Pedal To The Metal
Two ledes today: The North Carolina budget is two months overdue and being held up by gambling expansions. So much for self-regulation, sports betting ads are increasing in frequency.
The Bulletin Board
NEWS: The latest out of North Carolina has lawmakers scrambling to pass a budget, with gambling expansions the main sticking point.
BEYOND the HEADLINE: Does North Carolina need a separate regulatory body independent from the Lottery?
NEWS: Florida sports betting update: Is today the day?
NEWS: The bids are in. Five sports betting operators submit proposals in Vermont.
VIEWS: The cyberattack heard around the world. What can we learn from the MGM (Caesars) hack?
AROUND the WATERCOOLER: The danger of speedy launches.
STRAY THOUGHTS: A principle-based approach to RG.
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Gambling a Wedge Issue in North Carolina
North Carolina’s budget is two months overdue, with lawmakers quibbling over gambling expansions. the state was considering three gambling expansions: commercial casinos, VLTs, and online gambling.
Online gambling appears to be dead and buried. Casinos and VLTs have the legislature split, with the Senate pushing for both and the House resisting. As WRAL put it, “frayed nerves and flaring tempers.”
“At this point, it’s not the casinos,” Senate Leader Phil Berger told WRAL. “It’s whether or not I can go back to my members and tell them that I have an understanding with the leadership in the house on a particular issue. Doesn’t matter what the issue is. When I cannot do that, then it makes it very, very difficult for us to get any kind of business done. So it’s larger than just casinos.”
House Leader Tim Moore went so far as to publicly announce the current vote tally: 42 Republicans in favor of gambling expansions and 30 members opposed. Moore said he doesn’t have the 61 votes needed to pass a budget that includes gambling expansions.
The latest reporting indicates casinos (along with expanded Medicaid) would be decoupled from the budget bill and voted on separately by the House.
Beyond the Headline: NC Needs Independent Regulators
Meanwhile, GDC Group founder and CEO Charles Gillespie took to the opinion pages of the Carolina Journal to call for the creation of an independent regulatory body separate from the North Carolina Lottery.
“The North Carolina Education Lottery has served the state well as a lottery operator but is not equipped to handle the complexities of regulating the expanded retail and digital casino options being considered by the legislature,” Gillespie wrote. “Furthermore, the lottery’s role as a purveyor of gambling products is a direct conflict of interest with their role to regulate competing gaming interests.”
As Gillespie notes, the Lottery’s mission statement is to maximize lottery revenue, which he believes is in direct competition with other forms of gambling, particularly the soon-to-be-released online instant win games.
Gillespie makes a strong case, and I’m always in favor of better, more streamlined regulation. However, I would point out that I don’t believe these products are in direct competition. There is some overlap between all forms of gambling, but lottery products and online casino games can live in harmony, as they do in Michigan and Pennsylvania.
Latest on the Florida Front
West Flagler has unsurprisingly requested “to stay the issuance of the mandate in the Florida sports betting appeal pending the resolution of its forthcoming petition for writ of certiorari with the United States Supreme Court,” per Daniel Wallach.
In its petition, West Flagler said the ruling could be used as precedent by tribes in other states to expand gambling, writing, “The Panel Opinion thus enables an extreme shift in public policy on legalized gaming that, once started, may be difficult to stop. It, therefore, is in the public interest to preserve the status quo with respect to online gaming until such time as the Supreme Court has had a chance to review the Appellees’ petition for a writ of certiorari.”
If the stay is denied, the Seminoles can relaunch their Hard Rock mobile betting app today if the tribe chooses. If the stay is granted, the Seminole Tribe could still launch on Monday but would have more reason to hold off until the SCOTUS decides if it wants to hear the case.
As Professor Robert Jarvis (Jarvis is an editorial board member of Gaming Law Review, where I serve as the Editor-in-Chief) told Bookies.com, "There would be no upside to the Seminoles starting and then having to stop their operations and lots of downside (including possibly angering the Supreme Court).”
Jarvis believes that if the SCOTUS takes the case, it could be another 1-2 years before a final decision is made.
SCOTUS doesn’t take many cases, but Wallach told NBC Miami that “the ruling in the Florida compact challenge "checks at least three of the boxes indicative" of a Supreme Court review. The decision is "in conflict" with rulings from other federal appellate courts, is "arguably in conflict with the Supreme Court’s own precedent," and it involves an "important question of federal law that has not been, but should be settled," by the Supreme Court.”
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Vermont Sports Betting Attracts Bids From Major Players
Five operators have submitted bids for a sports betting license in Vermont: DraftKings, FanDuel, BetMGM, Penn-ESPN, and Fanatics.
Vermont is an online-only state and is using a bidding process similar to New York to determine winning bidders.
As Sports Handle’s Jill Dorson succinctly explained:
“Bids are vetted based on a rubric based out of 1,000 points with 800 possible points allotted to the “Technical Criteria” section and 200 allotted to the “Revenue Criteria” section. Bidders will get preference for working with companies based in Vermont, using products manufactured in the state, and “demonstrating business practices that promote clean energy and address climate change.”
As was the case in New York, Vermont licenses will hinge on the revenue share arrangement with the state.
By law, the minimum tax rate is 20%, but bidders cannot receive the full 200 points in the Revenue Criteria without bidding at least 51%. That said, Vermont is not New York, where operators are having a significant amount of buyer’s remorse over that state’s 51% tax rate.
Learning Lessons from the MGM Hack
I couldn’t start the week without chiming in on the ongoing situation at MGM (and also Caesars).
For those unaware, I’ll leave a couple of solid stories on the MGM cyberattack, as well as a few local Twitter users who are on the scene.
What I’d like to discuss is our preference for convenience. We want one-tap payments and are all too quick to provide sensitive information to move the process forward. But time and time again, we are discovering that information is not secure.
Even the safest among us get burned. As much as I enjoy the convenience of one-tap payments, it feels like we need more friction points to protect us from the unscrupulous actors out there.
Online gambling seems like a good place to start. There are a number of measures that can be put in place to ensure the person making withdrawals from an account is, in fact, the person who registered the account. Give me one or two extra steps in the process, please.
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Around the Watercooler
Social media conversations, rumors, and gossip.
Last week, I wrote about the inexperience of gambling regulators across the country. It seems former Louisiana Gaming Control Board Chair Ronnie Jones had some similar thoughts:
Yes, the industry, especially affiliates, cheerlead accelerated launch timelines, but it’s definitely a dangerous game to play.
Stray Thoughts
I often tell my martial arts classes that it’s the principle that matters. the individual techniques are just the byproduct of good principles. There are 101 ways to execute an armbar, but they all require the same basic principle - a lever and a fulcrum. There are countless punch combos, but they all require good mechanics and good balance.
Ineffective martial arts are usually the byproduct of focusing on memorizing techniques and foregoing the principle.
If the drill is to parry a jab, step off at an angle, and throw an inside roundhouse kick to the leg followed by a cross, the principle is the same as slipping a cross and throwing a left hook to the body: defend + get offline and hit. A principle-based martial artist will be capable of doing either one or countless other drills, whilst someone memorizing techniques will see each drill as its own entity that needs to be learned independently of the others.
What does that have to do with anything related to gambling? I think the responsible gambling community needs to explore a principles-based approach. There are countless ideas to reduce harm, but very few core principles that guide things along.
I’ll go into more depth on this in an upcoming Friday feature column.