NJ iGaming Profession History $245 Million in Takings Over 2017 for 24.9% Uptick

NJ iGaming Profession History $245 Million in Takings Over 2017 for 24.9% Uptick

New Jersey’s online gambling industry ended 2017 in style, as state-licensed iGaming sites posted monthly revenue of $ 20.75 million for a 12.9 percent increase year-on-year.

December marked the third straight month of revenue growth, capping off a record-breaking year that saw New Jersey iGaming generate $ 245.6 million in annual revenue. The figure easily surpassed last year’s annual revenue of $ 196.7 million, good for a year-on-year gain of 24.9 percent.

When net gaming wins were divided by game type, the casino segment – comprised of table games and slots – was the clear market leader. Casino games accounted for $ 221.3 million, or more than 90 percent, of the annual revenue haul. With more than $ 50.1 million in annual revenue added, the casino segment grew by 30.1 percent year-on-year.

On the other side of the coin, poker revenue dropped slightly from $ 26.5 million in 2016 to $ 24.2 million last year, down 8.5 percent on the year.

The Golden Nugget licensing group – which includes GoldenNuggetCasino.com, BetfairCasino.com, and PlaySugarHouse.com – was the overwhelming leader in December. Golden Nugget licensees posted $ 6.08 million in combined monthly revenue, well ahead of the Borgata licensing group (BorgataCasino, BorgataPoker, and PartyPoker among others) at $ 4.3 million.

The Golden Nugget has dominated New Jersey iGaming since August of 2016, all without an affiliated poker product. Instead, the group rolled out the state’s first Live Dealer table games, which connect players via live stream to human dealers operating genuine casino equipment from within a dedicated onsite studio.

Golden Nugget licensees combined for $ 68.6 million in annual revenue across 2017 – up an astounding 62.3 percent over 2016 – handily beating out Borgata at $ 48.5 million (3.2 percent increase year-on-year).

In early 2011, lawmakers in the Garden State voted to authorize regulated iGaming, but Governor Chris Christie rejected the plan as unfeasible under federal law. At the time, the Department of Justice (DOJ) interpreted the Wire Act of 1961 – a federal ban on sports betting via the telephone – loosely enough to apply the law to all forms of online gambling.

That changed in December of 2011, when the DOJ released a memorandum limiting the Wire Act to sports betting only. As a result, individual states were free to legislate iGaming on their own terms, and by 2013 a newly passed bill was signed into law.

By 2014, the industry generated $ 122.9 million in annual revenue, a figure which has grown by at least 20 percent in every year since. The market’s monthly revenue peaked at $ 21.7 million in March of 2017.

Given Attorney General Jeff Session’s previously stated opposition to online gambling legalization, and recent attempts to revive the “Restore America’s Wire Act” effort to ban iGaming on the federal level, New Jersey’s political establishment has rallied in bipartisan fashion to save the state’s cash cow.

In a letter sent to Deputy Attorney General Rod Rosenstein of the DOJ, New Jersey’s senior U.S. Senator Bob Menendez (D-NJ) and nine colleagues representing both sides of the aisle directly referenced the record-setting run of revenue growth:

“Since 2011, New Jersey has enjoyed robust revenues from online gambling.

In fact, 2017 has already shattered records with $ 200 million in revenue in the first ten months.

This has coincided with a rebirth of Atlantic City. This growth in revenue is in large part due to significant capital investments by the state in online gaming facilities, equipment, and technology that makes online gaming safe and secure.”

With gross gaming revenue taxed at a 15 percent rate, December’s totals sent $ 3.3 million straight into the state’s coffers. Since the launch of regulated iGaming in 2013, New Jersey has generated $ 126.6 million in tax revenue.

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U.K. Regulator Investigating 17 iGaming Operators Over Money Laundering & Problem Gambling

U.K. Regulator Investigating 17 iGaming Operators Over Money Laundering & Problem Gambling

The United Kingdom Gambling Commission (UKGC) has warned each of the 195 iGaming operators within its jurisdiction, directing them to review policies on money laundering and problem gambling prevention.

In a form letter dated January 4, operators were updated on the findings of a recent UKGC compliance assessment.

The regulator focused on each company’s adherence to crucial regulations – including the Proceeds of Crime Act of 2002 (POCA) and the Money Laundering, Terrorist Financing, and Transfer of Funds Regulations of 2017 – designed to prevent criminal elements from laundering funds through online gambling.

Additionally, the UKGC examined how operators have implemented Breach of Social responsibility (SR) code provision 3.4.1.1(e) which states “licensees must put into effect policies and procedures for customer interactions where they have concerns that a customer’s behaviour may indicate problem gambling.”

According to the letter, the UKGC has already opened active investigations into 17 operators concerning their compliance with either, or both, of the regulations. Furthermore, the agency revealed that five operators will have their licenses subject to review under section 116 of the Gambling Act of 2005.

The operators in question were not mentioned by company name or license number.

In an accompanying statement, UKGC chief executive Sarah Harrison explained the letter’s intent:

“It is vital that the gambling industry takes its duty to protect consumers and keep crime out of gambling seriously.

The Gambling Commission’s new strategy sets out our vision for a fairer and safer gambling market.

The action we are taking to examine online casino operators’ compliance with money laundering and customer interaction requirements is just one example of how we will be relentless in turning that vision into reality.”

The letter identified several widespread deficiencies within the industry.

When employees who have been designated as Money Laundering Reporting Officers (MLRO) were tested on their knowledge, the UKGC found that some “were unable to provide suitable explanations as to what constitutes money laundering and had no understanding of the main principles under POCA.”

The agency also determined that Suspicious Activity Reports (SROs) were routinely submitted to the National Crime Agency (NCA) and Financial Intelligence Unit (FIU), operators largely ignored recommendations provided in return.

Operators in the U.K. are also required to screen data pertaining to player activity – including deposits and wagers – to identify users exhibiting symptoms consistent with problem gambling. When players exhibiting addictive tendencies were spotted, operators regularly failed to initiate the required “customer interactions,” such as informing players about their ability to impose betting limits, or making self-exclusion readily available.

In the letter, the UKGC made it clear that these customer interactions were made infrequently, even when operators had evidence that problem gambling may be occurring:

“We reviewed a large number of customer accounts during the assessments and identified potential signs of problem gambling based on consumers’ gambling pattern and spend. In many cases, however, this behaviour did not trigger a customer interaction.

Customer account records did not show any evidence of customer interactions taking place and operators were of the view that these customers did not raise any concerns.”

While the letter was limited to current regulations, Harrison made it clear that the UKGC is continually updating and adjusting its policies to reflect the iGaming industry’s ongoing evolution:

“As the online sector continues to grow, and now accounts for a third of the British gambling market, it is right that we maintain a sharp focus on online gambling.

That is why in addition to our work on compliance among online casino operators, we have also been conducting a wider ranging review of online gambling looking at how the market has evolved and to identify where further action can be taken to make gambling fairer and safer for consumers.”

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Golden Nugget NJ Becomes First iGaming Platform in U.S. to Offer Live Dealer Casino Hold’em

Golden Nugget NJ Becomes First iGaming Platform in U.S. to Offer Live Dealer Casino Hold’em

Online gaming enthusiasts in New Jersey received another gift from GoldenNuggetCasino.com in the days before Christmas, when the site launched the first live dealer Casino Hold’em tables in the country.

Since rolling out live dealer Casino Hold’em on December 23, the primary iGaming platform operated by Golden Nugget Atlantic City has run the game on a daily basis between 3 p.m. and 3 a.m. local time.

Live dealer games connect online casino players directly to a dedicated studio built within the Golden Nugget casino. From there, professional dealers operate genuine cards and other casino equipment while running real table games, including blackjack, baccarat, and roulette. Players at home are able to place bets and sweat the action in real time, without worrying about the integrity of unseen random number generators and other risk factors associated with traditional online gambling.

Casino Hold’em is a variant on classic Texas Hold’em, designed in 2000 by Stephen Au-Yeung to be played as a house-banked table game. Players begin by placing an ante bet in exchange for a two-card starting hand, while the dealer takes their own two-card holding. After three community cards, called the “flop,” have been dealt, the player may opt to fold and forfeit their ante bet, or place an additional bet of equal size to call.

Upon calling, two more community cards are dealt (the “turn” and “river”), at which point the player and the dealer expose their starting cards. Using any combination of those two cards and the community cards, players make their best possible five-card poker hand in hopes of beating the dealer for an even money payout. Additionally, players can win progressively larger prizes using the Ante-Win pay table by forming high hands (four of a kind, straight flush, etc).

Golden Nugget became the first legal and regulated iGaming operator in America to offer Casino Hold’em as a live dealer game.

In a public statement, Golden Nugget’s senior vice president and general manager of online gaming Thomas Winter celebrated the historic product launch:

“Being the first to offer a Live Dealer version of the world’s most popular poker game in America, Casino Hold’em, shows our commitment to delivering on an innovative and world-class product to our patrons.

Our patrons have asked, and we are happy to deliver, on this request using our unique live-dealer digital platform.”

The new Casino Hold’em tables are operated in conjunction with Ezugi, a company specializing in furnishing live dealer studios and products. In August of 2016, Ezugi partnered with the Golden Nugget Atlantic City to construct the first live dealer facility serving the regulated American iGaming market.

Kfir Kugler, who serves as chief executive officer for Ezugi New Jersey, offered his own statement on the addition of Casino Hold’em:

“We are again honored to partner with GoldenNuggetCasino.com and Golden Nugget Atlantic City to bring the first ever online live dealer Casino Hold’em to America and New Jersey.

America is in love with poker, and by using the Live Dealer platform, the game retains its strong connection between the player and the dealer in a live environment.”

In July of 2016, the month before becoming the online live dealer provider in New Jersey, GoldenNuggetCasino.com generated just over $ 3.7 million in monthly casino revenue – just ahead of larger and more well-established competitors like Borgata ($ 3.3 million) and Tropicana ($ 3.2 million).

By December of that year, with live dealer games proving especially popular with players, the site jumped to $ 4.7 million in monthly revenue while Borgata and Tropicana both dipped to $ 3 million.

At the time, Winter attributed the site’s dominant market share directly to the introduction of live dealer games.

Today, the Golden Nugget remains the lone provider of live dealer products in the state, both through GoldenNuggetCasino.com and fellow licensee Betfair.

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Pennsylvania Adds Possibility iGaming Sportsman as Boyd Casual gaming Gains Valley Form Internet casino

Pennsylvania Adds Possibility iGaming Sportsman as Boyd Casual gaming Gains Valley Form Internet casino

As part of a series of acquisitions completed to close out 2017, Boyd Gaming Corporation has added Pennsylvania’s Valley Forge Casino Resort to the company’s burgeoning portfolio.

Per a press release issued on December 20, the Las Vegas-based Boyd Gaming acquired the casino from Valley Forge Convention Center Partners for a purchase price of $ 280.5 million. As a result, Boyd Gaming makes its first entrance into the lucrative Pennsylvania market – which has been built into the second-largest statewide commercial gambling industry in the United States, trailing only Nevada.

Valley Forge Casino Resort is located in King of Prussia, Pennsylvania, a small township 20 miles northwest of the Philadelphia metropolitan area. Despite its status as one of the state’s smaller casinos, Valley Forge is home to 600 slot machines and 50 table games spread throughout 35,000 square feet of gaming space.

With the addition, Boyd Gaming will operate 29 casino properties throughout 10 states. Of those, the majority are located in Las Vegas (Gold Coast, Orleans, Sam’s Town), with others in Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, and Ohio.

Boyd Gaming announced the terms of its Valley Forge deal just two days after another major acquisition moved forward. On December 18, the company agreed to pay $ 575 million to purchase four casino properties – Ameristar St. Charles (Missouri), Ameristar Kansas City (Missouri), Belterra Casino Resort (Indiana); and Belterra Park (Ohio) – from Penn National Gaming, which had only recently acquired them from Pinnacle Entertainment.

In a statement, Keith Smith – who serves as president and chief executive officer for Boyd Gaming – commented on the company’s casino shopping spree:

“With the successful completion of our acquisitions of Valley Forge and the Pinnacle assets, Boyd Gaming will gain direct access to four of the nation’s largest gaming markets – Philadelphia, St. Louis, Kansas City and Cincinnati – with a combined population of nearly 10 million adults.

We believe this expansion will help drive additional growth throughout our nationwide portfolio, as we market our destination properties to these new customers in the Midwest and Northeast.”

And while the Valley Forge deal is expected to close in the third quarter of 2018, Boyd Gaming is already being mentioned as a potential player in Pennsylvania’s newly legalized online gambling industry.

In late October of last year, Governor Tom Wolf signed a comprehensive gambling expansion bill into law – regulating online casinos, poker rooms, slot parlors, daily fantasy sports (DFS) platforms, and lottery ticket sales in the process. As a result, Pennsylvania became the fourth state to legalize online gambling, joining Nevada, New Jersey, and Delaware.

The new law stipulates that any of Pennsylvania’s 12 brick and mortar casinos, Valley Forge included, can apply for an online gaming license.

As the former part-owner of the Borgata casino in Atlantic City – the license-holder behind several successful online casinos and poker rooms in New Jersey – Boyd Gaming has prior experience in the iGaming industry. The company sold off its share of the Borgata in 2016, but as Smith alluded to in his public comments on the Valley Forge deal, Pennsylvania’s recently passed legislation provides another entry point to an online presence:

“The acquisition of Valley Forge Casino Resort is another excellent opportunity to further grow and diversify our nationwide portfolio.

And thanks to Pennsylvania’s recent passage of gaming expansion legislation, there are new opportunities to drive incremental growth at Valley Forge through the expansion of the property’s slot capacity and the introduction of new forms of gaming.”

And back in 2014, while praising the Borgata’s newly launched iGaming properties, Smith set Boyd Gaming apart from fellow brick and mortar casino operators by refuting the “cannibalization” argument routinely used against iGaming expansion:

“Online gaming is growing our database creating a long-term opportunity to market Borgata to an entirely new group of customers.”

The Pennsylvania Gaming Control Board is currently crafting a regulatory framework for iGaming in the state, and the industry is expected to launch in the second half of 2018.

 

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New Jersey Legislator Introduces Bill to Allow International iGaming Player Pool Sharing

New Jersey Legislator Introduces Bill to Allow International iGaming Player Pool Sharing

New Jersey operates the most successful statewide online gambling industry in America, but lawmakers in the Garden State are gearing up for international integration.

On November 30, state senator Ray Lesniak (D-20) introduced Senate Bill 3536, which would revise current regulations by allowing computer servers and other equipment used in New Jersey’s iGaming industry to be operated outside of Atlantic City.

If passed, SB-3536 – which is bears the title “An Act Allowing Location of Internet Gaming Equipment Outside of Atlantic City Under Certain Circumstances” – would pave the way for New Jersey to share its online casino and poker player pools with international operators in Europe and elsewhere.

In a concluding statement attached to SB-3536, Lesniak summarized the bill’s intent:

“Under current law, Internet gaming equipment is required to be located within the territorial boundaries of Atlantic City.

This bill allows the division to permit Internet gaming equipment to be located outside of Atlantic City if the division deems it necessary to facilitate the conduct of international Internet wagering.”

Existing regulations were put in place by the New Jersey Division of Gaming Enforcement (NJDGE) in 2013, when New Jersey legalized online gambling through licenses issued to Atlantic City casinos. Under the New Jersey State Constitution, gambling activity in New Jersey is confined to Atlantic City only, and requiring essential equipment involved in the iGaming industry to be physically located there preserves the iGaming law’s constitutionality.

But as Lesniak noted in his bill’s text, NJDGE regulations also permit player sharing agreements with other jurisdictions – including foreign nations – provided such agreements remain consistent with federal law.

In October of this year, New Jersey forged such an agreement with Nevada and Delaware, the two other states which had legalized iGaming at the time (Pennsylvania has since passed legislation to become the fourth).

And in August, a preliminary agreement to share online poker player liquidity with the United Kingdom fell through, in large part due to the current locational law.

At the time, NJDGE director David Rebuck explained how an emphasis on Atlantic City served to scuttle the U.K. deal:

“Our law is very restricted in that the gaming servers, the actual gaming servers that allow for the outcome of the game to be determined, have to be in Atlantic City, and that’s just not a business model that they were willing to adopt.

If those states will not allow their gaming servers for online gaming to be here, we really are kind of stuck, unless there is a legislative change. We’re not in a very strong position to effectuate liquidity with those restrictions.”

By removing the current restrictions and allowing similar agreements to be enacted, Lesniak’s bill would let international players access New Jersey’s online casinos and poker rooms.

So-called common operators – or iGaming companies like PartyPoker, PokerStars, and Betfair currently serving customers in New Jersey and abroad – would benefit through increased player liquidity. Per data compiled by player volume tracking site PokerScout, the New Jersey-based PokerStars platform maintains a seven-day average of just 110 active players at any one time. If connected to the international site through player sharing, that number would grow by 11,000 players.

Lesniak has spent much of his four decades in the New Jersey statehouse advocating for gambling expansion, and he issued a statement explaining where SB-3536 fits into his legacy:

“I’ve changed my mission from making New Jersey the Silicon Valley of internet gaming to the Mecca of internet gaming.

Online gaming has helped Atlantic City revive its casino sector with a success that we can expand in ways that will generate more revenue, create jobs and fuel technological innovation in gaming.”

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Special iGaming Commission in Massachusetts Recommends Game of Chance Classification for DFS

Special iGaming Commission in Massachusetts Recommends Game of Chance Classification for DFS

Days after issuing a draft document which recommended the state classify daily fantasy sports (DFS) as “online gaming,” a special panel appointed to study iGaming legislation in Massachusetts has voted to finalize their report.

The Massachusetts Special Commission on Online Gaming, Fantasy Sports Gaming and Daily Fantasy Sports – which was created last September after the state passed DFS legislation – released its draft report on July 25. The Commission had been tasked with studying all forms of online gambling, including poker, casino games, and DFS, before reporting their findings and recommendations to the state legislature.

The panel, which includes Massachusetts Gaming Commission (MGC) Chairman Stephen Crosby, then held a formal vote on July 31 – the stated deadline for its report to be delivered. By a 5-3 margin, the Commissioners elected to approve that report and send it on to lawmakers for review.

In their final findings, the Commission recommended that DFS remain fully legalized in Massachusetts – but that it should be regulated as online gaming rather than a game of skill:

“At this time, the Special Commission recommends legalizing DFS as a subset of online gaming and enacting legislation that would put into law the proposed regulatory, governance, and taxation system described above,” the report says.

“However, the Special Commission recommends not legalizing more expansive online gaming at present, particularly in consideration of the fact that two resort casinos are not yet open, but urges re-evaluation in the near future and legislative oversight to continue to evaluate online gaming and activity at state and federal levels.”

The decision has drawn the ire of DraftKings and FanDuel, the two major operators within the DFS space, as both companies have argued consistently for the game of skill designation.

James Chisholm, who serves as director of public affairs for DraftKings, issued a statement addressing the Commission’s findings:

“While this commission report is merely a recommendation, it runs directly counter to the economic development law that overwhelmingly passed last year designed to promote the state’s Innovation Economy. The commission’s actions today, as we and our partners in the fantasy sports industry pointed out time and time again, could restrain our company’s ability to thrive and create jobs here in Massachusetts.

These recommendations if ever adopted would put us behind every other state in the country on this issue, and send a troubling message to other startups. We urge Governor Baker, Speaker DeLeo, Senate President Rosenberg, and rest of the Legislature to reaffirm their commitment to Massachusetts startups and reject these ill-advised recommendations in whatever legislation is finalized.”

FanDuel declined to offer comment on the matter, but considering that the two companies have recently issued joint statements on other subjects, the second-leading DFS operator is ostensibly opposed to the panel’s findings as well.

In October of last year, shortly after joining the Commission, Crosby outlined his stance on DFS’ ongoing debate over the role of skill versus chance in an interview with Global Gaming Business Magazine:

“There have been millions of dollars spent litigating whether DFS is a game of skill or a game of chance, and if it’s some skill is it enough skill to make it avoid the regulations of games of chance. That just makes no sense to me.

“What difference does it make as a matter of public policy whether you gamble on the throw of dice or the throw of a dart? Does it make any difference that one is skillful and one is pure chance? Should they be regulated any different? I just don’t get that.”

The current legislation deeming DFS to be legal in Massachusetts includes a sunset provision, which allows the law to expire in August of 2018.

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iGaming Industry Continues to Grow on Global Level

iGaming Industry Continues to Grow on Global Level

A trio of stories making headlines in the iGaming world shows that while online gambling may be controversial in the United States, international locales are increasingly interested in getting in the action.

Russian Sports Betting Should Double by 2022

A recent report by the online sportsbook review site Bookmaker Ratings predicts that the Russian market will grow at a rate of more than double between now and 2022.

Per the study, Russia’s existing market for regulated sports betting currently hauls in an approximate annual handle of 677 billion rubles (USD$ 10.1 billion) – but that number is expected to jump to 1.4 trillion rubles (USD$ 22.4 billion) during the next five years.

The government of Vladimir Putin authorized legal sports betting in 2014, replacing an entrenched system of illicit underground bookies and offshore sites – a fact which Bookmaker Ratings viewed as a potential hurdle to those lofty growth goals:

“The main obstacles to the transition of players to the Russian legal bookmakers, are the complexity of identity verification and desire of players to avoid playing personal income tax.”

Factors driving the predicted boost in annual handle include the entrance of established European sites via an expanded licensing process, and the commencement of the 2018 World Cup.

At the moment, Russia licenses 29 operators to accept real money wagers on sporting events, 11 of which maintain online platforms.

Jamaica Set for Legalization and Regulation

A report published on June 18 by the Trinidad and Tobago Guardian detailed measures taken by prominent government officials who are actively pursuing iGaming regulation.

Audley Shaw, who serves as Minister of Finance and Public Service, recently delivered an address to the 7th Caribbean Gaming Show and Summit. With the Jamaican government considering an iGaming bill since 2014, Shaw revealed that international online gambling operators have been invited to apply for licensing:

“Since last year, the Casino Commission has met with two large international investors, which are now advanced in the preparation of their applications for Integrated Resource Development status.

With these developments, there is a lot of optimism for the growth potential of the gaming sector.”

In 2014, Member of Parliament Horace Dalley spoke to the Jamaica Observer and outlined the case for iGaming regulation:

“Internet gaming is happening right now in Jamaica. Therefore, it is time that we make that progression to this methodology of gaming, as Jamaicans are already well-equipped with the devices to facilitate this.”

Shaw provided his own justification, observing that the country’s gaming sector recorded revenues of JD$ 111.25 billion (USD$ 863 million) in the 2016/2017 fiscal year – up from JD$ 91.9 billion (USD$ 713 million) year-on-year.

Kenya Implements 35 Percent Tax on Operators

Responding to the rapid rise of online sports betting and lottery sales in Kenya, legislators recently enacted a heavy tax burden on operators which is designed to curb the industry’s growth.

After initially proposing a 50 percent tax on revenue for iGaming companies – which was rejected by the country’s president Uhuru Kenyatta – lawmakers in Kenya compromised with a 35 percent tax hike.

That tax obligation adds to the 30 percent corporation duty imposed by the Kenyan government.

The legislature reached its agreement on the final day of the current session, amending the Betting, Lotteries, and Gaming Act’s current 15 percent tax on iGaming revenue by more than double.

With a federal election on August 8 looming, president Kenyatta issued a stern statement which positioned the tax hike as a tool to increase fees charged by operators, and thus reduce the demand for online betting products:

“The purpose of the amendment of section 59B of cap 469 was to discourage Kenyans and especially the youth in directing their focus on betting, lottery and gaming activities instead of productive economic engagements, a vice that is likely to degenerate into a social disaster.”

In recent years the Kenyan media has highlighted the country’s online sports betting craze, typically covering stories of young and impoverished bettors who fail to find their fortune online.

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Massachusetts Special Commission Set to Recommend iGaming for 2018 Passage

Massachusetts Special Commission Set to Recommend iGaming for 2018 Passage

Just over nine months after its creation, Massachusetts’ Special Commission on Online Gaming, Fantasy Sports Gaming, and Daily Fantasy Sports is reportedly on the verge of recommending full iGaming legalization to the state’s legislature.

Per a report published by State House News Service on June 6, the Special Commission “has been studying the ever-changing world of online gaming and gambling (and) may be poised to recommend an all-inclusive approach to regulating the multifaceted industry.”

With a July 31 deadline to deliver its official findings looming, the nine-member panel of legislators, regulators, and industry experts appears to have formed a consensus on the once contentious issue of regulated online gambling.

Representative Joseph Wagner (D-Chicopee) – who serves as chairman of the Joint Committee on Economic Development and Emerging Technologies and co-chair of the Special Commission – told State House News Service that the debate now boils down to choosing the best method for eventual iGaming implementation:

“There are three options I think that we will look at.

There’s the gaming option, a type of structure where we have a separate law that would govern this; the omnibus approach, which is where we would give some authority some authority to oversee all of this; or to just simply let it play out for some time or more going forward.”

The Massachusetts Legislature embarked on an ambitious overhaul of the state’s gambling industry beginning in 2011, with the passage of the Expanded Gambling Act calling for the construction of three resort-style casinos.

By 2015 the state’s Attorney General instituted new policies to regulate the daily fantasy sports (DFS) industry, prompting further legislative discussion on the matter of full iGaming legalization. Those discussions eventually led the Massachusetts Gaming Commission (MGC) to form a Special Commission tasked with studying the industry’s viability.

Along with Wagner, the Special Commission is co-chaired by state senator Eileen Donoghue (D-Lowell). Other members include MGC chairman Stephen Crosby, state senator Jennifer Flanagan (D-Worcester and Middlesex), representative Mark Cusack (D-Norfolk), representative James Kelcourse (R-Essex), assistant attorney general Dan Krockmalnic, senatorial legal counsel Hirak Shah, and chairman of the Fantasy Sports Trade Association (FSTA) Peter Schoenke.

As a proponent of the omnibus approach, which would regulate all forms of iGaming under the same umbrella, Crosby commented on the need for centralized third-party oversight – either through the MGC or another body:

“Our view is that the Legislature’s job is to determine whether or not we want gambling online to be legal, and if the answer to that is yes – which it sort of presumptively appears to be – then come up with a regulatory environment that can deal with all of these things as they come down the pike and not have to try to be in a reactive mode.

And it could be the Gaming Commission, that makes a lot of sense. Though if it goes to somebody else it’s totally fine with us, we’re not invested in it one way or another.

Then give that agency really clear parameters of protection, what needs to be attended to for all these new gambling processes online, give them the ability to regulate and with the nimbleness and speed that is required.”

Bills which would’ve legalized online casinos, poker rooms, DFS contests, and lottery sales were introduced during the 2017 legislative session, but progress stalled in the Senate. The issue was essentially punted to next year, pending the Special Commission’s final recommendation report on July 31.

Chief among the reasons for this year’s delay is the integration of Massachusetts’ new land-based casino industry.

The state’s first brick and mortar gambling venue, Plainridge Park Casino, opened its doors in June of 2015, while the MGM Springfield and Wynn Boston Harbor casino resorts are scheduled to open in 2018 and 2019, respectively.

Crosby commented on the importance of working with the state’s newest gambling industry stakeholders, especially given the success of New Jersey’s use of land-based casinos as license holders and operators:

“If there is going to be a major change in the gaming world … the bricks and mortar people have to be attended to. Wynn is putting down $ 2.4 billion, MGM is putting in $ 1 billion and their economic interests, just to be fair, should be seriously considered.

Probably, we would think that online casino gaming – and we’ve got a definitional problem here – online casino gaming probably should be anchored in the bricks and mortar casinos.”

Special Commission members must deliver written opinions to co-chairs Wagner and Donoghue by June 16, while a final public meeting will be held at some point between now and July 31.

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Pennsylvania House Passes iGaming Bill to Set Stage for Final Negotiations with Senate

Pennsylvania House Passes iGaming Bill to Set Stage for Final Negotiations with Senate

Exactly two weeks after the Pennsylvania Senate voted to pass a comprehensive gambling bill, one which would regulate online casino games, slots, poker, and daily fantasy sports (DFS), the state’s House has done the same.

In a vote held on June 7, the full House voted 102-89 in favor of passing H-271 – an omnibus legislation package which expands Pennsylvania’s land-based casino industry, while creating a new regulatory framework for legal online gambling.

The next stage in the legislative process sends the bill back to the Senate, which passed its own version of H-271 by a 38-12 margin on May 24. But despite an apparent agreeance between the two bodies on the issue of iGaming regulation, the version of H-271 passed by the House differs in several major ways from the Senate’s previous attempt.

The Senate’s preferred model would see annual revenue generated by online slots and table games taxed at a rate of 54 percent, with the tax dropping to 16 percent for online poker.

Under the Senate’s plan, Pennsylvania would also charge online casino operators a licensing fee of $ 5 million, while online poker operators would pay a secondary licensing fee of $ 5 million – bringing the total cost to $ 10 million for most major iGaming companies which connect both platforms.

The text of H-271 as passed by the House modifies this taxation scheme – which is much higher than the 17.5 percent rate successfully implemented by neighboring New Jersey – to institute a flat 16 percent tax on all online gambling revenue. The dual licensing fee plan has also been modified, with the House seeking a one-time payment of $ 8 million to cover online casino and/or poker operators.

The partisan breakdown for the House vote saw 24 Democrats break ranks to join 78 Republicans voting for H-271, while 38 GOP lawmakers added their names to the list of 53 Democrats standing in opposition.

As reported by PennLive, Representative Dave Reed (R-Indiana County) – who serves as the House Majority Leader – discussed the higher revenue projections attached to the adjusted H-271:

“This is building upon the Senate proposal and will actually enhance revenue a little further.”

Initial revenue projections tabbed the potential increase from H-271’s passage at between $ 109 million and $ 147 million, under the Senate’s higher tax rate. But with many major iGaming operators already balking at the 54 percent tax, going on record to say they’ll simply sit out rather than join Pennsylvania’s new market, Reed’s prediction of “enhanced revenue” is based on attracting the industry’s most established operators to the state.

According to the House’s own revenue projections, the new version of H-271 would generate between $ 250 million and $ 300 million in new revenue for the state.

That increase of more than double takes into account the most controversial aspect of the House’s amended bill, which allows for casino gaming via video gaming terminals (VGTs) to be installed within non-gaming locations like airports and cafés.

Even so, Reed told PennLive that the House is actively seeking to avoid the sort of inflated revenue forecasts that have plagued states like Massachusetts and New York during similar iGaming legislation discussions:

“We want the most conservative estimate possible. We don’t want to overestimate revenues and I know that was a request of the administration and the governor’s office as well.”

Rep. Gene DiGirolamo (R-Bucks County) told PennLive that the inclusion of VGTs could be a potential deal-breaker for lawmakers who already had reservations about gambling expansion:

“This has the potential to be a disaster for our children, our families and our communities.”

Following the House vote, the Senate will now reevaluate the text of H-271 – with tax rates and the VGT issue chief among the negotiating hurdles. Should the two bodies reach a compromise, the final text of H-271 would then be sent to Governor Tom Wolf to be signed into law.

For his part, Gov. Wolf has remained on the proverbial sidelines during the extended debate, offering no public statements for or against H-271.

That trend continued after the House vote, as a spokesperson for Gov. Wolf offered only a noncommittal comment on the matter:

“(The Governor) is committed to continuing to work with all four caucuses to reach consensus on a gaming proposal.”

If and when Pennsylvania pushes its iGaming legislation through into codified law, the Keystone State will become the fourth in America to legalize and regulate online gambling – joining Nevada, New Jersey, and Delaware.

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Australia’s iGaming Onslaught Still is Poker Provider Penalized AUD$10,000

Australia’s iGaming Onslaught Still is Poker Provider Penalized AUD$10,000

During the 16 years which have passed since Australia enacted its Interactive Gambling Act (IGA) of 2001, the country has never prosecuted an online poker operator – until now.

As reported by The Australian, professional poker player Luke Gregory Brabin was fined AUD$ 10,000 by the Southport Magistrates Court, having been found guilty under the IGA of running an illegal gambling operation.

The 37-year old Brabin acquired the online poker platform play.pokerasiapacific.com in 2015, under the auspices of his company EV Plus Pty Ltd. He assumed ownership and operation of the Australian-facing site at that time, but Australian authorities have confined his criminal actions to the period between April and August of last year.

On August 10 of last year, a statement posted to the website and Facebook page maintained by Poker Asia Pacific announced the sudden closure of the site:

“Unfortunately, Poker Asia Pacific must suspend its services until pending legal action regarding the Interactive Gambling Act is resolved.

During this time, Poker Asia Pacific will be lobbying strongly to exclude online poker from the Interactive Gambling Act and ­resume its services without any legal implications.”

In November of last year, Australia’s federal government sought to strengthen existing laws covering the iGaming industry, including the IGA of 2001.

In crafting a new set of restrictions known as the Interactive Gambling Amendment Bill (IGAB) of 2016, Communications Minister Mitch Fifield followed up on the agenda of Senator Nick Xenophon. The anti-gambling political figure, who leads the Nick Xenophon Team (NXT) party, assumed the role of parliamentary “kingmaker” following last year’s elections, after NXT secured enough seats on the crossbench to influence major policymaking actions.

The initial objective of the IGAB was to tighten restrictions on “in-play” betting, or wagers placed as live sporting events are in progress. The original IGA of 2001 outlawed this practice, but unclear language in the law allowed for loopholes to be exploited, and up until the IGAB of 2016 was introduced operators of offshore online sportsbooks openly flouted the ban.

Unfortunately for Brabin, and millions of online poker players living in Australia, the IGAB of 2016 was written with open-ended legislative language, leaving only pre-game sports betting and casino games as exempted activities.
The Senate passed the IGAB in March of this year, but the law has yet to receive final assent, leaving Australia’s previously thriving online poker industry in a state of limbo ever since.

By December of last year, Poker Asia Pacific was posting regularly about the company’s lobbying efforts, in hopes of adding an online poker exemption to the IGAB before final passage.

But in an ominously worded post issued to the company’s Facebook feed on December 23 of last year, Poker Asia Pacific predicted that the entire industry would be rendered illegal upon the IGAB’s passage:

“If our efforts are not successful (then) online poker is likely to be banned in 2017 under the new bill (IGAB).
Which would mean Poker Asia Pacific would not be able to reopen and all of the other online poker sites would be banned as well.”

Even though the IGAB hasn’t become the law of the land just yet, it does call for the Australian Communications and Media Authority (ACMA) to dispense civil judgments against illegal operators. When the IGAB is fully assented, individual operators will be subject to fines of up to AUD$ 1.35 million per day, while companies may be fined up to AUD$ 6.75 million per day.

Not coincidentally, The Australian reports that the agency in question was indeed responsible for referring Brabin and his Asia Poker Pacific site to federal investigators.

Brabin declined to comment when asked by The Australian.

As a player, Brabin pocketed AUD$ 131,365 by winning an $ 1,100 Accumulator event at the 2014 World Series of Poker (WSOP) Asia Pacific event.

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