Events
IAGA SUMMIT San Francisco 2019
William Bogot, Partner, Fox Rothschild LLP
Bill represents clients in highly regulated industries, particularly gaming and cannabis. He has worked for all three branches of the Illinois government: the executive, legislative and judiciary. However, Bill represents clients nationwide, both in regulatory matters and civil litigation.
As a former legal adviser to the Illinois Gaming Board (IGB), Bill authored much of Illinois’ gaming regulations and advised the IGB and the governor’s office on all aspects of gaming law and regulation. Bill draws upon this and his other government experience to counsel clients in gaming and other industries that have regulatory oversight.
Smoking gun: the highs and lows of marijuana legalisation
As more US states with gaming legalise marijuana, an increasing number of operators are facing related macro compliance issues due to the significant influx of cash they believe is coming from marijuana businesses, which raises source of funds and structuring issues. FinCEN has never revised its marijuana guidance since the administration withdrew the Cole opinion in January, so the situation is murky. G3 speaks to William Bogot, panelist at the IAGA Summit about the knotty issues surrounding gaming and cannabis
Te Nevada Gaming Commission, as a result of Gaming Policy Committee meetings earlier this year, has allowed casinos to engage in B2B relationships with the legal marijuana industry, including hosting trade shows assuming no product or paraphernalia is involved. And, with more states adopting legal marijuana, either medical or recreational, Nevada may be the case of first impression on these policies.
If the federal government continues to classify marijuana as a Schedule 1 drug and Nevada regulators don’t change their position on marijuana ownership/engagement because of Nevada’s Foreign Gaming Act, there will continue to be friction between legal state policy and gaming operators, especially those with Nevada licenses. Te IAGA Summit panel in San Francisco will discuss these issues and more, as well as consider what the future might look like with the anticipated industry expansion in 2020 and the potential for a federal prohibition repeal eventually.
There are now spaces in America in which cannabis and casinos intersect, creating unique issues for gaming operators. And while parallels have been drawn between the federal and states recent falling out over the Wire Act, do you think there are clear comparisons between the two?
P86 NEWSWIRE / INTERACTIVE / MARKET DATA
Te issue with cannabis in the US is separate to the way that sports-betting has unfolded in connection with the Wire Act. Under federal law the Wire Act effectively bans sports-betting, and while many of the states legislated for sports-betting regardless, none began offering this form of gaming to their citizens until the Supreme Court struck down the Federal law. Interestingly, we still have the Controlled Substances Act, which says that marijuana is a Class 1 scheduled drug, but unlike in the case of the Wire Act, states were not willing to wait for a ruling from the Supreme Court - they ignored federal law by allowing cannabis in their states. Tere are now over 30 states that have legalised cannabis in various forms in direct defiance of federal law.
Who takes priority in terms of state and federal legislation in the US?
According to the Constitution of the United States there is a Supremacy Clause that states that federal laws are the supreme laws of the land and trump any contradictory state laws, which has generally held true across all states, except, in practice, in this unique area.
What’s unusual is that the federal government has not tried to sue individual states in regards to cannabis. During the Obama administration, the Justice Department’s Ogden and Cole
memos stated that the federal government was not prioritising enforcement of federal marijuana laws against people who were legally complying with state cannabis laws.
We had been operating under these memoranda for sometime, but under the Trump administration, Attorney General, Jeff Sessions, withdrew the Ogden and Cole memos. However, what wasn’t withdrawn, and what many people are unaware of, is that limiting appropriation bills were not amended in conjunction with the DOJ’s decision.
Congress has continued since 2014 to add amendments to the appropriation bills, effectively saying: “we are not giving the United States government one penny to enforce marijuana law against state compliant medical marijuana operators.” In fact, the Department of Justice several years ago, in the case of the United States v McIntosh, tried to prosecute state operators on the West Coast.
However, the Appellate Court told the government that it did not have money appropriated to conduct the prosecution. Basically, so long as the defendants were operating under state law, the government was not allowed ‘one penny’ to spend on a piece of paper to write the complaint to proceed with a prosecution. So they threw federal cases back to
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