Posts Tagged ‘gaming’

Pennsylvania Online Gaming Has Passed, But Will Online Outlets Join Them?

 Pennsylvania Online Gaming Has Passed, But Will Online Outlets Join Them?

After more than a year of haggling over the details, the state of Pennsylvania passed online gaming, poker and DFS regulations for its citizens. While the passage of that bill was a watershed moment that brings to four the number of states with such legislation, the question now is when will it go live. Although state legislators are looking to move quickly on the issue, there are questions regarding the taxation that could keep suitors away from Pennsylvania’s burgeoning online gaming industry.

In a report prepared by Moody’s Investors Service, which provides financial bonds research for investors and other companies, the taxation rate for slots segment of the Keystone State’s online gaming industry could scare off some suitors. The rate of 54% is much higher than the rate that states such as New Jersey (16%) and slightly higher than that in Delaware (43.5%). Such heavy taxation could be anathema to online gaming operators, who would be looking to make more of a profit from the games than not even 50% of their “win.”

And what effect would that massive tax bill on casino gaming have on those who want to enter for online poker? While they continue to indicate that they want to be a part of the industry, companies like 888 Holdings (888Poker), The Stars Group (PokerStars) and partygaming (partypoker) might not want to invest heavily with either a poker or a casino gaming operation in a market that they won’t see a suitable return.  

For now, the big question is when the clock starts ticking on just getting the licenses handed out. Although Governor Tom Wolf signed the bill into law at the end of October, the Pennsylvania Gaming Control Board hasn’t yet started the clock on accepting applications for online gaming licenses. Currently the PGCB is putting the final changes on the regulations themselves, pushing back further the opening of the Pennsylvania online gaming industry.

Once the PGCB opens the licensing process, those casinos inside the state will get first crack at the three levels of licensing. Those three licenses – for slots, table gaming and poker – will be available for a $ 4 million price tag for individual license. If an entity were looking to get all three, then the “hometown discount” would be $ 10 million for all three. The time frame for those companies already located in Pennsylvania will be 90 days from the date the PGCB opens for business.

After that 90-day period, outside operators would then be allowed to apply. They wouldn’t receive the discount price for all three licenses, instead they would be charged at the $ 4 million per license price. That process would run for 120 days, making for a grand total of 210 days – seven months – before just the licensing procedures would be complete. Looking at the calendar today, that would mean that just the licensing process would take until the beginning of July 2018.

Once the licensing process is complete, then the actual testing process for the different gaming software would have to be completed. If the PGCB was expedient in its review process, it is conceivable that it could take 30 days before online gaming would be opened in the state. Playing on the conservative side, let’s say it takes 90 days for them to complete their testing. That now makes it October 2018 before the first bets can be taken in the state of Pennsylvania.

Although online gaming and poker are now the law in the home of the Steelers and the Eagles, it isn’t going to be anytime soon that the games start. Hopefully within that time, state regulators will consider joining with the other three states that have online poker regulations – Nevada, New Jersey, and Delaware – and join that compact to fully maximize the abilities of the online poker segment of the industry. With 2018 around the corner – and several states examining the online gaming and poker question – a fully functioning and profitable Pennsylvania market would encourage others to join the party.

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And Then There Were Four…Pennsylvania Passes Online Gaming and Poker Regulations

 And Then There Were Four…Pennsylvania Passes Online Gaming and Poker Regulations

After a frenetic two days of action in the General Assembly, Pennsylvania has joined Nevada, New Jersey, and Delaware in the fraternity of states that have regulated and licensed online casino gaming and/or poker.

As reported by my friend and colleague Dan Katz yesterday, the Keystone State – faced with the end of a legislative session that still had not passed a budget – kicked off on Wednesday when the Pennsylvania Senate acted on HB 271. After debate, the Senate (which had always been more open to expanding gaming in the state) decided by a vote of 31-19 to pass the House bill, putting the onus back on the House to complete a deal that has been in the works for more than 18 months.

Thursday saw another lengthy debate session on HB 271, with many in the House decrying not only the expansion of gaming in the state but also the rushed nature of the nearly 1000-page bill. In the end, the vote went to the ayes for expanding gaming in the state by a tally of 109-72, barely beating the close of the legislative session this Friday. HB 271 now heads to Governor Tom Wolf, who has stated in the past that he will sign the expanded gaming bill and bring several gaming options to Pennsylvanians.

Once Wolf signs the bill, complete online gaming – slots, table gaming and other house banked games – would be offered to the citizens of the state. Online poker will also be offered to the customers as well as daily fantasy sports (DFS). One of the things that was holding up passage of the bill, video gaming terminals in bars and airports, ended up not causing any issues as it was included in the bill. Furthermore, there will be 10 “mini-casinos” allowed to open throughout the state and, should the federal government drop laws preventing the states from doing so, online and live sports betting would be authorized.

When it comes to licensing for business in Pennsylvania, three separate licenses will be offered. The first will be for slot gaming, the second for house-banked games and the third for online poker. The casinos in operation in the state will have the first option as to whether they want to participate in the newly born industry, with a $ 10 million cost for licensing across all three platforms and a $ 4 million licensing fee for each individual product. After 120 days, the industry is opened to outside businesses and licenses will go for $ 4 million.

There are still some issues with the taxation on the different operations, ones that could cut the industry down before it even gets started. A 54% taxation rate on slot gaming might be too big a bite for online operators to even enter the market (although legislators have said the live games are taxed at that rate and online operators will just have to live with it). Online poker is a bit more realistic, taxed at 16%, but that is still higher than neighboring New Jersey.

The debate over online gaming dates to 2015 when legislators, looking to plug budget deficits that have totaled upwards of $ 2 billion, entertained the options of opening for online gaming. It was actually penciled into the budget in 2016, but gridlock in Harrisburg and the reluctance of legislators on both sides to expanding gambling in the state kept the legislation from being passed. With the passage of the legislation on Thursday, Wolf now has 10 days to sign the bill. If he does not sign it, it automatically becomes law and chances of Wolf vetoing the action, especially after the lengthy period that it took to pass the bill, are slim.

If (once?) Wolf signs the bill, then there will be a 90-day period in which the Pennsylvania Gaming Control Board will be accepting licenses from qualified entities in the state. After that period has elapsed, then the next key date would be 120 days after that for accepting license applications from non-Pennsylvania gaming operations. If everything runs smoothly, it is likely that approximately a year from now (if not sooner), Pennsylvania will join Nevada, New Jersey, and Delaware as the only states in the U. S. to regulate online gaming and poker.

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Malta Gaming Authority Launches New Online Licensing System

 Malta Gaming Authority Launches New Online Licensing System

Last week, the Malta Gaming Authority (MGA) announced that it is launching a new Licensee Relationship Management System in order to better facilitate communications between existing and prospective licensees and the regulatory body. The system, developed by Microsoft, is designed to simplify the licensing processes and keep them – as much as possible – online via a dedicated web portal.

At the outset, the MGA is launching three online services: applications for remote (read: internet) gaming licenses, dynamic seal URL requests, and submission of players liability and gaming tax reports. Part of the idea here is to allow operators to take control of their licensing and regulatory requirements, rather than have the MGA constantly push requests downstream and wait for a response. Now operators can do things like check on their licenses and keep track of what sorts of deliverables they need to submit (admittedly, I’m presuming this based on deduction and my past life in IT consulting – I haven’t seen the system in action).

“The Malta Gaming Authority is taking another step towards achieving efficiency and innovation in the way it conducts its function as a regulator by applying information technology in regulatory processes,” said the MGA’s Executive Chairman, Joseph Cuschieri, in a press conference. “This project further aids the Authority in providing a top end service to its licensees and practitioners alike. Our main objective remains; that of exceeding the expectations of all our stakeholders at large. This portal goes a long way in achieving that.”

Parliamentary Secretary Silvio Schembri added:

Today, the MGA is launching a new system by which it will be facilitating the communication with clients applying for a gaming licence on our shores. This system will function via an online portal improving the efficiency of the Authority’s regulatory process. This project forms part of the government’s vision for the improvement of our gaming jurisdiction. With similar initiatives, the Authority is excelling in the service given to those wishing to invest in our country, whereby said service always exceeds the expectations of the vast majority of operators.

Frankly, it is a little surprising that a system like this was not put in place until now, but better late than never, as they say. I am also not exactly sure how the Malta Gaming Authority had been doing things, but I can imagine things like phone tag, faxes, and waits in line at a licensing office as possibilities. When I had an addition built on my house nine years ago, one of the subcontractors had to go to a county permitting office several times to take care of some busy work. It seemed like a huge waste of time and it would have been nice if he could have at least submitted plans and scheduled inspector appointments online. I wouldn’t be surprised if the MGA had been working in a similar way.

The next phase of the MGA’s new system is to expand it into land-based gambling operations.

The MGA licenses hundreds of operators. Most nobody has ever heard of, but some of the more recognizable names include Betsson, bwin.party, Evolution Gaming, GTECH, Microgaming, Relax Gaming, and Tain.

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Nevada Gaming Commission Bans Marijuana Usage on Casino Grounds

 Nevada Gaming Commission Bans Marijuana Usage on Casino Grounds

Although the state of Nevada has opened the doors for legal marijuana possession, usage and sales inside its borders, there are still laws making it illegal to smoke in public. As far as individual businesses go, they are free to set their own rules regarding partaking of weed. For casinos around the state, however, their regulatory body has made their decision.

The Nevada Gaming Commission last week decided that, even though it is legal to use marijuana in the state, consumption of AND possession of the drug on casino grounds would not be allowed. The discussion, which lasted for more than an hour, talked about several aspects of marijuana, including its current federal status (illegal), before rendering the decision. Marijuana’s status on federal statutes as a Schedule 1 controlled substance weighed heavy on the board members in setting a mandate that would provide the gaming industry with a distinct separation from an illegal substance.

Those discussions haven’t stopped, however, as the NGC decides whether they will need to codify their actions and just how wide to toss their net. “We’ve got some work to do in terms of distilling what is going to be the policy and how it should be manifested,” NGC member Terry Johnson commented. “Is it going to be sufficient to make policy-type pronouncements or is it going to be necessary to adopt rules that put everyone on notice as to what the requirements and expectations are?”

As of now, the guidelines from the NGC are that there is to be absolutely no smoking of marijuana by any employee or guest on casino grounds or in the hotel. Furthermore, gaming licensees (casinos) must not host shows, conventions or gatherings that promote using, selling, or growing marijuana and “should not” form any business partnerships nor finance any companies or individuals involved in the marijuana industry and vice versa. For all purposes, a stone wall has been set between casinos and the marijuana industry, at least while federal law still criminalizes the sale and usage of the drug.

Marijuana and poker (not to mention other drugs like cocaine, amphetamines and MDMA, or Ecstasy) have had a long association. The usage of marijuana relaxes many people and allows a person (perhaps in their own beliefs) to have a clear mind in making complex decisions on the poker table. It is something that is pointed out in an excellent article on Leafly.com by writer Derrick Oliver Dewan.

In his article “The Secret History of Cannabis at the World Series of Poker,” Dewan talked to three-time WSOP bracelet winner Dutch Boyd and 2006 WSOP champion Bryan Micon regarding their views on the usage of marijuana. Micon admitted to Dewan that he was high en route to winning his bracelet. “It calms me down in big tournament spots like that one,” Micon explained. “It helps me think things through clearly in the face of pressure. In that spot every decision matters, every chip counts. The weed relaxes me. Some people believe marijuana impairs or clouds your judgement. To each their own, I guess.”

Boyd told Dewan that marijuana usage was prevalent on the tournament circuit in the past but even more today. Back when he first started, “I’d be one of those guys running out to the parking lots during breaks, smoking it up,” Boyd is quoted as saying. Now, “It’s not talked about much, but it’s pretty pervasive in the poker culture. Marijuana is part of poker. If you’re ever on the tournament trail and stop in a Tunica hotel room during a World Series of Poker circuit event or in Los Angeles for a stop on the World Poker Tour, just walk down the halls and it’s everywhere. It smells like weed. It’s part of the game’s culture.”

While there seems to be popular consensus for marijuana usage in casinos (at least from poker players), it is plain from the decision of the NGC that it is expressly verboten for now. With the current political climate in Washington, DC, and an Attorney General who is looking to increase prosecution of marijuana usage rather than decrease it, that is something that isn’t bound to change anytime soon.

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State of Florida, Seminole Indians Reach Gaming Settlement

 State of Florida, Seminole Indians Reach Gaming Settlement

Ending a debate that has raged in the halls of the state capitol, Tallahassee, since early last year, Governor Rick Scott of Florida, his gaming enforcement board and the Seminole Tribe of Florida reached a settlement that will have a sizeable effect on gaming in the Sunshine State.

The new agreement will influence table games, which have started springing up in some of the poker rooms around Florida. Under the agreement signed by the Florida Department of Business and Professional Regulation and the Seminoles, the table games – which included blackjack and other “banked” games (games in which players played against the house rather than each other) – and slot machines will be immediately closed in the poker rooms where they were operating. That closure gives exclusivity for table gaming and slots in the state to the six Seminole properties owned and run by the tribe for the next 13 years of the compact between the two entities.

“The DBPR is glad that the state of Florida has reached an agreement to resolve the ongoing litigation between the state and the Seminole Tribe,” DBPR Secretary Jonathan Zachem noted in a statement reported by Mary Ellen Klas of the Miami Herald. “The agreement ensures the continuity of the current Seminole compact and does not allow for any expansion of gaming.”

What was the driver of the deal? For the state of Florida, it was the money. Under the new agreement, the Seminole Tribe will continue to contribute a monthly revenue sharing program to the state, in part due to the enforcement of the table game and slot ban on non-Seminole operations. That totaled $ 220 million in revenues that the Tribe put towards the revenue sharing over the past couple of years (and an estimated $ 120 million per year), but had been held in escrow while both had lawsuits pending in federal court.

In 2010, the Seminole Tribe and the state of Florida agreed to an exclusivity agreement, giving the Seminoles complete gaming rights in the state. That five-year deal expired in 2015 and, as might be expected, the various dog and horse tracks and poker rooms in the area wanted to find a way to get into that area of gaming. The Seminole Tribe called foul, as the renegotiation of the compact was ongoing with state officials, and the Seminoles brought a federal case against the state of Florida for not enforcing the regulations. The state didn’t roll over, instead filing their own countersuit that stated the agreement had expired and that the Seminole Tribe, in fact, was violating Florida gambling laws by being in operation.

Federal judge Robert Hinkle ruled last year in favor of the Seminole Tribe, affirming that the state didn’t shut down the “banked” games in the non-Seminole operations per the compact between the two, violating the agreement. After Hinkle made his ruling, the Florida legislature considered expanding gaming in the state – and was unable to come to any agreement – while the Seminoles considered the option of withholding their revenue payments outright until the state enforced the law.

The new agreement, while ensuring that the Seminole Tribe continues its revenue payments in exchange for exclusivity on table gaming and slots, also has an effect on another area of debate in the state. The expansion of casino gaming in Florida, which had seen consideration of new casino operations in Miami and even in the family oriented Disney area of Orlando, is now dead. For the next 13 years (the end of the overall compact between the Seminole Tribe and the state of Florida), there will be no further discussion of expanding gaming inside the state, keeping powerful casino gaming operations out of the Florida market and in the hands of the Seminole Tribe.

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