Tag: Legislation

Delaware Becomes First State to Launch Sports Betting

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Barely a month after the United States Supreme Court paved the way for nationwide legalized sports betting through a landmark ruling that lifted a federal ban on sports betting, Delaware has become the first state to launch sports betting. This move not only marks the dawn of a new era for both the gamblers and the operators but also gives a significant boost to legal sports betting in the country.

This began at 1.30 p.m. ET last Tuesday when the Delaware governor, John Carney, placed the first bet, wagering $10 on the Philadelphia Phillies to beat the Chicago Cubs.

Always Been Ready

The state had made prior preparation for the new development – during the duration of the federal ban, the state was already offering parlay betting. Launched in 2009, the parlay cards offered by the state were provided through the state lottery. In addition to this, Delaware also went ahead to build sportsbooks within its casinos in preparation for the inevitable lifting of the federal ban on sports betting.

When the state’s sports betting industry went live on Tuesday, three Delaware-based casinos – Delaware Park, Dover Downs and Harington Raceway – launched single-game wagering on NBA, MLB, NFL, and the World Cup. These will eventually be followed by sports betting offerings for others sports including college football, the NHL, and golf.

So Far So Good

Despite the absence of big game events such as Stanley Cup or even an NBA Finals game on the day Delaware sports betting went live, there was still plenty of betting action to go around. Vernon Kirk, the secretary of the Delaware state lottery reported that $322,135 was bet on sports at the state’s three casinos on the first day.

“For us, it’s really an enhancement of our tourism industry,” Governor John Carney told ESPN on Tuesday. “It will attract a lot of visitors to our state, particularly at this time of year, during the summer, coming to our beautiful beaches south of here. They come here and stop at the casinos and do slot machine and table gaming. This will be another opportunity for them.”

Projections from Eilers & Krejcik Gaming, a research firm, anticipates that the amounts wagered on sports every year will be in the range of $350 million and $760 million – this is if online sports betting is implemented fully. Of these projections, the state will receive between $23.1 million and $49.6 million annually from both sportsbooks and online sports betting services.

Fortunately, according to the secretary of the state lottery, Delaware intends to offer internet and mobile sports betting products in the near future but first wanted to get the physical sportsbook off the ground before proceeding.

MGM Resorts to Acquire New York-Based Casino and Race Track

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MGM Resorts International has announced that it has entered into an agreement to buy the real estate property and the operations associated with the Empire City Casino’s casino and racetrack for about $850 million. The acquisition is part of MGM Resorts International’s plans to penetrate the high-density New York City market, enhance the company’s free cash flow profile while at the same time opening doors for some attractive opportunities in the future.

“We are excited to announce the addition of Empire City to the MGM Resorts portfolio,” said Jim Murren, the Chairman, and CEO of MGM Resorts International. “This acquisition represents an excellent opportunity to further solidify our presence on the East Coast, and in particular, expand our reach into the high-density New York City region. We believe this transaction enhances our free cash flow profile and presents attractive future opportunities for the Company, and we look forward to welcoming the Empire City team and guests to the MGM Resorts family.”

The Empire City Casino is known for being the sixth largest gaming floor in the United States with about 8 million visitors every year. It also boasts of a workforce of over 1,200 people employed to tend to its over 5,200 slots machines and electronic games, numerous dining outlets as well both its live and simulcast horse racing.

“With Empire City’s approximately 40 percent share of gross gaming revenues in the market, we believe there are significant opportunities for MGM Resorts to further drive growth,” commented Dan D’Arrigo, Executive Vice President and Chief Financial Officer of MGM Resorts International. “We believe the transaction will be value-accretive within its first year of closing, with incremental revenue synergies expected to support growth in 2020 and beyond.”

The property that is to be acquired by MGM Resorts has been under the ownership of the Rooney family for the past 46 years. In 2017, the family made an announcement that it had hired JP Morgan Securities LLC in a bid to “explore strategic alternatives, including the possible sale of the property.” As it turns out, the sale was a culmination of the study that was carried out by JP Morgan.

“Our vision for this property has always been to develop it into one of the world’s greatest entertainment destinations,” Tim Rooney, Sr., president, and CEO of Empire City said. “We have been a partner of New York State and its communities for 46 years, and it was important to us that we identify an entity that could build on the strong foundation we have established and bring our vision to fruition.”

MGM Resorts Still Has Sights on Bridgeport

Despite the lucrative nature of this acquisition, MGM Resorts has confirmed that it will also keep pursuing the development of a casino in Bridgeport. The operator proposes the establishment of a casino in Bridgeport last year and even went as far as announcing plans to push the state legislature to establish a competitive bidding process for a commercial casino license. The legislature did no such thing by the time it adjourned but MGM remains hopeful that it will eventually go through at some point this year.

Integrity Fee Included in New N.J. Sports Betting Bill

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Just a few days ago, a top lawmaker in New Jersey called for all governors to reject the efforts by pro sports leagues to have an “integrity fee” on sports betting revenue included in the various states’ sports wagering laws. State Senate President Steve Sweeney, the lawmaker who also happens to have championed the state’s efforts to have the federal ban on sports betting overturned, said that the demands by the leagues are tantamount to “extortion.”

“Essentially, the leagues are asking to be paid to allow games to be played fairly,” Sweeney wrote. “Ironically, they are calling this extortion attempt an `integrity fee,’ even while fully aware that providing participants a stake in the volume of betting would amount to what could more accurately be called an ‘anti-integrity fee.’”

Sweeney expressed concern that the leagues had blatantly shifted their focus on getting a piece of the sports betting pie instead of concentrating on the integrity of their games. The lawmaker’s sentiments are quite justifiable especially considering the fact that, prior to realizing the inevitability of the abolishment of the Professional and Amateur Sports Protection Act (PASPA), the leagues had spent millions of dollars fighting against the sports betting laws in New Jersey.

“The Leagues fought with all of their resources to stop states from allowing their citizens to legally wager on sports,” Sweeney wrote in a letter that was addressed to the governors and lawmakers in all 50 states. “Now that their efforts have been ultimately unsuccessful they wish themselves to make ‘the fast buck’ and to ‘get something for nothing.’ Essentially, the Leagues are asking to be paid to allow games to be played fairly…. Taking the Leagues at their word, giving them a ‘piece of the action,’ would make suspicions grow whenever turning-point calls in close games go in favor of the more popular team — whose presence in the ‘big game’ would drive ratings and betting.”

New Jersey, however, chose to take a different approach – the state introduced a new bill with a proposed integrity fee, only that its version of the integrity fee is completely different from the ones in other bills and the one that the professional sports leagues have been lobbying for.

What It Entails

The proposed integrity fee, called the Sports Wagering Integrity Fund, diverges from the other bills mostly because it will be controlled by the state instead of the leagues. The idea is to bypass the pro sports leagues’ push for the 1 percent integrity fee on handles while at the same time offering them an alternative to ensure that do not miss out entirely on the fund’s coffers.

The draft bill states that all the money deposited into the Sports Wagering Integrity Fund will be channeled towards the recovery of any costs and expenses incurred during investigations that will be carried out in order to maintain the integrity of sports betting.

Push for Lower Online Gambling Tax Rate Succeeds in Victoria

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Following massive concerted lobbying efforts by corporate bookmakers led by the executive director of Responsible Wagering Australia, Victoria has made a decision to introduce its own tax on digital betting that is nearly half the rate of other states. Last year, South Australia levied a 15 percent consumption tax on online gambling that has been rumored to be also appealing to Queensland and Western Australia.

The Australian state of Victoria, however, chose to take a different path that was made public on Monday when state officials announced that it was planning to implement an 8 percent tax rate for online betting entities. This directive, according to Victoria’s state Cabinet Minister in charge of finance, will be implemented as from January 1st next year.

After years of tax evasion, targeted online gambling operators will be required to pay the rates which, as indicated in the announcement, will only apply to the bets that are placed in the state of Victoria. As such, said online gambling operators will be required to effectively put in place measures that are geared towards determining the locations of their customers.

Tim Pallas, the states finance Cabinet Minister, the move to introduce the move to lower the tax rate is long overdue and it will be implemented primarily to ensure that Victorians get their fair share of the highly lucrative multibillion-dollar online gambling industry. In addition to this, the state government projects revenues of up to a whopping AUS $30 million every year.

The Mixed Reactions

Even though the Conroy-led Responsible Wagering Australia (RWA) expressed that they were a bit disappointed by the announcement made by the state of Victoria, they did acknowledge what they termed as “consultative approach” by the government – the RWA is the body mandated to ensure that responsible betting practices are adhered to in Australia.

“The online wagering industry already pays a significant amount of consumption tax through the GST, as well as corporate income tax to the federal government,” Stephen Conroy said. “An 8% tax does not adequately account for these significant contributions and will result in Victoria having one of the highest effective wagering tax rates in the world.”

The organization argued that by setting the Point of Commission tax rates at half of what is offered by other states such as South Australia, Victoria will undermine the betting companies that are currently operating in other states where the tax rate is set at 15 percent.

Conroy further pointed out that online gamblers and online betting operators are currently being charged significant amounts through Goods and Services Tax (GST) and the federal government tax scheme. His concern is that the consequence would be the likely occurrence of a double taxation which will, in turn, make Victoria’s tax burden is actually higher than what it seems.

Nevertheless, Victoria’s tax course is intact and has already been finalized so as to guarantee the legislation is rolled out in full by January 2019.

What Is Next for Pro Leagues After Supreme Court Ruling?

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It has been a week since the United States Supreme Court repealed the Professional and Amateur Sports Protection Act (PASPA) thus effectively giving states the go-ahead to liberate over their own sports regulation and rules. Still, the landmark ruling remains quite a big deal especially because the implications it comes are huge, to say the least. While it will take time for various stakeholders to adjust appropriately to this development, it is impossible to ignore the ongoing discussion pertaining to how a legalized and regulated sports betting system will affect the professional sports leagues’ businesses.

In the recent past, a number of leagues – the most recent being the NFL – through their commissioners or other high ranking officials have expressed concern about the integrity of their games being compromised due to increased legal sports betting. This has been touted by many experts as a misguided opinion. To elaborate this, Nevada is a great example of a legalized sports betting market that has thrived without any evidence of match-fixing.

Getting the Best Out of It

It is estimated that more than $150 million is illegally wagered on sports each year. On a similar note, the Nevada Gaming Control Board also recently revealed that over $4.8 billion had been wagered on sports in Nevada Sports Books. As such, the Supreme Court ruling will actually be beneficial to the professional sports leagues by taking the billions that are illegally wagered in sports and subjecting it to state regulation and the league’s oversight.

Acknowledging the fact that sports betting has always been with us is the first step towards making it work for everyone involved. By bringing it to the open, the ruling will make it easier for the leagues to monitor the games that are most likely to be fixed and the players they need to keep an eye on. This kind of oversight would be impossible in an illegal sports betting market.

Also, the ruling came at a time when most state legislatures in the United States are already in recess. This means that the professional sports leagues have plenty of time to ideally and strategically position themselves to collaborate with individual state legislation when the 2018-2019 legislative period begins. This way, they will be able to effectively assist in tailoring new sports betting laws in order to ensure that their interests are also considered as the United States enters a new era of legalized sports betting.

The relationship between professional sports and gambling has never been as mainstream as it is now. While the leagues have not been particularly welcoming to the idea of embracing sports betting, the professional sports teams have on the other hand participated in one way or the other albeit indirectly. For instance, a number of teams have willingly invested in Daily Fantasy Sports and accepted money for the use of their logo in state lotteries and in-stadium casino signage. Clearly, there is a bright future ahead for all the stakeholders, they just need to know when and how to capitalize on this new opportunity.

New York Lawmaker Wants Online Poker Bill Passed In June

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After the United States Supreme Court repealed PASPA last Monday and paved the way for the legalization of sports betting in various states, a related concern has arisen and it is now being heavily debated – that is, the future of other skill-heavy forms of gambling such as online poker. While there is no direct correlation between the Supreme Court ruling that struck down PASPA and the legalization of online poker, it is believed that states that push forward with sports betting legislation will eventually lean more towards an all-inclusive gambling legislation rather than sticking to individual types of gambling.

In New York, the push for the legalization of sports betting surges with most recent development being the renewal of calls for the same by New York Assemblyman Gary Pretlow. The lawmaker hopes to have the online poker bill passed by next month. In fact, Pretlow believes that putting the bill on the Assembly floor is the only thing that stands in the way of its passage.

“To get it to the floor is all that’s needed. He [Heastie] is not going to guarantee passage, but get it to the floor and I’ll debate it and get it passed,” Pretlow said.

It will not stop there though. The assemblyman further confirmed that his long-awaited sports bettings bill will follow through next week and despite his current efforts to have online poker legalized he will not be including online poker in the legislation. According to him, every bill he introduces “should stand on its own merit.” As he sees it, such a move would be perceived as a plan to sneak in something else that some people may be opposed to. He, however, agrees that the expectation that a sports betting bill could be passed next month improves the chances for online poker.

“This will be helpful to getting online poker done,” Pretlow commented the sports betting bill. “There are more people interested in pursuing sports betting than pursuing online poker. For whatever reason, people consider online poker to be gambling but don’t consider sports betting to be gambling. I’m going to show them this is all gaming, and all forms of gaming happening are related.”

US Supreme Court Ruling Paves Way for Legal Esports Betting

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On Monday, the United States Supreme court repealed a law that prohibited sports betting with a 6-3 ruling that has finally brought to an end the six-year legal battle over the Professional and Amateur Sports Protection Act (PASPA) of 1992. The ruling effectively opened the doors for legal sports betting in any state that wishes to offer it. However, it does not stop there – the ruling is also now poised to have some major implication for the Esports industry.

While the ruling did not mention Esports specifically, but considering the recent commingling and partnerships of traditional sports and Esports, it is undeniable that the correlation will result in the legalization of Esports betting as well.

“The Supreme Court just struck down the primary law restricting sports betting throughout the US. This will have a profound impact on the Esports industry and we’re so underprepared for it. ~$5B wagered on Esports last year – about to skyrocket,” Bryce Blum, an attorney, and ESG Law founder tweeted.

Clearly, Esports betting is already tremendously lucrative even though the majority of the bets are done illegally. However, the U.S. Supreme Court ruling is expected to give it some legitimacy. Dallas Mavericks owner Mark Cuban believes that the ruling will double the value of Esports franchises overnight the same way it did for the traditional professional sports franchises.

“It doubled the value of the professional sports franchises in a second,” Cuban said. “It will increase interest, it will add to what happens in our arena and in stadiums. It will increase the viewership for our biggest customers online and on TV. It helps traditional television because it’s much lower latency, whereas online, because of cachet, it’s much higher latency.”

At this point, the inevitability of Esports cannot be denied and this puts the industry at a crossroads of some sort: are we going to embrace it or shun it altogether. We can all agree that gambling has its problems for sure but, as it turns, the negative externalities (such as illegal betting) are usually magnified due to the lack of participation of league operators. No one wants that.

“Some of the technologically advanced states will move relatively quickly, but my hope is that there’s a federal approach to it, as opposed to everyone having to deal with each state individually,” Cuban added. “If that’s difficult in the short term, I think it’d be really smart for the commissions from as many states as possible to work together to standardize things because that will enable the most creativity. When each state has its own rules and requirements that jacks up the expense for everybody, which minimizes the entrepreneurial and technology opportunities.”

West Virginia Casino Operators Dispute ‘Sports Betting Deal’

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Last Thursday, Governor Jim Justice made a surprise announcement that sent the West Virginia gaming industry into a state of confusion. The governor issued a release that claimed that the state and its casino operators had come into a tentative agreement to incorporate an “integrity fee” into the state’s new sports betting law.

The alleged agreement which also happened to involve the “sports consortium” would see the state’s casino operators part with a percentage of their sports betting profits – this is totally separate from the state’s cut. However, West Virginia casino operators are saying that they never agreed to pay the fee in case the Profession and Amateur Sports Protection Act of 1992 (PASPA) is abolished and sports betting is legalized in the United States.

According to an article that was posted on the gaming industry’s “Sports Handle” website on May 10, during the closed-door meeting at the Lottery headquarters, “nothing and a lot happened.”

“A lot, because firsthand accounts of this closed-door meeting paint a colorful picture between attendees that include state lawmakers, a lobbyist for the NBA and NFL who has ties to Gov. Jim Justice (Larry Puccio); an appearance by the NHL, possibly the first time the league has gotten involved on sports wagering publicly; representatives from West Virginia University and Marshall, plus casino representatives and a ‘citizen volunteer’ for West Virginia Gov. Jim Justice (Bray Cary), who did not attend in person but spoke by speakerphone. There was also some reported shouting, ‘shuttle diplomacy’ and an apparent conflict of interest in play,” reads a snippet of the article.

John Cavacini, the president of the West Virginia Gaming and Racing Association, said that the day-long meeting came to a close with the casino operators remaining opposed to the incorporation of an integrity fee that is to be paid to the professional sports leagues.

However, Cavacini revealed that there was a conceptual agreement for the casino operators to enter into private contracts with the sports leagues to provide them with game data that would be necessary for sports betting. The only alternative that the leagues would have is to buy data from third-party providers.

“We’re trying to get the leagues some money, but we’re not going to pay the integrity fee,” John Cavacini said.

As it stands, West Virginia lawmakers have shown very little interest in revisiting the sports betting law that they just recently passed, according to MetroNews. This implies that it will take a bit of time before the tug of war between the casino operators and state is won by either party.

France Lowers Crypto Taxes, Labels Them ‘Moveable Property’

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According to April 26 report from Le Monde, a local news outlet in France, the Conseil d’Etat (Council of State) of the country has lowered the tax rate on cryptocurrencies from the initial 45 percent to a flat rate of 19 percent. In addition to this, all the profit that will arise from cryptocurrency sales will be considered as capital gains of ‘moveable property’ as stipulated by the new regulations. This move follows the reclassification of bitcoin that is separate from commercial and non-commercial activity.

According to the Council, “The sale of ‘bitcoins’ [fell under] the principle from the category of capital gains of movable property.”

The news report also mentioned that the Council of State’s decision was partly motivated by an appeal that was filed earlier this year to the country’s highest regulatory body. The appeal sort to have the harsh regulations reviewed and changed so as to ensure the survival and growth of the French crypto industry.

Profits amassed from cryptocurrency mining will, however, be exempted from this and they will, therefore, incur higher tax rates as they are still considered to be industrial and commercial profits. These harsh cryptocurrency-focused tax rules that initially encompassed all transactions came to be in mid-2014. Four years down the line, Bruno Le Maire, France’s economy minister, assembled a task force for the sole purpose of scrutinizing the state of cryptocurrency regulations in France.

“Our goal is to provide legal certainty for those who seek it, without hindering those who want to follow their own path. We have a rather liberal approach. We work for a flexible, non-dissuasive framework. At the same time, we are not naive either, we know that these products can be risky” noted the finance ministry.

Other than the finance ministry’s efforts in putting together a task force to review the country’s cryptocurrency regulations, it has also been reported that it the financial market regulator has been considering legislation that would foster the development of Initial Coin Offerings (ICO) in France.

Belgium Gambling Laws Declare Video Game Loot Boxes Illegal

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Loot boxes have had a pretty rough time in the past couple of months and the troubles are not likely to go away anytime soon. Just recently, the Netherlands declared that loot boxes constituted gambling and were therefore illegal and now Belgium has made a similar move.

Following an investigation that the Belgian Gaming Commission had been conducting on some popular video game titles including FIFA 18, Counter-Strike: Global Offensive (CS: GO) and Star Wars Battlefront 2, the Belgian minister of justice, Koen Geens, on April 25 announced the results. Of the four video games, only Stars Wars Battlefront 2 was not in violation of the Belgian gambling legislation but this is only because EA, the company that develops Star Wars, removed loot boxes from the game after some debacles when it was launched.

OverWatch, CS:GO and FIFA 28, on the other hand, still had loot boxes which under Belgian gambling law are considered to be games of chance. As such, so long as they contained the loot boxes the games were illegal and they are forced to remove the loot boxes or “risk a prison sentence of up to five years and a fine of up to 800,000 euros.” The penalties could be doubled in cases where minors are involved.

“Mixing games and gambling, especially at a young age, is dangerous for mental health,” Geens said. “We must ensure that children and adults are not presented with games of chance when they are looking for fun in a video game.”

Loot boxes are by no means a new concept in mobile gaming applications but the recent upsurge in their inclusion in console-based video games have become a huge concern for parents as well as many other responsible parties. Furthermore, the gaming community has been very welcoming to initiatives that seek to have the insidious inventions removed from their games.

While regions like the US and the UK have Okayed the use of loot boxes, the declaration that they are illegal in the Netherlands and Belgium has presented what can be referred to as a dramatic turn for the video game loot box issue. If anything is to go by, game developers in the whole of Europe may be forced to make significant changes to the way the games they develop work, especially because more countries in the continent could launch similar initiatives.

Unlike the case in the Netherlands, Belgium has not imposed a deadline for the implementation of the necessary changes. Geens hopes to approach this is in a different way and this will involve dialogue between the country’s gaming commission and the affected video game developers.