Off Shore Gaming Association

On Monday sports gamblers on the East Coast experienced the agony of defeat. Upon hearing the verdict, I fear that now I may die and still never be able to legally place a wager on a sporting event, unless I go to Nevada. Sad to think this, but as I get older reality starts to set in. I’ve got about 30 years left, if you look at life as an optimist, and Monday’s ruling by the 3rd Circuit Court proclaimed a death sentence for legal sports gambling in the U.S.

People that I tell this too say that I am a pessimist, that there will be other issues brought before the courts on gambling. The problem is that the court took a most narrow approach in applying their decision to the Professional and Amateur Sports Protection Act. - PASPA. They could have ruled that single game betting in Delaware was permissible under PASPA. But instead, by deciding that only games that were previously offered can remain legal, they were saying that ANY expansion of sports betting violated PASPA.

New Jersey should forget their efforts. They plan to say that PASPA unfairly give four states and unfair advantage in offering sports betting and that is in violation of the U.S. Constitution. New Jersey Senator Lesniak was quoted saying, ” . . . this latest development does not deter us from challenging PAPSA as unconstitutional.” Perhaps I am over simplifying it, but the court’s ruling is obviously stating that ANY new sports gambling violates PASPA. Obviously, sports betting in New Jersey or any other state would be an expansion for sports betting, clearly flying in the face of current legal sentiment. In the sports betting world, PASPA is apparently now the Holy Grail.

We are hoping that the efforts of iMega and New Jersey are successful. But the odds of a federal ban on sports wagering being overturned dropped dramatically and are now considered by most to be a long shot, at best.

The proposed sports lottery was estimated to bring in at least $53 million annually for the state of Delaware. The state’s three casinos spent about $12 million upgrading their facilities in preparation of the launch. So instead of a legislated, regulated, taxed betting scheme, unlicensed bookmakers will still take in illegally bet dollars by the millions on any given Sunday. I would imagine that bookies in Philadelphia and Maryland were doing a jig on Monday afternoon. I was surprised that ‘South Philly Sammy’ was not at the hearing.

The NFL acknowledged to us back at the hearings in Dover that they know that illegal gaming occurs on their sport. But they do not want to see the proliferation gaming on their brands. Really what they did not want was for Delaware to win. What if the state’s revenue projections were low and the tiny state earned $100 million? Then every state would be lining up with Lesniak and iMega to get on board the gravy train. And that would certainly be the proliferation of sports gambling.

The NFL tired to hammer the ppoint that the expansion of gambling will hurt the integrity of the game. Certainly, they could not be talking about the small amount of wagers that Delaware might take in. However, they are worried about 50 states worth of bets. Still, it’s been explained many times, that legal betting acts as a watchdog for the leagues and sports in general.

Europe takes a different approach. Gambling is done on every major and minor soccer game played. BWIN, a gaming giant in Europe, is putting together a package worth $161.8 million to acquire Newcastle United F.C, one of the most fervently supported football clubs in the UK. They already have sponsorships with top soccer clubs including AC Milan and Real Madrid.

Basically, the NFL needs to get a cut of the pie. Had Delaware offered the NFL $20 million a year for the ‘right’ to bet on their games, do you think the NFL would have fired up the lawsuit wagon? Of if Delaware paid a sponsorship to have the state crest on the uniforms of the teams, do you think that the proliferation of gambling would be such a bad thing?

But barring such a deal (which again will not happen in my lifetime), with the latest case-law now in the books, any future sports gambling in the U.S. is going to have an impossible hill to climb.

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It’s September 1 at Delaware Park, just 45 miles from Philadelphia. Everything is ready to go. The granite table tops are polished and ready to go. The huge wall of television (there is an 82 individual 50-inch television wall) is blaring the NFL Pre-game show and the odds board is lit up.

But where are the sports bettors?

Probably at home on their phone or computer, because today the 3rd Circuit Court of Appeals ruled that Delaware’s plan to allow single game, Vegas style sports betting is in violation of the Professional and Amateur Sports Protection Act (PASPA). Thus, no single-game sports wagering will occur this football season in Delaware. And, wagering on sports other than the NFL are also in question.

Sad for Delawareans, certainly. But, the fact remains that this is a sad for sports betting in the U.S.. By this ruling, the court has basically come out and said that there will be no new sports betting anywhere, any time soon.

The NFL and the rest of the major sports leagues and NCAA had managed to get the 3rd Circuit Court of Appeals to expedite their request for an injunction against sports betting in Delaware. They brought their suit against Governor Markell, stating that ‘irreparable harm’ would occur to the leagues and their brands if this type of sports betting was allowed. Had Delaware been able to confine the arguments to just the harm that their proliferated betting was going to cause, they may have had a shot at packing their shiny, new sports betting parlors on September 1.

Attorney Kenneth Nachbar, who presented a solid case for the leagues and was very resilient to the sometimes hostile line of questions from the three-judge panel, stated early on that PASPA clearly prohibits single game wagering in Delaware. He quoted from the law, “to the extent that the (betting) scheme does not change form what existed before”. What the leagues’ contention was basically saying is that they know that Delaware had parlay betting before and that is (begrudgingly) ok, and is covered by PASPA. But, Delaware cannot add in single game wagering, because they did not offer single game wagers before PAPSA was enacted (1992).

The lawyers for Delaware, David Margules and Joel Friedlander, were dragged into a discussion on the legality ‘merits’ of the case. They tried in vain to keep on focus that single game betting was not going to cause irreparable harm to the leagues. Having to fight a potantial PASPA violation was unltimmately the downfall for the defense.

Judge McKee came out firing at Delaware’s first lawyer, Margules, saying that this situation was a “complete mess”. He went on to claim that Delaware could be selling illegal tickets, causing the state to become an illegal bookie. He appeared quite worried that the December case involving the merits of Delaware’s sports betting law and subsequent implementation would be found to be illegal. Judge Hardiman chimed in that it was up to Delaware to prove that their betting plan was not illegal. He said, “you have no problem with this court ruling the case on merits?” Later, he added to Friedlander, who was there to argue the case based on merits, that he was “fighting an uphill battle . . . at least with me.”

Friendlander did manage to make some headway with the judges. He stated the if you want to take what is said in the law literally, “we can only operate the three parlay games that we had before” and (Delaware) “could only operate them for four months, because that is what we did before.” Judge Hardiman did seem to like this line of reasoning and added in that you couldn’t “bet on the Texans, because they were not in existence before.” He added that schedules back then were only 14 games when Jude McKee, apparently an avid Cleveland Browns fan, noted that there were only 12 games in his team’s heyday. Hardiman said “it depends how thinly you want to slice the onion.”

The judges asked for a 35 minute recess after hearing again from the NFL’s Nachbar. The courtroom buzz was brisk and centered on the illegal betting that could be going on in Delaware. It appeared as if the NFL had done an outstanding job in presenting their case and had the upper hand early but Delaware’s Friedlander hit a three at the buzzer. It was anybody’s guess what the judges were discussing.

The three judges came back into the room more than 45 minutes later and Judge McKee read the courts’ decision. He said that Delaware’s single-game betting was in “violation of PASPA,” adding that “Delaware sports betting is not covered under the exemptions in the law.” Apparently, they did decide to rule this case on the merits, not mentioning the original reason that we were all there, the irreparable harm to the leagues. After all, with this decision, that is now a moot point.

Nachbar told a group of reporters after the trial that the NFL was “delighted” at the outcome.

They should be. The NFL, NCAA and other major sports leagues went to court looking for an injunction to temporarily halt Delaware’s sports betting. Instead, they got the decision that they were to seek in December. As of right now, they may have gotten the ultimate victory. Because, even through the Delaware racinos have already built their sports betting facilities, it is not without cause that they may opt out of this entirely. State studies have given an estimate that 90% of their wagers would be on single games. Parlay-only wagering could end up being a losing gambling proposition for the house (state). And that just wouldn’t be gambling.

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This week, the champion of freedoms for Americans Representative Barney Frank introduced yet another offering pointed at legalizing internet gambling. Last year the honorable Mr. Frank introduced similar legislation, which did not get much traction and did his best to block the implementation of the UIGEA. Unfortunately for Internet gamblers, he struck out with both efforts.

Frank’s most recent House Resolution, introduced on Wednesday, is so new that the bill does not yet have a number! Frank said Wednesday at a news conference introducing his bill that he hadn’t spoken to Congressional leadership nor to the Obama administration about the online gambling legislation. Never mind that the U.S. financial system is in the tank, news outlets this week were very interested in this new gambling bill. Frank was asked about his latest piece of legislation on his seemingly daily appearances on Bloomberg, CNN and Fox news. Fox ‘News’ seems to have already made up its mind on Internet gambling, “If running major financial institutions and the auto industry isn’t enough for the Obama administration, a new House bill would put the Treasury Department in charge of Internet gambling.”

View the News Conference video where Frank introduces the Bill here.

The initial offering from The House Financial Services Chairman calls for 5 year licenses for operators and seeks an applicant and any other person associated with the applicant to be a “person of good character, honesty, and integrity.” The bill plans to tax player payouts and makes it illegal for operators who are not licensed to take bets from U.S. citizens.

In all, the bill looks like it is aimed at poker and casino games and operators that are already land-based in the U.S. In fact, sports bettors are completely out-of-luck with this legislation, “No provision of this subchapter shall be construed as authorizing any licensee to operate an Internet gambling facility that knowingly accepts bets or wagers on sporting events from persons located in the United States, except for fantasy or simulation sports games.” It looks like the NFL, fantasy and poker lobbyists are certainly doing their job.

We applaud Barney for his continued efforts but wish he had not thrown sports betting under the bus. In all fairness, his previous efforts had met such staunch opposition form the four major sports leagues, he probably included the above language to create an easier path toward passage. Any laws that establish the Internet to the freedoms that Americans are entitled too are a positive step in the right direction. If nothing else, legalization of Internet gambling would free up the payment gateways.

Still, bettors should not get their hopes up too much as this legislation is far from coming to fruition. Frank indicated that this legislation is still in the early stages and he planned on pushing them through Congress some time before the break in the session scheduled for August.

Once this legislation is actually given a bill number, we will have a way to get involved and contact your representative to let him know to give Barney Frank his/her support. Keep your eye on this space or subscribe to our BLOG feed.

What’s Your Opinion? Add Your Comment Below!

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President-elect Barack Obama has been quite busy trying to get the public to support his upcoming initiatives. His web designers have been busy as well. Obama used the Internet to raise hundreds of millions of dollars and promote his campaign ideas to the younger generation. Now, he wants us to tell him what we would like to see him do over the next four years. To facilitate this, his transition team has set up an area on their website, change.gov, for input from ordinary citizens.

This is your opportunity to tell President-elect Obama that you want your right to gamble online in a safe and legal environment. Obama has been quoted as saying the Internet is “a Wild West of illegal activity”, and supports a study of Internet gambling. Call him on it – take the two minutes required to sign up and vote to repeal the UIGEA. Ask him why are we paying other countries millions of dollars to keep them from offering gambling services to US customers? Why do we want to violate international treaty? Why are we wasting time setting regulations for an unenforceable law that will not achieve the desired effect?

GET INVOLVED

Simply go to http://citizensbriefingbook.change.gov/ideas/viewIdea.apexp?id=087800000004xwM&srPos=2&srKp=087 and vote to repeal the UIGEA. You must register with you name and email address first, then click ‘Vote Up’. If you would like to comment there is an area at the bottom of the page to voice your opinion. You can also search under UIGEA and vote for legalized poker or click on ‘Share Your Idea’ and start your own thread.

Share your ideas on Internet gambling with the new administration, then rate or comment on other relevant posts. The best rated ideas will be gathered into a Citizen’s Briefing Book to be delivered to President Obama after he is sworn in. We have the power to affect change - sign in to get started, or start voting now. Don’t delay – the inauguration is only a few days away!

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Here at OSGA we have begun to see the effects of the ruling in Kentucky to ban certain domain names. This week we had several callers who were told by their companies that they no longer accept play from Kentucky. Oddly enough, one was a credit sportsbook that is not even on ‘the list’ of 141 domain names. I asked our own Advocate and the cynical bastard thinks that this book is using this as an excuse to throw out winners from Kentucky!! Beware of what your book may tell you – many books we spoke with are doing nothing in regards to this ruling. Or are they? These inquiries set the Insider off on a mission to get to the bottom of what this list means and….looking for companies that may actually comply with Judge Wingate’s decision..

I started by contacting dozens of gaming sites that are affected by the September ruling and found that many are simply going about business as usual. A majority of gaming operators have their domains registered in gaming friendly countries – certainly not with registrars in the US. Kentucky will still have to bring this judgment to France, Canada, the UK, and other countries, where many gaming domains names are registered, if they want to encompass all properties that are on their list. One operator stated, “Getting this ruling approved by another country is not going to be nearly as easy as it has been to do in their own back yard and will take years to do.” So for many operators, it is business as usual in Kentucky and around the globe.

However, others have gone 180 degrees the other way and already blocked Kentucky users. Golden Casino decided at the outset of all of this that they would simply seek out business elsewhere. In addition, should things go horribly wrong, they have also setup a mirror domain and have begun to use it for much of their internet advertising. One of the largest providers of gaming software, Microgaming, sent out an email to their clients this week stating that they will again be blocking access to their software from 13 states and the District of Columbia. The note mentioned that will be sending their funds back to blocked players as soon as possible. The states mentioned are Illinois, Indiana, Louisiana, Michigan, Missouri, Nevada, New Jersey, New York, Oregon, South Dakota, Washington State, Wisconsin and Washington D.C. In fact, it appears that this is the exact same list that Microgaming sent out to clients after the passage of the UIGEA back in 2007. Microgaming then lightened up their restrictions when it saw the UIGEA as unenforceable and has allowed all us players since early 2008. Please note that even though Microgaming is ‘on the list’ of the Kentucky court, they have not updated their banned states list to include Kentucky. Emails to Microgaming have so far gone unanswered.

Still, the majority of the gaming companies that are the target of this ruling are checking with lawyers and using a ‘wait and see approach’. The most frequent answer we got to our inquiries was more corporate lawyer drivel. Ex: “We have known about the list for some time now and rest assured our lawyers are looking into it and reviewing the options.”

It comes to reason that most companies would be waiting as this case appears to be ongoing and may continue for some time. An industry group – IMEGA, has made an appeal, stating that Kentucky does not have jurisdiction over the domain names . . . not to mention that Kentucky allows Internet wagering (sign up today at twinspires.com). The group is initially asking for the timeline for compliance be moved back from the next date of December 3. I would guess that one goal is to get this case out of the current short-sighted court where it is stuck now. Perhaps a different judge in a higher court will see not only the hypocrisy of this decision, but the fact that it is not going to stop Kentuckians from gambling online. Simply put, gamblers are going to gamble and with over 1000 sites available that are not under legislative attack, there are plenty of places to play. One associate of mine has already moved his Bodoglife.com account to a place not on the list. I would tell what site, because maybe Gov. Brashear is reading this….. 142 domain names….

Please add your thoughts and experiences below. I will be updating this BLOG as more information becomes available.

- The Insider - exclusive to OSGA.com

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The OSGA is moving to a new server. We expect to have all work completed within 24 hours. Please bear with us during this time.

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