News In Brief: February 12-February 16, 2024

February 16, 2024
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Alabama to consider amendment that would open gambling market and Australia's Star Entertainment trades job security for tax delays.
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Star, NSW Government Sign Jobs-For-Tax-Deferral Deal
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Australian casino operator The Star Entertainment Group and the New South Wales (NSW) state government have signed a jobs guarantee agreement in exchange for deferred tax increases.

Flagged in August, the agreement legally requires Star Entertainment’s Sydney casino to maintain 3,000 jobs until 2030 in exchange for deferring tougher slot machine duties to the same year.

A government statement on Friday (February 16) added new details of the deal, with Star facing trade union oversight and strict audits of its Sydney employees, including quarterly head counts and maintaining ratios of full-time staff, with fines of up to A$1m ($652,000) for shortfalls.

The deal appears to strengthen the company’s political position in the event of a hostile assessment by the gambling regulator.

In December, the NSW Independent Casino Commission said Star remains below the standard required of a casino licensee, and has six months to improve or be closed down.

Star’s casinos in NSW and Queensland state are under the supervision of special managers authorised by their respective gambling regulators, following damaging probes that identified widespread compliance failures and triggered board purges.

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Alabama House Approves Major Gaming Package
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The Alabama House of Representatives approved a constitutional amendment Thursday (February 15) that would potentially open the state’s regulated gaming market to seven new casinos, sports betting, and a state lottery.

House Bill 151 and House Bill 152 were approved by the full House during separate votes Thursday, clearing the required 60 percent threshold to amend the state’s constitution.

In addition to the expanded gaming, the bill would create a new gaming regulator, the Alabama Gaming Commission, that would have new enforcement powers to investigate and take action against illegal gaming operations.

“We have gambling in Alabama today,” said Republican Representative Chris Blackshear, the bill’s sponsor on the House floor. “We have illegal sportsbooks, gaming halls, casinos and more, it’s not capped, it’s not controlled or taxed in any way.”

If the bill successfully clears the Senate, the issue would be placed on the ballot for voters in November. Voters defeated a proposal to create a state lottery in 1999, but the issue has not been put to voters since then.

The proposal is also supported by Republican Governor Kay Ivey.

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Skill-Game Bills Passed In Nebraska, Virginia
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Several bills to regulate and tax skill games, also known as grey machines, that operate in convenience stores and gas stations were approved by lawmakers in Virginia and Nebraska. 

In Virginia, House Bill 590 and Senate Bill 212 were passed by the House and Senate, a crucial step toward legalizing the games that the legislature had previously banned. The Virginia Supreme Court upheld the state ban leading to both bills being introduced this session. 

HB 590 would require local city councils to pass an ordinance or voters to approve a local referendum before any machines could be operational in convenience stores or taverns. The bill limits truck stops to five machines and convenience stores to two.

Additionally, the bill limits wagers to no more than $1 and a $500 maximum payout for each play. He also proposed to set a 30 percent tax rate on the machines. 

The Senate bill proposes lighter-touch oversight by Virginia's liquor regulator and a 15 percent tax rate preferred by the industry. SB 212 has been referred to the Senate Committee on General Laws.

Nebraska lawmakers on Monday (February 12) passed LB 635 and will advance to a second debate. Among the bill’s provisions, there would be a $100 annual fee for each machine and a 5 percent tax on gaming revenue.

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DraftKings Informs Massachusetts Of More Credit Card Wagers
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The Massachusetts Gaming Commission (MGC) on Wednesday (February 14) delayed a regulatory hearing after new information was released that DraftKings allowed two additional instances of credit card funding of sports bets. 

DraftKings self-reported the two instances on Tuesday, according to the commission. The five-member commission agreed unanimously to delay the hearing to a future date to allow the Investigation and Enforcement Bureau (IEB) to conduct a complete investigation.

“In particular, I’m also hoping along with IEB’s continued investigation that we understand from the operators and have assurances that this is the extent of it,” said commissioner Nakisha Skinner. “It’s troubling that we first learned about this issue about a year ago and over a year there have been new and frequent developments.”

Justin Stempeck, the MGC’s deputy general counsel, said one of the incidents where credit card funds were used in Massachusetts took place in the August/September timeframe, while the other occurred last month. 

DraftKings self-reported to the commission last year that it had allowed 218 players to wager $83,663 via credit card deposits between the company’s launch on March 10 to July 23.

Wagering on credit cards is prohibited in the state under sports-betting legislation adopted in 2022.

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Maryland Considers Betting Ban On College Campuses
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A bill filed in the Maryland General Assembly would prohibit online wagering on college campuses throughout the state and require each institution to establish a geofence around their entire campus. 

House Bill 1087, sponsored by Delegate Pamela Queen, a Democrat, also requires each college or university to publish a written policy on their website detailing the policy. 

Under the bill, if a student attempts to wager online they should be blocked and shown a warning that the activity is prohibited and options for seeking help for gambling addiction.

The bill also requires geofences to be established by August 1. Queen’s legislation was jointly assigned to the House Ways and Means, and Appropriations committees. 

The Ways and Means has scheduled a hearing on the bill for February 22.

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Penn Acquires Wynn’s New York Sports-Betting License
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Penn Entertainment announced Tuesday (February 13) that it will spend $25m to acquire Wynn Interactive Holdings mobile wagering license in New York, meaning ESPN BET will have access to the largest sports-betting market in the country. 

A Wynn Resorts spokesman confirmed the sale in an email to Vixio GamblingCompliance but stressed that the decision to sell “has nothing to do with the failure of iGaming to pass” in New York. WynnBET’s operation in Michigan remains under review. 

Pending regulatory approval by the New York State Gaming Commission, Penn expects to launch ESPN BET state-wide this year. Wynn Interactive is a subsidiary of Wynn Resorts In Las Vegas.

Wynn Interactive was licensed by the commission in 2021. Penn and its former partner Barstool Sports applied for a New York license in 2021 but were not selected. 

According to Vixio GamblingCompliance’s Market Monitor, WynnBET had negative 0.2 percent of the New York online sports betting market in November and December, with an overall 0.2 percent share in 2023, down from 0.5 percent for 2022.

“This is an important development that will bring ESPN BET to the largest regulated online sports wagering market in North America,” said Penn’s CEO Jay Snowden in a statement. 

Snowden added that “operating in the New York market was key as we grow ESPN BET across the U.S.”

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Nevada Sportsbooks Post Record Super Bowl Handle
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The decision by the National Football League (NFL) to have Las Vegas host the Super Bowl for the first time helped Nevada set a handle record by taking $185.6m in wagers on the game, according to state gaming regulators.

The Nevada Gaming Control Board (NGCB) released data late Monday (February 12) that showed total wagers from 182 sportsbooks state-wide broke the record of $179.8m handled for the 2022 Super Bowl between the Cincinnati Bengals and Los Angeles Rams

Last year, $153.1m was wagered on the game between the Philadelphia Eagles and Kansas City Chiefs.

Nevada sportsbooks won $6.8m based on a 3.7 percent hold in the game won in overtime by the Chiefs 25-22 over the San Francisco 49ers. In 2023, sportsbooks won $4.3m based on a 2.8 percent hold, while the largest win since 2015 for sportsbooks was in 2020 at $18.7m on a 12.1 percent hold when the Chiefs beat the 49ers 31-20. 

“The Nevada Gaming Control Board congratulates and thanks all stakeholders involved for successfully delivering such a spectacular event from the state of Nevada,” NGCB chairman Kirk Hendrick said in a statement. 

In a research note, Macquarie Securities gaming analyst Chad Beynon wrote that roughly 60 percent of public bettors took Kansas City to cover the spread or win the game outright. He estimated that sportsbooks nationwide posted a 4 percent loss on all wagers. 

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U.S. Census Bureau Eyes Sports-Betting Tax Revenue
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The U.S. Census Bureau announced Tuesday (February 13) that its has added sports-betting proceeds, including pari-mutuels, to its Quarterly Survey of State and Local Tax Revenue. 

In the third quarter of 2023, the most recent version of the QTAX, sports betting generated sales taxes and gross receipts of $505.96m, up 20.5 percent from the same quarter a year before, but down from $571.48m in the second quarter of 2023.

New York was the state with the largest share of the nation’s tax revenue with $188.53m in the third quarter. Indiana ($38.6m), Ohio ($32.9m) and Illinois ($32.4m) followed. Pennsylvania was fifth with $28.8m, while New Jersey ranked sixth in the third quarter with $20.1m. 

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Virginia House Passes Strict Skill-Games Bill
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The Virginia House of Delegates has passed a bill to regulate skill-game machines, sending it to the Senate for consideration.

House Bill 590, which passed 65-34 on reconsideration of the initial bill passing Monday (February 12), would require local city councils to pass an ordinance or voters approve a local referendum before any machines could be operated in convenience stores.

The Virginia Lottery, which regulates casinos and sports betting, would oversee the industry, while truck stops would be limited to five machines and convenience stores to two. Additionally, the bill limits wagers to no more than $1 and a $500 maximum payout for each play.

Democratic Delegate Paul Krizek, the sponsor of HB 590, proposed a 30 percent tax rate on the machines. 

Senate Bill 212, which would also regulate skill games, was substituted by the Finance and Appropriations Committee and has advanced to its third reading in the Senate.

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Colorado Continues Debate Around Exchange Wagering
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The Colorado Limited Gaming Control Commission moved closer to approving regulations to allow exchange wagering, as regulators hosted a stakeholder workshop on Monday (February 12) to discuss the latest set of rules.

Before making any final decision, the regulator set a March 1 deadline for public comments on the rules.

Currently, New Jersey is the only state to allow exchange wagering, but regulators have not created specific rules to oversee betting exchanges. Both Sporttrade and Prophet Exchange offer exchange wagering in New Jersey.

Sporttrade currently offers sports betting in Colorado without its exchange wagering platform.

Among the revisions to the proposed regulations was the definition of exchange wagers. Previously, the rules described exchange wagering as a form of wagering in which two or more persons place identically opposing wagers in a given market, allowing patrons to wager on both winning and non-winning outcomes in the same event.

The new definition of exchange wagers means wagers placed in an exchange wagering system by those present in this state on the results of a sporting event approved by the Colorado Division of Gaming official sports betting catalog of events and wagers.

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New Zealand Prosecutes SkyCity Over AML
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The New Zealand government will file civil penalty proceedings against Australasian gaming company SkyCity Entertainment Group’s local casino-operating subsidiary over anti-money laundering (AML) breaches, SkyCity said in a bourse filing on Sunday (February 11).

The Department of Internal Affairs alleges SkyCity failed to comply with the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 across “five separate causes of action”, the filing to the New Zealand and Australian stock exchanges said.

The alleged “significant compliance issues” add to a maximum potential fine of NZ$8m ($4.9m), it said.

“SkyCity is disappointed that it has not met the standard to which it needs to hold itself, and this has resulted in the action taken by the Department,” the company said.

Earlier this month, SkyCity agreed with Australian money laundering watchdog AUSTRAC to an undisclosed financial penalty for separate compliance failings at its Adelaide casino.

The company said it had increased its cash reserve for the final settlement from A$45m to A$73m ($48m). The settlement has yet to be approved by the Federal Court.

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Albania Abruptly Withdraws Discussion On Gambling Amendments
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The parliament of Albania withdrew a vote on amendments to its gambling law last week that would have opened up the online sports-betting market, as well as some changes to bingo and lottery rules.

At the start of a plenary session on February 8, the chairman of the Socialist Party, which is the current governing party, filed a request to withdraw the discussion of the draft law. The request was approved with 74 votes in favour and none against.

Changes to the law have been supported by Prime Minister Edi Rama, who banned sports betting in 2018 after he admitted to local media that the country had failed to stop people from betting on unlicensed sites.

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Puerto Rico Bill Bolsters Slot-Machine Market
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Puerto Rico Governor Pedro Pierluisi has signed a bill to amend the 2018 law that authorized the operation of gaming machines outside the island’s licensed casinos. 

Among other changes, House Bill 1593 increases both the maximum number of machines in each retail location from ten to 15 and the maximum potential jackpot that can be awarded from $2,500 to $5,000. The bill also reallocates tax revenue from slot machines to active and retired police workers.

Puerto Rico’s 2018 law was designed to regulate an entrenched grey market of unlicensed machines in bars and other locations. The law allowed up to 25,000 gaming machines initially, with potential expansion to up to 45,000 in total. 

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Iowa Appoints New Gaming Regulator
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The Iowa Racing and Gaming Commission (IRGC) on Friday (February 9) appointed Tina Eick to become the new administrator of the agency.

Eick has been the deputy director and was named interim administrator when Brian Ohorilko left the position in December.

Eick has worked for the IRGC for more than seven years. Prior to being appointed as interim administrator, she served as director of operations and deputy administrator.

The IRGC administers the laws and rules for casino gaming and sports wagering in Iowa to ensure the integrity of licensees and their operations, maintain public confidence in regulated gambling and wagering activities in Iowa, and promote economic development for the citizens of Iowa.

Eick takes over immediately, and her first IRGC meeting as the administrator will be in March. 

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Alabama to consider amendment that would open gambling market and Australia's Star Entertainment trades job security for tax delays.

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