State of the union

first_img This week’s State of the Union, in partnership with Segev LLP, looks at developments in Connecticut, Kansas, New York, North Dakota and Virginia, while additional efforts to regulate sports betting are underway in Massachusetts, Washington DC’s mayor has signed sports betting legislation into law, and Maryland is looking to the past to move forward.Connecticut A push to catch up with neighbouring Rhode Island is underway in Connecticut with a bill to legalise sports betting and allow the lottery to operate online keno games filed in the state. It aims to amend the existing compact between the state and tribal gaming operators, namely the Mashantucket Pequot and Mohegan tribes, to allow sports betting at their casinos. Each operator would also be permitted to offer online wagering. This compact currently gives the tribes the exclusive right to operate casinos in the state, blocking all commercial gaming operators from doing so, for which Connecticut receives 25% of all slot revenue. The compact would require further amendment to allow the lottery to offer online keno. The bill, which is backed by lawmakers from both Democrat and Republican parties in both legislative houses, has been assigned to the Senate Public Safety and Security Committee.Kansas Lawmakers in the Sunflower State will consider Senate Bill 23, known as the Kansas Wagering Act, which aims to legalise sports betting via the state lottery. The lottery be responsible for regulatory oversight, with licensees able to offer retail, online and mobile wagering, though similar to Massachusetts Senator Rush’s draft legislation, will also have to pay a royalty fee to the professional sports leagues. This will be paid quarterly, and amount to 0.25% of amounts wagered, though this will be capped at 5% of operators’ gross wagering revenue. The tax rate, set at 6.75%, is particularly low. Unusually, the bill was sponsored by the Committee on Federal and State Affairs, and not an individual. In December the committee held a two-day hearing on sports betting.New York Assemblyman Gary Pretlow aims to push ahead with plans to submit sports betting legislation, despite acknowledging that it is likely to be vetoed by Governor Andrew Cuomo. Cuomo has argued that allowing sports betting to take place outside of commercial and tribal casinos would ultimately require an amendment to the state constitution. Pretlow, who disagrees, plans to file a bill that aims to legalise mobile betting and wagering at the state’s racetracks. Cuomo, however, remains keen on allowing sports betting to take place in the state’s casinos, which he describes as a key aim for the first 100 days of his administration. The New York Gaming Commission still must publish regulations for the vertical. North Dakota Efforts to legalise sports betting have also moved forward in North Dakota, where Representative Jason Dockter has filed HB1254, which would allow sports betting. While it does not set out specific requirements for oversight of the vertical, North Dakota only allows gambling for charitable purposes. This means all money raised goes to charity, which could concievably see larger charities set up sports betting operations to fund their causes. The bill has been assigned to the House Judiciary Committee for further scrutiny.Virginia A bill that would clear the way for the first land-based casinos to be opened in Virginia, as well as legalising sports betting, has been passed by the Senate Committee on General Laws and Technology. SB1126, introduced by Democrat Senator Louise Lucas, would legalise casino gaming in the state, with casinos permitted to offer on-premises wagering. The bill will allow cities that fulfil a set of criteria – unemployment rate of at least 4%, a poverty rate of 20%, and which had experienced a population decline of at least 7% between 1990 and 2016 – to host casinos. Tribal venues will be permitted in cities with a population of at least 200,000, and in which 24% of all real estate are exempt from local property taxes. The casinos would then pay a gross revenue tax of 10%. Having been approved by 9 members of the General Laws and Technology Committe, with three voting against and one abstaining, it now passes to the Senate Finance Committee.Washington, DC Regulated sports betting in Washington DC has moved a step closer after Mayor Muriel Bowser effectively signalled a two-month countdown to the Sports Wagering Lottery Amendment Act coming into law. Bowser approved the act on January 23, just over a month after the DC Council voted overwhelmingly in favour of the legislation. Following Bowser’s approval, the act will now undergo a 60-day Congressional review before coming into force. A public hearing will take place on Monday, January 28, primarily to explore whether the DC Lottery can use existing partner Intralot to support sports betting in the state instead of launching a new procurement process. Should it be forced to launch a tender process, the launch of sports betting in the US capital may be delayed until 2020 or beyond.Massachusetts – FIFTH time’s a charm? After a trio of sports betting bills were introduced by Massachusetts lawmakers on January 16, Governor Charlie Baker and Senator Michael Rush got in on the action with their own proposed legislation. Governor Baker’s proposal, An Act To Establish Sports Wagering in the Commonwealth, aims to legalise both online and land-based wagering. Unlike other states, however, it will allow online bookmakers to secure licences without partnering land-based venues. Regulation of the sector would be entrusted to the Massachusetts Gaming Commission, which already oversees the state’s casino industry. Retail betting licences would include a tax rate of 10% on gross sports betting revenue, while online-only licences would see operators pay a rate of 12.5%. Baker would also introduce a new 12.5% tax on fantasy sports contests, which are currently taxed in the state. Applicants will also be required to pay a $100,000 application fee for their five-year permits.Rush’s bill, meanwhile, would also allow online and mobile wagering, but online companies would have to operate through a partnership with a land-based casino. It also sets out a $100,000 licence fee for applicants. However, it deviates further from Baker’s proposal by offering the US professional sports leagues a royalty fee, amounting to 0.25% of amounts wagered each quarter. Sports betting operators would also be limited to using official league data.Maryland Maryland lawmakers are looking to use a 1972 referendum as the basis for launching sports betting via the state lottery. A 2007 law dictates that all gambling expansion plans must be put to a public ballot, but the state is exploring the option of bypassing this step. The lottery was approved through a 1972 referendum, and the state is examining whether this effectively gives it the power to launch new verticals without another vote. However, if this path is not considered viable, Maryland may have to wait until 2020 before the matter can be put to the public.Rhode Island – mobile move Rhode Island Senate President Dominick Ruggerio has filed bill 2019-S 0037 aimed at legalising mobile sports betting in the state. The Twin River casinos in Lincoln and Tiverton would be permitted to work with developers to create an app utilising geolocation technology. Consumers would first to register in person at one of the casinos. The state would takes 51% in tax from all mobile sports betting revenue, keeping new laws in line with regulations for land-based wagering. Ruggerio said it was estimated 97% of sports betting takes place illegally. “This is an opportunity to give Rhode Islanders and visitors a legal avenue to participate in an activity they enjoy, while providing a very tangible benefit to our state.” The state legalised land-based sports betting in June last year and launched its regulated market in November.  Ruggerio’s bill has been referred to the Senate Special Legislation and Veterans Affairs Committee for further scrutiny.Michigan: Snyder puts the brakes on In December, outgoing Governor Rick Snyder vetoed Rep. Brandt Iden’s House Bill 4926, the Lawful Internet Gaming Act, following its approval by the Michigan Senate and House. Under five-year licenses, the state’s tribal and commercial casinos would have paid 8% of GGR generated from games such as poker, blackjack, slots and other card and table games. This had been approved alongside HB5881, which would have amended the 1996 Michigan Gaming Control and Revenue Act and levied an 8% GGR tax on sports wagering.Pennsylvania: Parx goes live On 10 January, the Pennsylvania Gaming Control Board (PGCB) gave Parx Casino permission to launch its Kambi-powered on property sportsbook. Kambi now powers three of the state’s four live sportsbooks. Penn National Gaming’s William Hill-powered offering at the Hollywood Casino launched in November and the Rush Street-operated, Kambi-powered SugarHouse and Rivers casinos went live on December 15. The Keystone State became the fourth to fully legalize online gambling in October 2017 after Governor Tom Wolf signed an expansive gambling package into law.New York: Online poker returns In early January 2019, Chair of the Senate Racing, Gaming and Wagering Committee, Senator Joseph Addabbo, filed Senate Bill 18, which aims to allow all those aged 21 and above to play poker online. S00018 looks to issue up to 11 online poker licences, with only licensed video lottery gaming facilities and Class III (tribal) gaming licensees eligible. Each licensee would have to pay an up-front fee of $10m for a 10-year licence, as well as paying a 15% tax on gross gaming revenue. Despite the cap on the number of available licences, each entity would be permitted to operate an unlimited number of skins under its licence, provided each partner is approved by the New York State Gaming Commission. The legislation however includes a so-called bad actor clause, which would block companies that offered online gaming in the US after December 31, 2006 – when the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) was enacted – from participating in the market.West Virginia West Virginia approved legal sports betting in March 2018 with live, on-site betting getting under way at Hollywood Casino on 30 August. The bill authorizing sports betting allows for online and mobile wagering, and Delaware North-owned Mardi Gras and Wheeling Island casinos launched the first online and mobile app on 27 December 2018, the Miomni Gaming-powered BetLucky.com.Missouri Two legislators in Missouri have pre-filed sports betting bills for the 2019 legislative session. SB 44, introduced by Sen Denny Hoskins, presents an interesting twist by foregoing the typical integrity fee in favor of a quarterly 0.5% fee appropriated for upgrades to the state’s sports stadiums. The bill would also authorize sports betting via Internet and mobile devices.  The other measure, HB 119, introduced by Rep Cody Smith, would authorize interactive betting, but only for people who are physically located at licensed facilities.Kentucky: Staying on track Members of the Interim Joint Committee on Licensing, Occupations, and Administrative Regulations held a hearing on 12 October to discuss the authorization of sports betting in the state. The proposition has been well received in the legislature, and the outlook moving forward remains positive.Topics covered during the October hearing ranged from tax rates to integrity feels to mobile betting. A bipartisan group of legislators is expected to pre-file a sports betting bill prior to the start of next year’s legislative session. In September, the National Football League, Major League Baseball, the National Basketball Association, and the PGA Tour all registered to lobby during the 2019 General Assembly and are expected to push for a 1% integrity fee, which Committee Chairman Adam Koenig adamantly opposes. Provided the integrity fee doesn’t become a stumbling block, Kentucky could authorise sports betting as early as January.KS, MI and OR also hopeful for 2019 Legislators in both Kansas considered multiple sports betting bills in 2018, and their sponsors are hopeful for approval in 2019. Oregon’s state’s lottery is hoping to expand its mobile gambling offering to include sports betting by the third quarter of 2019, but the lottery will first need the legislature to approve a taxation scheme. No bills have surfaced yet.Indiana: Signs of Life Following a hearing on 19 October, the Interim Study Committee on Public Policy voted to recommend legislation authorising sports betting to Indiana. While the vote would indicate that the state is taking steps toward legalisation, Committee Chairman cautioned that there are “many perils down the pathway before it becomes law.”Illinois – Slow and steady The outlook for regulated sports betting in Illinois remains good, but lawmakers are in no rush to push through legislation. Rep. Lou Lang cautioned at a hearing held on 17 October that the state should go slowly and make sure they get it right, and he referenced Pennsylvania’s unusually high 36% sports betting tax as an example of errantly moving forward without fully understanding the economics of the industry. Lang also said they need to give careful consideration toward including an integrity fee. He rejected the idea of paying leagues for the “privilege of showing your games,” but is open to a fee that actually contributes toward preserving integrity in sports. Finally, Lange urged caution in deciding who should be allowed to offer sports betting, pointing out that a state that houses almost 30,000 video gambling machines must be mindful of providing too much access to walk-up betting.Ohio: Midterm election not good for sports betting The election of Mike DeWine as Ohio’s next governor does not bode well for advocates of regulating sports betting. DeWine has consistently opposed efforts to legalise sports betting, while his opponent, Richard Cordray had indicated that he would consider legalisation.In August, Ohio Senate President Larry Obhof said Senate Bill 316, which would provide for legalised sports betting in the state, would be studied in a committee after the midterm elections in November. Obhof further predicted that the bill would not likely hit the Senate floor until 2019. Meanwhile, questions have been raised about whether the legislature even has the right to legalise sports betting in Ohio. The state’s constitution prohibits gambling, except under specific circumstances. Other forms of gambling, such as casinos, were only legalised through a constitutional amendment in 2009, and Senator Obhof suggested that sports betting would need to be amended into the constitution by a vote in a similar manner.Florida: At the mercy of voters The passage of Amendment 3 on the November ballot makes the legalisation of sports betting a much more difficult task. The amendment puts gambling expansion in the hands of voters, via citizen initiatives, rather than legislators. Because the initiative process requires 60 percent of the votes for passage, the prospects for authorised sports betting in the state are greatly diminished.Colorado: Still an issue for voters to decide Despite Attorney General Cynthia Coffman’s determination that sports betting is not subject to state constitutional restrictions, at least one of the legislators who supports legalisation is of the mind that the issue should still be decided by voters. In October, Rep. Cole Wist told the Denver Post that, while he is in favor of regulated sports betting, “I think it’s important to go back to the voters and make sure it’s something that they want.”  Rep. Wist and Rep. Alec Garnett are hopeful of getting sports betting to a statewide vote in 2019, which would mean legal sports betting would not become a reality until at least 2020. Meanwhile, gubernatorial candidate Walker Stapleton, a Republican who favors sports betting regulation, lost in the November election.CA, LA, MD, SC are years away Proponents of sports betting in California have their sights set on the 2020 ballot. The state has approved signature collection for the most recent measure, which was introduced in June 2018. To land on the 2020 ballet, the proposal needs to garner 585,407 signatures from registered voters by February 2019.In Louisiana, Sen. Danny Martiny made multiple efforts to get his sports betting bill on the agenda during special sessions, but Gov. John Bel Edwards would have nothing of it. Martiny said he’ll make another push in 2019 but is not optimistic.Maryland’s legislature has already passed a bill that would authorise sports betting at the state’s casinos and racetracks, but a referendum is necessary for legalisation to become a reality. This year they failed to pass legislation that would put sports betting on the ballot, which means the earliest it could come up for a vote is 2020.Despite the introduction of a regulatory bill in South Carolina, the state is likely years away from authorising sports betting, which would require a constitutional amendment to become a reality.Segev LLP employs an eight-strong igaming team with corporate, commercial, IP commercialisation, M&A, private equity finance, public markets finance, privacy and data, and regulatory and compliance experience. Its senior attorneys have a combined total of more than 40 years in the industry. Regions: US AddThis Sharing ButtonsShare to LinkedInLinkedInShare to FacebookFacebookShare to TwitterTwitter Topics: Casino & games Legal & compliance Lottery Sports betting DFS Horse racing State of the union 24th January 2019 | By contenteditor This week’s State of the Union, in partnership with Segev LLP, looks at developments in Connecticut, Kansas, New York, North Dakota and Virginia. Meanwhile, additional efforts to regulate sports betting are underway in Massachusetts, while Washington DC’s mayor has signed sports betting legislation into law and Maryland is looking to the past to move forward. Tags: Fantasy Sports Mobile Online Gambling OTB and Betting Shops Race Track and Racino Casino & games Email Address Subscribe to the iGaming newsletterlast_img