Mississippi appoints taskforce to investigate egaming

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Study will look at pros and cons of legalizing internet gambling and sports betting in the state

Mississippi looks set to make egaming progress after a task force was commissioned to look into the pros and cons of legalizing internet gambling and sports betting in the state.

The task force has been given the green light by House Gaming Committee chairman Richard Bennett, according to reports in local newspaper the Biloxi-Gulfport Sun Herald.

“I’m looking for an unbiased study,” Bennett told the Herald.

The study was initially going to focus on internet gambling, but now includes sports betting after a number of legislators from the coast asked Bennett to expand its scope.

The taskforce, which includes the director of the Mississippi Gaming Commission Allen Godfrey and Larry Gregory, director of the state’s Gaming and Hospitality Association,  will start its study by looking at the three states where internet gambling is already legal – Nevada, Delaware and New Jersey.

One of the key areas of focus will be whether software such as geolocation and player identification works as well as it should do, as well as the protections in place for problem and underage gamblers.

The taskforce will first meet at the Southern Gaming Summit in Biloxi in May, and will present its findings by the end of the year. The task force will take on an advisory role rather than making recommendations regarding legislation or regulation.

According to Eilers Research regulated internet gambling could generate gross gaming revenues of US$106.4m per annum by 2020.

In other news:

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-          GameAccount Network signs Oklahoma freeplay deal

-          Influential groups oppose federal egaming ban

NJ appeals to Supreme Court to legalize sports betting

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State Senator Raymond Lesniak says he expects the court to make a decision on whether it will take the case by June

New Jersey has filed an appeal with the US Supreme Court in a last-ditch attempt to overthrow federal law and legalize sports betting in the state.

Sports betting is illegal in all bar four US states after a federal law to ban the activity was passed in 1992.

Nevada, Delaware, Montana and Oregon managed to legalize the practice before the law came into effect.

The Garden State has made several attempts to legalize sports betting over the past few years, with Governor Chris Christie signing a sports betting bill into law last year.

Christie said the state would ignore the Professional and Amateur Sports Protection Act and permit sports betting at casinos and the state’s four race tracks in a bid to boost revenues in Atlantic City.

However hopes for the provision of sports betting in New Jersey  received a blow in March 2013 when a federal judge granted a permanent injunction against the state, backing the argument of four major professional sports leagues who claimed legalizing sports betting would heighten the chances of corruption and match fixing.

The state then filed an appeal with the Third Circuit Court of Appeals, which ruled against New Jersey last September and left the Supreme Court as the only remaining chance for success.

Senator Raymond Lesniak, a supporter of sports betting, said he expects the court to make a decision on whether it will take the case by June.

The Supreme Court is selective in the cases it takes – of about 10,000 petitions received each year, the court grants and hears around 80 cases, or less than 1%.

In other news:

-          US investment firm set to buy 6% stake in bwin.party

-          Louisiana Governor opposes egaming regulation

-          Florida considering internet gaming regulation

CG Technology agrees record settlement with Nevada regulator

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The Las-Vegas based operator has agreed a US$5.5m fine by the Nevada Gaming Control Board to settle illegal sports betting complaint

CG Technology, formerly Cantor Gaming, has agreed a record US$5.5m fine from the Nevada Gaming Control Board to settle and illegal sports betting complaint.

The 18-count complaint alleged Lee Amaitis, president and CEO of CG Technology, and the company failed to supervise Michael Colbert sufficiently to prevent his illegal sports gambling activities.

Colbert, the former vice-president of race and sports risk management at M Resort and Cantor Gaming, was arrested 24 October 2012, in connection with an illegal offshore sports betting ring.

We reported that Amaitis was questioned by federal prosecutors as part of an investigation into an alleged illegal gambling ring. However no allegations of wrong-doing were brought against him.

CG Technology, which operates eight race and sports books and a poker room in Southern Nevada, is an affiliate of New York-based financial services firm Cantor Fitzgerald.

Both Amaitis and Cantor Fitzgerald chairman Howard Lutnick signed off on the settlement.

“We are glad we have reached a resolution and are pleased to put this behind us,” said CG Technology spokeswoman Hannah Sloane.

In an email to local newspaper the Las Vegas Journal, Gaming Control Board chairman A.G. Burnett called the agency’s decision to hand down the largest fine in state history “a severe punishment”.

“Public trust can only be maintained by strict regulation of gaming. Violations of the type alleged in the complaint must have significant disciplinary consequences,” he wrote.

Prior to the CG Technology settlement the largest fine issued by the Nevada regulator was to MGM Resorts International. In 2003 the company paid $5m for failing to file 15,000 currency transaction reports to the state.

In other news:

-          Lawyers and lobbyists in US$50m NJ egaming windfall

-          Optimal Payments posts strong end of year trading update

-          Pennsylvania Lottery appoints new director

Scientific Games sells entire Sportech stake

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Lottery and gaming supplier doubles investment in stock sale following acquisition of WMS Industries

Scientific Games has sold its stake in UK-based Sportech as part of its strategy of selling off non-core lottery assets following its $1.5bn acquisition of WMS Industries.

The US lottery giant purchased 39,743,179 shares at 42p each in 2010 and will double its money after offloading them for a total of £27.8m (USD$45.7m).

Scientific Games completed the acquisition of WMS Industries in October for $1.5bn in a pure debt transaction, bringing its total debt to almost $3bn.

eGR North America understands Scientific Games is now looking to aid its debt reduction by selling off any non-core lottery assets, which included Sportech.

It brings to an end a relationship which started in October 2010 when Sportech purchased Scientific Games Racing for $83m in cash and shares.

Scientific Games, in partnership with 888 and WMS, secured an exclusive contract with the Delaware Lottery to supply the state’s three racinos with egaming platforms when internet gambling went live last November.

The news comes as Sportech continues to focus on expanding its US-facing business after announcing two major deals last month.

Sportech will supply New York’s Finger Lakes Racing Association with its online horseracing platform, as well as operating up to ten horserace betting venues in California.

In other news:

-          PartyPoker in sponsorship deal with US sports teams

-          Ruby Seven Studios attracts $3.5m investment

-          Affinity Gaming launches freeplay platform

Predictions 2014: Rob Gallo

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Rob Gallo, president of the Peak Gaming Group, gives his predictions for the egaming industry in 2014

Next States to legalize egaming

Pardon me while I polish my crystal ball…  Ah, there we go, now I can see the future and it looks pretty interesting.  The first few rubs of the magic orb reveal the increase in the progression of individual states in the US making their move into the online gaming world.  While 2013 saw the regulation and launch of intrastate gaming in Nevada, Delaware and New Jersey, most of the other states are sitting on the sidelines taking a wait and see approach.

So who will be next in 2014?  The crystal ball may be a bit cloudy on this one, but from what I can read, it reveals that Pennsylvania, Colorado and California will make significant progress in their assessment of egaming, but the dark horse in the race may be Iowa.  While this one is super fuzzy, the real long shot is New York.  The voters at the polls this past November approved the licensing of seven new casinos in the upstate region, and it will only be a matter of time before the Empire State allows internet gaming.  However, given the snail paced speed at which things happen, or better yet don’t, in the New York state legislature, 2014 is a HUGE stretch.

Federal egaming legislation in 2014

Even without the use of the crystal ball, or even my back up, the Magic 8 Ball, I will make the bold prediction that internet gaming at a federal level will not happen in 2014.  Being on the front lines of the industry since 1997, I’ve heard the rumblings of a Federal Bill on gaming for the better part of the last decade, yet nothing has come of it.  The thing is, with or without an act of Congress, internet gaming will still continue to grow at the same pace.  Meaning even if the Feds did pass a law to legalize online gaming, each state would still be in control of whether they will allow it within their borders anyway, so not much would change.

Social casino gaming

The boundaries of social casino gaming in the United States have been pushed way beyond the scope of any predictions in 2012 for 2013, and I think that 2014 will be even more explosive in the space.  Truth be told, and in the effort of full disclosure, I have several major clients who are gearing up for massive expansions into the market.

The question then becomes how many is too many?  Reflecting back on the early days of real money online gaming in 1997, there were 5 or 10 operators in business, but by the time 21st Century rolled around there were more than 1,800 websites operating in the online gaming space.  I will boldly predict that the number of social casino gaming offerings will grow three times in terms of the number of different companies and brands, but in shaking the Magic 8 Ball to see how that ultimately reflects on actually increasing overall revenues, it reads, “Ask again later”.  Just for kicks, I asked a follow up question, “Will 2015 see consolidation in the social gaming space?”  And a simple, “Yes definitely” appeared in the little window.

Mobile gaming

Mobile will be the single biggest growth segment in gaming.  I suppose I could stop right there with that statement, but I will elaborate.  From personal observations, I use my phone for virtually everything.  From changing the channel on the TV and watching movies on Netflix, to making hotel and airline reservations, tracking all my business expenses, and even writing an article about 2014 egaming predictions, this phone is with me always.  Now I know I am not the only one.  Go into any location where people congregate and you will see 80% of them in the head down position, thumbing away on their phones.  So it is a natural progression that more and more gaming operators will be tapping into this most ubiquitous tool.

How big will it grow?  In 2013 the overall share of online gaming, which was done on mobile devices, was approximately 17%.  I think that number will rise to between 25% and 30% for 2014.  I also think the sector most responsible for fueling that expansion will be sports betting on a global level.  This actually creates a great segue into my final prediction about sports betting in the US market, but before heading there, and to validate my prediction, I asked the Magic 8 Ball if the mobile gaming space would be the biggest growth segment in gaming, and the answer was, “All signs point to yes”.

Sports betting in the US for 2014

The Magic 8 Ball and the crystal ball aside, ‘tis the time of year to ask old St. Nick for presents under the tree, and if you’re living anywhere outside of Nevada, I predict you will have a lump of coal in your stocking and not a ‘legal’ sports betting outlet other than what’s available in the Silver State.  I am not speaking of the parlay card betting found in Delaware, Oregon and Montana, but the ability to make a wager on the outcome of a single game.

With that said, there is a strong indication that a “milder and gentler” form of sports betting will be on a sharp rise in 2014.  Of course I am referring to daily fantasy sports.  With the carve out in the 2006 bill (UIGEA) which allows for real money fantasy sports to continue and flourish, several well-funded and creative operators have revised the methodology of the traditional season long fantasy games, to allow outcomes to be determined in a day.  Some big bets are already being made from the likes of Wall Street hedge funds, and Silicon Valley venture capitalists that are infusing these companies with millions in capital to exploit this market.

So in short, for 2014, traditional sports betting will only be available in Nevada, but rest assured there will be plenty of ‘betting’ in the daily fantasy world.  Busting out the Magic 8 Ball one last time reveals the total revenue for the fantasy sports business will be “north of $1.6 billion in entry fees” that will be collected next year.

Cantor gaming boss under federal scrutiny

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Federal prosecutors investigating if top gaming boss participated in his company in taking illegal sports bets

The president of US software supplier Cantor Gaming is questioned by federal prosecutors as part of an investigation into an illegal gambling ring.

Lee Amaitis is under investigation over claims he participated his company in taking illegal sports bets from a New York gambling ring called the “Jersey Boys”.

The Wall Street Journal reports his alleged involvement came to light after Michael Colbert, a former director of risk management and vice-president with Cantor Gaming in Las Vegas, pleaded guilty to knowingly accepting illegal wagers.

However the Journal reports that no allegations of wrongdoing have so far been made against Amaitis.

Robert Hubbell, Cantor Gaming’s spokesman, said: “We feel compelled to address this irresponsible and baseless rumour. The notion that Lee Amaitis is a target of federal prosecutors or that he participated in illegal bookmaking is false.”

Colbert was accused of knowing about and allowing a New York-based illegal gambling operation known as the “Jersey Boys” to place illegal bets through the use of “runners”, according to a court document filed by US Attorney Loretta Lynch.

Genting launches online offering on Bahamas cruise

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Operator signs sportsbook deal with SB Tech to provide betting facility on board cruise liner – applies for Nevada egaming licence

Genting Alderney has launched an online sports betting service on behalf of its sister company Resorts World Bimini, a cruise liner and casino which sails in the Bahamas.

The agreement sees Genting operate a physical sportsbook facility on board a 32,000-tonne cruise liner described as a “destination resort”, and an online offering which customers can access on their mobile and tablet devices.

The ship is owned by parent company Genting Group and sails twice daily between Port Miami in Florida and the Bahamian island of Bimini. Once in international waters, the online operator is free to offers its betting services to the 1,500 customers on board.

The launch follows a fixed-term contract signed between Genting Alderney and sports betting solutions supplier SBTech which sees the latter provide its sportsbook platform, trading and data feed services.

According to Genting Alderney managing director Peter Nolan (pictured), the launch is the first time the company has linked its online and offline capabilities and marks the start of similar projects across its land-based casino portfolio. The new system providing players a seamless journey between the two, Nolan said.

“We hope to bring the online and offline gambling experiences much closer. We’re creating the ability to physically deposit in one place and bet somewhere else such as by the pool or in the restaurant, which is the start of a longer-term strategy for us,” he added.

Nolan also confirmed the operator has applied for an online poker licence in Nevada in tandem with its application to develop and run a physical casino in Las Vegas.

The interactive licence filing was made last month and would allow Genting to launch online betting services to its casino customers, should the land-based licence be granted.

NJ loses sports betting case, lodges appeal

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State files appeal with Third Circuit US Court of Appeals after sports leagues and DoJ victory

New Jersey has been dealt a blow in its bid to legalise sports betting after federal judge Michael Shipp granted a permanent injunction against the state.

The state has already filed an appeal with the Third Circuit US Court of Appeals as part of a case which could yet go all the way to the Supreme Court as Governor Chris Christie seeks to challenge the Paspa federal law prohibiting all states from offering sports betting except Nevada, Delaware, Montana and Oregon.

The permanence of yesterday’s injunction is due to its enactment of a sports wagering law last year, in violation of federal law, although no charges will be made against the defendants representing New Jersey.

In an opinion, Shipp wrote: “Although some of the questions raised in this case are novel, judicial intervention is generally unwarranted no matter how unwise a court considers a policy decision of the legislative branch. As such, to the extent the people of New Jersey disagree with PASPA, their remedy is not through passage of a state law or through the judiciary, but through the repeal or amendment of Paspa in Congress.”

In January, the US Department of Justice joined the lawsuit filed by the National Collegiate Athletic Association along with the National Basketball Association, the Major League Baseball, the National Football League and the National Hockey League.

Last month, two New Jersey Congressmen introduced sports betting bills in Congress. Frank Pallone’s bill would exclude New Jersey from Paspa, while Frank LoBiondo’s bill would give all states until 1 January 2016 to legalise sports betting.

Betfair TVG seals NJ online horseracing contract

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Sportech to remain totalisator operator – TVG to provide betting platform for 4NJBets

TVG-owned Betfair has won the contract to run the platform for New Jersey’s customer-facing online horserace betting site 4NJBets.com, previously run by Sportech.

It is understood that Sportech will keep its role as the totalisator operator, registering the wagers and dividing the pay-outs.

TVG was licensed in the state by the New Jersey Racing Commission on Wednesday and selected to run 4NJBets by Darby Development, the Monmouth Park management company which also runs the state’s pari-mutuel horseracing industry on behalf of the New Jersey Sports and Exposition Authority.

Stephen Burn, president and CEO of Betfair TVG, said of the deal: “TVG has a long history of working closely with New Jersey racing through its television network. Now, we have an opportunity to use all our resources, including the online wagering platform, to help New Jersey racing have a long-term sustainable future.”

The contract comes into effect today and as part of the agreement, the phone bank for account wagering is to be relocated from the Meadowlands Racetrack to Monmouth Park.

Governor Chris Christie signed exchange wagering legislation into law in 2011, but the New Jersey Racing Commission is yet to produce formal regulations, as is the case in California, where Betfair TVG also operates.

In January Christie also signed into law a bill which allows racegoers to place bets and collect their winnings on mobile devices at the state’s racetracks.

New Jersey has suffered a major setback in its bid to offer legalised sports betting though after federal judge Michael Shipp yesterday granted a permanent injunction barring the state from offering it, as well as a summary judgement.

Shipp wrote in an opinion: “Although some of the questions raised in this case are novel, judicial intervention is generally unwarranted no matter how unwise a court considers a policy decision of the legislative branch.”

It is now likely that New Jersey will take the case to the 3rd US Circuit Court of Appeals.

NJ sports betting verdict expected this month

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Prosecution and defence give arguments to federal judge – new sports betting bills introduced in Congress

US district judge Michael Shipp has said he hopes to decide on the New Jersey sports betting case within two weeks, although the likelihood remains that the case would then be appealed to higher courts.

In Trenton yesterday, during nearly three hours of arguments for and against the state’s proposals to offer sports betting, former US solicitor general Ted Olson argued on behalf of New Jersey that the federal Paspa 1992 ban on sports betting violates the commerce clause of the constitution and affects the Garden State’s sovereignty.

Olson said to Shipp: “The government, through Paspa, has chosen to thrust the unwelcome burden of regulating sports gambling on the states. If it isn’t going to do so, it can’t instruct the states not to do it or else abandon it to Nevada or organised crime.”

Sports lawyer Jeffrey Mishkin, representing the prosecution – US attorney Paul Fishman and several professional sports leagues – said that Paspa does not overrule state legislature authority because it requires no enacting laws.

Mishkin said: “The language of [the law] does not require or compel the state of New Jersey to do anything. It forbids conduct, it does not require conduct.”

Last month, the US Department of Justice joined the lawsuit filed by the National Collegiate Athletic Association along with the National Basketball Association, the Major League Baseball, the National Football League and the National Hockey League.

New Jersey’s plans to permit sports betting were first announced last July following an announcement by Governor Chris Christie (pictured) about his intention to challenge Paspa to allow sports betting at Atlantic City’s casinos and race tracks. Paspa prohibits all states from offering sports betting except Nevada, Delaware, Montana and Oregon.

Although Shipp plans to make a decision before the end of the month, it is probable that the case would then go to the 3rd Circuit Court of Appeals and maybe even the Supreme Court.

He said: “I’m sure this is not your last stop along the way.”

Meanwhile, two New Jersey Congressmen have introduced sports betting bills in Congress. Frank Pallone’s bill would exclude New Jersey from Paspa, while Frank LoBiondo’s bill would give all states until 1 January 2016 to legalise sports betting.

He told the Press of Atlantic City: “It would be nearly impossible to pass federal legislation if it is perceived as New Jersey versus the 45 other states. I firmly believe the best legislative strategy for actually accomplishing our shared goal is to give states another opportunity to provide sports betting within their borders.”