Another year is almost in the books. It was another year of player and operator frustration, continued U.S. Department of Justice arrests and seizures, stalled Federal and State gambling bills and few positives.
One shining light of 2009 was that the state of Delaware did get sports betting up and running. Our Cheers and Jeers for 2009 start with Delaware.
CHEERS!
1) Cheers go to Delaware Governor Jack Markell for having the nads to hang in there against the NFL, the religious right and even federal lawmakers. He wanted sports betting in Delaware as the 1st State is one of only four states that is grand-fathered into the 1992 PASPA Act, which effectively bans sports betting and most non-lottery games) in virtually all of the U.S. After several court cases, winding up just short of the U.S. Supreme Court, Delaware was granted the right to offer betting on games. But, only in the sense that they did before PASPA! So, Delaware started teaser and parlay betting on the first week of the NFL season (apparently picking three more games requires more skill than picking just one!). Though the parlay betting program has had its ups and downs, the state has turned a profit and now they are looking at what games they can offer for the NFL Playoffs. As we were told by multiple operators any proliferation of sports betting is good for sportsbooks offshore. So, we will Cheer Markell’s efforts and results for sports bettor everywhere.
2) New Jersey: Fueled by the decline in Atlantic City casino revenue and Delaware’s victory, this coastal state made big waves and moves in an effort to get sports wagering at Atlantic City casinos. New Jersey Senator Raymond Lesniak is at the forefront of bringing legalized sports betting to New Jersey and received generous support from then-governor John Corzine. Since NJ is not one of the four states that opted-out of PASPA, the state partnered with iMEGA (the Interactive Media and Gaming Association) who brought forward a challenge to the constitutionality of PASPA itself. This is going to be a long fight for iMEGA, but this group has been, and is in it, for the long haul.
3) iMEGA: this is the second year in a row that this group has gotten into this category. It is because they are the ONLY group that is putting up a fight in courtrooms throughout the United States. Not only is Imega involved with New Jersey, but they fought and successfully won a Minnesota case where the state had tried to block gambling domains. They successfully defended 140+ domain names from seizure by the state of Kentucky. But, iMEGA also swam into the murky waters of the UIGEA and came up empty. In a case that went all the way to the 3rd Circuit Court of Appeals and was attended by OSGA, the UIGEA was upheld.
4) Barney Frank: The great purveyor of Americans freedoms took another run at the UIGEA in the U.S House of Representatives. You have to wonder where he finds the time as the chairman of the House Committee on Financial Services, but we applaud his continued efforts. Though both of his bills (H.R. 2266 & H.R. 2267) stalled again this year, he does appear to be getting closer with each year’s updated law offerings. He did manage to win a significant victory for online gaming as, though his efforts, the rules to implement the banking regulations of the UIGEA were delayed from a December 10th date for another 6 months. This also opens things up for another run at repealing the UIGEA from the Massachusetts Representative in 2010.
5) CRIS: One of the longest standing bookmakers offshore came to the rescue of several sportsbooks that were heading south during another difficult year in offshore betting. Back in March a failing BetJoint was acquired and most recently struggling LasPalmas was added to the portfolio. In addition to running Bookmaker, this group started up a small betting exchange using the betmaker.com URL, as they had purchased this book back in 2006. The CRIS operation is very wide reaching internationally and continues to be one of the only U.S.-facing gaming companies that is expanding.
JEERS:
1) The U.S. Department of Justice continues to apply the heat to online gaming operators and processors, both past and present. In May, the U.S. government seized $24 million from bank accounts linked to Bodog, in July, Party Gaming settled with the US authorities for an additional $105 million, and in August, Missouri officials got ex-BETonSPORTS kingpin Gary Kaplan to forfeit $43 million. .Most recently, NY seeks $125 million form the arrest of Joe Fafone et al. To add to the jeer here, the $43 million forfeited by Kaplan will be not used to return funds to the tens of thousands of bilked BETonSPORTS players.
2) Vantis: Year two-plus of the publicly-held English accounting firm’s involvement in the BETonSPORTS case yielded the same as their first year….zero. Players are still being told that they are in the process of recovering more funds to pay players with. We have reported every year since 2006 that next year will be the end of this ordeal for players who have made a claim on their funds. But, with no end in site and only a couple of million in the coffers to pay players, we continue to grow less enthusiastic with Vantis.
3) States: You could make a case for many states in the Union to be added to this one, however, the biggest offender by far is Kentucky. A case where the state attempted to seize 141 Internet gaming domain names has been defeated several times by iMEGA and now is poised to go to the Supreme Court. To make matters worse, and though they have been on the wrong end of every appeal decision, the state recently asked the court to add more U.S. defendants to the Domain Seizure List. All the while growing the Internet horse racing business for beloved Churchill Downs! Minnesota also got into the game by issuing an order to 11 Internet service providers to block state residents’ access to 200 gambling Web sites. Their quest was short lived and the Minnesota Department of Public Safety dropped their order after a short fight and only one month. California also failed in its bid to get Internet poker up and running. Though several states are looking at internet gambling (Florida being one of the most active), the process will most likely continue for years before one can wager, legally, over the Internet.
4) Representative Spencer Bachus is the new Jon Kyl. This Rep seems to have taken the entire issue of Internet gambling upon himself. He drags out broken gamblers and recites stories of bankruptcy, theft and suicide caused by gambling. His version of the truth is only to be believed by those who wanted to put Black Sabbath on the stand for demonizing our kids. And speaking of kids, that is where Bachus is making his last stand. His latest argument during a hearing of Barney Frank’s anti-UIGEA bill focused almost entirely on the youth of America all becoming addicted to Internet gambling. Bachus has stated emphatically regarding the legalization of Internet gambling that he would "do everything I can to make sure this never happens". Fabricating facts about today’s youth must fit that bill. Bachus will be facing Shelby County resident and business owner Paul Lambert in the 2010 Republican primary. Let’s hope that Mr. Lambert and the truth can unseat him.
2009 provided a bit of relief for many gambling operators. Let’s face it, most everywhere you turned, from Foxwoods to Macau, it was bad news for the gambling industry. But, many of the strongest online outfits suffered very little from US regulations or the industry concerns of fraud and money movement, spending the year to shore up their operations after a very tough 2007 and 2008. Expect to see continuing advances in payment methods on the Internet in the coming year and depending on Mr. Frank’s bill to repeal the UIGEA, maybe the return of a company like NeTeller. In the next 12 months, we can expect to see resolutions on the issues in Kentucky, follow Mr Frank and his adventures in legislation and look toward New Jersey, Florida, California and other states to move forward with legalization and regulation bills regarrding Internet and/or sports gambling. After all, just like the DOJ, states need money too.
