Gambling companies position themselves for state deregulation
It seems inevitable that online gambling will gain a foothold in the US this year, but the industry has thought that before.
he unexpected judgement by the Department of Justice that the Wire Act
online applies to sports bet- ting and that individual states seemingly have a free rein to regulate online gaming has suddenly thrown the local legislation in many states into focus. Since the judgment, many US states have fallen over themselves to announce the legalisation or ban of online gaming in a situation reminiscent of the eventual growth of state lot- teries in the country. New Jersey is consider- ing changes to its mobile gaming regulations, initially to allow casinos in Atlantic City to offer mobile gaming within its premises, but the state has long been at the forefront of deregulation in the US. Slightly worryingly, Governor Chris Christie has echoed the previous UK government by saying he wanted to make his state an ‘epicentre’ of the online gambling industry.
In Iowa, the state has published a report by local racing businesses on the possible regulation of intrastate internet poker and there is still a drive in California to legalise online
poker to raise $US250m in funds. “Two hundred and fifty million dollars buys you a lot of teachers,” State Senator Lou Correa told the Ney York Times. It’s far from all positive for the industry though. The Utah House of Representa- tives has received a bill that would prohibit online gam- bling in the western state, while the political will behind a law allowing online lottery in Washing- ton DC faded. The city coun- cil’s Finance Committee voted 3-2 to repeal a 2010 law that would have allowed it following contro- versy surrounding the way that Intralot had secured the contract. Byron Boothe, Intralot’s vice president for government affairs, told Reuters that Washington ‘was really leading the (online gambling) charge and obviously they dropped the baton.’
Whilst all this is occur- ring, existing US gaming operators are positioning themselves to get online. Caesars Interactive Enter- tainment (CIE) has extended its supply deal with 888’s B2B arm Dragon- fish so that it also covers America. 888 has already submitted its Service Provider license applica-
tion to the Nevada Gaming Control Board, while in March 2010, the Nevada Gaming Commission found suitable the September 2009 commercial relation- ship between CIE and 888. CIE CEO Mitch Garber said: “888 has been success- fully driving the World Series of Poker brand in the UK for the past three years, and with current momen- tum toward either a Fed- eral or State by State regulatory environment, 888 is uniquely positioned to support either outcome, without delay.” Similarly, Golden Nugget has selected Chiligaming as its exclusive online gaming partner in anticipation of the legalisation of online gaming in the United States and will launch a freeplay site next month. Golden Nugget’s chair- man and owner Tilman J. Fertitta said: “We believe that online gaming is inevitable in the United States and that the Golden Nugget will be well posi- tioned to compete when US laws allow for online gaming.”
CyberArts owner Fertitta Interactive has also submit- ted an application with the Nevada Gaming Control Board for the purposes of
interested in player protection
SENATOR CHRIS CHRISTIE HAS SPOKEN ABOUT MAKING NEW JERSEY THE ‘EPICENTRE’ OF ONLINE GAMING
It is generally thought that the first state to offer online gaming, which is expected to be New Jersey later this year, will see a domino effect across other states, especially in these straightened times when many are desperate for an influx of new money. A similar situation occurred when the first state lottery opened in the US and has eventually led to 43-state lotteries today. However, there should be a word of caution in that deregulation of the online industry might not attract the extent of funds that states are expecting and that the deregulation of online gaming could well become an issue for this year’s Presidential election if things get out of control.
being licensed as an opera- tor and service provider of online poker.
Lorenzo Fertitta, founder of the Vegas-based firm, commented: “We support the regulation of online poker. Our industry-leading software has a track record of complying with the strictest regulations in
jurisdictions around the world. Nevada has always been the leader in gaming regulation and we’re pleased to file our applica- tion here. Our goal is to pro- vide customers with the best online gaming experi- ence in a safe and well-reg- ulated online environment.”
Portuguese court rules against online firms advertising PORTUGAL B
rty’s marketing strategy in Portugal has been thrown into disar- ray after a local court ruled that it must remove all advertising and sponsor- ship from national sports competitions after labelling its activities illegal.
The ruling, which cov- ered tax and regulatory issues, is a worrying out- come for the rest of the online industry too, which has extensive sponsorship deals with several Por- tuguese sports clubs and associations.
rty currently sponsors the Portuguese soccer league cup at a cost of 4m euro. “The Por- tuguese professional foot-
RTY CAN CONTINUE ITS SPONSORSHIP IN SPAIN, BUT HAS BEEN TOLD TO
STOP IN PORTUGAL bling legislation.
Artur Mateus, a manager of the Portuguese Casino Association, commented: “We are happy with this decision, it was a positive one. We pay for extremely expensive licences so we want the state to combat illegal operators who have unfair advantages.”
ball league (LPFP) is obliged to remove all adver- tising that refers to Bwin,” the LPFP told Reuters in a statement, adding the ruling was harmful to the national game and that it will appeal.
The ruling in Porto extends from the ECJ
4 BettingBusinessInteractive • FEBRUARY 2012
‘Santa Casa’ deliberation - an unexpected setback for the online gaming commu- nity - where the Portuguese Casino Association teamed up with national lottery operator to complain about Bwin’s ‘unfair advantage’ because it is not taxed or subject to Portuguese gam-
Bwin said it would sus- pend all sponsorship and advertising and its lawyer, Eduardo Serra Jorge, added: “It is time for the state to legislate and tax online gambling instead of banning it. Regulating it is in the interest of the con- sumer, the economy and the state budget.”
has found itself caught up in the US Department of Justice’s copyright claims against Megaupload.com
, which has seen the file sharing website shut down. According to the DoJ’s indictment, PartyGaming has spent more than US$3m on marketing cam- paigns with Megaupload, but the firm has quickly moved to distance itself from the website.
The operator announced that it terminated the mar- keting and advertising agreement stating that Megaupload.com
had specifically promised that it would not infringe on copyrights belonging to third parties on their sites.
layer protection, not tax- ation was the key mes- sage conveyed by a
panel of international regu- latory experts at the World Regulatory Briefing’s ‘Set- ting the scene for 2012’ ses- sion at the ICE Totally Gaming show last month. The panel, comprising the UK Gambling Commission’s Nick Tofiluk; Birgitte Sand of the Danish Gaming Board; Peter Naessens of the Bel- gian Gaming Commission; Juan Carlos Alfonso Rubio from the Spanish Ministry of Finance; and Rhadames Killy of ARJEL, all claimed their respective jurisdiction’s reg- ulatory stances were taken to protect players from ille- gal and unchecked opera- tors.
Peter Naessens led the discussion, claiming tax rev- enue was not the driver in regulation but it was con- cerned with protecting play- ers. He told the audience: “Regulation works to make sure player’s interests are protected, and we need a level of control for regula- tion.” In fact, Belgium has just started blocking online poker sites, apart from the three that it licences. Rhadames Killy reiterated the stance, saying: “Confi- dence is key to the industry, and it’s our obligation as reg- ulators to protect players and their deposits. This is very important to what we do and that is to maintain a safe envi- ronment for players to enjoy the experience.”
The panel also called on
the European Commission to seek the advice of experi- enced regulators when making policy decisions, adding that 2012 was going to be a busy year for the industry and jurisdictions would benefit from a greater level of communication and cooperation. “There’s a need for regu- lators to co-operate together and find solutions,” said Juan Carlos Alfonso Rubio, adding: “We definitely sup- port the idea of a legal market across Europe.”
Birgitte Sand com- mented: “We’re not going to support a position against anyone, and there is a real need for a European network of operators. There should be no hesitation though about sharing information with European partners regardless of agreements and jurisdictions.”
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