Featured Article in Gaming.com on sports betting, featuring speech made by Steve Geller at National Conference of Legislators from Gaming States (NCLGS) Conference; That speech is published in full in prior blog post
Below is an article by Ryan Butler. It was the Featured Article on Gaming.com, and was published on July 12, 2019. I have boldfaced the parts where I am quoted or referred to in the article. This article references the remarks which I made at the NCLGS conference on July 12. I published the text of my speech on this blog less than an hour ago, and they appear directly below this article. Please view the speech in my prior blog post.
US Sports Betting Future, Legality Remain Largely Undefined
MINNEAPOLIS — More than a year after the Supreme Court struck down the federal ban on sports betting, nine states are taking legal wagers and 30 or more could do so within the next few years. But as more and more states embrace legal wagering, major questions remain about taxation, implementation and even the legal basis for the nascent industry overall.
Speaking at a conference of state lawmakers Friday, a group of gaming lawyers reiterated the myriad legal and regulatory challenges that remain even after the landmark Supreme Court decision opened widespread sports betting outside of Nevada. Questions and court battles over federal and state laws have loomed over the industry since its inception, but the complexities and possible impacts of these interpretations are even less certain than originally believed.
New Jersey led the legal challenge that ultimately resulted in the Supreme Court ruling and was the first state outside Nevada to implement a regulated online market, but even that intrastate array of internet-based offerings may run afoul of federal statute, argued Geller Law Firm’s Steve Geller. The former Florida state Senator and gaming lawyer said he didn’t believe New Jersey law wasn’t in compliance, but said it wouldn’t be hard for an opposing legal view to take shape.
That dichotomy served as a microcosm of the entire debate.
“The short answer as an attorney is I can make a convincing argument for whichever side hired me,” Geller said.
Geller and other speakers at a session during this weekend’s National Council of Legislators from Gaming States (NCLGS) meeting tried to address these questions over legality, but largely acknowledged one of the few definitive in U.S. sports betting was uncertainty.
Legislative Restrictions Remain Unclear
Questions over legality are nothing new to gambling stakeholders, but Friday’s NCLGS meeting only opened up more fronts in the ongoing developments, and challenges, for legal gaming.
Much of the meeting, and debate across the gaming industry, centers on the Wire Act of 1961. Enacted as a means to combat organized crime and legalized decades before the commercial internet was publicly accessible, there has been ongoing debate, and reinterpretations, over its effect on online gaming.
In 2011, the Obama administration answered a question from a state lottery by ruling the Wire Act didn’t apply to online gaming. This helped a handful of states pursue or expand internet lottery offerings, iCasino games and online poker.
That was revised in 2018 by the Trump administration, which ruled the law prohibited all forms of internet gaming in a move that sent shockwaves across the multi-billion dollar industry and threatened to cripple the fledgling U.S. market. The ruling was challenged in court soon after it was issued, and gaming advocates scored a significant victory earlier this year when a New Hampshire court ruled the new interpretation was invalid.
Still the matter remains far from settled, and even the presiding judge in the New Hampshire court believes the case will be challenged all the way to the U.S. Supreme Court. The fallout from this looming court battle remains the central concern of the industry, and gaming observers at NCLGS and across the country still remain unsure how it will end.
Under either interpretation, the law explicitly prohibits sports betting across state lines, but Geller opened up the possibility that intrastate markets conducted online may still be in violation.
Though New Jersey requires its internet servers for online gaming be located in Atlantic City, and bettors must be within state lines to place a bet, it still could be in violation of the Wire Act’s sports betting provisions against interstate communication. Any information, payment processing or other component inherent in online communication that is transmitted through any out-of-state location (or even a satellite in outer space) could, by technical definition, be in violation.
Geller also said a clause in existing New Jersey sports betting regulations prohibiting bets on in-state college teams could also violate federal statutes. The ban on bets could favor the integrity protections of an in-state team at the expense of an out-of-state team, which Geller said could violate the dormant commerce clause of the Constitution.
The veteran gaming lawyer didn’t say he necessarily agreed with that interpretation, but told attendees this is just one of a myriad of ways a law could be viewed, and how it could impact gaming.
During a question-and-answer portion of the seminar, Kentucky Rep. Adam Koenig asked panelists what to look for when interpreting these laws. A leader in Frankfort for his state’s sports betting expansion efforts, Koenig wanted to prepare for future legalization efforts when the federal laws remain so poorly defined.
The answer, panelists said, lies largely in the federal and state authorities who have the ability to interpret such laws.
Federal Inaction Continues as Lone Constant
If it’s any consolation, the actions – or inactions – toward gaming legislation on the federal level remains one of the few constants in the ongoing gaming debate.
The federal government has taken no significant move on gaming laws since the ban was overturned in May of last year and industry observers, stakeholders and consumers have largely believed that pattern will continue. The panelists during the NCLGS session reaffirmed that, with officials from law offices, sports betting data services platform Sportradar and even representatives from the National Basketball Association all agreeing that no move was likely.
Though a federal law could clarify many of the aforementioned legal question marks, this national-level ambivalence is a welcome development for much of the industry.
National advocacy groups like the American Gaming Association as well as commercial stakeholders and state-level officials have all preferred the current state-by-state approach to gaming legislation. Though it lacks a federal-level baseline that could potentially alleviate many of the concerns facing the industry, these stakeholders largely believe that any national-level action would be even more detrimental than the current hands-off approach.
In an address to NCLGS attendees later in the afternoon Friday, Penn National CEO Tim Wilmott didn’t mince words when asked about federal intervention.
“We believe gaming is a states’ rights issue and we’re going to fight that to the death,” Wilmott said. “Any involvement from the federal government will be something that we’ll put all our energies and resources against.”
Wilmott and other industry leaders don’t appear to have much to worry about. Congressional gridlock has become a punchline for even the nation’s most pressing issues, leaving most observers to believe gaming has little chance of being further regulated by a highly partisan and divided federal legislature.
“I think it would be a waste of time,” Geller said of a push for federal regulation. “The current Congress, I don’t think could pass gas, much less legislation.”
Text of Steve Geller’s remarks to NCLGS on Sports Gambling. Discussion and case law of legality of Internet Sports; Does the Dormant Commerce Clause affect Sports Integrity laws?; What are appropriate tax rates for Sports Betting?
Below are the lightly edited remarks which I made at the National Council of Legislators from Gaming States (NCLGS) conference in Minneapolis on July 12. I was the Founder of NCLGS in 1995, served as its first President, and currently serve as General Counsel of NCLGS. I have added some case citations and slightly expanded one or two topics.
I have 5-7 minutes to discuss “Sports Betting – The results and lessons after one year.” There were several things I wanted to discuss, and realized that I didn’t have the time. So, instead of discussing one item, I’ll raise questions about 3 items. Most of this Session will be the Q & A, and I’ll be happy to elaborate on the questions I’ve raised in the Q & A.
First, let’s talk about the legality of internet sports wagering. Many states have permitted this, mostly through affiliations with land-based sports gambling sites. In some cases, actual physical registration at a land-based site is required. A different model, however, is the legislation which Maine Governor Janet Mills just vetoed which would not have required any affiliation with a land-based entity.
Many people think that when the US Supreme Court threw out PASPA in Murphy v. NCAA (832 F. 3d 389, 2018) that this meant that states could legalize sports betting, including internet sports betting. I disagree. The Wire Act (18 U.S.C 1084) is still valid law. There have been recent court challenges to the November 2018 OLC opinion that the Wire Act applies to types of gambling other than sports betting; in fact a Federal District Court in New Hampshire (New Hampshire Lottery Commission V. William Barr, opinion 2019 DNH 091P) recently ruled against the OLC opinion, but there has never been any question that the Wire Act applies to Sports Wagering.
Section 1084 (a) of the Wire Act creates criminal liability for using a “Wire Communication” for the transmission of bets or wagers in Interstate or Foreign commerce. Section 1084 (b) creates a “safe harbor” for transmitting information “assisting in the placing of bets… on a sporting event… from a State… where wagering on that sporting event or contest is legal into a State… in which such wagering is legal”.
There have been a series of cases that hold that the Internet is a wire communication, and further that even if a signal starts and ends in the same state, but has been transmitted through a hub, exchange, or server in another state, that means that it’s been used in Interstate Commerce. I have a series of cases which show this. (See, for example, U.S. v. Yaquinta, 204 F.Supp 276; U.S. v. Kammersell, 196 F.3d 1137 10th Cir, 1999; U.S. v. Cohen, 260 F.3d 68 2d Cir, 2001; U.S. v. Lyons, 740 F.3d 702, 1st Cir, 2014) Many people have claimed that the Wire Act didn’t apply in their cases because they were in locations where Internet gambling was legal, or for other reasons. They continued these arguments while they were serving their sentences in Federal Prisons. My advice is not to argue with the people with guns and badges.
Reading all of this together, it seems that there are two serious issues here.
First, it appears to me that unless a completely in-state based system is set up, and that’s what wireless gambling is based on, any type of internet or wireless gambling that goes out over existing systems is probably in violation of the Wire Act. Understand that geofencing is probably not sufficient, that the system would need to be set up in a fashion that ensures that no part of the signal ever leaves the state.
Second, even in land-based casinos, if information on a sporting event is transmitted from a state that hasn’t adopted sports betting, is that legal? Remember that the “Safe Harbor” applies to information on wagering “from a State… where wagering on that sporting event or contest is legal into a State… in which such wagering is legal”. If the Utah Jazz is playing a basketball game against Portland Trail Blazers, and the game is occurring in Utah, where all types of gambling are illegal, can a wager be placed on that game in California, assuming that sports betting is legal in California? I offer no opinion; I merely raise the question.
Second Topic – One that will really excite you – The Dormant Commerce Clause!! Simply put, this Constitutional interpretation says that a law can’t discriminate against out-of-state actors or have the effect of favoring in-state economic interests over out-of-state interests. Several states, for example Delaware, New Jersey, Illinois, and others permit wagering on sporting events in other states, but make them illegal or illegal for college sports in the state where the wagering takes place for integrity reasons. Does this mean that the states are protecting their own sports teams from improper acts, but don’t care about the integrity of sports teams in other states? If so, it probably violates the Dormant Commerce Clause.
Last Topic – What’s an appropriate tax rate?
Let me begin by saying that I don’t know, and I believe that no one else does. Tax rates on Sports Gambling are all over the map. Literally. Nevada is 6.75 %, New Jersey is 8.5% for land based, and up to 14.25% for racetrack based online, Mississippi is 12%, West Virginia is 10%, Delaware and Rhode Island are trickier to figure out because they’re Revenue Sharing models but appear to be 50 and 51%, and Pennsylvania is at 36%, plus very high licensing fees ($10 million).
Everyone thought that if the tax rate was too high on Sports Betting, that the Bookies would have an advantage, and cut into legal gambling. I believe that the Jury is still out on this, and that it’s too early to tell.
The next question in determining tax rates is the question of why you’re having the Sports Betting. In Nevada, where they have a very low tax rate, it seems that the main reason for Sports Betting is to attract people to their casinos and hotels, generating other tax dollars and jobs. In Pennsylvania, the reason appears to be primarily about generating tax dollars. Both are valid, but very different reasons. Understanding this dichotomy, it appears that it may make sense to have different, higher rates for online sports betting, assuming that the online sports betting is set up in a legal manner. I say this because generally online sports betting doesn’t generate the same amount of jobs or economic activity in a state that gambling at bricks and mortar locations generate.
I feel very comfortable in saying that we still don’t know what the effect of higher tax rates will be on promoting illegal gambling, and that states need to look carefully at what their goals are when they set tax rates for sports betting. Is it to maximize gambling tax dollars, or to create jobs, tourism, and overall business taxes?
Thank you.
Discussion of last Florida Legislative Session and prediction for next Session; Geller speaks at NCLGS Conference in Minneapolis on Sports Gaming
I haven’t posted for a while because the Legislature was in Committee Meetings or Session, and I didn’t want to write anything that could conflict with the positions of any clients or potential clients. I’ve still been active, and I’ll bring you up to date now.
The Florida Legislature last year tried to pass comprehensive gambling legislation, with the emphasis on Sports Betting. Senate President Bill Galvano was once again the main driver of gambling legislation, based on his outstanding knowledge in this area. Remember that Galvano is a former President of the National Council of Legislators from Gaming States (NCLGS), an organization where I also served as President. Galvano prepared the legislation, and then largely turned it over to one of his closest confidants, Senator Wilton Simpson, who is scheduled to succeed Galvano as Senate President. President Galvano consulted with me on his proposed Legislation, and told several reporters and editors that I was his chief advisor on this Legislation.
The passage of comprehensive gambling legislation is always difficult, and this year was no exception. There were too many competing interests (as usual), and, as I predicted, it’s been made more complicated by the passage of the Constitutional Amendment last November (Amendment Three, Voter Control of Gambling). It’s still not clear what’s the actual effect of Amendment Three . The Seminole Tribe has suspended their payments to the State of Florida while indicating a willingness to continue talking. It’s still unclear if the Florida Legislature will sue the Governor based on the last Governor’s entering into a Compact with the Tribe without Legislative approval. Remember that the Florida Supreme Court ruled in Rubio vs. Crist that Indian Gaming Compacts could be negotiated by a Governor, but require ratification by the Legislature. Former Governor Scott entered into a compact with the Seminole Tribe through the process of resolving litigation between the State and the Tribe. This settlement has never been approved by the Legislature, and I believe that this renders any agreement at least subject to question. One of the biggest issues in the Litigation was over “designated player games”, and that remained among the most contentious issues in last year’s proposed Legislation.
This year the Session begins in January instead of March, with Committee meetings beginning in September. I’m sure that there will once again be gambling legislation, with Sports betting at the center of any such legislation. I last spoke on the topic of Sports Gambling Legislation in Minneapolis on July 12 at a NCLGS conference. I will publish my slightly edited remarks in the next day or two. I also would like to invite anyone with an interest in the Seminole Gambling Compact to view my remarks in Gaming Law Review, Economics, Regulation, Compliance and Policy Volume 22, Issue 8, October 2018, pages 469-484. https://www.liebertpub.com/toc/glr2/22/8 . This is the text of a panel discussion for a meeting of the American Bar Association Business Law Section.
Steve Geller named General Counsel of the National Counsel of Legislators from Gaming States (NCLGS); Speaks at NCLGS Winter Conference on casino saturation and what states can realistically expect in terms of Tourism from new casinos.
I attended the NCLGS Winter Conference in New Orleans, which was held from January 4-6. NCLGS is the only organization of State lawmakers that meets on a regular basis to discuss issues in regard to gaming. Members of NCLGS chair or are members of Legislative committees that are responsible for the regulation of gaming in their states. NCLGS does not promote or oppose gaming, but is primarily concerned with proper regulation of the gambling industry.
I was the founder of NCLGS in 1995 and was its long-time first President. I have remained very active in NCLGS, and was named its General Counsel at the Winter meeting.
On Sunday, January 6, I spoke on a NCLGS panel discussion. The topic for the panel was “When developing gaming public policy, legislators often envision casino out-of-state patrons who will do more than gamble in the casino. But with more than 1,000 casinos in 42 states, and with new casinos generally being built to smaller scale due to their proliferation, is it realistic to expect them to be tourism magnets? Are there many markets remaining where destination resorts could be developed to attract tourists? In this panel, operators will provide insight into what states can realistically expect, and what they must do to meet the goal of tourism promotion.”
In my remarks, I discussed the history of recent gaming expansion nationally. This included Indian casinos, “riverboats gambling” (which is generally not conducted on what most people would consider to be “riverboats”, racinos, and commercial casinos. The most common thread on the expansion of all of these except for Indian gambling is the desire for one state not to see its gambling dollars go to another state. Once one state starts a type of gambling, there is increased pressure on neighboring states to have similar types of gambling.
It seems clear that the proliferation of casinos is generally reaching saturation in most areas. For example, in the Northeastern United States, there appears to be a situation where new casinos are cannibalizing revenue from existing casinos. Total gaming revenue may go up, but revenue per casino appears to be going down. I gave quotes from both Moody’s and the American Gaming Association (AGA) discussing that while this appears to be most acute in the Northeast, it is a national issue.
It appears that building casinos by itself is no longer sufficient to attract new tourism. It is unclear if casinos by themselves have been enough to attract tourists in recent years, or if casinos were only helpful as part of a general resort that attracted people. Today, however, there is so much availability of casino gambling without the necessity of travelling that just providing additional opportunities for gambling will not attract tourism.
Many casinos today are being built on a smaller scale, and are designed to attract primarily local patrons as opposed to tourists. It seems that the new casinos that are attracting tourists are the “hubs” of the “hub and spoke” model. This seems to work better with large casino chains with robust loyalty programs where casino patrons can gamble locally, and then cash in player rewards at larger resorts, where casino gambling is only part of the attraction.
Food and beverage, shows, and other diversions are a must to attract tourism dollars. Las Vegas and Atlantic City have recognized this. For example, in Las Vegas in the 1990’s, over ½ of the casino revenue came from gambling, while today it’s down to about 1/3. As younger people lose interest in slot machines, which have traditionally been and remain the biggest gambling money-makers for casinos, casinos will need to do other things to attract people and remain relevant. Some things being discussed are sports gambling, skill-based gaming, E-sports, and even virtual reality gaming.
The most important thing to remember is that the tax rate set by a state will determine what type of gambling takes place in that state. Legislators will need to decide what is most important to them in their states. Hub resort casinos require a lower tax rate to be successful than does a “slots barn”. A state can make money on casino gambling with most tax rates, but lower tax rates result in more investment and jobs, while a higher tax rate can result in more total gambling-exclusive revenue. A tax rate of 6% may get a state a Wynn or Bellagio-style luxury resorts, a tax rate of 25% may get a state a nice hotel franchise casino, a tax rate of 60% may get a state slot machines at convenience stores. All may be viable models; all result in completely different outcomes based on the tax rate.
Geller to speak at Summer Meeting of National Council of Legislators from Gaming States (NCLGS)
I was the Founder and National President of the National Council of Legislators from Gaming States (NCLGS), and I remain as Senior Adviser and Special Counsel to NCLGS today. I will be speaking on Pari-Mutuels and Sports Betting at their upcoming summer conference in Cleveland. Enclosed below is a Press release with the details of this meeting.
Legislators from Gaming States Announces Roster of Expert Speakers for July 13-15 Summer Meeting in Cleveland
(PRNewsfoto/National Council of Legislators)
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National Council of Legislators from Gaming States
Apr 24, 2018, 11:15 ET
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CLEVELAND, April 24, 2018 /PRNewswire/ — The National Council of Legislators from Gaming States (NCLGS) today announced the roster of speakers for its Summer Meeting that takes place July 13-15 in Cleveland. Registration is open to the public.
“Our slate of speakers includes many of the most respected and thought-provoking experts from different fields, including regulators, gaming operators, attorneys, financial analysts, problem-gambling specialists, and other gaming-related professionals,” said incoming NCLGS President William Coley, a senator from Ohio. “Everyone with a stake in the future of legalized gambling – in any form – should join dozens of state legislators and attend our Cleveland meeting.”
In addition to legislators who will chair Committee sessions, the following experts will speak in Committee and general sessions:
Andy Abboud, VP, Government Relations & Community Development, Las Vegas Sands
Joe Asher, CEO, William Hill US
Karl Bennison, Chief, Enforcement Division, Nevada Gaming Control Board
Dennis Berg, Director, Ohio Lottery
Byron Boothe, Vice President, Government Relations, Intralot
Michael Burke, Executive Director, Michigan Association on Problem Gambling
Anthony Cabot, Distinguished Fellow, University of Nevada-Las Vegas, William S. Boyd School of Law
Richard Carter, CEO, SBTech
Heather Chapman, Supervisory Psychologist/Director Gambling Program, Louis Stokes Cleveland VA Medical Center
Andy Cunningham, Director Global Strategy Integrity Services, Sportradar
Brian Egger, Senior Gaming & Lodging Analyst, Bloomberg Intelligence
Steve Geller, Esquire, Geller Law Firm
Ken George Jr., Chair, Forest County Potawatomi Gaming Commission
Will Green, Senior Director, Research, American Gaming Association
Becky Harris, Chair, Nevada Gaming Control Board
Mark Hemmerle, VP, Legal and Compliance, Worldpay Gaming
Jeremy Kleiman, Member, Saiber LLC
Derek Longmeier, The Problem Gambling Network of Ohio, Executive Director
Tim Lowry, Partner, DLA Piper
John Maddox, Vice President Government Relations & Development, Caesars Entertainment
Art Manteris, Vice President, Race & Sports Operations, Station Casinos
Stephen Martino, Senior Vice President & Chief Compliance Officer, MGM Resorts International
Christopher McErlean, Vice President – Racing, Penn National Gaming
Dan Metelsky, Public Gaming Strategist and Public Policy Leader, Public Gaming Creative Strategies
Kevin Mullally, Vice President of Government Relations & General Counsel, GLI
Dave Payton, Vice President of Sales, AmTote International
Michael Pollock, Managing Director, Spectrum Gaming Group
F. Douglas Reed, Senior Pari-Mutuel Associate, Spectrum Gaming Group
Tim Richards Chief Product Strategy Officer, Everi
Lindsay Slader, Operations Manager, Geocomply
Ernie Stevens Jr., Chair, National Indian Gaming Association
Lovell Walker, Executive Director of Interactive Gaming Development, MGM Resorts International
Daniel Wallach, Shareholder, Becker & Poliakoff
Joseph Weinert, Executive Vice President, Spectrum Gaming Group
The NCLGS Summer Meeting agenda includes:
Six legislative committee sessions: Casinos, Emerging Forms of Gaming, Lotteries, Pari-Mutuels, Responsible Gaming, and State-Federal Relations
Two Masterclass panels conducted by the International Masters of Gaming Law focusing on sports betting and online gaming
Special general session panel examining the economic impacts of gaming
Friday evening welcome reception
Saturday afternoon tour of Intralot’s facility serving the Ohio Lottery
Optional Saturday night baseball game (via separate registration fee at special group rate): New York Yankees at Cleveland Indians
To view the agenda, register, and book hotel rooms at the host Marriott at special attendee rates, visit http://www.nclgs.org/meetings.html.
For sponsorship information, contact Dawn Wagner at dawn@nclgs.org. Legislators and others seeking NCLGS membership information should contact Wayne Marlin at wayne.marlin@nclgs.org.
NCLGS is the only organization of state lawmakers that meets on a regular basis to discuss issues relating to gaming. Members of NCLGS serve as chairpersons or members of state legislative committees responsible for the regulation of gaming in their state legislative houses. NCLGS does not promote or oppose gaming but is primarily concerned with the regulation and economic and social impacts of the industry. The NCLGS Foundation is the educational and research arm of NCLGS. The 501(c)(3) non-profit is a source of non-partisan data on issues of gaming legislation and regulation.
Spectrum Gaming Group, which has performed advisory and consulting work for gaming operators, regulators and legislatures in 36 US states and territories and in 47 countries on six continents, serves as the Executive Director of NCLGS.
SOURCE National Council of Legislators from Gaming States
Related Links
http://www.nclgs.org
Florida House of Representatives Majority Leader files major Gambling bill; Article on showdown over Seminole gambling agreement quoting me; McCain calls for re-examination of PASPA; Poarch Creek band of Indians threatens to sell marijuana from their Florida land if not given gambling; Comprehensive gambling deal in Florida described as “Enormous, Gargantuan Lift; Quotes from Orlando Sentinel gambling panel; Geller speaks at NCLGS
• Florida House of Representatives Majority Leader Dana Young filed a major re-write of gambling laws in Florida on March 2. This bill is over 320 pages, and will permit destination resorts, historic racing, and many other types of gambling in Florida. We will print a more complete analysis of this bill after we have time to review it, and see what the official Bill analysis says.
• Nick Sortal, the excellent gaming columnist in the Fort Lauderdale SunSentinel, wrote a column entitled “Showdown looming over Seminole gambling agreement.” One of the experts quoted in that article was … me. Sortal quoted Geller as saying “The one thing I can tell you with pretty good certainty is that anybody that tells you with certainty that they know what’s going to happen is wrong”.
• United States Senator John McCain has said that the U.S. Congress needs to reexamine the Federal ban on sports wagering [PASPA]. According to the Washington Post, McCain said “We need a debate in Congress… We need to have a talk with the American people, and we need to probably have hearings in Congress on this whole issue so we can build consensus.”
• The Poarch Creek Band of Indians (Poarch) is an Alabama-based tribe that owns about one acre of land in near Pensacola, Fl, where it is claiming the right to build a casino. According to the Associated Press, the Poarch currently operate a casino in Atmore Alabama, a few miles away from the Pensacola site. The Poarch are not currently a Federally recognized tribe in Florida, but they contend that they have the right to have casino gambling in Florida, based on the amount of time that the Florida land has been owned by the tribe. The Governor Rick Scott administration disagrees, stating that it is ‘premature” to negotiate with the Poarch until they have the necessary Federal recognition in Florida. The AP states that the Poarch are threatening to take advantage of a December opinion by the U.S. Department of Justice which will permit Tribes to raise and sell marijuana on their tribal property, and are stating that they will consider doing this in Florida if the Poarch do not get “a seat at the table” on Florida gambling issues.
• News Service of Florida has published a lengthy analysis of the difficulty in passing a comprehensive gambling bill under the headline “Gambling Deal ‘Enormous, Gargantuan Lift’ This Session”. That quote was from Rep. Dana Young. The article talks about Senate President Andy Gardiner’s repeated statements that he is fine with the Legislature doing nothing this year, and letting that portion of the Seminole Gaming Compact dealing with banked card games “sunset”, or expire. Gardiner has appointed Senate Majority Leader Bill Galvano as the lead on gambling for the Florida Senate. Galvano was the lead for the Florida Legislature five years ago when the Seminole Gaming Compact was originally approved [Although not in the article, it should also be noted that Galvano is currently national Vice-President of the national Council of Legislators from Gaming States (NCLGS), and is expected to become President of that group in 2016]. The article quotes Galvano extensively. The article goes on to say that “any gambling measure runs the risk of being overloaded with wish lists from industry operators, including pari-mutuels in Broward and Miami dade Counties that already have slots but want a lower tax rate and card games to better compete with the nearby Seminole Hard Rock Hotel and Casino in Hollywood.”
• Nick Sortal also wrote an interesting piece in the SunSentinel, including interesting quotes from many top players in the gambling debate from a panel discussion hosted at the Orlando Sentinel, the sister paper of the SunSentinel. Among those quoted were Geoff Freeman, President of the American Gaming Association; Mark Wilson, President of the Florida Chamber of Commerce; John Sowinski, President of CasiNos.org; and Izzy Havenick, a member of the family that owns Magic City Casino in Miami, as well as having other Florida Pari-mutuel interests.
• Since I mentioned NCLGS earlier, I want to point out that they had a very successful conference in Las Vegas in January. I spoke on three topics at their committee meetings, which may be a record for any single speaker. I spoke on updates in pari-mutuel technology, pari-mutuel decoupling, and gave an update on Indian gaming state compacts and Tribal recognition. The next NCLGS meeting is in June in Atlantic City.
DCA rules in favor of Magic City on Pari-mutuel permit, racing date battle between Gulfstram and Calder ends, New Cruise-to-Nowhere in Jacksonville, Steve Geller speeches
The last month has been very busy from both a gaming law perspective here in Florida, both in terms of new issues to deal with in Florida, as well as my own speaking schedule.
- The First District Court of Appeals in Florida has recently entered a ruling on a long-standing dispute over whether West Flagler Associates, Ltd. In Miami, the parent company of Magic City Casino, is entitled under Florida law to one or more summer jai-alai permits under a law that has existed for many years, but has not been used until the last three or four years. There have been different interpretations of this law, and the DCA entered an order overruling the interpretation of the Florida Division of Pari-Mutuel Wagering. According to Miami Today, The DCA ordered the DPMW to reconsider its ruling; it is not clear whether the DPMW will actually issue the permit. As of the time of writing this blog, it is not clear whether either side will seek to appeal the ruling to the Florida Supreme Court. A similar case involving an application from Hialeah Park is currently pending in front of the Third DCA.
- The battle over thoroughbred racing dates in Miami Dade County has existed since before the County was called Miami Dade County. It now appears to be over. Originally, this was a three way battle between Hialeah, Gulfstream, and Calder racetracks. Hialeah then ceased thoroughbred racing, and Gulfstream and Calder remained to fight. Now, according to the Tampa Times, the parent company of Gulfstream (the Stronach Group), and the parent company of Calder (Churchill Downs) have reached an agreement where Churchill Downs will no longer operate thoroughbred racing at Calder. Instead, the Stronach Group will operate the racing dates located at Calder, while Churchill Downs will continue to operate the casino operations at Calder. Under Florida law, there must be a minimum of 40 days of thoroughbred racing at Calder for them to continue to keep their cardroom and casino permits. This deal also provides for Churchill Downs to sell its 50% stake in HRTV (a racing broadcast network) to Stronach.
- According to Jacksonville.com (the Florida Times Union), a new gambling boat based in Mayport is set to begin operations. Cruises to Nowhere are governed by the Johnson act. Gambling is only permitted outside of the territorial limits of the United States (three miles from Jacksonville). While South Florida was once home to many Cruises to Nowhere, the presence of Indian and pari-mutuel casinos has greatly diminished the presence of Cruises to Nowhere in Florida.
- According to multiple news sources, Sheldon Adelson , casino magnate from the Las Vegas Sands, has contributed $2.5 million dollars to the Drug Free Florida Committee, a group formed to oppose Amendment Two to the Florida Constitution. Amendment Two would permit the legal use of Medical Marijuana. The major committee funding efforts to pass Amendment Two is United for Care. John Morgan is both the major funder of United for Care, and is the senior Partner of Morgan and Morgan, the firm which employs and has been so helpful to Governor Charlie Crist. Adelson has been a substantial contributor to Governor Rick Scott. It is widely speculated that Adelson’s contribution to Drug Free Florida is designed to help Scott in his reelection campaign.
- I have had a busy early summer. On May 20 I was at the Borgata Hotel Casino in Atlantic City as the Moderator of the East Coast Gaming Conference panel entitled “Florida- Ripe for Major Expansion?” The Panelists were Florida State Representative Jim Waldman, the Ranking Democrat on the Florida House Gaming Committee; Isadore (“Izzy”) Havenick, VP of Magic City Casino and Naples /Fort Myers Dog track; Lonny Powell, CEO of the Florida Thoroughbred Breeders and Owners Association; and Rod Matamedi, Senior Economic Associate, REMI. I also attended the National Council of Legislators from Gaming States meeting at the Hyatt Regency Hotel in La Jolla, where I spoke on several committees. I spoke at the Pari-Mutuel Committee on innovations in pari-mutuel wagering, I gave the Committee on Casinos an update on enforcement in Florida of the ban on “Internet Cafes”, and I spoke to the State-Federal Relations Committee on the current state of federal Internet Gambling laws, and my prognosis for additional Federal Legislation this year. To the best of my recollection, this was the only time any speaker has spoken at three different committees at any NCLGS meeting.
Steve Geller, Esq., is the former Minority Leader of the Florida Senate, and a Shareholder at Greenspoon Marder, P.A. He served on the Gaming committees of the Florida Legislature during the entire 20 years that he served in the House of Representatives and Senate, including serving as Chair of the Committee. He is an “A-V” rated lawyer, and chairs the Gaming Law Practice Group at Greenspoon Marder, where he has represented State and National clients. Greenspoon Marder is a law firm with approximately 160 attorneys in Florida, and the Gaming Law Practice Group can call on the expertise of other attorneys in the firm, in areas such as transactional law, labor and employment law, litigation, appellate law, etc.
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