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Daily fantasy sports giant FanDuel has restructured its workforce—including layoffs—after the resignation of CEO Nigel Eccles.

Eccles announced he was leaving the company last month. Details of the layoffs were not released, but a spokesman for the company told Legal Sports Report that the company had restructured its workforce.

“With the Supreme Court hearing oral arguments regarding PASPA and audiences increasingly watching sports through alternative platforms like ours, FanDuel restructured the operational functions within its core business yesterday to enable employees to maximize product innovation and delivery, and capitalize on the momentum across the sports tech industry,” the company said in a statement to the website.

FanDuel has become the No. 2 power in DFS behind DraftKings. The two companies had planned a merger, but it fell through after opposition from regulators.

Legal Sports Report also pointed to a recent audit by a UK firm that questioned FanDuel’s economic position and ability to raise more funds.

Most of the layoffs appear to have come on the product side of the company and reach as high as the vice president level, the website reported.

David Baazov, the former Amaya Inc. CEO charged with insider trading, saw the first day of his trial consumed by a motion by his defense to dismiss the case due to prosecutor’s moving too slowly in releasing evidence for discovery.

The trial began 20 months after Quebec’s securities regulator charged Baazov with insider trading involving Amaya’s purchase of PokerStars.

The Autorité des marchés financiers charged Baazov with aiding with trades while in possession of privileged information, influencing or attempting to influence the market price of Amaya securities and communicating privileged information.

The AMF charges that Baazov and two accomplices conspired to raise the price of Amaya stock in the lead-up to its $4.9-billion purchase of PokerStars. Baazov is charged with providing privileged information.

Baazov, however, wants the case dismissed saying the regulator has not released documents to his defense in a reasonable time and moved to stay the proceedings, which is now being considered by Justice Salvatore Mascia.

Baazov’s lawyers say the AMF released 16 million items in late September and then released more documents just days before the trial. They also noted that the AMF later advised them that the vast majority of these items were communicated in error according to Canada’s Globe and Mail newspaper.

They argued that the defense has not had time to review all of the information and a final verdict in the case would not be likely before July. Canada’s Supreme Court has made rulings outlining an 18-month limit for court cases, but it was not clear how Justice Mascia will rule on the motion, the paper said.

Italy is the largest nation in Europe in terms of its online gaming market. Only the UK has a larger share of the market. France and Spain are third and fourth.

The study was conducted at the Milanese university, which concluded that total online gaming revenue is over €1 billion, a 25 percent increase since 2015.

Typical Italian players have multiple online accounts, and although most such players are men, the share who are women is growing.

Some companies doing poorly in the U.K., such as Ladbrokes Coral, have seen dramatic increases in their online revenue in Italy.

The Florida Senate Regulated Industries Committee recently voted 8-1 to approve SB 374, which would clarify that fantasy sports games are not illegal gambling and do not require regulation. The bill’s sponsor, state Senator Dana Young, said, “We’ve got 3 million Floridians that love playing these games, and they are looking to us to let them know that they are not engaging in some sort of criminal activity.” State Rep. Jason Brodeur filed a similar bill , HB 223, but it has not been heard in House committees. The bills are filed for the 2018 legislative session, which starts January 9.

Prior to the Senate committee vote, Seminole Tribe of Florida General Counsel Jim Shore sent a letter to legislators expressing concerns that the bill legalizing DFS without regulation would infringe on the tribe’s exclusive rights to offer certain casino games and violate the tribal-state gambling compact. Under the agreement, the tribe is required to pay the state $200 million annually, which the Seminoles said would end if the bill becomes law.

The letter read, “By providing this notice, the tribe hopes to avoid a situation where the state enacts legislation that inadvertently violates the tribe’s exclusivity. Federal law requires that any reduction in the tribe’s exclusivity must be balanced by some additional consideration from the state. Without such an agreement, the 2010 gaming compact would allow the tribe to cease all revenue sharing payments to the state based on the expanded gaming contemplated by these bills.”

The letter continued, “The tribe also is concerned about the substance of the bills and the lack of any form of regulation for an entire class of gaming activity. While it is premature to list all of the issues now, the tribe believes that the scope of permitted games and the appropriate regulatory structure are issues that should be addressed in detail before this legislation moves forward.”

In response, Young said, “This issue has been around since 2015 and this is the first time the tribe has raised the compact as it relates to fantasy sports.” She stated fantasy sports games are not gambling but are contests of skill. In support, Young referred to a legal opinion issued in February on behalf of DraftKings by former Florida Supreme Court Justice Ken Bell, stating, “Fantasy sports competitions, such as those sponsored by DraftKings, should not be classified as internet gambling as they do not constitute an online bet or gamble.”

State Senator Dorothy Hukill, vice chair of the Senate committee, voted no on Young’s bill. “I don’t think the issues raised are clear. Is this a game of skill or not? I don’t think that’s clear, at least for now. If I knew more, I would do an amendment to the bill,” she said.

In 1991, Florida’s then-Attorney General Bob Butterworth issued an opinion that fantasy football leagues were a form of illegal gambling. Since then, however, DraftKings and FanDuel have been accepting players from Florida, but not Yahoo. A 2006 federal law banned online gambling but specifically exempted fantasy sports.

Recently the U.S. Supreme Court heard arguments in New Jersey’s challenge to a 1992 federal law banning states from allowing sports betting.

The Michigan House of Representatives’ Regulatory Reform Committee recently voted 12-3 to approve the latest version of state Rep. Brandt Iden’s HB 4926 which would allow online gambling. However, like his original bill heard by the same committee in September, the measure did not move forward, but is likely to come up for a floor vote in the House next year.

The most recent version of Iden’s bill requires online gambling servers to be located on casino property, in reference to the Michigan state constitution’s requirement that casino gambling take place “in the casino.” Another change lowers the online gambling tax rate from 15 percent to 10 percent, even though Michigan Gaming Control Board Deputy Director David Murley warned legislators in September that the state’s effective tax rate could drop to 6 percent because the state’s 12 tribal gaming compacts will have to be renegotiated.

Due to those changes, Michigan’s three commercial casino operators changed from supporting the general idea of intrastate online gambling to specifically supporting the amended HB 4296. The tribes still resist the legislation, and anti-gambling groups would demand a voter referendum for any gambling expansion.

Sports betting also remains a hot topic in Michigan, one of 15 states where legislation has been introduced to legalize it if the federal ban is overturned. State Rep. Robert Kosowski proposed a measure in January to allow sports betting. He noted people can spend thousands of dollars on lottery tickets but are not permitted to make a $20 bet on a Detroit Lions game. “Something doesn’t make sense there,” he said. Also, Kosowski noted, local residents can drive three minutes to cross the Ambassador Bridge and place a legal bet on sports at Caesars Windsor Casino, where they also may dine, drink and gamble.

An analysis indicated if sports betting had been legal last year, Michigan would have received $114 million instead of $112 million in gambling taxes, with Detroit’s share rising from $175.5 million to $179 million. Kosowski said noted revenue sharing has not been fully funded since 2000, resulting in fewer police and firefighters on the street, a decrease in street repairs and reduced recreation programs. With legalized sports betting, income taxes and gas taxes would not have to be raised. “It seems like an easy answer,” he said.

The U.S. Supreme Court is considering a federal law that prohibits sports gambling outside Nevada. The case could be decided by June 2018, and gaming experts said sports betting could come to Detroit within two years.

If the high court’s ruling supports sports betting, Michigan would be one of the first 14 states to offer it, according to the research firm Eilers & Krejcik Gaming LLC.

One complication is some Detroit casinos are owned by individuals associated with sports teams. MotorCity Casino is operated by Marian Ilitch, whose family owns the Detroit Tigers and Detroit Red Wings. Cleveland Cavaliers owner Dan Gilbert owns Greektown Casino. It’s possible the casinos would not be allowed to accept bets on teams they own.

In 2017, 12-15 million Americans bet illegally on sports with bookies and offshore sites, which earned $3 billion in revenue, according to Eilers & Krejcik Gaming Managing Director Chris Grove. He said, “The sports betting customer is likely different than the typical casino customer. It would create new customers and new revenue for casinos.” Detroit casino revenue for 2012 was $1.4 billion. Revenue dropped for two years after casinos opened in Ohio in 2012, including in nearby Toledo. Revenue rebounded over the next two years, reaching $1.3 billion in 2016, but still remains below the 2012 level.

Matt Cullen, chief executive at Greektown owner JACK Entertainment, said, “Under the right and thoughtful regulatory framework, we generally support legalization of sports betting.”

MGM Grand spokeswoman Mary Hynes said, “Our company’s longstanding position is that sports betting should be legalized outside of Nevada in those states that choose to offer it.”

Bookies hope Victoria will stand against levy

Australian bookies are pushing back at a proposed 15 percent tax on online betting under consideration for the Australian state of Victoria. According to the Sydney Morning Herald, Queensland recently announced it would become the third jurisdiction to add the point-of-consumption tax, which is already a reality in South Australia, and in the pipeline for Western Australia in the new year.

“Not many bookmakers would even be making a 15 percent margin on their wagering” if the tax is enacted, griped one bookmaker to the Herald. “The downstream consequences for the wagering industry and consumers are very real.”

The bookie added hopefully, “We think the Victorian government is going to pay more attention than the other states have.”
 
Corporate bookmakers licensed in the Northern Territory say they are a significant economic driver in the region, adding other taxes as well as jobs, wages, product fees they pay to sporting codes and race-field fees paid to state racing bodies. Racing Victoria’s latest annual report shows revenue from race-field fees in the past financial year reached $157.5 million.

Supporters of the new tax say it will “level the playing field” for gaming operators because totalizator providers Tabcorp and Tatts have to pay far higher taxes than online corporate bookies.

Trade group Responsible Wagering Australia, which represents Sportsbet, CrownBet, Bet365, Betfair, Ladbrokes and Unibet, slammed the plan as a “naked tax grab” that does not factor in the industry’s “significant contribution to the economy.”

“In the last financial year in Victoria, RWA’s members employed more than 900 people, paid more than $127 million in wages, contributed $78 million to the racing industry and paid more than $11 million in sponsorships to support Victorian events and tourism,” a spokeswoman said. A report from Credit Suisse earlier this year said a similar tax introduced in England in 2014 seriously undercut industry profit.

Meanwhile, a Sydney council is appealing to the New South Wales state government to cap poker machine licenses in the area. Members of the Northern Beaches Council called for other councils in the state to do the same.

“The state government of both political persuasions has been addicted to poker machine revenue for too long now, it’s causing great harm to the community,” Liberal Councillor Pat Daley told the Australian Associated Press.

Australians lost a record $24 billion on bets in 2015-16, with pokies losses growing 4.2 percent, roughly double the rate of inflation. Sports betting remained the fastest-growing form of gambling, the Herald reported.

Pokies accounted for the largest share of losses ($23.6 billion), followed by casinos ($5.2 billion), racing ($2.9 billion) and Lotto ($1.9 billion). An anti-pokies lobby group, the Alliance for Gambling Reform, wants the government to enact measures that will reduce the overall losses to under $20 billion, said spokesman Tim Costello.

“Whilst sports betting is top of mind with the advertising deluge … the latest national figures once again confirm that the pokies are easily the biggest contributor to Australia’s tragic status as the world’s biggest gamblers.”

According to the latest statistics, New South Wales has the most poker machines of any state and had the biggest increase in pokies losses in 2015-16, up 6.2 percent.

U.S. Senators Lindsey Graham and Dianne Feinstein are pushing the Department of Justice to reconsider a 2011 DOJ ruling that allowed states to introduce online gaming within their borders.

The senators sent a letter to Deputy Attorney General Rod Rosenstein asking that the ruling be revisited.

In 2011, the Department of Justice ruled that the Wire Act of 1961—which concerned transmission of racing results across telephone lines—only addressed sports betting across state lines and not online gaming within a state’s borders.

Three states—Nevada, New Jersey and Delaware—quickly allowed online gambling under the interpretation and have been offering online gaming for several years. Only Pennsylvania has been added to the list as the state recently passed legislation to allow online casino gaming, though no sites have gone active. Several other states also offer online lotteries.

In the letter, Graham and Feinstein noted that the department had interpreted the Wire Act as prohibiting online gambling until the 2011 decision.

“Internet gambling takes gambling too far,” they wrote. “It preys on children and society’s most vulnerable.”

Graham and Feinstein are both sponsors of the Restore America’s Wire Act legislation which has been introduced in Congress. The bill, however, has floundered for several years and gained little traction. The bill is supported by Las Vegas Sands owner Sheldon Adelson, who has largely funded lobbying efforts for the bill.

The letter, however, focuses on the 2011 decision and the effect of online gambling. Graham and Feinstein are both members of the Senate Judiciary Committee and said they are concerned with whether the FBI has the resources to effectively oversee a growing online gambling industry.

“Online casinos are already opening across state lines pursuant to compacts and states are contemplating opening up their online casinos to foreign markets,” they wrote. “We fear that unless DOJ promptly revisits its 2011 opinion, our prediction that online casinos could sweep across our country could come to pass.”

Feinstein and Graham sent a similar letter to Attorney General Jeff Sessions in May urging him to restore the department’s practice of enforcing the Wire Act against online gambling. Sessions, in his confirmation hearing, said he did have concerns about the 2011 opinion and would revisit it, but there has been no news on the decision since then.

“Concerns about the proliferation of online gambling are bipartisan and span the political spectrum,” Feinstein and Graham wrote in their letter last week. “The 2011 DOJ opinion needs to be revisited and withdrawn, with the question of whether online casinos should be permitted in the United States properly returned to Congress to determine.”