Slippery Slopes
A plan by Dave & Buster's to allow patrons over the age of 18 to place small wagers with friends through its app is the topic of the day on Gambling Twitter.
The Bulletin Board
VIEWS: Is Dave & Buster’s crossing a line by allowing friends to bet with one another on arcade games?
NEWS: A lawsuit in New Jersey would close a loophole that exempts casinos from the state’s indoor smoking ban.
QUICK HITTER: Minnesota sports betting bill clears a committee; future very much in doubt.
NEWS: All signs point to Chicago authorizing VGTs at some point in the future.
VIEWS: North Carolina Gov. Roy Cooper proposes a tax code change to benefit bettors.
AROUND the WATERCOOLER: Who you talk and listen to matters.
STRAY THOUGHTS: Two of my favorite song lyrics.
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Welcome to the Dave & Buster’s Casino
Social media was in a tizzy yesterday when Dave & Buster’s announced that it would start allowing “friendly” wagers (or, as the tech provider Lucra calls them, “cash-based competitions”) on some of its arcade games, such as Skee-ball and Hot Shots basketball.
According to the report, “Adults age 18 and older will be able to place real money wagers on arcade games with friends.” The new function will roll out in the coming months and will be available to loyalty reward members through the Dave & Buster’s app.
The critical component of this is in the following excerpt from the article:
“Lucra says its skills-based games are not subject to the same licenses and regulations gambling operators face with games of chance. Lucra is careful not to use the term "bet" or "wager" to describe its games.”
Betting on skill games is not a new concept. The most obvious example is daily fantasy sports, but much closer to what Dave & Buster’s is doing was an effort in 2016 to bring skill-based contests to Atlantic City.
As I wrote in 2016:
“The New Jersey Division of Gaming Enforcement (DGE) originally authorized skill games for money back in October of 2014, but the industry requested additional information regarding regulations for these games. The DGE finally responded with a letter spelling out the regulations on Tuesday.”
“The regulations cover a variety of topics ranging from payout rates to how games must be explained to players.”
Perhaps seeing the possibility of increased visitation, former New Jersey Division of Gaming Enforcement Executive Director David Rebuck was a proponent for skill games. In 2017, Rebuck said he was “encouraging the industry to innovate in areas such as skill-based gaming.”
The result of the regulation of skill-based games in New Jersey was a free-throw contest held at the Borgata in 2015 that drew 750 competitors.
Back to the Dave & Buster’s news. I’m ok with this for two reasons.
First, nothing is preventing this from happening right now. There is this thing called cash or Venmo, and people (of all ages) can bet with their friends on Skee-ball, air hockey, or any other game located in Dave & Buster’s… or in their driveway.
Second, as long as the limits are capped at $5 or so, and it remains peer-to-peer (not betting on other people), this is about as harmless as it gets. It’s not the act of betting that is inherently problematic. The ability to lose large amounts of money in a short amount of time is more worrying to me.
Now, I have no idea how this ends, and frankly, I don’t care one way or the other.
Regulators could squash this before it ever rolls out. Legal Sports Report’s Mike Mazzeo noted Lucra’s existing issues with Ohio regulators over player vs. the house DFS games. Mazzeo also reported the Ohio Casino Control Commission has “serious concerns” about the Dave & Buster’s news.
I’ll end with a previous newsletter entry called Arcades Are Casinos For Kids:
“As I’ve said in the past (and above), carnival games and arcade games like the Claw Machine are great ways to educate kids about the mechanics and potential dangers of gambling because they are gambling.”
They don’t need $5 side bets to make them gambling.
NJ Lawsuit Would End Casino Smoking
Efforts to prohibit smoking at Atlantic City casinos have run into legislative roadblocks. However, depending on the outcome of a court case, the New Jersey legislature’s role may become redundant.
As reported by CDC Gaming Reports, the lawsuit, filed on April 5 by the Casino Employees Against Smoking’s Effects, claims the exclusion of casinos in the 2006 Smoke Free Air Act violates the state constitution in two ways:
Exposing casino workers to the proven dangers of secondhand smoke deprives them of their constitutional right to safety.
Exempting casinos from the Smoke-Free Air Act ignores the state constitution’s prohibition of laws granting “any exclusive privilege” to a corporation, association, or individual.
The Attorney General and Local 54 of the Unite Here union (which now opposes a smoking ban) have asked the court to dismiss the case. Arguments are expected to begin two weeks from now, on May 13.
Smoking has been a hot-button issue in New Jersey and neighboring Pennsylvania in recent years. The momentum is all on the side of the prohibition crowd, but somehow, whenever a bill gets close to passage, it suddenly gets derailed.
The topic is also being broached elsewhere. Recent polling in Nevada indicates that smoking bans in casinos are more palatable to the public, as 60% of respondents said they support a ban on smoking in Las Vegas casinos.
Quick Hitter: MN Committee Approves Sports Betting Bill
A Minnesota sports betting bill made some progress on Tuesday, but its outlook is still very much in doubt.
The Minnesota House Taxes Committee approved HF 2000 in a 12-9 vote. The bill will now head to the Ways and Means Committee.
That’s the good news. The bad news is that Republican committee members stated their belief that the bill would be dead upon arrival in the Senate, assuming it would get through the House.
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Are VGTs Coming to Chicago?
The Illinois VGT industry is an unbridled success. It generates more revenue than the state’s casinos, with VGTs totaling $2.9 billion in 2023. And it has put up those impressive numbers without access to the Chicago market.
Eilers & Krejcik Gaming (a newsletter sponsor) estimates suggest that VGT authorization in Chicago will add 10,000 to 12,000 VGTs to the Illinois market.
However, Chicago bars, restaurants, convenience stores, and truck stops are not devoid of gaming machines. The prohibition on licensed VGTs in Chicago has created a thriving gray market of what are known as “sweepstakes” machines. According to one source I’ve spoken to, as many as 40% of establishments possess these machines. So, the prohibition is working about as well as every other prohibition.
That could be changing soon.
The first hint is legislation allowing current Chicago retailers offering gray “sweepstakes” games to shift to regulated machines (assuming Chicago authorizes the machines). In a move that harkens back to selling indulgences, the bill would wipe clean any potential complaint against an applicant who previously possessed sweepstakes games.
And now, per Chris Altruda, there is a request for qualifications (RFQ) for gaming consulting advisors to the office of Mayor Brandon Johnson.
Per the city, it could award zero, one, or more contracts. No matter what, none of the contracts will be exclusive, as no contract would grant an advisor “with an exclusive right to be the City’s sole consultant for any of the City’s objectives and projects stated in the Scope of Services.”
NC Gov. Calls Out Unfair Gambling Tax Policy
North Carolina Gov. Roy Cooper is calling on the legislature to amend the state’s current tax code to allow bettors to deduct their gambling losses against their winnings (h/t CBS 17).
“When it comes to sports wagering, it’s not fair to have to pay taxes on your winnings without being able to deduct your losses. Legislators should fix this,” Cooper tweeted.
The tweet was in response to an article by Nathan Goldman, a CPA and accounting professor at North Carolina State University, and Christina Lewellen, an associate professor of accounting at NC State.
“The state actually has the power to address this immediately,” Goldman wrote. “Most notably, what would really help, is it would eliminate these tax surprises. And, it would really help connect the North Carolina tax system with what many people perceive to be a just tax system.”
As the authors explain, taxing gambling wins without allowing the taxpayer to deduct losses can result in paying taxes on those winnings, as in the case of someone who wins $10,000 but gambles the entirety of the win away. It can also put filers into higher tax brackets, causing them to pay a higher rate on other income.
Taxes and receiving W2-G forms for your gambling winnings over $600 are some of the myriad reasons some bettors have chosen to wager in the black market.
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Around the Watercooler
Social media conversations, rumors, and gossip.
More on black market usage, which I wrote about in Friday’s feature column.
And as I said in response:
Stray Thoughts
Two of my favorite lyrics:
Yes, there are two paths you can go by, but in the long run
There’s still time to change the road you’re on
And if I claim to be a wise man
Well, it surely means that I don’t know
If you don’t know the songs, shame on you.