Category Archives: Court Case/Decision

Major Manufacturer of Missouri’s Illegal Gambling Machines Attempts a Lawsuit to Avoid Shutdown and Prosecution

Casino Watch Focus has long reported on the ongoing saga of illegal gambling machines that are operating outside of regulated casinos and in gas stations and convenience stores all over the state.  They have always been illegal as they operate outside of casinos, and despite the collective Missouri leadership taking much longer than needed to declare them illegal, both the court and local prosecutors have established they are not allowed. Legislation has been introduced to make the penalties steep enough to prevent such action as well, but a recent lawsuit by one of the leading manufacturers of these illegal gambling machines, has proven they still plan to fight. The St Louis Post Dispatch reports:

A politically connected company that has flooded Missouri with unregulated slot machines is suing the state, saying it’s devices do not qualify as illegal gambling.

Torch Electronics, a Wildwood firm, and Warrenton Oil, which offers Torch games at its gas stations, are asking a Cole County judge to issue an order stopping the Missouri Highway Patrol from seizing machines as part of a crackdown on illegal gambling. The suit was filed Feb. 5, three days after the Highway Patrol seized three machines from a St. Clair location owned by Warrenton Oil.

The company’s action was met with skepticism in the Missouri Senate, which is debating legislation designed to shut down the proliferation of unregulated slot machines in the state. Senate President Dave Schatz, R-Sullivan, called the lawsuit “ironic” coming from a company that is pushing a product considered to be illegal by many, including a Platte County judge. 

“They are flat illegal,” Schatz said. During brief comments on the Senate floor Wednesday, Schatz scoffed at the lawsuit, saying the machines are siphoning money from education programs and veterans because players are not going to the state’s casinos, where profits are taxed and distributed to schools.

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Miami Mayor’s Veto of Edgewater Gambling Expansion Upheld in Court

Casino Watch Focus has reported on the ongoing efforts to secure a new casino in the Edgewater district near Miami, FL.  The community has opposed such a casino and other smaller gambling expansion attempts by the existing casino such as a proposed jai alai fronton and poker room in the Edgewater neighborhood. Miami Mayor vetoed the most recent proposal and naturally, his veto was challenged.  A Miami-Dade Circuit Court has upheld the veto, thus killing the gambling expansion.  The Miami-Herald reports:  

A controversial proposal to bring a jai alai fronton to Edgewater has been shot down in Miami-Dade Circuit Court. Judge Michael Hanzmann ruled on Wednesday that the push by West Flagler Associates, the owners of Magic City Casino, to bring gambling to Edgewater in downtown Miami was, at its core, a “land use issue” that overruled any other permissions the company had been granted to pursue its pari-mutuel facilities..

West Flagler had received a permit to proceed with their establishment in July 2018. When a change in law that would change zoning permits for gambling establishments was enacted in 2019, the developer sued and won approval from City of Miami commissioners in a 3-2 vote on Feb. 13, 2020, to proceed with its plan to build a fronton and card-gambling establishment as part of a larger complex at 3050 Biscayne Blvd.

On February 21, 2020, a week after the commission approved the project, Mayor Francis Suarez vetoed that lawsuit settlement, blocking Flagler Associates to proceed with the fronton.

West Flagler Associates and the City of Miami were sued in March 2000 by a group of elite civic leaders, including billionaire automobile magnate Norman Braman and Related Group CEO Jorge M. Pérez, who claimed the permission to proceed with the gambling establishment had not been properly settled by a court.

Judge Hanzmann’s ruling on Wednesday affirmed Mayor Suarez’s legal ability to veto the deal, citing the casino owners “claimed they obtained special rights to expand casino gambling through private meetings with City officials.”

This particular backroom deal appears to be completely dead as no appeal is planned.  A new attempt, one that is above board and more transparent is planned however.  The Miami-Herald concludes:  

Joseph DeMaria, a partner at Fox Rothschild who is representing West Flagler Associates, said his client has no plan to appeal the ruling. “We have already resubmitted a settlement proposal to the city attorney and asked that they schedule it for the next commission meeting,” DeMaria said. “The new proposal provides for a jai alai fronton and card room but no slot machines and waives all attorney’s fees, which could run up into the millions. If the city commission doesn’t approve it, or if the commission not override the mayor’s veto, we’re going to court.”

 “We are pleased with the Judge’s decision,” Braman said in a press release Thursday. “And with help from the City Mayor and Commission, Miami has become a world class city and is on the precipice of further transformational leaps. The last thing our city needs is the plight and desolation that come with casino gambling. I look forward to working alongside City officials to continue the advancement of Miami.”

Grace Mead, one of the attorneys at the Stearns Weaver Miller law firm representing Braman and the other opponents of the casino, said “We are pleased with the ruling and one preceding it which together likely brings an end to a back door, secret attempt to alter the zoning code to expand gambling in the City.”

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Guest Article: Editorial: Why won’t state and local officials enforce Missouri gaming laws?

Casino Watch Focus has reported on the ongoing issue of shutting down illegal slot machines that popped up all over in Missouri gas stations and similar business.  Those machines were finally the subject of a proper lawsuit  giving way to full enforcement of Missouri’s regulations to only allow slot machines in regulated casinos.  However, that enforcement has been almost non-existent.  Nearly two months ago it was reported that enforcement wasn’t happening as expected  and it doesn’t seem to have picked up too much.  The following article is from the Editorial Board at the St Louis Post Dispatch and can be read in its entirety HERE, with a few highlights below: 

It is illegal in Missouri to host gambling machines except in licensed casinos. The law is clear on that, and just for good measure, a judge in September confirmed it. So why are state officials and local prosecutors still failing to confront the bars and gas stations that are hosting thousands of these unlicensed video gambling machines?

Some argue that gambling should be legalized across the state altogether, if only because it’s already everywhere anyway. But legalization must come with oversight and taxation, which still isn’t being applied to these rogue games. That must change, especially at a time when the state should be scrounging for every bit of revenue it can find.

At issue are some 14,000 video machines in business venues all over the state that players pay to play on the chance of making more money back. If that sounds like exactly what goes on in a casino, well, it is. Yet the machines aren’t licensed, taxed or regulated by the state, in blatant violation of Missouri’s gaming statutes…

There is no reasonable justification for it. They’re just doing it, and getting away with it, in large part because the industry lobbies heavily and contributes to politicians’ campaigns, including Gov. Mike Parson’s.

The fact is, the judge’s ruling wasn’t even necessary for state officials and local prosecutors to move on this. The purveyors of these machines are breaking the law. Until the law changes, they and the business venues that host them should be raided, prosecuted and fined. Period. They have gambled on Missouri’s patience long enough.

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Netherlands Court Rules EA’s Loot Boxes are Illegal Gambling and Upheld Earlier Fine

Casino Watch Focus has reported on the newest form of gambling in video games known as loot boxes. This particular gambling-esque mechanic was first brought forth to mainstream media because of their prevalence in EA’s Star Wars licensed BattleFront II game.  Since then, regulators all over the world have urged for studies or moved to advance legislation that regulates or bans loot boxes.  So perhaps it’s fitting that the publisher EA is again at the forefront of the battle over loot boxes in the Netherlands.  This time they have been accused of allowing illegal gambling in their world popular soccer game Fifa.  The court ruled that their loot boxes are illegal and ordered them to pay a fine. An online gaming source explains:

A Netherlands District Court this week ruled against Electronic Arts in a case over FIFA loot boxes, allowing the Netherlands Gambling Authority (Kansspelautoriteit, or Ksa) to proceed in fining the publisher €10 million for violating the country’s Betting and Gaming Act.

“The Ksa believes it is crucial to shield vulnerable groups, such as minors, from exposure to gambling,” the regulator explained. “For that reason, the Ksa supports a strict separation between gaming and gambling. Gamers are often young and therefore particularly susceptible to developing an addiction. As such, gambling elements have no place in games.”

According to the judgment, EA argued that FIFA loot boxes would not count as gambling under the Betting and Gaming Act because FIFA Ultimate Team packs (loot boxes) don’t offer items of value because they cannot be directly converted into money, that FIFA is inherently a game of skill rather than chance, and that there is no scientific evidence linking the opening of Ultimate Team packs to gambling addiction.

The court was unswayed by those arguments, noting that there are ways for people to profit from Ultimate Team cards that can be valued at nearly €2,000, and that people can ignore the proper FIFA gameplay and “play” the Ultimate Team packs as their own sort of game.

As for the lack of scientific proof, the judges ruled it not necessary that every new game of chance be proven to cause problems, because the Betting and Gaming Act is based on the assumption that games of chance carry with them a risk of gambling addiction. They also pointed to an increasing body of scientific research and experts warning about loot boxes, as well as reports made to the Ksa by individuals who had been affected by them.

Naturally, EA is expected to appeal the decision.  They asked the court to not disclose the amount of the fine, but the court’s response was “that the public interest in announcing the fines and warning the public about unlawful commercial practices outweighed EA’s interest in preserving its reputation.”

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Apple & Google face Federal Lawsuit for Allowing Gambling-esue Apps in their Play Stores

Casino Watch Focus has long reported on the development, recognition and battles over loot boxes as a new gambling mechanism in video games, including a pair of recent California based lawsuits against Apple and Google.  Those suits centered around popular gaming apps that had loot boxes inside an otherwise normal looking game like EA’s Fifa soccer or Nintendo’s Mario Kart Tour.   A new Federal lawsuit, however, alleges that same access to loot box type gambling, but in a more obvious gambling related app.  An online Alabama new source reports:

Two federal lawsuits filed Wednesday seek refunds for Alabama residents who downloaded games from app stores that the plaintiffs say are illegal gambling under state law. The potential class action lawsuits were filed against tech giants Apple and Google by two Shelby County residents who purchased the app-based games and paid money for more playing time. The suit specifically deals with games that begin with offering the player a set number of free starting “coins” to play the slots, blackjack, roulette, poker, keno, bingo, and other card and gambling games.

A loss results in a loss of the coins, but the customer has the chance to win more coins. When a customer runs out of coins, the player is prompted to use real money to buy more coins to keep playing. Both suits list 200 games available through Apple’s App Store and the Google Play Store that feature casino-type gambling.

“Apple and its chief mobile device software competitor, Google, both allow customers to purchase games that are no more or no less than casino-style slot machines, casino-style table games, and other common gambling games,” one suit alleges. The suit contends that under Alabama’s gambling statutes, paying money in a game for a chance to win more playing time constitutes illegal gambling. 

The suit brings up state law’s definition of “something of value,” which it says is not limited to games where one gambles in the hopes of winning actual cash. “Rather, ‘something of value’ specifically includes ‘extension of a service entertainment or a privilege of playing at a game or scheme without charge.’ As a matter of law, paying money to get ‘coins’ one bets hoping to win more ‘coins’ so as to gain the ‘privilege of playing at a game or scheme without charge’ is gambling a thing of value under Alabama law,” the suits contend.

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Unregulated Slot Machine Manufacture Found Guilty of Illegal Gambling in Western Missouri

Casino Watch Focus has reported on the ongoing struggles to properly regulate illegal slot machines outside of casinos in Missouri.  These slot machines, often referred to as pre-reveal machines, have been popping up all over the state claiming to be legal games and not slot machines.  The regulatory problems have mostly stemmed from disorganization regarding who needed to be regulating these machines.  Local prosecutors had to take the lead and bring charges in their individual jurisdictions while the Missouri Legislature debated how to handle the situation.  The results of the first prosecution attempt are in and as expected, the machines were deemed illegal. The St. Louis Post Dispatch reports:

A Platte County Circuit Court judge on Tuesday found a Kansas-based company guilty of promoting illegal gambling in the first degree, a class E felony that carries a fine of up to $10,000.

The ruling against Shawnee, Kansas-based Integrity Vending LLC likely will have wide-ranging consequences: gaming companies have long argued that their machines are legal under Missouri law; the Missouri Highway Patrol and some county prosecutors have disagreed, saying the machines are illegal gambling devices. Observers had long awaited Judge Thomas Fincham’s ruling for clarity on what kind of games Missouri law actually allows.

The unregulated machines — state officials estimated last year there were about 14,000 of them in gas stations, bars and clubs across the state — have come under fire because of the stealth nature by which they were deployed.

Unlike regulated gaming, no proceeds are diverted to education. There are also no government-sanctioned resources for addicted gamblers or rules to protect consumers from low payouts.

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Whistleblower Lawsuit Alleges Caesars Rushed to Reopen during Covid-19 Pandemic Which Violated California Labor Law

Casino Watch Focus has long reported on the ongoing impact the coronavirus has had on the gambling industry.  The pandemic has been understandably disruptive, but the goal of the government and community leaders has been to balance keeping people safe and preventing the spread of the virus against keeping the economy from collapse and keeping people employed where possible.  Unfortunately, the gambling industry isn’t in any way viewed as essential, which places its employees in an incredibly tough position.  However, maintaining a balance isn’t just about doing what’s morally correct, but it’s also about following the various laws of each jurisdiction.  This year has already seen a casino close properties it had just opened after not having or enforcing proper PPE equipment which lead to an employee’s death.  Additionally, a suit was filed by Las Vegas hospitality workers claiming they didn’t have proper protections. Now, a new southern California whistleblower lawsuit has been filed by a casino executive that alleges he was forced to quit for opposing a rush to reopen.  The San Diego Union – Tribune reports:

A Harrah’s Resort Southern California  executive who resigned before the casino reopened in May has filed a lawsuit against the parent company, Caesars Enterprise Services, alleging the tribal casino rushed to reopen despite safety concerns about the COVID-19 pandemic.

Darrell Pilant, who had served as the senior vice president and general manager, worked for the company for 23 years. He alleges that he was forced to resign  from his position because he said he didn’t want to follow the direction of his employer to reopen because doing so posed a threat to employee and customer health, according to the lawsuit filed Aug. 31.

This suit isn’t simply about an executive being pushed out of the organization.  This suit alleges that Caesars has violated California laws aimed at protection in order to place business and profits first.  The The San Diego Union – Tribune continues:

The lawsuit, which declares it is a whistleblower action, claims that in reopening during the pandemic, the casino violated the California Labor Code and Occupational Safety and Health Administration regulations for the health and safety of employees.

“Pilant, among other things, alleges that Caesars constructively terminated his employment because he opposed and refused to carry out Caesars’ directive to reopen Harrah’s Resort Southern California,” the lawsuit states. “Rather than carry out the illegal and dangerous directive of his employer, Mr. Pilant had no alternative but to resign his long-time employment with Caesars.”

Harrah’s Resort Southern California is operated by Caesars Enterprise Services, but is owned by the Rincon Band of Luiseño Indians and located on its 5,000-acre reservation in North County. Tribal Chairman Bo Mazzetti said profits from the casino make up about 85 percent of the tribe’s budget during an interview in April.

“The disregard for public health and safety outlined in this lawsuit is consistent with the arrogance we’ve grown to expect from many tribal casino operators in California,” Kirkland said. “By remaining open while other indoor recreational facilities have been forced to close, they have demonstrated a lack of concern for the health of their employees, guests and the surrounding communities in the pursuit of slot machine profits.”

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Miami Florida Area Poker Room and Jai Alai Fronton Gambling Expansion Opposition Suit Allowed to Proceed

Casino Watch Focus has reported on the ongoing efforts to secure a new casino in the Edgewater district near Miami, FL.  The community has opposed such a casino and other smaller gambling expansion attempts by the existing casino such as a proposed jai alai fronton and poker room in the Edgewater neighborhood.  Those in charge made zoning changes in the city area to ensure the Edgewater proposal couldn’t move forward.  This action was challenged in court and several subsequent political maneuverings took place to try to keep the project on course, including a questionable settlement.  The Miami-Herald explains:

Under the agreement, West Flagler could apply for a permit for a summer jai-alai facility. The casino agreed to not operate slot machines at the fronton and to not seek legal fees from the city. If West Flagler wanted to open a card room in the facility in the future, it would need approval only by three of five Miami commissioners.

That settlement was based on questionable grounds, according to the judicial order, which stated that the City of Miami settled with West Flagler because its zoning administrators gave the casino operator letters in 2012 and 2018 saying that it could operate a jai-alai and card room in Edgewater. But Hanzman said the letters may or may not have been issued legally.

“If the Settlement Agreement resulted from a lawful exercise of discretion it will remain enforceable and West Flagler will be permitted to operate in accordance with its terms and conditions. If it is an illegal contract that is void, it will be West Flagler’s prerogative to decide whether to pursue claims against the City based upon its alleged reliance on the Letters, or any other viable theory,” Hanzman said in his order.

As a result of the settlement, a local business claimed standing and pushed forth a lawsuit.  Naturally, the suit that challenged, however, a local judge is allowing the lawsuit to move forward.  The Miami-Herald explains:

A legal challenge to a jai-alai fronton and poker room planned for Edgewater remains in play.

Miami-Dade Circuit Civil Judge Michael Hanzman ruled in August that a lawsuit against the City of Miami and West Flagler Associates, owner of Magic City Casino, can proceed. The suit, filed in March by auto dealer Norman Braman and developer Jorge Pérez, seeks to block the gambling facility set for Biscayne Boulevard in the burgeoning neighborhood between the Omni and the Design District.

Braman and Pérez are able to sue, Hanzman ruled, because a February settlement agreement between the City of Miami and West Flagler was not decided by a court and can be challenged by parties that are impacted by the plans. The settlement was vetoed by Miami Mayor Francis Suarez.

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Timely US based Class Action Lawsuit Claims EA Loot Boxes are Gambling as Study examines the link between Loot Boxes, Accessibility, and Problem Gambling

Casino Watch Focus has long reported on loot boxes in video games and how more and more jurisdictions are treating them like gambling and regulating them accordingly.  Most recently, a California law was used to push lawsuits against Apple and Google for loot boxes allowed through games in their app stores.  Now, EA, the publisher best known for kicking off the media and social campaigns that outlined and revealed loot boxes and gambling to the world through its Star Wars game Battlefront II, is facing a $5 million class action lawsuit.  Specifically, the class action is citing one of EA’s most profitable games, Fifa Ultimate Team.  An online source explains:

Video Games Chronicle reports Kevin Ramirez filed the class action lawsuit with the Northern District of California on the behalf of 100 other plaintiffs. In the suit, they allege EA “relies on creating addictive behaviors in consumers to generate huge revenues.” They specifically call out EA’s Ultimate Team Packs, which allow gamers to assemble their favorite teams for online play, saying they “are predatory and designed to entice gamers to gamble.” They go on to add:

“EA’s Ultimate Team Packs are Loot Boxes. Buying the Packs are nothing more than a gambling bet. Purchased using real money, the Ultimate Team Packs are simply wagers on completely randomized chances within the game to win valuable professional players and other items for the EA gamer’s virtual sports team.”

They will have to prove that loot boxes rise to the level of California’s definition of gambling. That definition defines a gambling  device as “a machine, aperture, or device; something of value is given to play; and the player may receive something of value by element of chance.” The lawsuit goes on to say:

“None of these elements can be in dispute. A gamer uses his console, computer, smartphone or tablet with the EA sports franchise game on it (#1); the gamer pays real-world currency for the opportunity to open an Ultimate Team Pack (#2); and the Ultimate Team Pack is a randomized chance to win something valuable in-game.”

The timing of this particular class action lawsuit is of particular note given a recent study that examined the relationship between loot box purchases and gambling problems.  The study draws a parallel between gambling problems and access to loot boxes.  The study doesn’t claim that loot boxes will lead to problem gambling, but that those who suffer from problem gambling issues will engage in loot boxes.  Given how widely accessible they are to gamers, this makes the responsibility to regulate them appropriately even more clear.  An online source explains:

A new study from CQUniversity Australia has found that gamers who purchase loot boxes are more likely to have gambling problems… The study looked at 2,000 gamers between the ages of 12 and 24, and over 93% had played a video game that contained loot boxes in the past year. The majority of respondents agreed that loot boxes have some sort of addictive quality, and one third said they regularly purchased them. In fact, adolescents between the ages of 12 and 17 spent a median of $50 on loot boxes. Parents are often unsure as to what loot boxes even are and, because of this, the study calls for increased monitoring and enhanced public awareness campaigns by the gaming industry.

Worse yet, researchers Dr. Alex Russell and Professor Matthew Rockloff found that 62% of the best-selling games now include loot boxes — including /Angry Birds/ and /Counter-Strike/. They point out that many of the most valuable rewards are often resold online for real cash, further blurring the line between loot boxes and gambling.

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Congress hears Testimony from NCAA on Why Collegiate Sports Betting should be Banned

Casino Watch Focus has reported on the dramatic impact and subsequent explosion of sports betting since the Supreme Court decision.  Virtually all states have looked into what legalizing sports betting would mean for its jurisdiction, but some states have still not moved forward.  For those venues where sports betting is legal, most of the focus has been on the major professional sports leagues, but collegiate sports have long been a focus of would be sports betters.  As such, Congress has agreed to hear arguments in favor and against allowing sports betting on collegiate sports.  An online source reports:  

College sports betting is slowly being legalized across the United States. The practice has sparked a debate about the morality of the practice so much that the US Senate Committee had to weigh in and hear arguments from both proponents of the measure and those who opposed it.

The meeting was entitled “Protecting the Integrity of College Athletics” and it included a number of college representatives, educators, lobbyists and industry specialists.

Heather Lyke, the athletic director at the University of Pittsburgh was present on the behalf of the Atlantic Coast Conference (ACC) and the University both.

Those in favor of a ban on collegiate sports approach the situation from a few different angles.  The online source continues:

Ms Lyke said that while the repeal of PASPA was understandable and sports betting was here to stay, the U.S. Congress was supposed to take action so as to preserve the integrity of intercollegiate athletics. She directly asked for a prohibition on any sports betting that targets collegiate contests.

Her argument ran on the lines that the practice would be detrimental to the integrity of collegiate sports: “The introduction of legal wagering on intercollegiate athletics will have a corrosive and detrimental impact on student-athletes and the general student body alike. Gambling creates pressures and temptations that should not exist.”

She explained that students may become victims of corrupt practices and fall victim to gambling firms who want to push their interests. Ms Lyke said that even if the NCAA were to enact far-reaching measures that warn students and athletes of the dangers of gambling and outright prohibit it as per current law, the “corrosive effect” would be nevertheless widespread.

She further explained that sports teams have both the finances and man power to enforce integrity whereas most colleges in the country would  struggle to do the same.

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Las Vegas Employees Suing over Unsafe Work Conditions during the Covid-19 Pandemic

Casino Watch Focus has reported on the ongoing developments surrounding the gambling industry during the coronavirus pandemic.  Most recently, after shutting down due to the virus, Las Vegas opened back up and a record number of Covid-19 cases were reported.  Casino employees have been exposed to a rash of gamblers flooding back to casinos and in Arizona, a casino re-closed after an employee caught the virus and died.   The lack of PPE requirements were at the center of the situation and employees have taken note.  Citing similar types of work place issues, Las Vegas workers are trying to protect themselves anyway they can, including using the courts.  As Fox Business reports, a new lawsuit has been filed:

Las Vegas Strip hospitality workers filed a lawsuit against casino operators on Monday accusing the companies of failing to protect employees from Covid-19, one of the first efforts to hold employers legally responsible for infections as cases in the U.S. surge.

The lawsuit, filed in U.S. District Court in Las Vegas against the owners of Harrah’s, MGM Grand and Bellagio casinos, says the company didn’t immediately shut down food-and-beverage outlets and other areas after learning of positive cases, didn’t immediately inform employees when co-workers tested positive, and didn’t adequately contact-trace before allowing colleagues of infected employees to return to the job.

Culinary Union Local 226 and Bartenders Union Local 165, through their joint bargaining agency, filed the lawsuit against Harrah’s Las Vegas LLC, a subsidiary of Caesars Entertainment Corp., and The Signature Condominiums LLC at the MGM Grand and Bellagio LLC, subsidiaries of MGM Resorts International.

The lawsuit said unsafe working conditions violate the unions’ contract. The unions represent 60,000 hospitality workers. “We’re not just numbers,” Mr. Zermeno said at a news conference Monday. “We’re families also. We’re human. I just want them to care, honestly.”

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New Class Action Lawsuits filed against Apple and Google Allege Gambling-esque loot box mechanics in Apps they sell violate California Gambling Law

Casino Watch Focus has reported on the ongoing saga of gambling-eque loot boxes that have been for sale in video games.  These game mechanics are said to prey upon people’s addictive personalities the same way a common slot machine would and they have come under intense scrutiny across the world.  Some legislation has been enacted to force regulation on these gambling like micro transactions, and California is one such jurisdiction.  A class action lawsuit has been filed alleging that companies like Apple and Google, through their game app stores, are violating the law and fostering predatory behavior.  An online tech source explains:

A new $5 Million Class Action was filed against Apple on Friday in the U.S. District Court in San Jose in a very important case relating to the promotion of video games that have in-app purchase mechanisms that are primarily aimed at children and addicted gamblers. Apple’s iPhone and iPad are considered illegal “slot machines or devices” in California. In-app purchases in this case are deemed to be “Loot Boxes” or “Loot Crates.”

The issue is quickly becoming an issue in Europe with both Belgium and the U.K. now demanding that the government modernize its gambling laws to include “Loot Boxes” especially targeting children. While Apple legally tried to protect themselves by creating mild restrictions on its developers, the bottom line is that they allow this practice considered gambling, and more importantly, profit handsomely from “Loot Box” purchases, according to the pending Class Action. This type of Class Action is long overdue in the U.S. and will be an important one for the gaming industry as a whole.

A similar class action was also filed against Google alleging the same illegal behavior.  An online legal source breaks down some of the specific tactics that are used to hook young children who play these games:

The complaint accused Google of allowing children to gamble through games available in the Google Play store, allegedly in violation of California legislation. The plaintiffs equated Google’s tactics to “Big Tobacco’s ‘Joe Camel’ advertising campaign.” They claimed that “Google relies on creating addictive behaviors in kids to generate huge profits for the Company.”

For example, plaintiff S.M has been “induced to spend his parents’ money to purchase ‘Loot Boxes’ in-game” while playing a game on a smartphone.  Mei-Ling Montanez “estimates S.M. has spent more than $100 on in-game purchases including Loot Boxes. The money spent on Loot Boxes was done in exchange for the random-chance possibility of winning valuable items in-game.” S.M. was able to purchase these items with his parents’ credit card that was on file with the Google Play App store. 

Moreover, no parental consent is required to purchase these items. Montanez claimed that her son fell victim to this “scheme,” which is allegedly “designed to hook children into spending money on the game.” Furthermore, while these games are “free,” they may be free to download, but not fully free to play because of these induced allegedly purchases.

According to the complaint, various games, including Mario Kart Tour, FIFA Soccer, Roblox, Brawl Stars, Final Fantasy Brave Exvius, and others use loot boxes. The Loot Boxes rely on a “variable rate enforcement” reward structure, which “results in people quickly acquiring behaviors and repeating these behaviors frequently in hopes of receiving a reward.” For example, “purchasing and opening a Loot Box – by design – is visually, physically, and aurally stimulating. Opening a Loot Box gives the player a rush; the moment of anticipation followed by release. 

The Loot Box mechanism has been proven to be effective on adults, and its effects are only intensified when used on minors who are more prone to engage in risk-taking behaviors, more prone to gambling addiction, and “are less equipped to critically appraise the value proposition of these schemes.”

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Court Rules Florida Greyhound Amendment doesn’t Violate 5th Amendment

Casino Watch Focus has reported on the various efforts to shut down greyhound racing in Florida.  The direct issue of live dog racing was settled with voter support in favor of a constitutional ban on live races in Florida.  The facilities are still allowed to show simulcast races and they can still operate as mini casinos as the amendment didn’t shut down their existing slot machine offerings.  However, even with that much operating ability under the new law, facility owners challenged the law claiming it violated the 5th Amendment by taking away their property.  That case has now been dismissed by the Florida court.  An online source explains:

A federal judge in Florida has dismissed a lawsuit that challenged the state’s greyhound racing ban on constitutional grounds. Chief US District Judge Mark Walker said in a 55-page ruling this week that the prohibition was a “legitimate exercise in Florida’s police power,” rejecting the plaintiffs’ arguments that the ban represented an illegal “taking of property” without just compensation.

Walker ruled that Florida had used its police powers to prevent “plaintiffs’ property from being used in a particular manner that the State has determined to be contrary to the health, morals, or safety of the community.”

The plaintiffs also argued the amendment had violated their equal protection rights because the State of Florida continued to permit wagering on horse racing. The lawsuit claimed dog racing had been singled out because it was “politically unpopular.” But the judge rejected the equal protection claim because Amendment 13 “does not involve suspect classes such as race, gender, or national origin.”

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Illegal Slot Machine Manufacture Faces Criminal Charges In Missouri

Casino Watch Focus has reported on the ongoing saga of illegal gambling machines that have popped up all over Missouri.  Gambling is restricted to the 13 licensed casinos along the Missouri and Mississippi rivers only.  However, new slot machines have surfaced in gas stations and other establishments that have caught the ire of law enforcement.  At first only a few cases again the establishments were filed and very little attention was given to them. Then as more state wide attention emerged, several different attempts were made to eradicate them, including a civil lawsuit by legitimate manufactures against the illegal slot machines manufacturer.  That same manufacturer is now facing criminal charges. The St. Louis Post Dispatch reports:

A county prosecutor has filed illegal gambling charges against Torch Electronics, one of the largest operators of unregulated slot machines in the state. Torch, owned by Wildwood businessman Steve Miltenberger, is one of the companies whose machines have triggered a mixed response from law enforcement. 

The company is also a player in Missouri politics, contributing more than $20,000 to Gov. Mike Parson’s election effort. The filing is the first known instance of a county prosecutor in Missouri bringing charges against the company. According to a probable cause statement, two Brookfield Police Department officers on Sept. 12 removed three “slot machines” from the County Line Convenience store after speaking with store manager Tannis Williams.

Because the machines are unregulated, machine revenues don’t go to public education, there are no rules for acceptable payouts, and there are no state gambling addiction resources funded by machine revenues. Money from Torch and its owner, Steven Miltenberger, flowed to numerous politicians last year, according to Missouri Ethics Commission records.

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Missouri Gov. Opposes Gaming Commission and Missouri Highway Patrol on Illegal Slot Machines Highlighting the need for Legislation

Casino Watch Focus has reported on the illegal gambling machines that have been popping up outside of casinos and all over Missouri.  Slot machines are only allowed in licensed Missouri casinos, yet the manufacture of the machines claim they aren’t games of chance, so they aren’t slot machines.  Many jurisdictions have dealt with pre reveal machines and they have all concluded they are slot machines. The Missouri Gaming Commission has defined them as illegal machines, but they can only enforce gambling regulations at the casinos.  The Missouri Highway Patrol has been clear they view them as gambling and they have been working with local prosecutors to try to crack down on the machines. Most recently, authorized slot machine manufacturers have taken to the courts to sue those that manufacture the illegal machines.  Various editorial boards are also standing up against this illegal expansion of gambling. The St Louis Post Dispatch had the following to say:

Reasons abound why the spread of unlicensed payout video-gaming machines in Missouri’s bars, restaurants and gas stations constitutes an intolerable situation. Legalized gambling was approved here as a tradeoff for state tax revenue, but the unlicensed machines don’t bring in any. The state regulates legal gambling operations to ensure they aren’t cheating their patrons, but there is no such protection for those who play these machines.

Another important reason regulation is necessary is that gambling is an addictive activity for some people, which is why the state requires that access to addiction services and a voluntary self-exclusion program be offered at regulated gambling sites. These unregulated sites have no such resources.

The editorial continues and its sentiment is joined by other editorial boards as well, so its odd that Missouri Gov. Mike Parsons isn’t convinced the machines are clearly illegal slot machines.  US News and World Report explains:

Gov. Mike Parson says he’s not convinced that unregulated and untaxed video gambling terminals in the state are illegal, even as investigators in his administration work to halt their spread. The governor’s stance is in contrast to the Missouri State Highway Patrol, whose leaders have made a decision. A patrol lieutenant told a state House committee in October that the machines are illegal and that its investigations resulted in dozens of criminal referrals to prosecutors.

Besides the Platte County case, several others have been filed, including one in Parson’s home county. Polk County Prosecutor Ken Ashlock said there are no payout requirements for unregulated machines, meaning the operators can keep more money than they could in one of the state’s 13 regulated casinos. “People are just getting cheated on them and they don’t know it,” he said.

The Governor’s position doesn’t instill confidence and some have argued its a symptom of a larger problem and is the real reason the Missouri legislator must address the issue this legislative session.  The Joplin Globe argues:

The biggest distributor of the machines, Torch Electronics, has aggressively marketed the games. It says the terminals are not gambling devices because a player has the option of checking the outcome of a wager by clicking an icon before continuing play, thereby removing the element of chance, though players are not required to click the icon before completing the play.

Torch employs politically connected lobbyists and high-powered consultants. The company has made campaign donations to key political players, including at least $20,000 to Gov. Mike Parson, according to a July report in the St. Louis Post-Dispatch.

The fact that criminal cases are going forward while the governor questions whether the devices are in fact illegal highlights the problem. Torch and similar companies distributing the devices are skirting the edges of the gambling laws in Missouri and appear to be trying to game the system through political influence.

The Missouri House held special hearings into the machines and unregulated gambling this past summer, and the Senate is looking at a plan to ban the terminals outright.

This is an issue of the letter of the law versus the intent of the law. The Missouri General Assembly must resolve the matter, to permit these games or to clearly ban them.

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