Category Archives: Poker

Massive State Online Gambling Expansion Proposed by Missouri House Legislator

Casino Watch Focus has reported on various methods of expanding gambling in Missouri.  Everything from new casinos, the recent efforts of online sports betting, to legalizing illegal slot machines operating outside of regulated casinos.  In Missouri, the constitution only allows for 13 casinos to operate. They are technically riverboats, but outside of the lottery or perhaps some fraternal bingo/charity type gambling events, everything operates through the casinos.  With the Supreme Court ruling that states can now offer online gambling, it’s no surprise Missouri legislators would be examining the possibility of expansion.  There are still state constitutional limits however, so proposed legislation must be tailored accordingly.  A new bill being introduced does look to casinos to handle online gambling, but is the expansion too great?  An online source examines the newly proposed legislation:  

For quite some time, Missouri  has been looking towards legalizing sports betting. Now, it seems that lawmakers are also looking at online casino and poker games. The Senate has been the driving force behind sports betting and now it is the House looking to add other online gambling options in the state. Representative Dan Houx introduced a new measure this week, HB 1364, which will allow for complete online gambling, in all verticals. This bill would actually replace the Senate measure instead of a separate initiative.

Poker is mentioned in the legislation, but only to classify it as well as sports betting as a game of skill. Operators in the state are allowed to offer games of chance and skill. For the sports betting portion, the measure is similar to SB 256, which is already introduced in the state. It also allows for up to three skins per license holder.

The bill allows for each of the 13 riverboat casinos in the state to have up to three skins. If everyone gets involved and all the skins are taken, the industry would be the largest in the US.

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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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Possible New Miami Gambling Expansion Plan Faces Regulatory Roadblock

Casino Watch Focus has reported on the many efforts to expand gambling in Florida. There have been several attempts at passing Vegas-style resort casinos, but those failed. Other gambling expansion attempts include slots, card games and jai alai. Now most recently, gambling expansion efforts are being made in Miami. Magic City Casino is seeking to open a jai alai fronton and poker room in the Edgewater neighborhood. The proposal was seen as controversial by many citing concerns that it would lead to even more gambling expansion. Now in response, city planners are using zoning regulations to halt the immediate expansion so the process can be open to feedback from the community. An online source explains: 

City commissioners voted 4-0 on Thursday to authorize Miami City Manager Emilio Gonzalez and the planning department to begin working on amendments to the Miami 21 zoning code that would define what gambling facilities are and where such facilities can be located in the city. It would also require four out of five commissioners to vote in favor of any future pari-mutuels, casinos, or card rooms.

Commissioner Ken Russell proposed the legislation after learning that the state’s division of pari-mutuel wagering recently awarded a permit to West Flagler Associates, the entity that owns Magic City Casino. West Flagler would lease the property from Crescent Heights and would also include a restaurant and poker room.

Several prominent businessmen and developers, including Jorge Perez, Craig Robins and Norman Braman, have come out against the new gambling facility.

Russell said the city does not have a mechanism in place that requires gambling facilities to go through a public process that would vet any proposed development or give the city the ability to reject the location of a new casino, pari-mutuel or card room. He said adding the regulations ensures residents have a role in deciding whether they want gambling facilities in their neighborhood.

 

 

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Florida’s “Player-Banked Card Games” become Major Legal Focus

Casino Watch Focus has reported on the exclusive gambling agreement the Seminole Tribe has with Florida.  The state allows the Seminole Tribe to hold exclusive rights to various table and card games in exchange for guaranteed revenue for the state. A few years back, gambling regulators authorized a type of card game known as “player-banked card games.”  Various card games were made legal if the players played against themselves, not the house.  Now several years removed from the initial regulations, its become a major legal focus for the industry, as pari-mutuels are clearly taking part in the games by acting as the bank instead of the players.  The Panama City News Herald reports:

Gambling regulators and a pari-mutuel operator at odds over the legality of popular card games, first authorized by the state more than four years ago, pitched their cases to an administrative law judge on Tuesday. The issue involves “designated-player card games,” also known as “player-banked card games,” which include a hybrid of three-card poker and resemble casino-style card games but are played among gamblers instead of against the house.

State regulators contend that the card games themselves are legal, but the way they are being operated is too much like “banked” games, which are illegal anywhere in Florida except for the Seminole Tribe’s casinos.

State regulators filed legal action over a year ago that extended to seven pari-mutuels.  This specific legal action is a test case involving just one operator, Bestbet Jacksonville.  The issue seems to clearly boil down to the intent of what legislators authorized versus the process the pari-mutuels have implemented.  The News Herald explains:

According to regulators, the designated players —- who have a “break room” at the Jacksonville facility and never touch the cards —- are actually employees of unlicensed, third-party companies, something not envisioned when the state first approved the games. “They text. They talk. They don’t play the games at all. Sometimes the designated player will get up and leave in the middle of a hand and be replaced by another designated player,” Department of Business and Professional Regulation lawyer William Hall said during opening arguments Tuesday.

Some pari-mutuels require players to put up $50,000 in order to serve as the designated player, indicated by a “button” on the card table. And some require five times that amount in order to pass the “button” to another player, Hall said Tuesday. The designated player companies are “basically running a business in the card room,” Hall told Administrative Law Judge Suzanne Van Wyk, likening the “button” used to identify the designated player at the Jacksonville facility as “a glorified paperweight” used “to hold the cards down.”

“Our theory is that they have established a bank” in which the designated player is “really not a player,” Hall said. “It’s just someone sitting by chips so that the dealer can pay out of them. If that’s not a bank, I don’t know what is,” he said.

The position taken by the Department of Business and Professional Regulation is fairly simple, if the action is illegal and clearly not the intent of state regulators, then it needs fixed even if they have operated this way for the past four years.  News 4 Jax explains:

Even if state regulators signed off on a popular type of card game years ago, that doesn’t make the games legal, a Department of Business and Professional Regulation attorney told an administrative law judge on Wednesday. “If the petitioner (the department) allowed something that should not have been allowed, shame on us,” Department of Business and Professional Regulation lawyer William Hall told Administrative Law Judge Suzanne Van Wyk during closing arguments Wednesday.

Regulators in February sent cease-and-desist letters to six designated-player companies, ordering them to “cease conducting business activities related to the providing of designated players for the establishment of a bank in licensed cardrooms in this state.” “By providing this service your business is assisting the cardrooms in establishing a bank, and violating the law. Although individuals are free to participate in authorized games within licensed facilities, your business interest and active participation in the establishment of a bank is strictly prohibited,” the letter read.

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Court Ruling Allows Limited Gambling Expansion in Florida

Casino Watch Focus has reported on the ongoing efforts to expand gambling in Florida.  The latest round attempted to take advantage of a type of loophole in proposed legislation to allow expanded gambling around greyhound racing and poker & slot machine permits. Now it appears that a court ruling is allowing something very similar, this time revolving around jai alai.  Jai Alai is a sporting event that pari-mutual gambling is allowed to revolve around in Florida.  There are other forms of gambling allowed to take place at these pari-mutual gambling facilities and as the Miami Herald explainsa new court ruling affirming a loophole in existing law will allow for gambling expansion:

Florida City could be home to Miami Dade’s next poker room and, with time, slot machines, under a loophole in the law affirmed Tuesday by a state appeals court.

The decision by the First District Court of Appeal in Tallahassee overruled state regulators and said that Magic City’s parent company, West Flagler Associates, is eligible to obtain a summer jai alai permit that could also open the door to expanded gambling.

Because of a loophole in state law, West Flagler is required to obtain the jai alai permit then operate a single jai alai game to be eligible for a poker room. After two years, it could become eligible for a slot machine license in Miami Dade County.

Isadore Havenick, West Flagler owner and vice president, said the company has an option to buy a piece of property in Florida City and, if the division grants the summer jai alai permit as expected, the company plans to build a poker room and jai alai fronton near Homestead there.

As for building a new casino, “we honestly haven’t thought that far in advance,’’ Havenick told the Herald/Times. “Now, it’s a poker room and a jai alai fronton and, hopefully, we’ll be allowed to build that if the division allows us.”

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As Communities Consider Online Gambling, the FBI Warns of Money Laundering, Cheating & Fraud

Casino Watch Focus has reported on the various attempts at legalizing online gambling, both on a state by state level and at the federal level. As debates continue in these various arenas, the FBI wants to be sure the criminal implications are understood by those who consider either gambling online themselves or simply allow its existence in their communities.  An online source carried the PRNewsire release of a Joint Statement of Experts who outline the FBI’s statement:

Joint statement by: Michael K. Fagan, career federal prosecutor and post-911 anti-terrorism coordinator active in investigating and prosecuting illegal offshore online commercial gambling enterprises; Earl L. Grinols, distinguished professor of economics at Baylor University, former senior economist for the President’s Council of Economic Advisers; Jim Thackston, software engineer with a background in the aerospace, manufacturing and energy industries; John Kindt, Professor of Business and Legal Policy,University of Illinois, Senior Editor, U.S. International Gaming Report.

The FBI recently wrote Congress for the second time expressing the Agency’s concern that online gambling – including Internet poker – is vulnerable to money laundering and cheating and is a vehicle to bribe public officials and others. Online players can disguise both their location and identity and thereby fleece unsuspecting innocent participants. In its September, 2013 letter, the FBI stated “Transnational organized crime (TOC) groups might exploit legal online gambling to generate revenue, steal personally identifiable information (PII), and engage in public corruption.” The FBI’s correspondence confirms what we have known for several years that, despite the gambling industry’s claims to the contrary, there exists effective and non-detectable methods which can be used to anonymize a player’s identity and geo-location in order to corrupt a game and these threats will become more prevalent as more states race to embrace online gambling. As the FBI confirmed, “Individuals may use a wide variety of mechanisms to conceal their physical location, or give the appearance of operating in a different jurisdiction ” This statement is easily proven using scientifically verifiable and undetectable methods to demonstrate how a person located in Pakistan can play poker on a system located inside New Jersey. We know because we have done it. Despite what the poker websites and online gaming activists claim, this science is irrefutable and has been peer reviewed by top computer experts and law enforcement.

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Federal Online Poker Bill Introduced

Casino Watch Focus has reported on the many attempts to legalize online gambling.  Most recently, Rep Peter King introduced a bill to allow a broad range of online gambling.  Other legislators such as Sen. Harry Reid commented that the bill would not likely move through the process and that it undermined poker only efforts.  Now, it appears that a poker only bill is being introduced.  The Las Vegas Review Journal reports:

A Texas congressman and longtime Internet poker advocate introduced legislation Thursday that would allow states and Indian tribes to legalize the activity without fear of federal intervention.

The bill, titled the Internet Poker Freedom Act of 2013, marks the second time Rep. Joe Barton, R-Texas, has tried to push federal Internet poker legislation through Congress. His 2012 attempt stalled.

In interviews after King’s bill surfaced, Barton said his belief was that a poker-only bill had a better chance of passing Congress, rather than full-blown casino wagering.

Barton’s bill would set up a federal system for regulating only online poker. Individual states could opt out of the system, if they wish.

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Zynga to Expand Real Gambling Options in the UK along side Facebook: Sights set on the US

Casino Watch Focus has reported on the ongoing partnership of Facebook and Zynga to introduce real money gambling into the social media arena.   Facebook has already started allowing real money gambling and will soon introduce sports betting.  The Daily Mail reports:

Facebook will offer real money betting on horse racing and football matches in a major expansion of its gambling operations. The social networking site was criticised last year for launching a range of Las Vegas-style casino games with the promise of jackpots worth tens of thousands of pounds.

It already offers virtual slot machines for children as young as 13 – with real money games advertised as soon as users hit their 18th birthday.

Now it will begin offering sports betting under a lucrative deal with online bookmaker Paddy Power, which was announced last night. The game, called Paddy Power In-Play!, will be rolled out in the coming days. It will only be available in the UK, where gaming laws are more relaxed than in the US.

 Zanga is also a part of Facebook’s gambling strategy, but Facebook appears to be far more important to Zynga’s success. As explained by The Week, Zanga has started offering real money gambling games and their operation will soon be available on Facebook:

At a World Gaming Executive Summit in Barcelona, Facebook’s Sean Ryan is showcasing two new Zynga games, ZyngaPlusPoker and ZyngaPlusCasino, according to VentureBeat‘s Dean Takahashi. Zynga “says that social gaming remains its heart and soul,” Takahashi says, “but the gambling games are a logical extension for fans who want to bet real money and win it in social games.”

The first step is conquering Britain, where online gambling is legal and regulated. In April, Zynga released online and downloadable versions of its two real-money games in the U.K., in partnership with established British poker company Bwin.Party Digital Entertainment. Facebook and mobile versions are coming soon.

The Facebook component is key to Zynga’s strategy. Zynga and its investors believe, with some justification, that “the real-money Facebook games could be a game changer, luring in the general U.K. population that has known Zynga for years as a social gaming pioneer,” says Jennifer Booton at Fox Business

 So how will this affect the American Market?  Right now Britain is viewed as a test market to work out any issues and with the current US legislation landscape shifting to States allowing online gambling, Facebook and Zynga could be worth billions in the future.  The Week continues:

Britain is “the ideal test-case for Zynga, with it’s concentration of seasoned online gamblers contributing to a £2.3 billion ($3.4 billion) industry for the country,” says Lauren Hockenson at GigaOm. But the company’s “sights are no doubt set on the United States, which, despite its currently restrictive gambling laws, could be worth $9.3 billion by 2020.”

Rep. Peter King (R-N.Y.) is pushing for legislation to drop all federal regulation of online gambling, leaving it up to individual states to decide what to allow. Nevada and New Jersey — home to Las Vegas and Atlantic City, respectively — have recently legalized the practice. (Nevadans can already play online real-money poker against other Nevadans, and New Jersey and Delaware are setting up their online gambling systems.)

It won’t be a slam dunk getting a chunk of the Jersey or Nevada markets — Zynga needs to partner with a casino in Atlantic City, and only two of the 10 are still up for grabs, says VentureBeat‘s Jeffrey Grubb. But as signs point toward more online gambling in the U.S., Zynga has put itself in a prime position to profit. It has an established brand plus loads of customer data to work with, and Facebook is a great platform for minting new online gamblers.

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Rep. Peter King Introduces Online Gambling Bill; Sen. Harry Reid Objects

Casino Watch Focus has reported on the many attempts to pass federal online gambling legislation.  Most attempts have centered around online poker and Sen. Harry Reid has led the way.  Casino Watch Focus reported that this year’s attempt would not come from Sen. Harry Reid, but rather Rep. Peter King.  His bill has now been introduced, but goes beyond legalizing online poker.  An online political source explains:

Rep. Peter King (R-N.Y.) introduced legislation on Thursday that would legalize online gambling.

The Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2013 would establish a federal regulatory regime for online gaming.

King’s bill comes after a 2011 Justice Department ruling that the Wire Act only banned online betting on sports, a decision that led many states to move forward with legalizing Internet gambling.

State officials and lotteries have resisted legislation that could hinder states’ authority over gambling. A similar “opt-out” measure was included in Senate Majority Leader Harry Reid’s (D-Nev.) online poker bill last year but did not win over critics from state governments.

Sen. Harry Reid does not support this legislation.  He is working with Sen. Dean Heller on yet another online poker bill and believes King’s bill will not get any traction as it undermines his and other pro online poker advocates.  An online source reports:

Senate Majority Leader Harry Reid believes that a bill proposed by New York Congressman Peter King to legalize online gambling at the federal level undermines the efforts of Web poker advocates.

In an interview with the Las Vegas Sun, Reid says that King’s bill would authorize just about everything with little oversight.

“(It) basically authorizes everything – 21, poker, everything,” Reid said.

“I felt for several months now that I don’t see any movement on this,” Reid said. “I don’t see anything happening.”

Other online poker bills are expected to be filed at the federal level this year.  Stay tuned to Casino Watch Focus for updates and for more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION.


Nevada Poker Bill Looks to Allow Other State’s Residents to Gamble on Their Online Gambling Sites

Casino Watch Focus reported that an Obama Administration ruling allowed for each state to introduce online gambling if gambling was legal in that state.  Much discussion has taken place as to whether the same ruling actually applies between states. The current legislation making Federal online gambling illegal is the Unlawful Internet Gambling Enforcement Act (UIGEA).  However, after the Obama Administration’s ruling, states have been pushing the envelope.  Now it looks like the attention is on Nevada as they are considering legislation that allows other state residents to gamble on their online gambling sites.  Bloomburg’s Business Week reports:

Soon after the Nevada Legislature begins its four-month session on Monday, lawmakers are expected to begin debating a bill that would let companies offering online poker in Nevada accept wagers from players in other states.

Such betting is essentially banned in most of the nation, but several states, including California and New Jersey, are weighing bills that would legalize some types of online gambling. The Nevada proposal, known as Assembly Bill 5, is intended to position Nevada-based companies to expand their customer base as other states ease restrictions. It’s one of a handful of gambling bills lawmakers will be asked to consider but it’s by far the most important.

Republican Gov. Brian Sandoval requested the change in his State of the State address in January and the Nevada Gaming Control Board drafted the legislation, which officials see as a potential moneymaker. Nevada currently permits online poker but no other type of internet gambling, so the agreements would apply only to poker.

Past Nevada legislation to allow online poker stipulated that their companies could not accept interstate wages until the federal government makes such online gambling legal.  However, this bill removes that stipulation, essentially acknowledging their belief that a federal bill will not pass soon.  However, this is also an acknowledgment that the practice is still illegal.  Much debate will take place as to the constitutionality of the bill given UIGEA and the current federal laws.

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After Failed Federal Attempts, Online Poker Efforts to Shift from National to State Platforms

Casino Watch Focus has reported on the numerous attempts to legalize online poker, including a recent report explaining that Senator Harry Reid’s latest, yearly-attempt to legalize online poker at the national level, had failed again.  After so many failed attempts at the federal level, it looks like the new goal of the online poker lobbyists will be to focus on passing State legislations. An online source explains:

Ever since the movement for legalized online poker grew out of the threat from the Unlawful Internet Gambling Enforcement Act six years ago, the poker lobby’s focus has been to obtain regulation at the federal level. This focus will change in 2013 as the future of online poker in the U.S. moves to a state-by-state basis.

The proposal last year from Senate Majority Leader Harry Reid (D-Nev.) and now former Senator Jon Kyl (R-Ariz.) would have regulated Internet poker while prohibiting other forms of online gambling to get support from liberals and conservatives. This proposal was the best chance for legislation at the federal level. Reid’s office claims there might still be an opportunity to pass the bill this year, but passage will be difficult without Kyl in office to deliver Republican support. Poker lobbyists aren’t going to completely abandon Capitol Hill, but it’s become clear that their focus is better placed elsewhere.

For those looking to protect families from the dangers of easy access and unsecured online gambling, it would be wise to be wary of local lobbyist efforts, as they have indicated a great deal of money and resources will be spent to win on a these smaller battlegrounds.  The online source continues:

With the PPA’s focus moving to the states, expect to see more grassroots campaigns at the state level in 2013. “We certainly could mimic some of the things we’ve done at the federal level in terms of fly-ins, paid advertisements, letters to the editor, op-eds and media placements in a variety of papers throughout the states from a poker players perspective,” Pappas said. “There are a number of ways to ramp up the grassroots and activity, and we’re considering all of those.”

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UPDATE: Online Poker Bill Said to Lead to Unintended Criminal Consequences dead in 2012

Casino Watch Focus reported that a new online poker bill was filed by Sen. Harry Reid and Sen. Jon Kyl. The bill, known as the “Internet Gambling Prohibition, Poker Consumer Protection, and Strengthening UIGEA Act of 2012,” attempts to legalize online poker. However, as explained by Professor John W. Kindt in an online article, the bill allows for a variety of nefarious activities:

University of Illinois emeritus professor John W. Kindt says the Reid-Kyl Internet gambling bill would facilitate money laundering by terrorists and organized crime through new encryption technologies, which would allow for the potential abuse of banks’ abilities to process payments to offshore gambling websites.

“What the bill allows makes it easier for mobsters and even terrorists to launder money,” said Kindt, a retired professor of business and legal policy at the U. of I.

“The bill’s supporters argue that the Reid-Kyl legislation is worded in a way that allows for poker while prohibiting most other forms of Internet gambling,” he said. “But regulatory technologies can now be circumvented by cheaters and, even worse, by international criminal enterprises. Furthermore, gambling is gambling, whether it’s poker or some other game. And Internet gambling is the crack cocaine of gambling. It would place gambling at every school desk and workstation, in every living room, and on every cellphone.”

Given the current state of the fiscal cliff negotiations, the bill is not expected to pass this year. As an online source explained, even Sen. Harry Reid has conceded the bill’s passage this year as there is no consensus. However, this process does lend itself to being used as leverage in the fiscal cliff negotiations or during next year. Professor Kindt explains:

Although the bill doesn’t appear to have much momentum behind it now, Kindt cautions that both senators are very influential in their respective parties. “That signals to me that it could be part of a fiscal cliff deal,” he said. “But the lame duck legislative period also would be an opportune time for pro-gambling lobbyists to band together and pass it.” But passing such a bill through political horse-trading would be a huge mistake, Kindt says.

“Internet gambling in particular shrinks the consumer economy and destroys consumer confidence by promoting a ubiquitous gambling philosophy,” he said. “Legalizing online gambling would allow dubious parties to create a queue of speculative bubbles in international stock markets that could collapse the already fragile financial systems and destabilize essential international economic security.” Kindt likens gambling to “an economic cancer” that would only metastasize with more Internet gambling.

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


New Federal Online Poker Bill Expected to be Filed and Raise Constitutional Concerns

Casino Watch Focus reported many times on the failed attempts of the federal legislature to pass a bill to remove UIGEA and fully allow online gambling at the federal level.  Most attempts have been lead by Senator Harry Reid. A new bill is once again being introduced by Sen. Reid and Les Bernal of Stop Predatory gambling provides a summary of the bill: 

A draft of the online poker bill that Sen. Harry Reid (D-Nev.) and Sen. Jon Kyl (R-Ariz.) plan to introduce was released this week. The bill, known as the “Internet Gambling Prohibition, Poker Consumer Protection, and Strengthening UIGEA Act of 2012” would legalize online poker at the federal level, a step that became possible last December when the U.S. Department of Justice released an opinion stating that the Wire Act does not apply to online poker.

The bill provides an opt-in structure, in which states have to affirmatively choose to participate in the online poker program. A state would be considered to have opted in if it has passed a law legalizing online poker. Thus far, only Nevada and Delaware have passed such laws. An Indian tribe is considered to have opted in if a designated authority of the tribe submits written notice to the Secretary of Commerce saying so. Money could only be accepted from players located in those states or tribal lands at the time they are playing.

No game other than poker would be allowed under the bill, even if it is licensed by the state. A state could still legalize other games under their own laws, but this law would not allow them to operate those games interstate. The bill has a carve-out that allows interstate bets on horse racing to continue to operate legally, as well as an exception to allow lotteries to sell tickets online.

Other portions of the bill seek to establish a criteria to determine how licenses are issued and tax issues are handled.  The Las Vegas Review Journal explains how parts of the bill could violate due process:

A bill to legalize online poker that is being written in Congress and that Nevada senators are trying to pass by the end of the year could be challenged in court and found unconstitutional, according to a legal analysis by a former top government attorney.

The bill would set up a framework to license and regulate Internet poker companies, and to nourish a U.S.-based online poker industry. But former U.S. solicitor general Paul Clement said he found flaws in segments of the bill that seek to punish overseas providers that ran games in the United States and continued to take bets from U.S. players even after Congress passed online restrictions in 2006.

The so-called “penalty box” provisions would prohibit those companies from applying for an online poker license for five years, and from selling their trademarks or software to others seeking a license.

Clement said the bill being formed by Sens. Harry Reid, D-Nev., and Jon Kyl, R-Ariz., “raises serious due process concerns.”

He said it would deprive the providers of “significant property interest,” and could be considered an unconstitutional “bill of attainder” because it effectively singles out a group for punishment without adequate protections for their rights.

This bill could be its own worst enemy as it closes off several forms of online gambling in order to establish a legal framework for poker.  Those party to gambling online outside of just poker will certainly object.  The Las Vegas Review outlines both the National Governors Association and the National Conference of State Legislatures as groups who oppose due to restricting states opportunities to benefit financially. 

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Video Game Company First to Enter US Online Gambling Market

Casino Watch Focus has been reporting on the ongoing saga of expanded online gambling in the US.  A ruling by the Obama Administration has opened the door for some states to engage in online gambling.  Legal questions still loom as to how far online gambling’s jurisdiction lies, and Congress is still debating proposals to allow full scale federal online gambling.  In preparation, several social media and gaming groups, such as Facebook and Zanga have looked into expanding their business to real money gambling. Most recently, Apple decided to allow real money gambling on their iPhones and iPads, albeit in the UK, not in the US.  Now, an online source is reporting that a Nevada-based video game company seeks to become the first to enter the federal online market:

Video game developer 3G Studios filed with the Nevada Gaming Control Board for multiple Online Service Provider’s licenses, making them the first video game company to move into the U.S. online gambling market. With this move, 3G Studios will be the first video game company to be approved for real-money gambling in the U.S.

3G Studios plans to launch one of the nation’s first licensed, for-money U.S.-based poker sites. The site will initially be restricted to Nevada residents, and geo-location software will ensure that gamblers are located in Nevada at the time of the wager. The site will also feature other casino-style games that can be played for virtual currency, and as U.S. gambling restrictions loosen, may be also played for real money in the future.

An August decision by a Federal Judge ruled that poker was a game of skill opened the door for online poker sites to surface in states that legalized the practice. Nevada joined Delaware in legalizing online gambling, and at least 10 other states are expected to follow suit next year.

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UPDATE: Zynga Confirms Real Money Poker to begin in 2013

Casino Watch Focus has reported that Zynga has been heavly considering offering real money online gambling.  They have worked with social media company Facebook to offer games to online users of the social media site.  They have a full infrastructure in place to have people purchase credits to use in their various games, the most popular being Zynga Slots and Zynga Poker.  An online source is now reporting that Zynga has decided to launch real money online Poker in 2013:

Following a late afternoon collapse of Zynga’s share price Wednesday, CEO Mark Pincus confirmed reports featured on Gambling911.com earlier in the week that the company will be offering “real money” online poker in the first half of 2013.

Pincus stated that the launch will be subject to individual country regulations.  “Real money” play may not immediately be available within the US, although some states have begun legalizing online poker while a bi-partisan measure is currently being considered at the federal level.  Sponsors of this legislation have suggested it will likely be attached to an upcoming bill.

This sudden and quick move seems to smell of desperations as the companies stock has plumited and its users have dropped by millions.  The online source continues:

The company expected full-year EPS of 4 to 9 cents vs. estimates of 26 cents (for 2012).  Earnings were significantly less than those projections, however.

The company reported earnings of 1 cent a share on revenue of $332 million.Analysts had expected 5 cents a share on revenue of $344 million, according to an estimate from Thomson Reuters.

Since buying OMGPOP for about $210 million, Zynga’s daily users have fallen from about 70 million to just more than 55 million.

Following trading, Zynga shares had dropped to an all time low at press time, falling by as much as 36 percent.

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