Category Archives: Online Gambling

Sports Betting and Other Major Provisions in the Florida Gambling Compact with the Seminole Tribe Could Prevent Deal

Casino Watch Focus has reported on the ongoing efforts to renegotiated the expired portion of the Seminole Gambling Compact. Several attempts have been made over the past few legislative sessions, but nothing has been established and they have been acting in good faith since.  As this year’s session approaches its end, the efforts to finalize a new compact have strengthened. As previously explainedit was suggested that sports gambling could be legalized in Florida without needing to involve a vote of the people. Tribal gambling is not regulated in the same way, so if they were to offer it, its believed that it could be a way to work around the need for voter approval. Florida Politics online explains:

Simpson acknowledged last week that the concept of allowing the tribe to run sports books at the state’s dog and horse tracks and jai alai frontons was intended to sidestep a constitutional amendment that passed in November requiring statewide votes on citizens’ initiatives that would expand casino-type gambling.

But [Florida Gov. Ron] DeSantis, a graduate of Harvard Law School, indicated the constitutional amendment adds another layer of analysis to an already-complicated legal deal that also encompasses serious policy-making decisions.

“Obviously, me and my staff we’re going through it, looking substantively (at) what it means, but also legally. As you know, there’s a lot of legalities that are involved in this. There is just a (constitutional) amendment that passed. You know, the question, does it apply to the tribe? Does it apply to this or that? So there’s a whole host of things I think that need to be vetted through, but prior to yesterday I had not seen the outline. We have it now and are going through it,” DeSantis said.

This sports betting provision in general, however, is being set up in a way that Florida Gov Ron DeSantis believes could cause problems. Florida Politics continues:

With time already an enemy, Gov. Ron DeSantis injected more uncertainty Tuesday into a gambling deal reached by a Senate Republican leader and a representative of the Seminole Tribe, suggesting its passage would be too heavy a “legislative lift.”

The governor said he and his staff have begun scrutinizing “a draft outline” of the agreement, which would open the door for sports betting in Florida, with the tribe acting as a “hub” for sports betting at the state’s pari-mutuels.

But the Republican governor appeared skeptical of some sports-betting provisions in the deal, which reportedly also would permit in-play betting at professional sports arenas.

The manner in which sports betting is set up “could really affect the integrity of the games,” said DeSantis, who, as an undergraduate played baseball for Yale University.

“If I can place a wager on whether the first pitch of a game is going to be a strike or not, well, hell, that’s a big moral hazard, because that’s not necessarily something that would affect the total outcome,” he added.

Clearly sports betting has its own set of issues, but that’s not the only sticking point for a successful compact. Designated player games also need addressed given the temporary agreement expires after May of this year. The Tampa Bay Times explains: 

But some issues opposed by pari-mutuels could imperil the deal’s success in the House, several lobbyists said.

Controversial “designated player” games offered at many of the state’s pari-mutuel cardrooms are a key element of the deal. The Seminoles — and a federal judge — have maintained that the card games violate a 2010 gambling agreement with the state that gave the tribe “exclusivity” over offering banked card games, such as blackjack.

Amid the dispute about designated player games, former Gov. Rick Scott entered an agreement with the tribe in which the Seminoles have continued to pay about $350 million a year to the state, which pledged to “aggressively enforce” how the games are played. But that agreement expires on May 31, and the House and Senate have not included the revenue in next year’s budget.

The deal under discussion would severely alter the way the card games are being played, making them virtually unprofitable for pari-mutuel cardrooms, sources said.

House Speaker José Oliva told The News Service of Florida on Tuesday afternoon that he had seen a “brief outline” of the gambling proposal.

The issues don’t stop there either. There are discussions to decouple horse racing in the same way dog racing was decoupled by the voters last election as well as other intertwined gambling issues. At the end of the day, Gov. DeSantis thinks it could simply be too many issues with too many parties to come to an agreement in time. The Tamp Bay Times continues:

To appease the pari-mutuels about the changes to the designed player games, the proposed agreement would also allow horse tracks to do away with horse races, while keeping lucrative activities like cardrooms and slot machines, which are legal at tracks in Broward and Miami-Dade counties. It is unclear whether such “decoupling” would also apply to jai alai frontons. Dog tracks are already allowed to drop greyhound races, thanks to a voter-approved constitutional amendment passed in November.

The pari-mutuels would also be able to operate sports books, with a cut going to the tribe, but the profits from sports betting wouldn’t offset the losses from the changes in the designated player games, according to industry experts.

Under the agreement, the Seminoles would be able to add craps and roulette to other gambling activities currently underway at the tribe’s casinos. The tribe would agree to pay about $400 million a year to the state, an amount that could gradually increase to about $500 million a year. That’s a boost from the current revenue-sharing agreement with the tribe, but far less than what legislative leaders had originally envisioned.

The decisions by the House and Senate to not include the tribe’s annual payments in their budget proposals takes some pressure off negotiators as lawmakers work to hammer out a final budget in the coming days.

Senate President Bill Galvano on Tuesday afternoon told the News Service that Simpson was continuing to work on the gambling deal, which the president said was still in play.

But with just a week-and-a-half left before the legislative session is slated to end, DeSantis hinted that passage of a compact would be extremely difficult. 

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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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UPDATE: Wire Act Changes delayed by DoJ until June 14

Casino Watch Focus has reported on the developing situation surrounding the Department of Justices’ decision to restore the interpretation to the plain language of the Wire Act to ban all online gambling. The Obama Administration went against this long standing interpretation and concluded the Wire Act was only refereeing to sports betting, meaning all other forms of online gambling were not banned by federal law. This opened the floodgates to numerous state lottery programs as well other online gambling activities such as online poker. Now that the Trump Administration has announced its intent to restore the Wire Act to it original intention, many have objected and others have threatened to join in legal action. As a result, the DoJ is extending the recommended enforcement deadline to allow time for some of the legal challenges to play out. An online source explains: 

The U.S. Department of Justice extended any implementation of the agency’s revised Federal Wire Act opinion until June 14, according to a memo from outgoing Deputy U.S. Attorney General Rod Rosenstein.

The memo to all U.S. Attorneys, assistant attorney generals and the director of the FBI was signed Thursday. The Justice Department originally delayed the implementation until April 15. “We have decided to the extend that window an additional 60 day (through June 14, 2019),” Rosenstein wrote. “Providing this extension of time is an internal exercise of prosecutorial discretion and does not create a safe harbor for violations of the Wire Act.”

The move allow a legal challenge to the opinion, brought by New Hampshire, to moved forward in federal court. Rosenstein issued a memorandum on the 90-day delay the day after the opinion was announced, giving “businesses that relied on the 2011 (Office of Legal Counsel) opinion time to bring their operations into compliance with federal law.” Rosenstein is leaving office this week. Some in the gaming industry quietly hope new U.S. Attorney General William Barr – a state’s rights advocate – will simply opt not to enforce the opinion, just as the department doesn’t opt to prosecute for simple possession of marijuana. 

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Florida Bill Banning Online Lottery sales Advances with Additional Warnings for Gamblers

Casino Watch Focus has reported on the ongoing developments of the Department of Justice’s decision to restore the wire act to its long standing position that makes online gambling illegal. Many states have an eye on the developments as legal action was threatened by New Jersey and New Hampshire. The topic is also of interest in Florida where many are curious how gambling legislation will move forward in the wake of the Voters in Charge gambling bill being passed that requires statewide voter approval for gambling expansion. The most well know issue centers around sports betting, but online gambling is also of interest. To that extent, a bill is moving forward in the Florida legislature to end the practice of online lottery sales before it gets off the ground. An online source reports:

Florida does not sell lottery tickets over the internet — and if a bill passed Wednesday by the House Gaming Control Subcommittee becomes law, it never will.

While New Hampshire has sued the Department of Justice in a bid to protect the revenues it derives from its online lottery operations, State Rep. Will Robinson (R-Bradenton) wants to the option taken off the table entirely.

The main aim of Robinson’s bill — which was advanced by the committee in a 10-1 vote — is to shut out third-party websites that claim affiliation with the state lottery but actually just buy tickets and mark up prices.

The bill would ban the use of personal electronic devices for the sale and purchase of tickets, ensuring that every ticket sale involves a transaction between a store and an in-person buyer.

“These fraudulent websites are, in my view, illegally advertising when they are not related to the lottery system at all,” he told /Florida Politics/ earlier this week. “The lottery is significantly regulated and that’s for a purpose … The state of Florida wants to make sure the right thing is being sold.”

The bill’s intent goes beyond just selling tickets online however. The Rep. Will Robinson Jr believes people should truly understand how very unlikely the changes of winning the lottery are for would be gamblers. He has proposed additional warnings placed on physical tickets. The Tampa Bay Times explains:

Debate about a bill that would require warnings on lottery tickets quickly turned into a debate on Wednesday about whether anyone in Florida is actually addicted to lottery games, with one lawmaker blasting it as “deceptive.” The bill (HB 629) by state Rep. Will Robinson, Jr., R-Bradenton, would add two warnings to the front of every lottery ticket:

“WARNING: PLAYING A LOTTERY GAME CONSTITUTES GAMBLING AND MAY LEAD TO
ADDICTION AND/OR COMPULSIVE BEHAVIOR.”

And, “THE CHANCES OF WINNING A BIG PRIZE ARE VERY LOW.”

Under the bill, those two warnings would take up 10 percent of the face of every lottery card, and they would be required in every Florida Lottery advertisement, including those on television.

But state Rep. Emily Slosberg, D-Boca Raton, grilled Robinson during a House Gaming Control Subcommittee meeting about whether he knows of anyone addicted to lottery games. Robinson he didn’t know of any personal examples, but he pointed to news articles out of state. That led Slosberg to come out strongly against the bill.

How many people might be addicted to the games is unclear. But the numbers show that some Floridians spend a staggering amount each year on lottery tickets. Last year, the Florida Lottery sold $6.7 billion in tickets — nearly $400 in tickets for every adult in the state. (The figure doesn’t include tourists, some of whom also play.) And while the Florida Lottery does post the number to a gambling addiction hotline on its website, it doesn’t say anything on its tickets. State Rep. Randy Fine, R-Palm Bay, who used to run a casino consulting company in Las Vegas, disagreed with Slosberg. “The research proves that there are people that become addicted to gambling, and whether it’s 1 percent or 5 percent, people do at times become susceptible to this,” he said. “I know this from my prior life.”

The bill passed the House Gaming Control Subcommittee with only Slosberg voting against it. 

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New Jersey Plans to Sue the DOJ over Online Gambling Ruling

Casino Watch Focus has reported on the ongoing saga of the DOJ’s handling of the Wire Act as it pertains to gambling over both the Obama and Trump Administration. Most recently, the DOJ announced they had gone back to the long standing interpretation of the wire act that makes all forms of online gambling, not just sports gambling as the Obama Administration claimed, are illegal. This has understandably prompted a reaction from those that have decided to promote gambling in the online space. One of the more vocal states in regard to sports and online gambling has been New Jersey and they plan to sue the DOJ if they don’t reverse their stance. An online source reports:

New Jersey Senate President Stephen Sweeney has asked the Department of Justice to rescind its new opinion on the Wire Act. And if the DOJ does not, Sweeney has indicated NJ will go to court.

Sweeney’s letter to Rosenstein followed up on his statement days after the OLC opinion was made public in which he called on Lesniak, an attorney who served in the New Jersey legislature for 40 years, to come out of retirement to help protect the online gambling and sports betting industries that he helped bring to the state.

Lesniak then wrote a letter to Sweeney outlining how New Jersey could fight the opinion, and Sweeney used some of that language verbatim in his letter to the deputy attorney general.

Lesniak, who reactivated his license to practice law in the state of New Jersey on Monday, tells Online Poker Report that he plans to wait 30 days for new *US Attorney General Bob Barr* to get up to speed on the issue before filing the complaint requested by Sweeney.

The odds seem slim that the DOJ will resend their ruling. They aren’t taking a radical stance and they are simply going back to the clear intent of Congress that stood for so many years before the Obama Administration opened the flood gates of gambling by reversing the original intent. They have also been hinting at his position change for a while, so it truly seems unlikely that they would reverse their position based on New Jersey’s position. Time will tell if they follow through, but it seems likely that they will file a motion in court. 

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Guest Article: DOJ opinion will help protect kids from dangers of online gambling

Casino Watch Focus has reported on the new Department of Justice ruling that reestablished online gambling to be illegal under the wire act. The need for this ruling existed because the long standing intend of the wire act was erroneously reinterpreted by the Obama Administration to only apply to sports betting. This opened the flood gates to all other forms of online gambling. John Kent, Law and Economics Professor at the University of Illinois and the Senior Editor of the United States International Gaming Report opined why this reversal will help protect kids in an article published by The Hill: 

Until 2011, this DOJ ban had been in place for 50 years via the DOJ’s use of former U.S. Attorney General Robert F. Kennedy’s Wire Act, 18 U.S.C. sec. 1084, which was initially passed to fight organized crime.

In concert with the recommendations of the 1999 U.S. National Gambling Impact Study Commission established by Congress, the DOJ’s use of the Wire Act protected the public — and particularly kids — from 24/7 online gambling, including gambling on video games.

However, on Dec. 23, 2011 via a 13-page memo, the DOJ’s Office of Legal Counsel (OLC) reversed its long-held interpretation of the Wire Act to allow online non-sports gambling.

This 2011 OLC opinion was immediately vilified by the national press as reflecting corrupt influences and conflicts of interest, as detailed by the editorial board of the Christian Science Monitor on Dec. 27, 2011.

During a congressional hearing on Sep. 27, House Judiciary Chairman Bob Goodlatte (R-Va.) again raised these bipartisan concerns, including OLC conflicts of interest. On Dec. 11, incoming Senate Judiciary Chairman Lindsey Graham (R-S.C.) signaled to Gambling Compliance that he thought that the 2011 OLC opinion was incorrect.

Showing a picture of a child on his wireless ipad, Newsweek’s front cover on Aug. 14, 2014 stated:
“How Washington Opened The Floodgates To Online Poker, Dealing Parents a Bad Hand.”

Subsequently, the severe social and economic consequences of online gambling were highlighted in congressional hearings on March 25, 2015, and most recently on Sep. 27 before the House Subcommittee on Crime, Terrorism, Homeland Security, and Investigations, chaired by Rep. James Sensenbrenner (R-Wis.).

The full article can be viewed HERE. 

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Online Gambling in Jeopardy in Wake of New Dep of Justice Ruling

Casino Watch Focus has reported on the impact of the Obama Administration’s reinterpretation of the long standing Wire Act. It very clearly made online gambling that crossed state lines illegal, but the Obama Administration said it only covers sports betting, thereby opening the floodgates to all forms of online gambling except sports betting. This understandably led to a lot of concerns and questions over the safeguarding of those with access to online casinos, poker rooms or lotteries. Casino Watch reported two years ago that the Trump Administration was heavily considering reversing that reinterpretation and restoring the Wire Act to its original congressional intent. The Associated Press is reporting that the Department of Justice has followed through: 

The 2011 opinion opened the door for cash-strapped states and their lotteries to bring online gambling to their residents, as long as it did not involve interstate sports betting.

Nevada, New Jersey and Delaware legalized online gambling after that opinion was issued, and the three states have agreements allowing poker players to compete online across the states. Pennsylvania became the fourth state to legalize online casino gambling in 2017.

Now, the Justice Department says the previous opinion misinterpreted the statute.

“Based upon the plain language of the statute, however, we reach a different result,” attorneys for the department wrote in the opinion dated Nov. 2. “While the Wire Act is not a model of artful drafting, we conclude that the words of the statute are sufficiently clear and that all but one of its prohibitions sweep beyond sports gambling.”

The Wire Act was enacted in 1961 to target the mob and its gambling activities.

The full scope of the impact of this decision by the Depart of Justice is still unknown and this story will continue to develop. It’s very possible that a sea of litigation will be opened up, but the Depart of Justice hasn’t fully explained how severely they plan to enforce this interpretation. The AP continues: 

Jennifer Roberts, associate director of the International Center for Gaming Regulation at the University of Nevada, Las Vegas, said the impact of the opinion rests on how strictly the Justice Department is going to enforce the new interpretation of the statute.

“Some could go really far and say even if you send a text message to a casino customer in another state and you are saying ‘Come play blackjack this weekend here’s a deal,’ arguably you can say that is information that assists in the placement of a wager,” she said. “I doubt it will go that far, but we will once again be subject to the interpretation.”

The new legal opinion will likely be challenged in court, an issue acknowledged by the department attorneys in their document.

Daniel Wallach, co-founding director of the University of New Hampshire School of Law Sports Wagering and Integrity Program, said the opinion could have “an immediate chilling effect” on the ability of states to conduct lotteries online.

“I think the most obviously impacted stakeholders are the lotteries that do internet sales, and that group is the most likely stakeholder to challenge this opinion in court.”

Advocacy group Coalition to Stop Internet Gambling and former U.S. Sen. Blanche Lincoln of Arkansas in a statement cheered the new opinion, characterizing the previous one as “problematic legally as it was morally” and calling the new one a “win for parents, children and other vulnerable populations.”

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