Author: Casino Connection Staff

West Virginia recently became the sixth state to enact legislation that would legalize sports betting if the U.S. Supreme Court lifts the federal ban. Governor Jim Justice allowed the West Virginia Sports Lottery Wagering Act to become law without his signature.

The new law allows sports betting at West Virginia’s five licensed casinos and on Lottery Commission-approved mobile device applications. The state would charge casinos a $100,000 licensing fee and impose a tax of 10 percent on gross receipts after the first $15 million and direct the rest to the Public Employees Insurance Agency. Bettors would have to be at least 21.

The measure’s sponsor, Delegate Shawn Fluharty, said, “As long as you are in the state of West Virginia, you have an account and you are 21 or older, you can place a bet. That’s how it is going to operate. So I think it is going to be a great indirect revenue stream for all of our local bars and restaurants and casinos.” He added sports betting will draw residents of neighboring states to West Virginia to place bets on sporting events.

The legislation does not include the 1 percent integrity fee sought by the National Basketball Association and Major League Baseball. However, Justice said if the federal ban is lifted, he might call a special session to modify the newly passed law, including a 0.25 percent fee. Justice’s family owns Greenbrier Resort whose casino would be authorized to operate sports betting under the bill. “I believe there could be real value to this partnership. This approach will allow us to develop a relationship with all the major sports leagues so that it is beneficial to everyone,” Justice said. He added, “Ohio hasn’t started on this legislation and Pennsylvania takes too big of a cut, so if the U.S. Supreme Court legalizes sports betting, we will have an advantage over surrounding states.”

Furthermore, Justice stated, “I personally believe there’s a benefit to partnering with the major leagues and that there’s some cleanup work to be done. I really believe that partnership with the major leagues is something we should look at and maybe make it a model legislation the whole country could use.” He said the quarter-percent integrity fee, which was introduced in New York, “is not a lot of money to tell you the truth, and the casinos surely ought to be able to afford that.”

Analysts said the 1 percent integrity fee actually would direct 20 percent of the handle for sports book operators to the leagues.

Fluharty commented, “The integrity fee is essentially West Virginia money being sent out of West Virginia for these billionaire leagues for this so-called fee that they tax on a handle. As a result of that, essentially you could have many months where West Virginia would not even see revenue but yet we’d still send money to Major League Baseball, to the NBA, to the NFL to enforce this so-called integrity fee. It’s a complete joke on the basic premise.”

Senate Majority Leader Ryan Ferns added, “I don’t think it’s realistic to say we will have a special session to make those changes. When major league sports proposed those changes to both houses of the legislature, both House and Senate, it’s my understanding that it was pretty universally rejected. So to have a special session on a topic that there’s almost no support in either house for–and, quite frankly, this was a bipartisan piece of legislation–I don’t think it makes good sense to call a special session with there being no support.”

Justice’s Chief of Staff Mike Hall said Justice is aware that lawmakers d not approve of the integrity fee. “There’s not a lot of legislative support right now for doing that. We’re one of the early states to do this, so major league teams came in and said, ‘We’re going to be doing this in other states so let’s see what happens and we join the party.’ The governor wanted to assure them in his conversation with him that we have not just shoved them aside.”

In Kansas, a House committee heard testimony on a bill allowing the

Kansas Lottery to legalize and regulate offer sports betting in state-owned casinos, online and via mobile apps. Hollywood Casino lobbyist Whitney Damron said sports betting should be limited to “brick-and mortar” locations to promote foot traffic.

In Missouri, SB 767, a video gaming bill, was amended to address how existing casinos would handle sports betting in Missouri, such as where sports books could be located within existing facilities, the security and storage of revenue and the process of applying for a license. In addition, the amendment specifies a $10,000 application fee and a $5,000 annual renewal fee, plus a tax rate of 12 percent on gross sports wagering revenue and a 2 percent administrative fee. Casino operators testified in late February that they would support a bill with similar language. The amended bill does not include the 1 percent integrity fee.

And in Louisiana, state Senator Danny Martiny sponsored SB266 which would allow sports betting, regulated by the Louisiana Gaming Control Board. “I think there is a good chance that we would consider sports book betting because I’m going to tell you Beau Rivage and all those Mississippi casinos, they already approved it and that will cut into the New Orleans market. Arkansas is also looking to approve the same and cut into the Shreveport market.”

If the bill becomes law, voters in each parish would decide whether or not to make it legal there. Martiny noted, “I think a lot of people who were dead set against it on a moral basis now look at it from the standpoint of, well I’m not going to do it. But if these people want to waste their money doing it, I’d rather take their gambling revenue, rather than raise my sales tax or do away with my excess itemized deductions or compressed the income tax brackets so that we can raise money, all of which have been rejected during the last special session.”

In New York, Senate Bill 7900, introduced March 7 by Orange County Republican John Bonacic and currently before the Senate Finance Committee, does a lot of things right, say those who favor a regulated New York sports betting market in one shape or another.

Mainly, it establishes rules for New York’s four new commercial casinos—del Lago Resort and Casino in the Finger Lakes, Rivers Casino & Resort in Schenectady, Tioga Downs Casino in the Southern Tier and Resorts World Catskills near Monticello—to exercise provisions in their licenses allowing them to take bets on sports both on-site and by computer and mobile phone.

Significantly, it also cuts the state’s racetracks, racinos and OTBs into the action by allowing them to partner with the casinos in offering affiliate betting stations and registration for their patrons to access the online and remote platforms

Daily fantasy sports company FanDuel is considering a backdoor way of taking the company public, according to a report citing unnamed sources at financial news site Axios.com.

Axios said that the fantasy sports site is likely to participate in a reverse merger with Platinum Eagle Acquisition Corp., a special purpose acquisition company formed earlier this year by veteran media executive Jeff Sagansky.

Special purpose acquisition companies are basically management teams that raise money from the public markets, with the promise of then buying one or more companies, according to the report.

Reverse mergers are seen as a simpler and less expensive way for a private company to go public. The process takes less time than a conventional IPO and the private company does not need to raise capital. They are also less contingent on market conditions.

Platinum Eagle raised $300 million earlier this year and currently trades on NASDAQ, according to Axios.

The report did not say how much Platinum Eagle would pay for FanDuel or the percentage of ownership it is seeking to acquire. In 2017, FanDuel estimated its values at $1.2 billion during a planned merger with DraftKings. The merger was blocked by regulators.

The failure of the merger has reportedly hurt FanDuel’s efforts in attracting new investors. Axios quoted one source as saying to consider the Platinum Eagle deal more as a fundraiser for FanDuel than as an exit for FanDuel investors.

FanDuel did not comment on the report.

In another daily fantasy sports matter, the Pennsylvania Gaming Control Board has announced that it will begin accepting applications for fantasy sports operators this week. Applications can be made through the Board’s website at gamingcontrolboard.pa.gov.

Pennsylvania passed a DFS law late last year. The bill sets a $50,000 fee for a five-year license and taxes gross revenue at 15 percent.

At a public hearing last week Connecticut lawmakers heard from various speakers on the advisability of legalizing online gaming. The testimony was made to the Connecticut Public Safety and Security Committee. It included testimony by the Connecticut State Lottery’s Steve Wagner and Connecticut Attorney General George Jepsen and many other stakeholders.

Foxwoods Resort Casino in written testimony not only supports such efforts, it calls online gaming, the “strongest opportunity for the state.” Seth Young, Foxwoods’ executive director of online gaming told the panel, “As we see it, the strongest opportunity for the state is in legalizing statewide iGaming, another activity that is currently operating for Connecticut residents in the black market today.”

Young emphasized that off-track betting and daily fantasy sports are already on the verge of legalization—they await amendments to the state’s tribal state gaming compacts.

Young pointed to neighboring New Jersey. “Since iGaming was introduced in New Jersey in 2013, New Jersey has collected more than $126M in tax revenue. We project the revenue opportunity for iGaming in Connecticut to be greater than the revenue opportunity for sports gambling. Based on our estimates coupled with a pragmatic tax rate, over the course of five years Connecticut stands to collect roughly $87M in tax revenue from iGaming, at a rate starting at roughly $14.25M in Year One, escalating to roughly $20M in Year Five.”

He quoted reports that estimate 3,374 full-time jobs were created in New Jersey through online gaming since 2013. “The regulated New Jersey iGaming market has had no reports of replacing people with computer servers. In fact, dozens of jobs were created directly as required by regulation, along with hundreds of additional jobs to support the market,” he said.

Young argues that the state’s two tribal casinos would benefit from online gaming because it would make them more competitive, and bring more visitors to their brick and mortar operations. He said that in 2016 Atlantic City casino turned around a decade-long decline in revenues and grew their market by 2.2 percent from 2016 to 2017.

“iGaming has contributed to Atlantic City’s stabilization and turnaround in a market with new casinos right over the border in Philadelphia and other neighboring states, in a similar destination-style market as we have here in Connecticut,” said Young.

Moreover, iGaming brings in customers who haven’t visited casinos before. Young quoted David Satz, the Senior Vice President of Government Relations at Caesars that 91 percent of online players were new customers that hadn’t been in the Total Rewards program prior to playing online. This experience was duplicated at other New Jersey casinos, he said.

Young also denounced lobbying efforts by Major League Baseball and the NBA made at an earlier hearing of the committee when they argued for a share of sports betting, should it be legalized.

In the Lottery’s testimony Wagner concentrated on how sports betting might be implemented. The Attorney General’s comments concentrated on how sports betting and online gaming might complicate the state’s relationship with its gaming tribes, in particular the tribal state gaming compacts.

The H1Z1 Pro League recently announced the 15 charter teams that will compete in its inaugural season, starting April 21 at Caesars Entertainment Studios in Las Vegas, the league’s home base. The H1PL also announced it will partner with Facebook to exclusively broadcast all digital content. The first professional eSports league, H1PL is a joint venture between Daybreak Game Company and Twin Galaxies LLC.

The 15 teams joining the H1PL inaugural season are: Alliance, Cloud9, Counter Logic Gaming, Echo Fox, Epsilon Esports, GankStars, Impact Gaming, Luminosity, Noble Esports, Obey Alliance, Rogue Gaming, SetToDestroyX, Team SoloMid, Tempo Storm and Vitality. They will compete over the course of two 10-week “splits” at Caesars Entertainment Studios, a 50,000 square foot, state-of-the-art production facility. The competition will livestream over Facebook Live throughout the season. H1PL and Facebook also will offer free, redeemable in-game rewards for fans who watch H1PL streams throughout the week. Fans also can watch the matches in person.

Teams will compete for total cumulative match points over the course of the entire season. The H1PL’s scoring system will reward strategy, aggressive gameplay and creative thinking, leading to standings for the H1PL Battle Royale Championship in the fall.

Twin Galaxies Co-Chairman Jace Hall said, “Our goal with H1PL is to take the leap from eSports 1.0 to 2.0, establishing a league where for the first time in eSports history, everyone participates in success–the fans, the players, the teams and all of our supporting partners. The battle royale format has quickly become the most popular and entertaining multiplayer video game genre, and we’re confident that the H1PL will drive fan engagement and excitement to even higher levels through the use of groundbreaking production techniques along with access to Facebook’s global gaming community.”

Facebook Manager of Esports Partnerships Patrick Chapman added, “The battle royale genre is fast becoming one of the most popular and accessible gaming categories to both watch and play, and we’re excited to help this brand-new league for H1Z1 grow its community on Facebook. The league’s primary focus to engage and support players and fans aligns closely to our commitment to help build the world’s community for people to play, watch and share the games they love.”

H1PL will release ticketing and hotel information soon.

More than 378,000 viewers watched H1Z1’s prime-time premiere, “Fight for the Crown” tournament, nearly one year ago.

A judge in New Hampshire last week ruled that a woman who sought to remain anonymous after winning a $560 million Powerball jackpot can do so, but that transparency laws require that her community be named. Her home town is Merrimack, but that’s all the public will be able to learn about her.

She won the jackpot on January 6 and was the largest winner in the state’s history. She signed the back of the lottery ticket, not realizing she could have put the name of a legal trust on the back instead, to protect her identify. Her attorney argued that wording on the ticket was vague as to whether she could do this. The lottery commission acknowledged that the rules were not made clear on the ticket, although they were spelled out on the website.

The woman, identified in court records as “Jane Doe,” had sued the New Hampshire Lottery Commission, which cited the Granite State’s “Right-to-Know” law in its insistence that her name be released to the public. Its attorneys claimed that releasing her name would demonstrate that she was a “bona fide” player and a “real” winner.

The woman had worried that she would be subject to harassment and people demanding or soliciting money from her. Her law firm had written, “For instance, the law firm that represents Ms. Doe, Shaheen and Gordon, have been bombarded with solicitations from various individuals seeking to capitalize on her winnings.”

Her attorney argued that her right to privacy outweighed the public’s right to know in this instance.

The judge agreed, writing that Doe “has met her burden of showing that her privacy interest in the nondisclosure of her name outweighs the public’s interest in the disclosure of her name.” He added that it was unlikely that revealing the name of her town would lead to her name being disclosed.

Upon learning of Judge Charles Temple’s ruling, “Doe” was ecstatic, according to her attorneys. “She was jumping up and down,” said William Shaheen. “She will be able to live her life normally.”

The woman has created the Good Karma Family Trust of 2018 and has promised to give away at least $50 million to various charities during her lifetime, such as $150,000 to Girls Inc. and $33,000 to three local chapters of End 68 Hours of Hunger.

She has already been given the $264 million that remained after taxes.

Malta-based Gambling.com Group is readying a major push into sports betting by acquiring Bookies.com—which has a portfolio of 76 sports betting related domains.

The purchase included a cash settlement of £2 million along with a year-long deferred payment of a further £4.5 million, according to CDC Gaming Reports. Bookies.com has 76 sports betting and casino-related domain names, including Bookmakers.co.uk and Footballscores.com. Up until now, Bookies.com has largely focused on horse racing and soccer matches. Gambling.com said the acquired assets generated collective sales of more than £600,000 in the fourth quarter of 2017.

Nearly all of the acquired domains serve the UK gambling market, but Gambling.com officials have specifically pointed to the possible opening up of the U.S. sports betting market as a reason for expansion. The U.S. Supreme Court will soon rule on New Jersey’s challenge to the federal ban on sports betting. That has led to a flurry of activity in the U.S., with several states readying sports betting laws should the court strike down the ban.

Gambling.com Group CEO Charles Gillespie pointed to the case in a press release on the sale.

“This is both the largest and most exciting acquisition we have done since we began acquiring in 2017,” Gillespie said. “These websites perfectly complement our existing portfolio in terms of both increasing our sports betting market share and continuing with our focus on big brands and big domains.

“Should (former New Jersey) Governor Chris Christie triumph at the Supreme Court and strike down the federal ban on sports-betting, Gambling.com Group stands ready with the strongest domain portfolio of any performance marketing company for the American sports betting market,” he said.

Stars Group is predicting a difficult year in the Russian market as new rules regarding payment processing go into effect there.

In its 2017 earnings report, the company said the new rules, scheduled to go into effect in May, will make it difficult to process payments from Russian gamblers. Though Russia has not said exactly how it will enforce the rules, they could mean Russian banks will no longer be able to do business with foreign payment processors or gambling operators who have been blacklisted by the government.

Stars Group CEO Rafi Ashkenazi told analysts that his team has contingency plans to deal with Russia’s actions, according to a report at casino.org.

“We have plan As and plan Bs and plan Cs for every type of scenario that may happen in the market,” Ashkenazi said. “We are monitoring, we are assessing, and we are ready.”

Stars Group considers Russia a grey market with no regulatory or legal guidelines available for offshore online gambling sites. Russia, however, has been steadily reforming its online gambling rules and has begun issuing licenses for sports betting.

The report also showed solid earnings for Stars Group in 2017. Total annual revenue was up 13.6 percent for fiscal 2017, at more than $1.3 billion. Other earnings figures were also up, with net earnings rising by more than 25 percent.

That growth, however, slowed in the fourth quarter of 2017 and Stars Group projected that the trend would continue in 2018. The company is predicting just a six to 12 percent growth rate in revenues when compared to the previous year. Earnings per share also came up just a bit short of analysts’ estimates, returning $0.54 per share, rather than the predicted $0.57, the casino.org report said.