Author: Casino Connection Staff

If Illinois enacts a sports betting law that seeks to exclude the daily fantasy sports companies FanDuel and DraftKings, the state will be quickly sued by both companies which will charge that the exclusion is unconstitutional.

An amendment to the state’s proposed sports betting bill seeks to block the two companies—which now offer online sportsbooks—to protect state casinos.

Lawyers for the two companies, said such an exclusion would not likely withstand a legal challenge.

“…As the amendment’s proponents have made abundantly clear in their committee testimony, the purpose of the amendment is not to seriously assess the suitability of potential operators, but instead to exclude two specific competitors who are leading the market in other states,” the attorneys for the fantasy sports sites wrote. “We believe FanDuel and DraftKings could make a strong claim that this selective targeting of winners and losers is not permitted by the Illinois or U.S. Constitutions.”

According to the Cook County Record, the report was authored by attorneys from the firm of Jenner & Block, of Chicago. The authors included Anton R. Valukas, a former U.S. Attorney for the Northern District of Illinois and former chairman of Jenner & Block; Ian H. Gershengorn, who served as Principal Deputy Solicitor General and Acting Solicitor General, under former President Barack Obama; Thomas J. Perrelli, who served as Associate U.S. Attorney General under Obama and now serves as chair of Jenner & Block’s Government Controversies and Public Policy Litigation Practice Group; and Clifford W. Berlow, a former Illinois Assistant Attorney General and is now a partner in Jenner & Block’s Appellate and Supreme Court Practice Group.

They said they had been hired by FanDuel “assess the constitutionality” of an amendment recently proposed by Illinois state lawmakers which would essentially block FanDuel and Draft Kings from participating in Illinois’ sports betting market for three years.

The Illinois Legislature is considering a number of proposals for sports betting. The exclusion amendment was added to a House version of the bill. It would basically ban FanDuel and DraftKings for having offered daily fantasy sports contests in the state at a time when the state’s attorney general issued an advisory opinion that DFS was illegal gambling under Illinois law.

In response to that opinion, the fantasy sites filed suit, asking the courts to declare they were not illegal gambling operations. After years of litigation, the state and fantasy sports sites settled the matter without a ruling, the Record reported.

The sites argue that supporters of the “bad actors” amendment are attempting to use the 2015 non-binding Attorney General’s opinion to give the opinion the force of law.

“In essence, the amendment would give legal effect to the Attorney General’s disputed advisory opinion after the fact and without judicial review, all to the benefit of and at the behest of particular in-state casinos,” the Jenner lawyers wrote.

But the bill is short on time.

As the Illinois legislative session winds down, state Rep. Mike Zalewski, chairman of the House Revenue and Finance Committee, said he plans to introduce a last-ditch sports betting amendment to H 1260 that would include the lottery, mandate the use of official league data for in-play wagers and lower the fees and taxes from two previous amendments.

The only issue that remains is a so-called “penalty box” for DraftKings Sportsbook and FanDuel Sportsbook, which is being negotiated with stakeholders, Zalewski said. “That remains the Number 1 issue to be decided upon and then I think we can file a final amendment. This issue consumes all the oxygen related to sports betting right now. We know we need to make a decision on whether to include a penalty box or not. We still haven’t reached a consensus way to move forward on this,” he stated.

Zalewski said he listened to stakeholders’ concerns and lowered the fees and taxes. However, he said the initial licensing fee per operator will remain at $10 million because Governor J.B. Pritzker’s proposed budget includes the revenue.

At the most recent hearing, Illinois Casino Gaming Association Executive Director Tom Swoik pointed out a previous amendment allowed sports betting at 2,500 retail locations. Swoik said it was unfair that casinos would have to pay $10 million for a sports betting license while it would be legal at so many other locations. Zalewski responded, “We think there’s room for a lottery pilot program. It’s a state asset so we think it’s important to see what they can do with sports betting.” He added, “We’ve heard feedback on the type of wagers lottery concessionaires could take, the number of locations, where the money would go. I think we solved those items.”

Despite the narrow time frame—the session ends May 31—Zalewski believes he can advance H 1260 through committee to the House floor soon after the amendment is introduced. “We’ve been working with the Senate. They know where we stand. This isn’t happening in a vacuum. I think there’s a desire to do sports betting in the governor’s office and two chambers,” Zalewski said.

Regarding the bill’s requirement that official league data be used for in-play wagers, Zalewski said Tennessee was the first state to pass a sports betting bill including that demand by professional leagues. “Tennessee going on official league data is indicative to us that we might not be the first state,” Zalewski said. However, he noted, “We could maybe survive that challenge.”

A tweet by President Donald Trump wasn’t able to kill the H.R. 312, the Mashpee Wampanoag Tribe Reservation Reaffirmation Act, and neither was a defection of two Democratic representatives from Rhode Island. The bill passed 275-to-146, with 47 Republicans crossing party lines to vote for putting land into trust for the Massachusetts tribe.

The bill still faces great uncertainty in the U.S. Senate.

The bill, if passed by Congress and signed by President Trump (a very big if) would put about 321 acres in Taunton and Martha’s Vineyard into trust for the Mashpees. It would allow them to build a $1 billion casino with its partner Genting Malaysia.

Rhode Island opposes the bill because it estimates a casino in Taunton would cost its two Twin River casinos about $37 million annually. Gaming is the Ocean State’s third largest source of government revenue. That amounts to about $300 million annually.

Rhode Island Governor Gina Raimondo’s spokesman said last week, “She thinks it is a bad bill and is focused on protecting Rhode Island’s revenue.”

President Trump had tweeted two weeks ago, calling on Republicans to oppose the bill, mainly because of its connection to Democratic presidential contender Senator Elizabeth Warren, whom he derides as “Pocahontas,” because of her claims of having Indian blood in her ancestry.

One of Twin River’s lobbyists, Matthew Schlapp, whose wife is White House communications director, is credited with swinging Trump’s opposition to the bill. Warren’s involvement doesn’t help, however.

Other critics of the bill accuse the Mashpees of “reservation shopping” because they found land outside of their ancestral homeland and purchased it for a casino and tribal offices.

Rep. William Keating, who sponsored the bill in the House, said the vote gave him hope that it might pass in the Senate. He told the Providence Journal in a phone interview, “That was a significant vote that helps its chances a great deal,” adding “I think the central issue was that this was the tribe of the first Thanksgiving. It was an easily identifiable tribe, the only one in New England that was not federally]recognized.”

The bill is probably the tribe’s last hope for a sovereign reservation. The 2015 land into trust decision by the Department of the Interior was overturned by a federal judge a year later after the tribe had already broken ground on the First Light Casino & Resort. The judge ruled that the Taunton residents who sued were correct in their argument that the tribe was not able to demonstrate that it was under federal jurisdiction in 1934, as required by the Supreme Court decision Carcieri v. Salazar. The tribe was recognized by the federal government in 2009.

The judge gave the department a chance to find another route for the tribe but it wasn’t able to. Last year the Trump administration reversed the department’s previous decision.

Keating declared, “To deny them the right to their land is an absolute disgrace. Without land, the Mashpee Wampanoag are essentially treated as a second-class tribe with no ability to properly govern [their] people or provide essential services such as housing and education initiatives.”

During the House vote, Keating added, “The cast of characters behind the scenes spewing misinformation is revealing. Cultural warfare to benefit bank accounts. Corrupt intent for personal gain, all in the form of a racist tweet. And some members of this body are eager to let him get away with it — but not me, not my co-sponsors and not the majority of this House.”

Rep. Joe Kennedy, who represents the town of Taunton, had characterized the vote as a “matter of right and wrong, of correcting a historical injustice that has been perpetrated for far too long.”

One of the leaders of the opposition, Rep. Paul A. Gosar, argued that the bill would enrich a foreign corporation, Genting Malaysia. “Do you really want to vote for a $500 million bailout for a foreign gaming corporation?” he demanded.

Now that the battle shifts to the Senate, Rhode Island Senator Sheldon Whitehouse spokesman Meaghan McCabe said he would oppose bringing the bill up for a vote.

A spokesman for the state’s other senator, Jack Reed, said he opposed it too.

The DC Lottery, which oversees sports betting in the District of Columbia, said sports betting regulations could be released in June, followed by the issuance of licenses. Legal sports betting could begin in September.

However, the launch of the lottery’s app is running behind schedule and is not expected to be available until January 2021—well beyond the start of the National Football League season. The delay is worrying sports bettors but also will impact the District’s fiscal 2020 budget which will begin in October. That’s because according to the projected budget, the sports betting app accounts for $84.1 million of the expected $91.7 million in sports betting revenue for FY2020.

The committee on finance and revenue has been negotiating with the app’s supplier, Intralot, while that company has been struggling financially. In fact the committee recently urged the DC Council to search for a new supplier. Council member Jack Evans wrote in the budget report, “The committee encourages the Lottery to continuously monitor whether to pivot to a competitive mobile marketplace, especially considering the project start of private sports wagering in September 2019 and the delayed timeline for the Lottery offering.”

Even without an app, sports betting will be available in DC later this year.

The first $200,000 of sports betting tax revenue will go toward problem gambling services and the rest will be divided between neighborhood safety programs and free child care.

The sale of Sands Casino Resort Bethlehem by Las Vegas Sands Corp. the Poarch Band of Creek Indians, owner of Wind Creek Hospitality, will be the subject of a special meeting at 1 p.m. May 29 in Harrisburg, Pennsylvania, Gaming Control Board Chairman David Barasch said at the start of the board’s meeting last week.

A vote on the sale, which officials of the Alabama tribe say will be followed by a $90 million hotel expansion immediately, has been delayed twice due to the multitude of sports betting applications, truck stop gaming issues and mini-casino applications the board has been handling, according to a board spokesman.

Meanwhile, more details emerged last week on the tribe’s plans for the property, on the land of the former Bethlehem Steel plant. In filings with the gaming board revealed by the Lehigh Valley Live website, Wind Creek Hospitality laid out plans to turn the former Bethlehem Steel No. 2 Machine Shop into a 300,000-square-foot indoor adventure/water park and hotel. Conceptual renderings show the long, vacant building transformed into a gigantic greenhouse-like structure between the SteelStacks and casino.

The tribe has pledged $100 million for the Machine Shop transformation, in addition to the $90 million hotel expansion. However, the Allentown Morning Call reported last week that the Poarch Band has set aside $250 million for the water park and adjoining hotel.

Within the park will be about 105,000 square feet of water rides, along with other activities like rock-climbing and zip lines, according to the plans submitted with the state.

Wind Creek told the gaming board it wants to begin the improvements as soon as it closes on the $1.3 billion sale of the South Side Bethlehem property.

The National Labor Relations Board has ordered Station Casinos’ Palms Casino Resort to cease illegally refusing to recognize the Culinary and Bartenders Union and to begin negotiating with it.

The federal panel official certified the April 2018 union election and unanimously ruled that Station Casinos was in violation of federal law by refusing to recognize and bargain with the union. It added that the casino could not change working conditions before such an agreement is adopted.

Geoconda Argüello-Kline, Secretary-Treasurer for the Culinary Union issued this statement: “We demand that Station Casinos recognize their workers’ voices and votes at the Palms and begin contract negotiations in good faith immediately.”

Jeopardy! champion James Holzhauer has been added to the speaker lineup or this week’s 17th annual International Conference on Gambling & Risk Taking at the University of Nevada, Las Vegas.

The UNLV International Gaming Institute, which is producing the four-day conference at Caesars Palace, added Holzhauer to a panel discussion on Thursday, May 30 with Andy Bloch, a professional poker player.

Bloch, who also lives in Las Vegas, was part of the MIT card-counting team in the 1990s, made famous in the book Bringing Down the House.

Holzhauer, who has won 23 straight matches and more than $1.7 million going into last week’s Jeopardy! show, will discuss how he attributes much of his game show success to sports betting.

Holzhauer’s emergence coincided with the first anniversary of the Supreme Court decision allowing widespread sports gambling outside Nevada. “That face happens to be clean-shaven and accompanied by tasteful button-down shirts and a math degree from the University of Illinois,” according to the Washington Post.

The panel will focus on the real-world applications of research and how experiences and knowledge in sports, sports betting, the game show, poker, and blackjack overlap with each other and with the world outside of gaming.

The Republican Party recently has accepted nearly $400,000 in donations from Steve Wynn. 

The April contributions included $248,500 to the Republican National Committee and $150,000 to the National Republican Senatorial Committee in April, according to a report last week from Politico citing two people familiar with the gifts, which are set to be disclosed publicly this month, the news website said.

The GOP defended accepting the money despite the 77-year-old billionaire’s history as an alleged sexual predator.

“Everyone is entitled to the presumption of innocence and due process,” said RNC Chairwoman Ronna McDaniel. “Over the last year and a half, multiple investigations into the allegations against Steve Wynn have concluded. Throughout this entire process, Steve has repeatedly and unequivocally denied wrongdoing, and he has not been charged with or found guilty of any crimes. At this point, there is no reason for refusing his support.”

Wynn resigned last February as chairman and CEO of Wynn Resorts, the Las Vegas-based casino giant he founded, following a report in The Wall Street Journal detailing accusations that he’d been harassing and assaulting female employees of the company for years.

He also stepped down as finance chairman of the Republican National Committee, a post he won after Donald Trump entered the White House in January 2017 in acknowledgement both of his stature as a longtime GOP megadonor and fundraiser and his friendship with Trump, who himself has been accused of sexual assault or harassment by some 19 women.

Last month, Wynn greeted Trump on the tarmac when the president flew to Las Vegas for a political rally.

As McDonald pointed out, Wynn has not been charged to date with any crimes, and he has steadfastly denied the accusations. Wynn Resorts, however, has not gotten off so lightly. Investigations by gaming regulators in Nevada and Massachusetts have resulted in $55 million in fines against company for failing to act on numerous in-house reports of his alleged misbehavior. In one case that was known to Wynn’s board of directors at the time and to some former high-level executives of the company, these included a payment of $7.5 million he made in 2005 to a former Wynn Las Vegas manicurist who accused him of raping her and making her pregnant.

MGM Resorts International and Boraie Development LLC announced a plan to build 200 luxury condo units in Atlantic City’s Marina District, near MGM’s Borgata Casino.

“We believe there is strong demand in the high-quality primary and second home market, and Boraie is the best possible partner to execute this project,” MGM said in a press statement. “While we are very excited about this project and its potential positive impact on the city, at this time we have not yet established the project’s feasibility, and it is subject to extensive regulatory approvals.”

MGM Resorts owns the land where the housing project will be built. The plan is contingent on approval from the U.S. Army Corps of Engineers and the New Jersey Casino Reinvestment Development Authority, which has zoning and land-use oversight of the city’s Tourism District.

Boraie recently completed construction of Atlantic City’s first market-rate housing development in a half-century in the city’s South Inlet section, according to the Press of Atlantic City.

MGM has reportedly been in discussions with the city over the redevelopment of its marina properties, but no details have been released.

Bob McDevitt has won a fifth term as president of UNITE HERE: Local 54, the city’s largest casino workers union. McDevitt defeated Al Tabei for the fifth consecutive time.

The winning slate included Vice President Javier Soto and Secretary-Treasurer Donna DeCaprio, both incumbents. The local casino industry employed more than 30,000 people in 2018, and Local 54 represents nearly one-third of Atlantic City’s casino and hospitality workers.

The losing side accused McDevitt and his team of forcing shop stewards to convince members to either vote for McDevitt or not vote at all. A van transporting members to the voting station was seen ejecting a worker who said she was going to vote against McDevitt. What the opposition calls “thugs” were surrounding the voting location intimidating members arriving to vote.

Of 16,000 eligible members, only 1,596 voted. McDevitt prevailed by 268 votes. Many of those who arrived to vote were challenged about their paid-up union dues, and eventually left without voting. Lawyers for Tabei and his slate believe there are grounds for a challenge and will seek to overturn the vote.

The election victory comes just months before negotiations will start on the next contracts with Atlantic City casinos. Opponents claim that the last three contracts have resulted in givebacks that have weakened the position of the union, cost jobs and reduced opportunities for union members.

Local 54 has a history of corruption. One of McDevitt’s predecessors, Roy Silbert, was removed from power in 1990, along with the union’s national president Edward Hanley, and accused of being controlled by the Philadelphia mob family of Angelo Bruno and later Nicky Scarfo. Silbert is now an MMA referee.

In a filing with the Securities and Exchange Commission, MGM Resorts has reportedly said to expect damages of $800 million in connection with the lawsuits filed by victims of the shooting at Mandalay Bay on October 1, 2017 that killed 58 people and injured more than 800. The company says it has insurance that will cover $751 million of that total.

But that’s news to lawyers from the plaintiffs. Robert Eglet, who is negotiating for more than 2,500 of the victims, says talks have barely begun.

“We’re not even close to resolving all the terms and issues before we have a settlement,” said Eglet. “Nothing is signed. We have a long way to go before we have an agreement.”

The suits mostly allege that MGM is responsible for their physical and psychological injuries because the company allowed shooter Steven Paddock accumulate an arsenal of weapons in his Mandalay Bay room where he launched his attack.

MGM believes that such a settlement is possible.

“MGM’s stated goal regarding mediation is, as it always has been, to resolve these matters so that all impacted can move forward in their healing process,” spokeswoman Debra DeShong said in an statement.

“After multiple mediation sessions over several months, progress has been made, and while mediation is ongoing, the company believes it is reasonably possible that a settlement will be reached,” she said.

Eglet says nothing is certain.

“I wouldn’t be involved in mediation for three months if it wasn’t possible,” Eglet said. “But it’s not probable—it’s possible. We may get a settlement, but we may not.”

It’s unclear how many of the suits are under negotiation. MGM Resorts filed suit to consolidate the complaints into one lawsuit in a federal court where its liability could be defended, but was rejected by a judge. And when it was reported that MGM has sued the victims, an MGM boycott was launched by several victims groups.

MGM still doesn’t believe it is liable. The SEC filing said the company “continues to believe it is not legally responsible for the perpetrator’s criminal acts,” but would seek to settle “in the interest of avoiding protracted litigation and the related impact on the community,” according to the Las Vegas Review Journal.

Caesars Entertainment has scored a deal with ESPN to bring an ESPN-branded TV studio focused on sports betting to its Linq Las Vegas Hotel & Casino on the Strip.

The partnership calls for the creation of sports betting-themed content to air with segments of ESPN’s recently launched “Daily Wager” betting show and the integration of Caesars’ sports betting data and branding across all facets of the cable network’s programming.

ESPN said the studio will serve as its Las Vegas hub and will contribute to its linear, digital and social shows as well as ESPN.com and the ESPN app.

“The sports betting landscape has changed, and fans are coming to us for this kind of information more than ever before,” said Mike Morrison, vice president of business development at the network. “We are poised to expand our coverage in a big way.”

Slated for launch next year, the studio will be the second for Caesars on the Strip following a partnership concluded with Turner Sports in February that will create an outpost of Turner’s “Bleacher Report” show inside the sportsbook at Caesars Palace.

Caesars has been aggressive in seizing opportunities presented by a U.S. Supreme Court ruling last May that voided a longstanding congressional ban on sports wagering nationwide. Since then, eight states have legalized sports betting and at least a dozen more are expected to follow suit in the near future.

In January, the company announced a deal with the National Football League that establishes the Caesars as the league’s first-ever “official casino partner,” although the agreement doesn’t include sports betting.

Partnership deals have also been reached with the league’s Oakland Raiders, who are moving to Las Vegas in 2020.

Caesars and its casinos also have marketing deals with the NFL’s New Orleans Saints and Baltimore Ravens, the NHL’s New Jersey Devils, the NBA’s Philadelphia 76ers and is partnering with New York’s Oneida Indian Nation to run sportsbooks at the tribe’s three casinos.

“During the last few years, Caesars has spent a lot of time and money to re-energize the Caesars brand,” Macquarie Securities gaming analyst Chad Beynon said. “Given (both) this deal and prior ones, it’s quite clear to us that the Caesars brand will be prominently featured in a significant amount of programming and live events, giving them more connections with sports.”

Currently, the Las Vegas Strip is home to a studio at the South Point Casino developed in partnership with the Vegas Stats & Information Network, which features veteran sportscaster Brent Musburger and programming dedicated to discussing odds, betting lines and related content on satellite radio and streaming services.

Downtown Las Vegas casino operator Derek Stevens has said he plans to bring a VSiN studio to his new Circa Las Vegas resort, which is under construction and scheduled to open in 2020.

FOX Sports is teaming with the Stars Group to launch a sports betting network titled FOX Bet which will be offered in states and jurisdictions were sports betting is legal.

The Stars Group already has market access in 13 states for sports betting. The companies hope to launch the site by August in time for the NFL season.

FOX Sports will provide the Stars Group with an exclusive license to use certain FOX Sports trademarks and will invest $236 million to acquire 5 percent of the group. CNBC has also reported that FOX will have an option to acquire half of the group’s U.S. interests after 10 years.

Under the partnership, the Stars Group and FOX Sports expect to launch two products in the Fall of 2019 under the FOX Bet umbrella. One will be a nationwide free-to-play game, awarding cash prizes to players who correctly predict the outcome of sports games.

The second product, which will be named FOX Bet, will give customers in states with regulated betting the opportunity to place real money wagers on the outcome of a wide range of sporting events in accordance with the applicable laws and regulations, the companies said in a press release.

As part of the deal, Fox Corporation will acquire about 5 percent of the Stars Group through newly issued shares at a price of $16.44 per share.

The Stars Group will use the money—estimated at $236 million—for general corporate purposes and to pay down debt.

“We believe this strategic partnership uniquely positions us to build a leading betting business in the U.S., which represents one of the most exciting long-term growth opportunities for our company,” said Rafi Ashkenazi, chief executive officer of the Stars Group. “Leveraging our proven media partnership strategy with Sky Sports in the UK, we are excited to partner with FOX Sports to integrate wagering into sports media and drive customer acquisition and retention in the U.S.”

Under the commercial agreement, FOX Sports will grant to the Stars Group an exclusive license for the use of certain FOX Sports trademarks for a range of immersive games and online sports wagering, and certain exclusive advertising and editorial integration rights on certain FOX Sports broadcast media and digital assets.

As part of the transaction, FOX Sports will receive certain brand license, integration and affiliate fees. In addition, during the term of the commercial agreement, the Stars Group has agreed to a minimum annual advertising commitment on certain FOX media assets, the release said.