson, Assembly Speaker Sheldon Silver, Senate Conference Leader John Sampson, Senate Racing Committee Chairman Eric Adams and Assembly Racing And Wagering Committee Chairman Gary Pretlow and their respective staff members, which resulted in this legislation.”

Remember those names folks. Come reelection time, it will be very interesting digging through their campaign contributions.

Online Gambling Entrepreneur, Daniel Tzvetkoff, Gets Bail; Awaits Trial in New York

Friday, April 23rd, 2010

Contrary to the predictions of his own lawyer and against the wishes of U.S. prosecutors, Daniel Tzvetkoff, the 27-year old Australian entrepreneur who was arrested in Las Vegas on charges of bank fraud, money laundering, and illegal online gambling activities (all of which I pretty much thought was illegal in the U.S. anyhow), has posted bail on account of his father, Kim Tzvetkoff, who travelled from Brisbane, Australia to appear before a Judge and put his $1.17 million house up for bond.

Appearing before US Federal Court Judge Peggy Leen, Kim Tzvetkoff said he understood the implications of his son not showing up for his court appearance, i.e, losing his house. He also said he would carry out the Judge’s orders and drive his son from Las Vegas to New York, where Daniel Tzvetkoff will wear a GPS tracking bracelet and abide by a curfew as he waits for his trial (date yet to be determined).

While granting bail to a U.S. citizen in the same circumstance would be a no-brainer according to Judge Leen, she cautioned that Tvetkoff’s release into his father’s custody could be delayed for several days as an immigration detention order is still being imposed and would have to be fought by Tzvetkoff’s lawyers. In the meantime, Tzvetkoff remains in custody at the Las Vegas Detention Center, which to Tzvetkoff’s good fortune, is where white collar criminals are held – separate from State criminals being held on charges of robbery, drugs, rape and the like.

Although prosecutors argued in the bail hearing that Tzvetkoff could serve at least 24 years in prison for his crimes and would likely flee to anywhere in the world and set up online businesses once again, Tzvetkoff’s defense attorney, Robert Goldstein, argued that his client had no criminal record, was just a kid who started his first internet business inside the basement of his parent’s home, and furthermore, that Tzvetkoff had legitimate concerns for the health of his seven-month pregnant wife, who will evidently be staying with Tzvetkoff in New York as he awaits his trial.

Judge Leen was obviously won over by the latter, granting Daniel Tzvetkoff a little more freedom before it is likely taken away at the outset of his trial. However, contrary to some earlier reports that Tzvetkoff could face up to seventy-five years in prison, considering the fact that illegal gambling is considered a misdemeanor in the State of New York, Daniel Tzvetkoff is more likely to face 10-16 months in prison – still a long way off from the days of unbridled luxury living, sports cars, yachts and fancy mansions.