Category Archives: Online Gambling

Online Gambling Industry has Tools to Help Low-Income & Problem Gamblers; Chooses to Target & Prey on them Instead

Casino Watch Focus recently reported that gambling lobbyist finally admitted that casinos prey on customers. In a comment meant to say casinos hope more to prey on tourist, than the local residents, the well-understood relationship between casinos and gamblers was painted in a truthful light. Its clear the industry needs gamblers to make money, but it can be rather upsetting to learn just how they truly view them. Now it appears the online gambling community finds itself in a similar position. A recent study has shown that the online gambling industry has the tools to identify the most vulnerable of gamblers, yet they don’t help them, they pursue them. Consumer Affairs online reports: 

Focusing on practices in the United Kingdom, the Guardian reports that the gambling industry often takes data from third-party companies to serve online gambling ads to low-income consumers or those who have struggled with gambling addiction. One digital marketer detailed his experience of working with one such betting company.

“Third-party data providers allowed us to target their email lists with precision. Lower-income users were among the most successfully targeted segments,” he said. “We could also combine segments, ie we could target users who are on less than £25k a year, own a credit card and have three kids, via these providers.” 

Its upsetting to think the industry has no moral issue with targeting those most vulnerable, but to some its shocking. They promote the idea that gambling is an entertainment provided for people of the community to have a good time. They publicly preach messages of responsible gambling and offer 888 numbers and resources to help those in need, yet privately, they secretly target them as sustainable and easy money making prey. Consumer Affairs continues: 

The practices of these gambling sites bring up some interesting ethical implications when it comes to digital marketing. One could argue that serving a targeted ad to get someone to buy a product they could be interested in is harmless, but can the same be said for serving an ad to someone who is desperate or struggled with gambling in the past? According to some consumers, the answer is a definite no. In the Guardian report, several people say that bookmakers are purposely taking advantage of its targeted audience to promote their business.

“It just reaffirms my belief that the betting industry has no moral compass and are capable of exploiting the vulnerable in order to obtain the last pound out of them,” said Carolyn Harris, Labor MP for Swansea East in the UK. “They are actively seeking out those who can least afford to be involved in gambling. I’m absolutely aghast that they use these hostile techniques in order to suck the life out of people. If we were to offer free cocaine to an addict, they’d find it very difficult to decline. The betting industry knows this and they are by token doing exactly the same thing.” 

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Trump’s Attorney General Nominee Likely to Overturn Obama’s Wire Act Interpretation Making Online Gambling Illegal Again

Casino Watch Focus has reported on the ongoing evolution of online gambling on a federal level. Prior to the Obama Administration, online gambling was illegal. However, the Obama Administration took a stance on online gambling through an alternate interpretation of the Wire Act, which legalized online gambling. Now that there has been a change of power, it looks like online gambling could be made illegal again as originally intended by Congress. In addition to actual legislation that was introduced on Capitol Hill, it now seems like the Trump Administrations official stance on the Wire Act interpretation could become the new law should his pick for Attorney General be affirmed. An online source explains:

When the Department of Justice issued a memorandum in 2011 in which it limited the 1961 Wire Act to include just sports betting, the online gambling industry rejoiced. It opened up doors to legal and regulated online gambling industries in several states, with others expressing interest to do so and are now in the process of changing their own laws.

However, certain comments by Attorney General nominee, Jeff Sessions, made this week have caused rumblings of concern among igaming proponents.

In response, Sessions said that he had been “shocked” by the DOJ’s change of heart and that he found the move to be “unusual”. “I did oppose [the 2011 DOJ opinion] when it happened, and it seemed to me to be unusual,” Sessions said. He also replied regarding the opinion: “I would revisit it or make a decision about it based on careful study. I haven’t gone that far to give you an opinion today.”

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Congressional Committee to Take Up Daily Fantasy Sports Issue

Casino Watch Focus has reported many times on the newest form of sports gambling known as Daily Fantasy Sports. Also known as DFS, it’s an industry that very clearly represents sports gambling, and many states have either clarified their state rules to inform the industry that DFS is illegal, or have decided it represents gambling with no protection for players and they have decided to regulate the industry. The two most prominent companies involved, DraftKings and FanDuel, have even tried to proactively pass internal regulations in hopes of avoiding wide-scale government regulations. However, with the industry coming under fire from so many sources, including not only states, but also the FBI and the US Attorney general, its no surprise that Congress has decided to take a strong look at the issues at hand. An online source reports:  

A senior Democratic Energy and Commerce source has confirmed to Legal
Sports Report that the Subcommittee on Commerce, Manufacturing, and
Trade is planning a May 11 hearing on daily fantasy sports. That committee is housed within the Energy and Commerce Committee, chaired by *Fred Upton* (R-MI). *Frank Pallone* (D-NJ) is the ranking Democratic member.

There is *no active legislation* at the federal level that addresses daily fantasy sports. According to the source, the subcommittee will examine the *nature of DFS* as a product and the *current legal status* of the product. Ongoing legislative developments at the state level, consumer protection issues, and the potential role of the federal government will also be topics on the table.

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Recent Negative Rulings Force Daily Fantasy Sports Companies to Massively Increase Lobbying Efforts

Casino Watch Focus has reported on the ongoing criticism and identification of Daily Fantasy Sports (DFS) as the newest wave of sports gambling. Various states have been investigating DraftKings and FanDuel to determine if they are offering online gambling. Even the FBI and US Attorney General have been investigating. The DFS has tried to take a proactive approach. Recentlythe DFS industry called for government regulations and offered problem gambling safeguards. The industry believes if they can get it regulated, then that will prevent an outright ban, given online sports betting is illegal in almost all jurisdictions outside of Las Vegas. Unfortunately for DFS, more and more states are ruling that they are illegal. Now, they are aggressively changing their strategy and attempting to lobby for each state to exempt DFS from gambling laws so they can stay in business. USA Today reports:

Fighting for its life from coast to coast, the daily fantasy sports industry has dramatically changed its survival strategy since last year.

The industry now has about 75 lobbyists in more than 30 states, up from two lobbyists in two states last February, said Jeremy Kudon, an attorney for the industry. The goal is simple: If existing state laws indicate that your business might be illegal, then hire some professionals to help change those laws.

“This is a battle that’s going to be won in 50 states,” said Paul Charchian, president of the Fantasy Sports Trade Association, which advocates for the industry. “It’s going to be 50 small battles, not one big battle.” 

Its unclear how successful this strategy will be for DFS. They have started lobbying at the Federal level as well, but that could still leave individual states with the ability to clarify that the activity is illegal gambling. In their efforts at both levels, they believe they can prove that their games are games of skill not chance, but the skill level diminishes severely when new teams are drafted each day and not carried out through an entire sports season. Typically however, when a company puts forth enough lobbyist and lobbying dollars, change happens in those companies favor. But as the USA Today article explains, they have lobbied various states in the past to no avail:

The argument over daily fantasy’s legality hinges upon whether it’s considered a game of skill or a game of chance. Generally speaking, games that involve chance are usually considered gambling. But states hold different standards for how much chance is needed for a game to be illegal gambling.

While the industry started lobbying the federal government this year, it can exert more policy influence at the state level, said Marc Edelman, an associate professor of law at Baruch College, who consults in fantasy sports law. If federal lawmakers explicitly decriminalized daily fantasy, state governments could still impose stricter rules, he said.

Attorneys general in New York, Illinois and most recently Texas have argued that paid daily fantasy contests are illegal gambling under state law. Disclosures show the industry lobbied last year not only in those states but also others that could become legal battlegrounds.

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As Daily Fantasy Sports Industry Comes Under Fire, Even Draftkings and FanDuel Acknowledge Dangers as They Call for Gov Regulation and Implement Problem Gambling Safeguards

Casino Watch Focus has reported on the new Daily Fantasy Sports (DFS) industry, including the recent realization that at its core, its gambling, and that when left unregulated or banned, its leading to online scandals and wide spread investigation, including from the FBI and US Attorney General.  Recently, New York investigated the practice of daily fantasy sports and quickly reached a ruling that its illegal, which lead to the attorney general’s office to issue a cease and desist order to DraftKings and FanDuel.  The Washington Post explains:

New York Attorney General Eric Schneiderman found daily fantasy sites DraftKings and FanDuel in violation of the state’s gambling laws and sent both companies cease-and-desist letters to stop accepting payments – “wagers,” in his words – from New York residents.

The leagues that profit from it may be up next. Questioned about the leagues’ responsibility regarding daily fantasy, a spokesman in the New York attorney general’s office declined to comment, but did not rule out that it was an area of focus in the investigation.

The NBA, MLB, NFL and NHL all operate out of Manhattan. Just as MLB owns a little piece of DraftKings, the NBA owns a small percentage of FanDuel. The NHL shares an extensive marketing agreement with DraftKings. The NFL has attempted to keep the companies at arm’s length, but multiple team owners are heavily invested in both companies, and the league’s network partners draw massive advertising dollars from both of the daily fantasy titans.

Beyond just the individual state level, it’s rumored that the Department of Justice will outlaw DFS by the end of the year.  Following the recent insider trading type scandal between FanDuel and Draft Kings, and perhaps seeing the writing on the wall, FanDuel CEO called for government regulation.  The Wall Street Journal explains:

Nigel Eccles, who founded FanDuel in 2009, said Thursday that intervention by state governments is the only way to ensure consumers can trust the fantasy sports industry, which is facing a federal criminal probe and scrutiny by state regulators.

He said a plan announced this week by the industry’s trade group to police itself with an outside control board is positive but doesn’t go far enough. “Consumers want a higher level of protection,” he said in an interview. “They need to know it’s fair, that the information is protected. If the consumer doesn’t trust the industry than the business doesn’t exist.”

The most telling move though, just recently, and somewhat quietly, happened by DraftKings.  They have started a program familiar to problem gamblers that the gambling industy refers to as a self-exclusion list.  It’s a clear sign that they understand the dangers involved and it’s as close to an outright admission that the industry is simply gambling as you might expect.  Self-exclusion lists aren’t always an effective tool, but, but the addition is a clear signal what type of product is being pushed.  A regional online Boston website explains:

As it fends off comparisons to illegal gambling operations, Boston-based daily fantasy sports company DraftKings now offers a system familiar to many legal gambling businesses: a self-exclusion option, which allows users to deactivate their accounts for periods ranging from three months to five years. On a new responsible gaming section of its website, DraftKings presents the self-exclusion policy as a way to prevent addictive gaming.

DraftKings has resisted gambling comparisons in the U.S., arguing its games are valid under federal and most states’ gaming laws. But self-exclusion is common in the gambling industry, and its usage appears to be an acknowledgment by DraftKings that its users could be susceptible to the same kind of addictive play.

Les Bernal, the national director of the Washington, D.C.-based organization Stop Predatory Gambling, dismissed self-exclusion options as a “sham.” “The whole idea of somebody who’s an addict is the absence of free will. How does somebody who’s an addict exercise their free will?” Bernal said. “It’s a gimmick that’s not meant to protect the player. It’s meant to give the appearance of concern by Internet gambling companies like DraftKings.”

Self-exclusion can be helpful to gambling addicts who have already recognized they have a problem, but it does little to help those who have not reached that point of self-awareness, said Krystle Kelly, the director of development and communications at the Massachusetts Council on Compulsive Gambling. “As a standalone, if that’s the only thing they’re doing to acknowledge this could be a gambling problem, I don’t think this is going to be very effective,” Kelly said. “If all of this negative attention did create these controls, I think that’s a good thing. I think that’s a step in the right direction. But I think there probably needs to be more work done to address high-risk populations.”

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION


Expanded Support from State Attorney Generals for the Restoration of America’s Wire Act: Would Return Online Gambling to an Illegal Activity

Casino Watch Focus has reported on the ongoing efforts to restore online gambling regulations after a recent and broad Obama Administration view of the Wire Act allowed for the legalization of online gambling.  The newest efforts in Congress and the Senate has been through the Restoration of America’s Wire Act.  Many have supported such efforts, including Republican Presidential Candidate hopeful Marco Rubio.  Now, two state Attorney Generals have added their support in an open letter sent to the other state Attorney Generals. An online source explains:

The attorney generals from Missouri and South Carolina have come together in support of the Restoration of America’s Wire Act (RAWA), the anti-online gambling measure that has been introduced in both the Senate and House of Representatives.

Writing a letter distributed to all 50 state attorney generals, Missouri’s Chris Koster (D) and South Carolina’s Alan Wilson (R) request that “each of you sign-on … in supporting Congressional clarification that Internet gambling is prohibited by the Wire Act.”

An attached draft letter seeking the signatures of the attorney generals and addressed to the Senate and House Judiciary Committees states, “We fear that if RAWA is not adopted we will see a return to the wild west of Internet gambling.”

The memo was first circulated on October 19 and came with a signing deadline of October 30. Handled by the National Association of Attorneys General (NAAG), it’s unclear how many attorney generals actually signed the petition.

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Daily Fantasy Sports Violate Florida Law

Casino Watch Focus has reported on the ongoing evolution of how daily fantasy sports (DFS) is being viewed as gambling. It was last reported that companies like Draft Kings and FanDuel are starting to lobby in Florida in hopes of ensuring DFS stays legal on both federal and state levels. It appears that as of now, federal law could be interpreted to say DFS are legal. However, Florida law would seem to indicate its illegal, and that is where major players in the DFS industry physically reside. A local NBC news affiliate reports:

If you play fantasy football in Florida, you may be breaking the law as it may be considered gambling. At the federal level, fantasy football is legal, but Florida law considers it illegal to wagers under contest of skill.

Attorney Robson Powers said the sport could qualify as gambling based on how you argue contest of skill.Attorney General Bob Butterworth found fantasy football was in violation of Florida statutes in 1991. Not much has changed since then as his opinion hasn’t been enforced in nearly a decade.

“I think people should know there is a potential to be prosecuted for this type of activity and that just because everybody else is doing it doesn’t make it legal,” said Powers.

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