Desperate Times; Desperate Measures
Online casino legalization has stalled across the country. Could a bold new strategy remove the biggest obstacle standing in its way?
The Bulletin Board
VIEWS: Could a bold plan end organized labor’s opposition to online casino gambling?
LOOSE ENDS: Penn rebrands retail sportsbooks; Hard Rock class action suit; New report highlights missed tax opportunities; Parleh Media gets a LOI.
NEWS: A recent SCOTUS ruling (Loper) could complicate the hub-and-spoke mobile betting model.
NEWS: Ontario online gambling looks to go international.
AROUND the WATERCOOLER: Technology a huge asset for poker cheats.
STRAY THOUGHTS:
Old habitsBad theories die hard.
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Can Lawmakers Overcome Labor’s Online Casino Fears?
Organized labor has become the greatest impediment to legal online casino gambling.
Labor has helped derail efforts in New York and Maryland, with unions pointing to potential job loss following the legalization of online casino gambling. The legitimacy of those concerns is in question, but without airtight evidence, the issue will not go away.
In a recent Forbes commentary, Gaming attorney Daniel Wallach suggested an interesting idea to overcome labor’s opposition to online gambling: Guarantee the jobs.
“Instead of trying to win the ‘battle of the experts’ or funding more economic studies, the focus should be on crafting a solution that will meaningfully address the concerns of the HTC and its membership,” Wallach wrote. “In other words, condition the granting of a casino’s iGaming license on its maintaining current employment levels.”
Winning over labor unions isn’t a groundbreaking idea, but Wallach’s strategy goes much further than other suggestions. Perhaps too far, as I don’t think this idea, as presented, is feasible, but with a tweak, it could be.
Assuming all licenses are tied to land-based gaming properties, the state could tie licensing fees and/or tax rates to employment levels rather than condition licenses on employment. Graduated tax rates have gotten a lot of press since Illinois, and this would be an inventive way to implement a graduated rate. If a licensee doesn’t meet the employment requirements, it pays more in licensing fees and taxes on its online offerings, with those funds dedicated to things like job programs, continued education, and retirement plans.
It’s just crazy enough to work.
Loose Ends: Penn Rebrands Retail Sportsbooks; Hard Rock Class Action Suit; New Report Highlights Tax Opportunities
Penn is rebranding its retail sportsbooks: Penn will rebrand eight retail sportsbooks to ESPN Bet by the end of September. Three will rebrand in August: Hollywood Casino at Kansas Speedway (KS), L’Auberge Casino & Hotel Baton Rouge (LA), and Plainridge Park Casino (MA), and five are scheduled to finish the rebrand in September: Hollywood Casino Columbus (OH), Hollywood Casino Perryville (MD), Hollywood Casino Toledo (OH), L’Auberge Casino Resort Lake Charles (LA), and Margaritaville Resort Casino Bossier City (LA). The rebrands will “help to further our brand connectivity and create meaningful cross-sell opportunities in order to capitalize on the incredible growth we have seen in our database,” Penn CEO Jay Snowden said during the company’s Q2 earnings call.
Class action lawsuit filed against Hard Rock and Seminole Tribe: Per Sports Handle, Brandon Montgomery filed a class-action lawsuit against the Seminole Tribe and its Hard Rock Sportsbook in Florida in May, “claiming that the operator’s “No Regret First Bet” promotion was misleading and in violation of Sunshine State consumer protection laws.” Similar class action suits were filed in Massachusetts in December and New York in April for what the plaintiffs called “unfair and deceptive” bonus practices by DraftKing. The New York suit was recently dropped.
Missed opportunities: A new report, commissioned by Light & Wonder and produced by research firm Vixio, attempts to quantify the tax revenue states are missing out on by not legalizing online casino gambling. Per the report, the six states with legal online casinos generated $1.6 billion in tax revenue in 2023. Vivio estimates that number would climb to somewhere between $9 billion and $15 billion (depending on the tax rate) if online casinos were legal and available in the 44 states that offer casino gambling, sports betting, or both.
Hard work pays off: Friend of the program Parleh Media (which includes the often-cited-in-this-newsletter Gaming News Canada brand) received a letter of intent from Lazarus Agency Limited. Per the press release, “Lazarus is raising $5,000,000 CAD to facilitate the 100% acquisition of Parleh Media Group and provide a multi-year runway to fuel growth and media expansion.” Congrats to Steve McCallister and the rest of the team.
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SCOTUS Ruling Undercuts the West Flagler Decision
Tribes scored a major victory when the Supreme Court declined to hear the Florida sports betting case (West Flagler). The court’s decision to not grant a writ of certiorari left the Florida compact authorizing mobile sports betting in place and lit a path for tribes in other states to follow.
But anything the SCOTUS giveth the SCOTUS can also taketh away, which it did with its recent Loper vs. Raimondo decision, which undercut a 1984 ruling that created the Chevron Doctrine.
The Chevron Doctrine allowed federal regulators to interpret ambiguous regulations, which the gambling industry and tribal gaming are full of. The SCOTUS decision complicates legal challenges, like the West Flagler case (which, thankfully for tribes, was decided before the Chevron case) and land-in-trust battles that are playing out in Massachusetts and elsewhere.
The Loper decision is critically important, as Department of Interior regulations, not federal statutes like IGRA (enacted in 1988, pre-online gambling), are the final say on the legitimacy of compacts and land-in-trust debates.
As Eilers & Krejcik Gaming (a newsletter sponsor) noted in its Online Sports Betting Policy Monitor, the hub-and-spoke model at the center of the West Flagler case is now more vulnerable to legal challenges. “In our view, the Loper decision increases uncertainty around the model’s long-term viability, which may decrease its odds of being adopted,” EKG said.
“When you’re in a position of challenging a federal action, the Chevron doctrine has worked against you. When you’re supporting a federal action, it’s worked in your favor.” Tribal-gaming attorney Scott Crowell said on a recent episode of the New Normal webinar series hosted by Victor Rocha and Jason Giles.
Will Ontario DFS and Online Poker Return to the International Market?
As I first reported in March, Ontario is asking the courts if it can compact with jurisdictions outside of the province. Before the province regulated online gambling, it was part of the international online poker and daily fantasy sports markets. An affirmative court ruling would allow it to return to the global player pool.
The order-in-council asks the court to answer the following question:
"Would legal online gaming and sports betting remain lawful under the Criminal Code if its users were permitted to participate in games and betting involving individuals outside of Canada?"
If the courts agree, Ontario operators could link their online poker and daily fantasy sports with other jurisdictions around the globe.
As CBC News reports:
“Online gaming companies say many Ontario poker players are skipping the provincially regulated sites and opting for international ones in search of higher stakes games. They say a ruling in favor of allowing Ontario players to mix with non-Canadians would bring those gamblers into the regulated system – and along with them, more revenue to the province.”
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Around the Watercooler
Social media conversations, rumors, and gossip.
Technological advances have created new opportunities for criminals. The latest example was detailed on the Only Friends podcast hosted by Matt Berkey (h/t to Poker.org for relaying the story).
According to the Only Friends crew, miniature camera technology is becoming an increasing problem in the high-stakes poker community, with rings of as many as 30-40 individuals deploying the technology to fleece poker players and casinos.
As Haley Hintze reported for Poker.org:
“The timely discussion by show hosts Matt Berkey, Conrad Simpson, and 'Guapo' was spurred by the recent arrest of two gamblers at France's Enghien-les-Bains casino, north of Paris, where the gamblers, assisted by an accomplice, used concealed pinhole cameras positioned at low angles to capture images of the cards that dealers were pitching to all the players at the tables.”
You can watch the episode here. The video below is queued up for the cheating discussion.
Stray Thoughts
Everyone is familiar with the saying that old habits die hard. I would posit that “bad theories die hard” is just as apt.
The responsible gambling space is full of them and full of people who continually push policies and ideas that have proven ineffective.