Category Archives: Court Case/Decision

Miami Casino Plans that Were Halted Look for Life in Lawsuit Against the City

Casino Watch Focus has reported on past efforts of Magic City Casino to built gambling facilities in Miami. Most efforts, including the many attempts by Genting grouphave been shut down, and this was no different. In this case, Magic City Casino was looking to open a jai alai fronton and poker room in the Edgewater neighborhood, however, zoning law changes stopped the project and expansion of gambling in Miami. Now, West Flagler Associates, the parent company to Magic City Casino is suing the city for not only the lost money that was invested in the project, but the right to continue with the original gambling expansion plan. An online source reports:

A court has given West Flagler Associates, Ltd., owner of Miami’s Magic City Casino, the go-ahead to proceed with its lawsuit against the city of Miami. West Flagler sued the city in April of this year for $750,000 after the city’s commission altered the zoning code for gambling venues. The date for the proceedings was set for May 2020.

The lawsuit is the result of a zoning law change approved in September 2018 by the city’s commissioners. In a 4-1 vote, the commissioners passed a new rule that would require four of the five commissioners to approve any new gambling locations.

West Flagler is seeking upwards of $750,000 plus the right to build its gaming establishment. The company argues that it announced its plans when the zoning rules allowed for pari-mutuel betting in the area and had been given written approval by the city. The rules were still in place when West Flagler received its permit.

The primary reason for the zoning adjustments was to limit gambling in the city. It was clear those in the community didn’t want to see the expansion in their neighborhood, and they city commissioners agreed. The source continues:

Commissioner Ken Russell said that he had heard from many local residents who opposed a gaming establishment in or near their neighborhood.“We don’t need gambling in the city of Miami,” auto magnate Norman Braman told the Herald “We’re doing very well without it. Gambling is a parasite, and this is an invasion.”

“As a resident of that neighborhood, I don’t believe it’s a bad thing for the neighborhood,” Havenick countered. “This will be a good attraction. It is not going to be anything more than poker and jai-alai. We’ve said that all along. It is not a casino. It’s simply poker in an area that has many other forms of entertainment, and this is another form of that.”

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UPDATE: DOJ to Files Intent to Appeal Wire Act Court Ruling

Casino Watch Focus has reported on the ongoing battle to properly regulate online gambling through the Wire Act. The Wire Act’s long standing language and interpretation limited online gambling, yet the Obama Administration claimed it only applied to sports betting, thus freeing the way for all other forms of online gambling. The current Administration reversed that puzzling interpretation and declared the Wire Act applied beyond sports betting. Recently, a US District Court upheld the Obama Administration interpretation, and the DOJ asked Attorney’s General to hold off enforcement until the issue could be properly vetted. An online source reports: 

The DOJ in 2011 had stated that the Wire Act applied only to sports wagering. But it *reversed course with a memo from 2018 expanding the possible reach for federal prosecution, which triggered worries about its applicability to online gambling, lotteries, and other forms of gaming that potentially cross state lines.

The New Hampshire District judge had forecast that the case would likely reach the*US Supreme Court*. While the case is going on, the DOJ has said it would not enforce the new interpretation of the Wire Act until 2020.

The *Department of Justice* filed its intent to appeal a district court decision on the Wire Act to the First Circuit Court of Appeals. In June, a federal judge in the New Hampshire District ruled that the Wire Act applies only to sports betting, and not to other forms of interstate gaming.

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Missouri Prosecutors Advance Lawsuit to Shutdown Illegal Gambling Machines Popping Up Across the State

Casino Watch Focus has reported on a recent gambling expansion proposal in Missouri that would legalize slot machines outside of casinos. Currently, legalized gambling in Missouri is limited to a set number of licensed and regulated casinos that exist along the Missouri and Mississippi rivers. The proposal would be an unprecedented expansion in gambling, as it would allow slot machines virtually anywhere in the state. However, the state is currently seeing similar expansion due to illegal gambling machines that operate exactly as these proposed slot machines would. These machines are popping up all over Missouri and the manufacture claims they are not slot machines because the reveal the result of the next spin to the player. These machines act exactly like the pre-reveal machines Florida had to deal with recently and the courts quickly called them out as illegal slot machines. It’s very clear that even though the initial spin shown is your outcome, it’s the spin after that the gambler is paying to see. Players are simply paying in advance and the subsequent outcomes are all a matter of chance. It is a slot machine through and through and a Platte County prosecutor is cracking down on these machines through a new lawsuit that seeks to get clarification by the court. An online source explains:

They look like slot machines, but they aren’t inside a casino.

Video gambling machines have been popping up across Missouri, including in St. Joseph, which has led one prosecutor to file criminal charges to stop their spread. Integrity Vending LLC, based in Kansas, currently faces one felony county of promoting gambling in Platte County.

“In Missouri, games of chance are illegal,” Eric Zahnd, the Platte County Prosecuting Attorney said. “These machines, according to the manufacturer, reveal whether or not you’ll win the next round of the game so they allege that it’s not a game of chance.”

“However to continue to play you have to play through those losing rounds,” Zahnd said.

The legal question that a judge must resolve is whether or not the machines constitute a game of chance, like a slot machine or video poker game. According to Zahnd, the company who distributed the machines, Integrity Vending LLC, has agreed to remove the machines if they’re determined to be illegal. 

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UPDATE: Court Strikes Down DOJ’s Wire Act Ruling – Appeal Likely to Follow

Casino Watch Focus has reported on the Department of Justice’s Wire Act interpretation as it relates to online gambling. Prior to the Obama Administration, the Wire Act was always interpreted to apply to all online gambling. During the Obama Administration, the DOJ decided the wire act only applied to sports betting, thereby legalizing all other forms of online gambling. Its been argued that their decision wasn’t grounded in the plain language and clear intent of Congress when the act was passed in the 1960’s. Never the less, it opened the floodgates to online gambling. Recently, the DOJ produced a memorandum that said they planned to reinterpret the wire act to apply to all gambling as it was for so many years prior. Naturally many groups opposed the ruling and the DOJ delayed its enforcement to allow time for the court process to take place. Now, the first ruling has been made and unsurprisingly, it upholds the Obama Administrations ruling. An online source reports:

In a memo dated June 12, 2019, US Deputy Attorney General Jeffrey Rosen instructed all US attorneys to hold off on implementing the Wire Act opinion until the end of the calendar year. The last date given had been June 14, 2019, but the decision by the US District Court last week makes any enforcement of that Wire Act opinion illegal as it pertains to any forms of gambling other than sports betting.

[E]veryone will wait to see if the DOJ decides to appeal that decision or let it stand. It is unlikely that the DOJ will not appeal, as even Judge Barbadoro fully expected the case to head to the US Supreme Court, as noted during the oral arguments phase.

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Greyhound Industry Seeks to Overturn Florida’s Amendment 13 that Bans Live Races

Casino Watch Focus has reported on the recent attempts to ban dog racing in Florida. Voters passed Amendment 13, which banned live greyhound races. The issue was anything but straight forward, as many voters wanted to eliminate the gambling that goes along with dog racing as well. However, the bill simply decoupled the live racing requirement from the gambling that took place at the tracks. The bill allows gambling on races that are simulcast and leaves open the possibility for existing slot machine gambling to be allowed even though the track doesn’t support live racing. However, Florida voters also passed Amendment 3, which requires voter approval for any expansion of gambling. This would seemingly mean new “tracks” couldn’t go up that are essentially just mini slot machine casinos that offer simulcast dog races. The true decoupling implications and the actual landscape of how slot machine gambling will expand as a result is uncertain until such mini casinos attempt to be built or expanded and all the legal posturing takes place. However, the seemingly clear issue of live dog races being banned in Florida may not be as certain either. It has been announced that a new group has been formed with the goal of legally challenging Amendment 13. Orlando Weekly reports:

Amendment 13, which passed with a 69 percent “yes” vote last year, banned betting on greyhound races in Florida. Now, the head of a pro-greyhound racing group says they’re fighting to bring the so-called sport back.

In a public Facebook post last week, Jennifer Newcome, chairman of the Committee to Support Greyhounds, announced the group’s intention to move forward with challenging the amendment in court.

Newcome said the group plans to file the case in July. The group adds on their website: “Greyhound Nation did not back down before, and we refuse to stop until the last judge says ‘NO.'”

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UPDATE: Seminole Tribe Ends Payments to Florida After Failed Compact Negotiations: Special Legislative Session Talks Begin

Casino Watch Focus has reported on the recent news that the Florida legislative session would end with no gambling deal in place. The failure to renegotiate a deal has been an ongoing issue. At the core of the problem is that the Seminoles have exclusive rights to table games and certain gambling. Florida has not been enforcing this exclusivity and the courts sided with the Seminoles. However, the Seminoles have been acting in good faith, providing the state with the estimated $300 – $350 million annual payments the original agreement set up for such exclusivity. But now that the legislature has once again failed to stop others from offering designated card games, which is expanding gambling in the state, the Seminole tribe has decided to now stop providing the good faith payments. The Sun Sentinel reports:  

The tribe had warned it would halt the payments, which totaled nearly $330 million last year, because of controversial designated-player card games offered by many of the state’s pari-mutuel cardrooms. The Seminoles — and a federal judge — say the games violate part of a 20-year gambling deal by the tribe and the state in 2010. That deal, in part, gave the tribe exclusive rights to “banked” card games. 

The Seminole Tribe of Florida made good on threats Tuesday by telling Gov. Ron DeSantis it is quitting a long-standing revenue-sharing agreement with the state after negotiations on a new gambling deal went nowhere this spring. 

In a July 2017 settlement between the Seminoles and former Gov. Rick Scott, the state agreed to drop its appeal of Hinkle’s decision and to take “aggressive enforcement action” against pari-mutuels operating banked card games that violate state law. In exchange, the Seminoles agreed to continue making payments to the state until the end of this month. “Unfortunately, there has not been aggressive enforcement against those games, which have expanded since Judge Hinkle’s decision,” Osceola wrote.

Florida lawmakers considered this possible outcome, and mad adjustments the budget, but some believe the financial contribution, and the gambling restriction that comes from Seminole exclusivity, too import to not make an attempt to resolve the issue.   An online source explains:

State Representative Evan Jenne called for negotiations with the Seminole Tribe of Florida to reinstate the annual payments of an estimated $350 million suspended by the tribe after a failure to reach an agreement about the future of gambling in the state. “That’s just too much money to be left out there unaccounted for in our budget,” said the legislator.

Jenne, a Democrat who represents 99th District which include most of Hollywood and Southern Broward, said the suspension of payments from the tribe could have been avoided. “It was something that was a long time coming, it’s been talked about for quite some time it’s been nearly a decade since the compact would, should have been signed,” he said.

“They had a promised of exclusivity when it came to games like that and the state has not done their part in holding up that part of the bargain,” said Jenne.

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DOJ Seeks to get State Online Lottery Lawsuit Dropped

Casino Watch Focus has reported on the Department of Justice’s reversal of the Wire Act and that decision’s impact on online gambling. Many said lawsuits would be the deciding fact as to whether or not they could reverse the out of place Obama Administration’s reinterpretation of the wire act, which lead to the massive expansion of online gambling. One area of concern for states has been the impact on state lotteries, specifically where those state offer online access to their lotteries. The DOJ recently extended the deadline as they wanted to more closely examine the full range of its ruling. The DOJ is now seeking a motion to dismiss a lawsuit brought by New Hampshire claiming they don’t have standing to sue yet and that the state hasn’t proven that the ruling would even impact them. The Associated Press explains: 

The U.S. Justice Department says in a federal court brief that the New Hampshire Lottery Commission has failed to demonstrate that it wouldn’t be immune from 1960s law enacted to crack down on the mob.

On Thursday, the Justice Department filed the brief in Concord, New Hampshire, in response to a judge’s order for it to clarify its interpretation of the Wire Act. States fear losing at least $220 million annually in lottery profits if the Wire Act is determined to apply to all forms of gambling that crosses state lines.

The department also affirmed any early promise to not prosecute state lotteries or their vendors while it continues to review whether the Wire Act applies to lotteries.

The concern goes beyond the state of New Hampshire. Several states offer online access to their lotteries and some lotteries extent to multiple states. Some believe the intent of the DOJ isn’t to stop lotteries, as Powerball and Mega Millions are too engrained as a societal norm, but the actual transactions might very well fit the original 1960 Wire Act. An online source explains: 

The states are anxiously waiting on a clarification from the Justice Department about its opinion that, if strictly interpreted, would outlaw lottery tickets sold online and prohibit all lottery-related activities that use the internet. Legal experts say Powerball and Mega Millions are at risk if the opinion is read to the letter, which would cost the states billions. 

Seven states now sell lottery tickets online and others offer residents internet-based lottery subscription services.

When state lotteries use the internet to transmit data for online ticket sales, the network signal can cross state lines, and games that are played in multiple state s, like Powerball and Mega Millions, transmit data to a central database out of state, according to the North American Association of State and Provincial Lotteries.

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