Author: Casino Connection Staff

West Virginia governor suggests “partnering” with leagues

Last week, the NBA came up with yet another supposed justification for the fee, when a vice president for the league told a West Virginia radio news program that the reason for the fee is once again integrity, based on the assumption that more people would wager on sports if the wagering were legal.

“The league is going to incur significant additional expenditures to best protect the integrity of our game as sports betting becomes more widespread, so the fee would go in part to pay those fees,” said Scott Kaufman-Ross, vice president of fantasy and gaming for the NBA, in an appearance on the MetroNews network’s Talkline program.

“Secondly, the league is going to be taking on additional risk as sports betting becomes more widespread in the United States and there’s additional risk to our brand. If anything happens, it’s going to be our brand that bears the brunt of it.”

The AGA and other legal sports betting proponents have noted that legalizing sports betting will shift billions being bet illegally to legal, regulated sites, rather than resulting in sports betting becoming “more widespread.” And legal, regulated sites will require less monitoring because of their transparent nature.

In West Virginia, lawmakers of both parties said no changes are needed for SB451, which Governor Jim Justice recently signed into law. The measure would allow sports betting at the state’s four racetracks and the casino at the Greenbrier Resort (owned by Justice) if the U.S. Supreme Court lifts the federal ban. However, the legislation did not include the 1 percent integrity tax promoted by the National Basketball Association and Major League Baseball. Justice said wants to pursue an integrity tax for a lesser amount and “absolutely” will call a special session to address the issue.

Justice said, “After the U.S. Supreme Court issues its decision on sports wagering, to address any provisions of the legislation that might be in conflict, I will ask the legislature to look at the advantages of partnering with the major sports leagues. 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 added West Virginia’s sports betting law could become “model legislation that the entire country can use and duplicate.”

No other state has included the integrity tax in sports betting legislation. The leagues claim the tax revenue would help them to monitor their games for corruption and to maintain the integrity of their sports.

State Delegate Shawn Fluharty, the bill’s sponsor, said, “It was two years in the making to see it come full circle. By building the interest since I first introduced it, we were able to get everyone on board and gather bi-partisan support. It passed the House with 77 votes. We do not need a special session, nor do we need changes. The governor is being pressured by the leagues to include an integrity fee. It is absurd to think we will send money out of West Virginia and to billionaire leagues. There’s no support in the legislature for it. If anything, an integrity fee should go directly to our universities, and not out of state leagues.”

State Senate Majority Leader Ryan Ferns added, “There is zero interest in integrity fees or anything else associated with professional sports in the legislature. I think major league sports were late to the game. The sports organizations recognize and admit that there is hundreds of millions of dollars in illegal betting taking place right now. Whether that betting is legal or illegal, major league sports should already be protecting the integrity of the game regardless of how the bets are being placed.”

Under the legislation, casinos would direct 10 percent of net profits from sports betting to the state. Nevada currently collects 16 percent.

In leaving the door open to future discussion of a fee, many West Virginia lawmakers mentioned a much smaller potential fee—possible as low as 0.25 percent, instead of 1 percent.

It’s something that West Virginia Governor Jim Justice may consider, after he issued a press release saying he would sign the sports betting bill in which he promoted “partnering” with the leagues on sports wagering. In the end, Justice did not sign the bill, but it became law nonetheless.

“After the U.S. Supreme Court issues its decision on sports wagering, to address any provisions of the legislation that might be in conflict, I will ask the legislature to look at the advantages of partnering with the major sports leagues,” Justice said in the press statement. “I believe there could be real value to this partnership. I expect the Supreme Court to rule on this issue in the next few months.

“This approach will allow us to develop a relationship with all the major sports leagues so that it is beneficial to everyone.”

Meanwhile, Maryland has become the latest state to consider legislation to regulate sports betting should the federal ban be lifted. The Maryland House of Delegates overwhelmingly passed a bill that would put the sports betting issue in the hands of voters. HB 1014 would create a referendum for November’s statewide ballot to create a constitutional amendment “to provide for the operation, regulation, and disposition of proceeds of sports wagering in the state.”

The bill would allow for sports books at existing Maryland casinos and racetracks. A parallel bill in the state Senate would limit sports betting at racetracks.

Rep. Frank Turner, a Democratic sponsor of the bill, told the Baltimore Sun that the amendment would target sports betting revenues for education. “We specifically want any money from sports betting to go to the Education Trust Fund,” he said.

The bill does not address whether or not online wagering on sports would be permitted.

The U.S. Supreme Court is expected to rule as early as next month on Murphy (formerly Christie) v. NCAA, the lawsuit brought by all the major sports leagues to block New Jersey’s sports betting law. New Jersey’s lawyers have argued that PASPA, on which the lower-court rulings held for the leagues, is unconstitutional. The court could partially or totally repeal PASPA. There also are bills in the U.S. Congress to repeal the federal ban, implemented in 1992.

In Illinois, five sports betting bills are in committee. State Senator and chairman of the Senate Gaming Committee Steve Stadelman said, “Some of the bigger issues and questions that we’ll have to discuss is, obviously, the tax rate. What venues would be allowed to have sports betting? For example, casinos, racetracks? Would it be offered online? Would it be offered in a retail environment?”

One of the bills in the Senate Gaming Committee, SB 3432, was introduced by state Senator Napoleon Harris III, a former NFL linebacker. The legislation includes the integrity fee. Although lawmakers are divided on the issue, Stadelman noted, “I don’t want to be debating a year or two down the road while something’s being allowed in other states. I don’t think that’s to our advantage in Illinois.” He said although a tax rate hasn’t been determined, his legislation estimates sports betting would generate $7 billion a year, with $23.8 million going to the state.

Cocktail waitresses at Caesars Entertainment’s Atlantic City casinos are protesting the introduction of a new automated drink ordering system.

The system allows patrons on the casino floor to order drinks, which are then served by the waitresses. The system reduces contact between the customers and waitresses.

According to a report at Casino.org news, casino officials say the system is more efficient and allows gamblers to play rather than wait for drinks.

The waitresses, however, say that with less contact with customers, it becomes harder to determine if patrons are drunk and should be cut off.

The waitresses have delivered a petition to the New Jersey Division of Gaming Enforcement. The petition requests that the department examine potential problems with the system. The waitresses are all employed by Caesars Entertainment-owned properties, including Bally’s Atlantic City, Caesars Atlantic City, and Harrah’s Atlantic City, the report said.

Officials for Local 54 of the Unite Here Union—the city’s largest casino workers union—said they support the petition

“All of these cocktail waitresses have extensive training in identifying when people are inebriated so they can cut them off,” Ben Begleiter, research analysts for the union told Casino.org. “They have extensive training in slowing down how often they bring drinks so that people don’t become overly intoxicated. Now they don’t have the ability to do any of that.”

Caesars Entertainment officials did not comment for the report.

Casino Reinvestment Development Authority Executive Director Christopher Howard announced he will be leaving the post at a public meeting, setting stage for newly appointed Deputy Director Matt Doherty to get a quick promotion.

Howard was appointed by former Governor Chris Christie in 2016. Doherty was appointed earlier this month by current Governor Phil Murphy.

Doherty, 44, a Democrat, is mayor of Belmar New Jersey, another shore tourist town. His annual salary will increase from $150,000 to $175,000 once he assumes the new position no later than July 1, according to the local Press of Atlantic City.

“It’s been incredible,” Howard, 33, said of his time in the post. “It certainly opened some new doors for me, and I’m extremely grateful for the opportunity you all have given me.”

During Howard’s tenure, the authority downsized 15 percent of its full-time positions after casino tax revenue was diverted from the authority. The authority also established an entertainment-retail district for the Hard Rock Casino and Hotel.

“Chris Howard certainly left his mark on Atlantic City, and his leadership and management will be sorely missed,” CRDA Board Chairman Robert Mulcahy said. “We wish him the best in his future endeavors. At the same time, the board welcomes Matt Doherty to the CRDA with open arms. We are excited to continue bringing a new vision to the city together.”

In some other Atlantic City stories, GVC has launched a second online gambling site in New Jersey with PartyCasino NJ. The site features about 250 slots and table games.

GVC already offers casino games and slots through its PartyPoker site in the state. Officials said those games will remain available to PartyPoker subscribers, but the company will market the new site to online casino players.

Also, Atlantic City’s Democratic Committee has filed a criminal complaint in municipal court against Mayor Frank Gilliam and his former campaign manager, Richard Winstead, according to the Press.

The committee alleges Gilliam, a Democrat, and Winstead committed theft by unlawful taking when Gilliam deposited a $10,000 check meant for the committee into Gilliam’s campaign account.

Gilliam has consistently said the check was deposited into his account by mistake and that he returned the money after it was discovered, the Press reported.

Maryland and New Jersey’s combined brick and mortar and internet poker markets are running nearly neck and neck.

Data released two weeks ago by New Jersey’s Casino Control Commission showed that the combined poker rooms and sites generated $3.68 million in February, with live poker accounting for $1.91 million.

Internet poker decreased $400,000 compared to the previous year and live poker was down about $200,000 over 2017.

In Maryland the four casino card rooms brought in $3.6 million in February, which was very close to the year before. Internet poker has not yet been legalized in the state. The market enjoyed a 25 percent increase last year when the MGM National Harbor opened a 39-table poker room.

Last year, as a result New Jersey’s poker market was about $4.5 million each month, compared to $3.7 million in Maryland.

Because New Jersey’s intrastate poker market is small it’s hard to get accurate comparisons between it and states such as Delaware and Nevada.

According to the Nevada Gaming Control Board, “The consensus is that traditional poker will not experience any significant growth without a national interactive component to support growth in traditional poker by introducing new players to the game.”

It’s been a tough winter for Atlantic City’s seven casinos as revenue declined for a second consecutive month falling 6.5 percent in February.

Online gaming, however, was still strong taking in $21 million. All told, the city’s seven casinos took in $192 million for the month according to figures released by the New Jersey Division of Gaming Enforcement.

“Let’s face it, February was a weak month,” said Jim Plousis, chairman of the New Jersey Casino Control Commission in a press release. “Business was off at virtually every casino. I am hopeful that casinos can turn this around and start expanding the market as we move into the busier spring and summer seasons.”

Only the Golden Nugget Atlantic City had a good month with a revenue increase of 16 percent over February 2017 to $25 million. That was also helped by the casino’s strong online presence in the state, bringing in $7.9 million. According to an analysis by the Associated Press, that’s almost twice the amount brought in by the casino’s nearest competitors.

Borgata and Resorts Digital each won about $3.8 million online, while Tropicana came in at $3.3 million and Caesars Interactive NJ won $3.2 million.

Caesars Atlantic City saw the biggest overall decline, down 23 percent to $17.5 million. Resorts was down about 21 percent to $11.9 million, though its online revenue was up 24 percent.

Bally’s was down 12.8 percent to $14.2 million; Tropicana, which recently took over the No. 2 spot in the Atlantic City market behind the Borgata, was down 7.2 percent to $29.2 million; Borgata was down 5.1 percent to $58.7 million; and Harrah’s was down 4.3 percent to $28.2 million, according to the AP.

Thomas Cantone, a senior vice president for Mohegan Gaming & Entertainment may be called to testify in the sexual assault trial of comedian Bill Cosby.

This is a big surprise to Cantone, who didn’t know that he could be called to as a witness. Last week he told the New London Day: “I have no understanding of that. I have not heard anything,” after that paper learned from the New York Post of the executive’s possible deposing.

Cantone previously was employed at Foxwoods Resort Casino, where Cosby appeared in 2003, and where Andrea Constand alleges she met the venerable comic in his hotel room. She alleges that on a different date two months later he sexually assaulted her at his home in Pennsylvania.

The judge declared a mistrial in this case last summer. Cosby’s attorneys say they plan to call Cantone to testify about when Cosby met Cantone at Foxwoods.

Pennsylvania’s new online gaming business is set to begin its application period next month, according to a top regulator. Kevin O’Toole, executive director of the Pennsylvania Gaming Control Board, told a state House budget panel last week that the board is prepared to begin accepting applications for iGaming licenses in mid-April.

That will kick off a 90-day period in which applications for different online gaming licenses will be accepted by the board. Only current land-based licensees will be permitted to apply for iGaming Licenses during this initial period, and according to the rules, the only licensing available during the initial period will be a package deal—online slot, table-game a peer-to-peer poker licenses for a fee of $10 million.

In August, any remaining licenses will be available individually to current licensees, at a cost of $4 million each. Thirty days after that, the board will accept licenses from outside the Pennsylvania’s current casino industry.

What remains to be seen is who applies for which license, and it is feasible that no current casino will opt for an all-in-one license because of the tax structure set up by Pennsylvania’s gaming expansion law—particularly the 54 percent tax for online slot games, which mirrors the land-based slot tax. Many operators have said they will not seek licenses for online slots at that tax rate, which they say is unworkable, particularly when online gaming in neighboring New Jersey is taxed at around 9 percent, regardless of the game.

It is conceivable that casinos could wait until after the initial 90-day period and purchase licenses for online poker or table games only.

The other important thing to keep in mind with this timeline is when non-Pennsylvania entities can start applying. After 120 days, approved outside entities can apply for the individual $4 million licenses.

Online casinos are not the only new element for Pennsylvania gambling. Applications and launch dates are in motion on several different fronts. O’Toole said licenses for video gambling terminals (VGTs) at truck stops should be available around the same time as online casinos, and online lottery sales will begin in May.

Last week, the board also released details on applying for a fantasy sports license.

The board has yet to decide on some online gaming regulations, most prominently whether or not licensees will be permitted more than one “skin,” or iGaming site, as in New Jersey. Some operators are pushing for multiple domains while others are seeking to limit casinos to one skin.

Prognosticators who were predicting a decision on March 5 in NCAA v. Chris Christie, the U.S. Supreme Court appeal of lower-court rulings blocking New Jersey’s sports-betting law which also challenges the constitutionality of the federal ban on sports betting, were disappointed last week.

However, the best odds for a decision that could overturn the 1992 Professional and Amateur Sports Protection Act (PASPA) are on the next regular date the high court announces decisions, which is April 2. Experts at the IMGL/ABA Gaming Law Minefield conference in Las Vegas last week, however, don’t expect to hear from the Supreme Court until late spring.

The case began in 2014, when New Jersey Governor Chris Christie signed a bill to create a self-regulated sports betting program centered in Atlantic City casinos. All of the major sports leagues—the NCAA, NFL, NBA and Major League Baseball—sued to block the legislation as a violation of PASPA. Last summer, SCOTUS made a surprise announcement that it would hear New Jersey’s appeal of lower-court rulings that held for the leagues.

The smart money, by the way, has moved from a long shot on New Jersey winning— from -1,000 after a lower-court ruling for the sports leagues to -250 last week, as bills have been introduced in 18 states to regulate sports wagering presuming PASPA is repealed.

Those views are held by a number of potential sports-betting stakeholders, including some of the sports leagues themselves, with the NBA and MLB both lobbying states to include a 1 percent “integrity fee” on all wagers for their leagues’ games, a prospect that many proponents of legal sports wagering consider unworkable, as it would squeeze operators to cut into already thin profit margins, rendering them unable to compete with the odds set by illegal bookmakers.

Gambling experts agree. Last week, famed gambler Jeff Ma—one of the leaders of the MIT blackjack team that inspire the book Bringing Down the House and the film 21—told CNBC that the push for a league cut of thin profits is “short-sighted.”

“Traditionally, a lot of the leagues are run by lawyers, so they think about how do we protect our assets; they don’t think about how do we monetize our assets,” Ma told CNBC at the recent MIT Sloan Sports Analytics Conference. “In this case, they are thinking protect and charge people money instead of focusing on the bigger opportunity down the road.”

Dr. Laila Mintas of Sportradar, a company that provides data to the NFL, NBA, NHL and several foreign betting operators, told CNBC that an integrity fee would not only keep bettors with the illegal bookmakers in the U.S., but would drive them offshore. “If you put too much burden on the (legal bookmakers), they will not be able to compete with the offshore markets,” Mintas said at the MIT Sloan conference.

The U.S. Supreme Court has yet to rule on New Jersey’s attempt to allow sports betting at city casinos and the state’s racetracks. The ruling—which could lead to sports betting in as many as 15 states should the court strike down a federal ban—could have been released March 5, when the court released two other decisions.

Though the court releases its decisions at its own pace, the March 5 release potential did spark a lot of media coverage which ultimately was disappointed. The court’s next scheduled release date is March 19, but again, there are no assurances that the sports betting case will be included.

WEST VIRGINIA

The West Virginia Lottery Sports Wagering Act, which would legalize sports betting, passed both the House and Senate and awaits Governor Jim Justice’s signature. If he signs it, West Virginia would become the first state to enact a sports betting law, and be ready to implement it if and when the U.S. Supreme Court removes the 1992 federal ban.

The bill authorizes the West Virginia lottery to regulate and license sports betting at the state’s five licensed casinos and racetracks; it also would allow mobile sports wagering via approved online platforms or apps. Licensees would have to pay a $100,000 application fee, to be renewed every five years at the same rate. Gross sports wagering revenue would be taxed at 10 percent.

The state commissioned a study by gaming research firm Eilers and Krejcik that showed the West Virginia sports betting market would generate $13.4 million in revenue the first year, $21.7 million the second, $29.7 million in year three, $29 million the fourth year and $28.7 million in five years. The first $15 million in net profit will go to the State Lottery Fund, then to the Public Employees Insurance Agency Financial Stability Fund.

The legislation does not include the controversial 1 percent integrity fee promoted by Major League Baseball, the NBA and other sports leagues. The fee actually is a 20 percent cut of all sports book revenue. Connecticut’s sports betting legislation does not include the fee, however, bills in Missouri, Indiana and Illinois include it. The leagues claim the fees are needed for their protection. However, observers noted the leagues have rules in place forbidding players and officials to gamble as well as internal security to handle such matters. In addition, observers said the estimated amount of money these fees would bring in—at least $200 billion in annual illegal sports watering alone—far surpasses what integrity fee measures would cost.

MLB Commissioner Rob Manfred held a conference call with West Virginia media to explain the league’s position. Manfred said, “Unfortunately in West Virginia, there’s only one interested group that has dominated the substance of this bill, and that’s the gaming industry – the people seeking to make money from sports betting. It contains literally no protections toward the integrity of the sport. There’s no recognition of that risk. It does not protect young people in West Virginia, by limiting their access to sports betting. It does not protect people with gambling problems. All it does is maximize the opportunity for the gaming industry to make money. The structure of the bill is so fundamentally flawed, bettors will seek other states with better regulatory frameworks. As a result, the expected financial windfall for West Virginia will be much lower. We will continue to urge the Governor to veto the bill.” Even if Justice does veto the legislation, the votes exist for an override.

West Virginia bar owners also weighed in on the sports betting bill. West Virginia Restaurant and Bar Association Vice President and bar owner Jake Padlow said, “We are a group of restaurant and bar owners who are tired of getting slaughtered by out-of-state corporations that own racetracks in the state. Why should racetracks get to monopolize it? If our legislators can’t trust local businesses, but they can trust these out-of-state corporations, that says a lot.” The association’s President Mike Duplaga, also a bar owner, said the legislation will hurt his business. “We are busy on Sunday afternoons during football season. Why should I stand by and watch Wheeling Island take my customers over there where they can bet?” Duplaga said. “The tracks certainly have their lobbyists on the job in Charleston. The local folks feel like they are getting left out,” said the group’s attorney and former state Senate President Jeff Kessler.

OKLAHOMA

In Oklahoma, HB 3375, passed the House Appropriations Budget Committee in an 18-8 vote and now moves to the full House. The bill—which does not include the leagues’ desired integrity fee–would amend the state constitution to legalize sports betting, but not horse or dog betting, at the state’s 70-plus tribal casinos. It also would expand tribal gaming to include non-house-banked table games. Tribes would pay the state 10 percent of the monthly net wins from sports books and non-house banked table games revenue.

The American Gaming Association estimated a regulated sports betting market annually could contribute $600 million to Oklahoma’s economy and generate up to $124 million in tax revenues for the state.

IOWA

And in Iowa, state Senator Jake Highfill has proposed legislation that would place sports betting under the direction of the state’s casinos, regulated by the Iowa Racing and Gaming Commission. Properties would be pay a $25,000 license fee and a tax of 8 percent on sports betting revenue, which would be allowed on professional and college athletics. Bettors could wager in person at the casinos or via mobile phones—a move to attract younger participants. The Innovation Group said legal sports betting could generate $80-$90 million in new annual tax revenue for the state.

The Iowa legislation does not include the major leagues’ integrity fee. NBA Executive President of Communications Mike Bass said, “We agree that time has come to give fans a safe and legal way to bet on sports. But any law authorizing betting must include rigorous protections to safeguard the integrity of our games. The bill rapidly advancing through the Iowa legislature is deeply flawed and will not achieve that critical goal. It lacks the most basic requirements for strict regulation of sports betting. We hope the legislature rejects this severely flawed bill and restarts the process to draft a bill with thoughtful, stringent protections.”

MLB issued a statement noting, “The legislation quickly advancing in Iowa would create incredibly weak and insufficient oversight of sports betting, and would not sufficiently mitigate the potential risks to our game that will emerge from legalized sports betting. The steps for strong regulation have been studied and proven to be effective for years in betting markets overseas, but this bill does not even come close to mandating the necessary precautions.”

Highfill called the integrity fee a “non-starter” in the Iowa legislation and criticized the leagues for pushing their agenda. Highfill said the Iowa proposal has more bipartisan support among state lawmakers than any gambling bill he has worked on during his six years in the state legislature.

MASSACHUSETTS

The stakes are high if sports betting is legalized in Massachusetts. According to estimates the state’s gamblers pay as much as $61 million in taxes if, first, the U.S. Supreme Court lifts the current ban and Bay State legislators adopted a regulatory framework.

The figures come from a white paper that was commissioned by the Massachusetts Gaming Commission and which recommended a path for adding another layer to the Bay State’s gaming landscape should the Professional and Amateur Sports Protection Act of 1992 be abrogated.

The White Paper posits that it is possible that other federal laws, such as the 1961 federal Wire Act, might still prevent sports betting from being conducted online because it prohibits the “interstate transmission of bets.”

In the White Paper the MGC writes “The introduction of a new aspect of the emerging gaming industry in Massachusetts presents an opportunity to bring a significant amount of gaming activity and revenues out of the shadows and into the legal market,” adding “With that transition would come the opportunity to cultivate the associated economic benefits—including tax revenues—while providing consumers of sports betting with protections not afforded them by illegal bookmakers.”

One of the references the 187-page paper cited was a study Oxford Economics did for the American Gaming Association that said if only brick and mortar casinos in the state were allowed to conduct sports betting that the annual taxes would be about $8.6 million at 6.75 percent. If the venues were expanded to retail and online, and the tax rate was 15 percent that amount would rocket to $61.3 million.

The state should also consider whether others besides casinos should be allowed to offer the service, such as racetracks and off-track better parlors, says the White Paper, and the possibility that all online gaming should be placed under an online gaming authority.

The MGC writes, “Under that approach a regulatory body would be provided the authority to address the broad subject of online gaming (including sports betting) and thus could quickly react to an industry where change is constant.”

The intent of the paper was to give the legislature “a menu of the variety of approaches,” according to MGC associate counsel Justin Stempeck.

The high court is unlikely to do nothing, concludes the paper: “Although it is possible that the Supreme Court would uphold PASPA in its entirety, it seems unlikely given that the Court chose to hear the case and extensively questioned counsel during legal argument with respect to the commandeering issue at the heart of the case. The Supreme Court could have simply denied the writ of certiorari if it was going to leave PASPA unchanged.”

Currently there is no bill in circulation on sports betting, although a bill Senator Eileen Donoghue authored on daily fantasy sports that calls for a commission to be established to conduct a comprehensive study if the Supreme Court rules that any part of PASPA is unconstitutional.

Donoghue has speculated that if that happens, “things could happen very rapidly.”

House Chairman of the Committee on Economic Development and Emerging Technologies Joseph Wagner agrees that sports betting should be “expedited” in that case.

Although at first blush there wouldn’t seem to be a connection between daily fantasy sports and sports betting, DraftKings appears to think such a connection exists. It recently hired a sportsbook director to have on staff just in case it needs to move quickly.

CONNECTICUT

Connecticut lawmakers figuratively showed the door last week to representatives of the NBA and Major League Baseball who wanted to help themselves to a share of the money that the state government might collect in the event that sports betting becomes legal—and the state chooses to regulate it.

As they have in all the states that are considering sports betting, the NBA and Major League Baseball representatives argued that they should be paid a 1 percent “integrity fee.” But while the other state lawmakers have included the fee in legislation being considered, Connecticut legislators wondered out loud what they would be getting in return.

The committee considering the legislation called the proposal something other than an “integrity fee,” they preferred “royalty” or “processing fee.”

NBA Vice President Dan Spillane, who was grilled by committee members, had to admit that the fee’s sole purpose was not to guarantee the integrity of the game. He also had to admit that the NBA commissioner Adam Silver has called such a fee a “royalty” as well.

He told the panel, “It’s the value of our product, the royalty aspect. And then the risk that comes along with it. It’s a form of insurance. I guess we could have broken the fee down into buckets. It’s akin to a royalty of the value of product we deliver.”

Some of the committee member said they believe that sports betting provides a benefit to professional sports by generating interest in the games and through the potential use of marketing and sponsorships.

Rep. Michael Dimassa declared, “I want my people to get the most bang for their buck. So if there’s a 1 percent fee I want some accountability.”

Other lawmakers said they thought the leagues want too much money, and besides, they pointed out, the money wouldn’t stay in the state.

A report by the American Gaming Association shows that more than 750,000 Connecticut residents bet more than $1.5 billion each year, mostly online.

LOUISIANA

In Louisiana, lawmakers presented bills to authorize sports betting at the state’s four live horseracing facilities and to allow online gambling. If approved, both actions would require voter referendums.

State Rep. Major Thibaut recently introduced HB 245, which would authorize “additional games and sports betting at eligible live horseracing facilities.” Currently the state has four such facilities, including the Fairgrounds Race Course and Slots in New Orleans. The measure would limit sports betting to one location in each of the four parishes that already allow live horseracing.

The proposal also would require voters in each parish to approve sports betting. It reads, “No gaming activities shall be allowed in an eligible facility in any parish unless the operation and conducting of gaming activities pursuant to this Chapter has first been approved at an election held for such purpose.”

In addition, Thibaut’s bill calls for “limitations on an eligible facility in Orleans Parish,” referring to Fairgrounds, but the legislation does not spell out those limitations.

The state already has a tax structure in place for casinos and racetracks, but the measure not address taxes or fees specific to Louisiana sports betting nor the controversial integrity fee promoted by the NBA and Major League Baseball.

In addition, state Senator Daniel Martiny recently introduced S 322, which would authorize parish-by-parish voter referendums to legalize online gaming. Every parish could determine if the proposal would be placed on the November ballot and a majority vote would be required. The ballot question would ask, “Shall internet gaming be allowed to be conducted within the parish of ______?” Online gambling would not begin before January 1, 2020, according to the measure.

The legislation also would require online gambling players to be at least 21 years old and living within the state of Louisiana. The Louisiana Gaming Control Board and gaming division of the office of state police would enforce all rules required to implement, administer and regulate internet gaming. Also, online gambling licenses would be restricted to riverboat and land-based casinos licensed by the LGCB.

S 322 does not mention taxation rates or licensing fees and does not authorizing specific forms of online gambling. However, it does include “gaming tournaments,” in which “players compete against one another in one or more games authorized by the board or in approved variations or composites thereof if the tournament is authorized by the board.”

The Louisiana legislature regular session will run March 12 through June 4. It met in “Extraordinary Session” since from February 19 through March 7.

Wynn Resorts and Universal Entertainment have agreed to end a long, bitter court fight over Wynn’s seizure six years ago of former Universal Chairman Kazuo Okada’s sizable shareholding in the company.

In an agreement that appears to remove a major obstacle to the company’s efforts to restore investor confidence and extricate itself from the turmoil surrounding allegations of sexual assault and harassment against former Chairman and CEO Steve Wynn, the two sides have resolved their differences with a settlement worth approximately $2.4 billion. Okada is no longer the chairman of Universal, having been purged after financial irregularities were found in connection with the company’s Manila resort.

The terms call for Wynn Resorts to pay off a 10-year promissory note valued at $1.93 billion it issued in 2012 when it canceled some 24 million Wynn shares Okada owned through machine gaming manufacturer Aruze USA, a subsidiary of Japan-based Universal, the company Okada founded and the principal source of his fortune. The move had wiped out 30 percent of the value of Okada’s holding at the time.

Wynn also has agreed to pay Aruze $463.6 million in interest on the note.

In effect, Aruze is getting $78 per share at 6 percent interest calculated over the six years of the disputed redemption.

Universal-Aruze has agreed in turn to drop all litigation against Wynn, its Hong Kong-listed Wynn Macau subsidiary and their current and former officers and directors, including of course Okada’s longtime foe Steve Wynn.

“Today’s outcome is tremendous for our client,” said David S. Krakoff, a partner in the law firm of Buckley Sandler, which represented Universal. “It resolves long-running litigation on very favorable terms and provides substantial resources for Universal to continue its international growth.”

Significantly, the settlement entails Aruze’s agreement to withdraw from a tangled court fight that as of this writing still involves a counter-claim in the Okada-Aruze case filed against Wynn by his ex-wife Elaine Wynn for the right to dispose of her 9 percent equity stake in Wynn Resorts.

Her claim stems from the terms of a 2010 divorce settlement that effectively combined her shares with her ex-husband under his control, an agreement crafted in no small part to offset Okada’s influence and ensure Wynn’s dominance of the company’s affairs.

Subsequent to his resignation on February 6, Wynn filed a motion in Nevada state court to drop his opposition to Elaine’s claim—a move that conceivably frees them both to sell their stock, mostly likely in a buy-back by Wynn Resorts—but a judge dismissed it, citing the Okada litigation, which had been scheduled to go to trial in April.

It was not known at press time how the settlement may affect the outcome of the Wynns’ dispute.

Jefferies analyst David Katz said it “clears the way for Steve and Elaine Wynn to settle their suits, which would remove obstacles to the company capturing its highest value in the public markets. Our impression is that both would be positioned to divest their shares in an efficient manner, with the larger question being how to go about it.”

Fitch Ratings analyst Alex Bumazhny said, “It removes an overhang for the company although a question remains how Wynn Resorts will fund it.”

Okada was a co-founder of Wynn Resorts and bankrolled its 2002 IPO. But as the company’s largest individual shareholder he and Steve Wynn ultimately clashed over corporate strategy. Wynn opposed Okada’s desire to develop a casino in Manila, and problems arose when Okada pursued the project himself. His Philippine affiliate along with members of Universal management were implicated in a bribery scandal in that country, and Wynn’s board launched an investigation that concluded Okada himself was guilty. On the grounds that he had breached his trust and endangered the company’s licenses he was ousted from the boards of Wynn Resorts and Wynn Macau and his shares canceled. Okada denied any misconduct and sued Wynn to undo the seizure of his stock.

What remains for Wynn Resorts now is to distance itself as much as possible from Steve Wynn and the burden represented by his 12 percent equity stake. In that regard, burying the hatchet with Okada can only help.

Wynn’s standing as a major shareholder will be a key focus of regulatory investigations into the sexual misconduct allegations now under way in the company’s home market of Nevada, where it operates two luxury Las Vegas Strip resorts, and in Massachusetts, where it is developing a $2 billion-plus resort outside Boston. Macau regulators also are looking into the allegations. Wynn Macau operates three resorts there, and the market generates the lion’s share of the parent company’s revenues.

Those investigations will have to confront the issue of what the board of directors and upper management may have known about a slew of complaints from female employees regarding Wynn’s conduct. In some instances these date back years and included a slush fund Wynn’s lawyers created to pay one of his purported victims, a former Wynn Las Vegas manicurist, $7.5 million to silence her.

Lawyers for Elaine Wynn claim members of upper management knew of the payment and have cited it as evidence that Wynn ran the company as a dictator with the compliance of a board that functioned for all intents and purposes as an adjunct of his will.

It’s an accusation also raised in shareholder suits by public employee pension funds in six states accusing the board of violating its fiduciary duties by what at best could be described as tacit complicity in Wynn’s alleged predations.

Though the $7.5 million payment was a matter of court record, it was the publication of a Wall Street Journal story on January 26 that finally brought Wynn and the company under fire. It contained testimony from a host of current and former female employees who claimed the 76-year-old tycoon routinely pressured them into performing sexual favors and which taken together amount to a decades-long pattern of serious misconduct and harassment.

The report cites testimony from salon workers who entered fake appointments in the books to help other women workers get around a request for services in Wynn’s office or arranged for others to pose as assistants so they would not be alone with him. Former employees told of female workers hiding in the bathroom or back rooms when they heard he was on the way to the salon.

“Everybody was petrified,” said Jorgen Nielsen, a former artistic director at the salon. Nielsen said he and others repeatedly told company executives Wynn’s sexual advances were causing a problem, but “nobody was there to help us”.

Alleged victims reached as high as a former personal assistant to Elaine Wynn, whose bid to regain control of her stock resulted in 2015 in her own ouster from the board.

Wynn’s first response was to vehemently deny the allegations. But then he sought to negate the story’s impact by intimidating workers at his salons, according to new accusations leveled against the billionaire.

A manicurist suing Wynn for sexual assault, battery and infliction of emotional distress, claims that a week or so after the story appeared, Wynn brought salon employees before his executives and demanded that anyone who had ever felt assaulted or abused to raise their hands. No one did, “out of fear of retaliation,” the lawsuit says.

The next day, according to the suit, Wynn showed up with audio-visual personnel during a birthday celebration for a salon staffer and demanded that all employees record a video stating he had never assaulted them.

The suit, one of three recently filed in District Court in Las Vegas, claims moreover that Wynn continues to receive manicures, pedicures and other salon services either at the hotels or at a villa he maintains on company property and does so with “full knowledge and permission” of Wynn Resorts, the Wynn board and Claude Baruk Salons, which manages the facilities.

A company spokesman told the Associated Press that Wynn no longer uses spa or salon services at the hotels.

The state Gaming Control Board, which is conducting Nevada’s investigation, has set up a link on its website to receive complaints from alleged victims, several of which have been recounted in other news reports, in past court actions and in police reports.

Meanwhile, the board of directors, which initially hired an outside law firm to investigate the allegations, switched gears last month and dropped the firm, deciding instead to review the charges in-house. Since then, one director, Ray Irani, a former chairman and CEO of Occidental Petroleum, has resigned, and a second, Alvin Shoemaker, a director of Huntsman Corp., said he is leaving when his term expires in 2019.

The board’s current probe is being led by its remaining female director, Pat Mulroy, a politically connected former member of the Nevada Gaming Commission.

But it’s unclear if all the activity at the corporate level will have any impact on the company’s license in Massachusetts.

Members of the Massachusetts Gaming Commission, which is conducting an inquiry into the continued suitability of Wynn Resorts to complete and operate the $2.4 billion Wynn Boston Harbor in Everett, are focusing on whether Steve Wynn’s continued ownership of part of the company he founded is an issue—even though he has stepped down from running it.

Now the commission is deciding whether his company is fit to operate a casino in the state—while many officials are calling for his name to be removed from the casino even if the company is allowed to operate it. Wynn currently owns 12 percent of the company.

Commission Chairman Stephen Crosby pointed out last week, “He, as a major stockholder, he would be a qualifier, even though he’s out as CEO. In due time that will be one of the issues that we will consider along with all these others.”

State gaming law requires that key employees and stakeholders of more than 5 percent must pass a suitability investigation. Wynn passed those originally, but that was before the allegations of sexual misconduct surfaced, and before it was disclosed that he had paid $7.5 million in a settlement, something that came out during the high-profile divorce case between Wynn and his former wife.

The commission’s investigation is focused on whether the company itself, as opposed to just Wynn, knew about the settlement when it was applying for the license.

Crosby said the commission has “virtual absolute authority” to make decisions in such cases. “All of those issues are on the table, including the ones the governor and the attorney general raised.”

He referred to demands by Attorney General Maura Healey and Governor Charlie Baker that the Wynn name, at the very least, be removed from the casino.

Healey last week also questioned whether Wynn Resorts should be allowed to keep the license for the Wynn Boston Harbor, which is scheduled to open in June 2019.

In a statement the AG said, “It’s clear to me, if what’s being alleged is true, that the casino cannot bear Wynn’s name. I’m not convinced the company should have a license at all.”

The governor said, “I certainly think that’s one of the things that should be on the table. Obviously, the allegations from the beginning, all of them, have been horrifying and incredibly disturbing.”

However, Crosby refused to speculate on what might be done until the investigation is complete.

Wynn continues to deny all allegations. He issued a statement: It’s revolting that the media repeated such inflammatory claims from events that supposedly occurred four decades ago without the slightest bit of fact-checking or skepticism.”

He added, “This is not journalism, it is the peddling of smut and it is atrociously unfair to Mr. Wynn, his family and friends. Mr. Wynn is left to ask this simple question: when did we abandon such fundamental fairness, due process and decency?”

Florida legislative leaders failed to act on any gambling measure by Sunday, March 11, the deadline to finalize gambling legislation. Under deadline pressure, members of the House conference committee on gaming had agreed to renew the multibillion-dollar compact with the Seminole Tribe of Florida. They also voted to allow three yet-to-be-determined counties that had voted to allow slots to add them their dog racetracks.

The three counties were required to meet certain conditions designed to minimize competition with the Seminole Tribe’s Hard Rock and other casinos. For example, no facility may be located within 100 miles of the Seminole Tribe’s Tampa Hard Rock. Any facility within 25 miles of the tribe’s remaining casinos also would not be eligible, including Naples/Fort Myers Greyhound Racing track, run by the Havenick family. But parimutuels in St. Lucie County, where Senate President Joe Negron said he wants to honor the voters’ decision, would be eligible.

The House proposal would also have required the selected counties to conduct a second referendum to confirm the first, to be held after July 1. And owners would have had to surrender a gambling permit at one of their locations and agree to “permanent termination of all gaming activities at that permitted location.” For example, the Alabama-based Poarch Band of Creek Indians operates tracks in Gretna and a greyhound venue in Pensacola; it would have to shut down greyhound operations to get slots in Greta. In addition, the new casinos would have to generate at least $40 million in annual slot machine taxes and fees.

The conference committee bill also would have required the eight casinos in Miami-Dade and Broward to reduce the maximum number of authorized machines from 2,000 to 1,500.

Until agreeing to the compromise, the House had spent the entire session resisting expanded gambling. HB 223 authorizes the 20-year agreement the tribe negotiated with Governor Rick Scott in 2016, allowing the tribe to add craps and roulette at seven casinos in exchange for $3 billion over seven years. The bill also exempts fantasy sports games from state gambling regulations.

The Senate bill had proposed expanding slot machines in eight counties that voted for them, but the Seminoles opposed that provision. It also would have allowed dog and horse racetracks to decouple racing from lucrative card games; the House bill did not allow decoupling. Both the House and Senate earlier rejected amendments that would have legalized pre-reveal games. A lawsuit about the legality of the machines is pending in the 1st District Court of Appeal.

The roadblock was the Senate, where negotiators weren’t anxious to upset the status quo.

This could be the last time gambling measures are considered in the Florida legislature, as a constitutional amendment on the November ballot would allow voters—not lawmakers–to control future gambling. The Seminoles and the Disney Company have been the main backers of the Voter Control of Gambling Amendment. It requires 60 percent approval to become effective, and would require a statewide referendum for any expansion of gaming.

State Rep. Mike LaRosa said the failure to reach an agreement stemmed from a dispute over expanding slots, which was “the big elephant in the room.”