Off Shore Gaming Association

I guess that gambling on sports is OK after all. At least as long as the proceeds can be used to help fill State coffers. We attended the recent sports betting hearing in Atlantic City and I gave a presentation to eight New Jersey senators who are looking to add sports betting at Atlantic City casinos and racetracks in an effort to prop up both faltering industries. The meeting emphasized one thing for sure, New Jersey is going full bore after this one and any opposition had better have thick skin.

The NJ Senate held a public hearing on Monday that was, as expected, lightly attended. After all it was the day after Easter Sunday AND it the eve of the NCAA Championship game. Neither of those conditions are going to get gamblers out of bed at 11AM to listen and add their views.

Still, in addition to our testimony, the side for adding sports betting was well represented. Industry advocates included Joe Brennan from the Interactive Media Entertainment and Gaming Association (iMEGA), the Atlantic City Chamber of Commerce, the local unions and the New Jersey Thoroughbred Horseman’s Association. All testimony was well received by the Senators, who all appeared in favor of the bill.

Though our own testimony revolved around the fact that the government should be insuring the safety of its citizens and offer regulated Internet Gaming and sports betting, the bulk of the testimony went after two things that are certainly hot button items in any state – jobs and revenue.

It appears that several other states are hopping on the sports betting and Internet gambling bandwagons. Now that New Jersey is making waves with its potential law changes, Pennsylvania, New Hampshire, Massachusetts and other states have bandied about the idea that all of this gambling is not bad, but instead is a revenue source. Washington Democrat Jim McDermott has brought the Internet Gambling Regulation and Tax Enforcement Act (HR 4976) back with several new amendments and the American Gaming Association (AGA) has even changed its stance. The AGA has now come out publicly this week with the statement that it is “open to the concept of legalized US gambling sites.”

Perhaps, as I stated in Atlantic City, it is because the Internet gambling industries in many of these remote places are big business for those areas. In some countries, such as Costa Rica, Malta and Antigua, online gambling companies employ thousands of people and are actual industries, contributing to the country’s GDP. And, in places that do real regulation, a huge tax revenue is generated from online gambling companies.

Apparently, Senator Ray Lesniak has made the leap from the current prohibitions to the realization that, since New Jersey is already the Vegas of the East Coast, this industry would fit all of the necessary criteria for moving his agenda forward. Lesniak said at the hearing: “I continue to find it ridiculous that adults in New Jersey and 45 other states cannot legally bet on sporting events, while citizens in four states essentially maintain a monopoly on legal sports betting.”

He was quite vehement to opposition presentations and at one point made every head in the room turn. That was when he stoically questioned Joseph Tyrell, representing Harrah’s. Tyrell said that Harrah’s was in opposition to the bill! He claimed that this bill would give voters ‘false hope’ and that they would be voting for something that is currently illegal. Lesniak hit the roof raising his voice, while causing quite a stir during the otherwise subdued proceedings. “Are you saying that I have introduced legislation that is illegal?”, Lesniak asked. He went on to say that the voters of New Jersey are ‘not stupid’.

If you use your corporate BS to reality translator, you can see that Harrah’s is basically saying that they do not want to extend any of their vast political capital when NJ still has to defeat the Federal Government in a PASPA suit. The Professional and Amateur Sports Protection Act (PASPA) is really at the crux of the entire sports betting legal situation. As recently as last year, the court upheld PASPA, even restricting it further in the case against Delaware. If Senator Lesniak is successful in overturning PASPA, you can guarantee that Harrah’s will suddenly jump on the bandwagon.

The NFL, as expected, played the PASPA card. In addition, Representative Tim McDonough offered up the usual rhetoric on ‘integrity of the game’. He went on to say that the game of football was not created for betting purposes and that this would do nothing to ‘take street level bookies off the street’. He went so far as to tell the panel that they would not be willing to spend the time, effort and money to fight PASPA.

Lesniak bellowed out “What Cost?”, turning the spokesman for the league into a retreating safety on a Tom Brady/Randy Moss bomb. Again, Lesniak hammered him adding in that he is willing to do the legal work for the suit pro-bono and, similar to Delaware, the casinos would be paying costs, not the state. “There is no cost to us”, stated Lesniak firing a salvo that the NFL would be the ones who are going to have to work hard and pay to stop his legal efforts.

The rest of the panel of Senators took shot at the NFL saying that professional sports are already tainted with the off-the-field problems of star athletes, doping and even the NFL’s involvement in lotteries. I am 100% sure that Mr. McDonough wished he had stayed in bed. Still, having attended several of the Delaware hearings last year this is not their best effort. With each subsequent hearing in Delaware more, and more powerful, attorneys showed up for the NFL. If the bandwagon continued to fill, tell the high-profile lawyers to fire up their first-class plane tickets and head to Washington.

Senator Lesniak does appear to be on a mission and is unyielding in his efforts. He fiercely attacked opponents’ arguments and the Federal Government for controlling what can and cannot be done in New Jersey. It about time that the other 46 states in the Union to stand up and ask why sports betting is allowed in the other four. I am sure that if New Jersey gains traction against PASPA and Senator Lesniak’s legislation makes the ballot in November, many other states and probably even gaming companies will follow his lead and jump on the bandwagon.

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The online gambling community was widely optimistic last fall as voters in the U.S. bucked the previous 8 years of Republican rule and voted a democrat into the White House. Everyone, yours truly included, figured that Democratic majorities on both Capitol Hill and the executive branch of government would spell a return to the days of easy payments and loosened regulations. Instead, this regime has continued the same Bush prohibitionist stance on online gambling. The ongoing confiscation of more payment processors’ bank accounts and the recent apprehension of a prominent bookmaker, and the government’ attempt to tie Internet gambling into his arrest, prove that the U.S., despite the efforts of Barney Frank and others, will remain one of just three developed nations on the planet that prohibit gambling on the Internet . . . at least for the near future.

Since the Obama administration took office there have been more arrests, continued confiscation of bank accounts, ongoing investigations into Internet gambling companies and the impending implementation of the banks as the police of internet gambling.

Party Gaming founder Andrew Dikshit settled with the previous administration for $300 million and our eyes popped when reading the story. However, in July, Party Gaming itself settled with the US authorities for an additional $105 million, payable in installments through 2012! This settlement was in return for the US Attorney’s Office for the Southern District of New York ensuring the company and any of its subsidiaries will not be prosecuted for providing internet gambling services prior to UIGEA. In May, the U.S. government seized $24 million from bank accounts linked to Bodog. And, in August, Missouri officials got ex-BETonSPORTS kingpin Gary Kaplan to forfeit $43 million. Now, NY seeks $125 million form the latest arrest.

For several years now, the Feds in Maryland have been pursuing alleged money laundering in the internet gambling realm. So far in 2009, Maryland has seized $800,000 from Electracash and $365,366 from Atrium Financial Group. In addition, Account Services’ Douglas Rennick was indicted on charges of money laundering, bank fraud, and illegal gambling. If found guilty, Rennick faces a $1 million fine on the bank fraud charge, a $500,000 fine on the money laundering charge, and a $250,000 fine on the gambling charge. The indictment also seeks the forfeiture of at least approximately $565,908,288 (yes, that’s half a billion), which represents the amount of proceeds obtained as a result of the illegal gambling and bank fraud conspiracies. The list goes on and on. With a couple of million here and a few hundred thousand there, the government will have to hire extra accountants to count all of the money.

In 2006, Congress passed the Unlawful Internet Gambling Enforcement Act (UIGEA), which prohibited banks and credit card companies from transferring money for Internet gambling, in effect banning online gambling. However, the law left open the door for states to allow Internet gambling within the state’s boundaries, according to a Legislative Analyst opinion related to a bill last year. Still, the prohibitionist stance has taken hold in several states throughout the union. In April, the Minnesota Department of Public Safety released a list of 200 internet gambling sites that it was looking to ban in the state. Kentucky continues to fight over some gambling domains that they feel they can shut down. That case is now in the state Supreme Court.

Internet poker has been looked at by Indian tribes and states alike with California, via the loophole in the UIGEA, looking to come to the forefront. But, the effort many industry insiders thought was going to become law in California became muddled as everyone wanted a piece of the pie. The California bill has been declared dead at this point.

Really, the stance continued by this administration is simple. It’s all about the money; Making it and keeping it without any new political ramifications.

The voices for regulating and taxing Internet gambling all have one thing in common - taxation and regulation will yield big revenue for a government that is currently running deep in the red. But when you add up the ‘criminal proceeds’ gathered from the cases just this year – the prize is nearly $200 million. Add in another $300 million from the Party Gaming founder and the 2-year haul is nearly half a billion. That’s some serious cash and it leads to a surprising hypothesis. If the prohibitionist stance can rake in millions, why bother to head down the path of the rest of the Free World? Why not just keep investigating, busting and confiscating to fill the coffers? In fact, I wonder if right now there is talk amongst state and federal legislators to add a line item their budgets for proceeds from Internet gambling raids. Then, simply put enough manpower behind gathering the ‘criminal proceeds’ to meet the budget . . .

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Payouts, Payouts, Payouts. This is what is on every players mind right now, especially after several weeks of favorites winning. The OSGA inbox, Live Chat and phone lines have been buzzing with questions from players who want to know who straight answers to players’ #1 concern.

The most frequently asked question since the start of the football l season is, “Why is my book taking 5 days or up to a week or longer to get me a payout by check?”

We have gotten this question frequently but also have had an inordinate amount of players make the same inquiry regarding one of the top books – OSGA Elite-rated Bookmaker. Several Bookmaker players have been quite irate when they are told that their check will take 7-10 days to arrive – even via the more costly delivery option of FedEx, DHL or UPS. Obviously, these players have not requested a payout for some time from any book offshore. Bookmaker and MANY other books have been using similar time frames for check payouts for over a year. At least Bookmaker is very up-front about their check times and do not try to deceive the customer in any way. In fact, here at OSGA we use the 7-10 day time period as the benchmark for whether or not a book is paying fast via check. Less than a week is great and more than 10 days is a bit long. As far as check payouts, we have heard very positive feedback on both Heritage and BetJamaica where checks have arrived within a day or two.

Our Advice: Relax. With Bookmaker or any solid shop, these checks are like money in the bank. In addition, from both first hand knowledge and customer feedback, the checks from Bookmaker are like clockwork – ask for one on a Monday and have it in your hands by the middle of the following week.

Bottom Line: If you are playing with a reputable outfit, do not sweat the wait time for a check. Players may be tempted to jump ship for a book that promises a check in 72 hours. But with the ever-evolving payment processing system, there is not a single sportsbooks that can guarantee payout times – for any method.

We also have seen this question over and over again. “Who is the fastest paying?”

We usually respond with something smart – like “What day is it?”, as the payout situation is always changing. Reports indicate that YouWager is one of the fastest with Western Union payouts – generally getting them to player the next day, if request by noon the previous day. BetPhoenix does not have WU as an option right now but their MoneyGram payouts are also within a 24 hour window, many can be done same day. The typical time frame is 72 hours, most top books can guarantee a control number within 2 days of request.

Our Advice: Wait until after the payout crunch time on Monday if you do not want to become frustrated.

Bottom Line: Reputable sportsbooks want nothing more than to pay players quickly. Have some patience, as limits are in place with WU, Moneygram and checks. If your book imposes limits, they are generally being dictated by the third party processor. And, as in the response above, if you are with a top book, the person-to-person transaction is like money in the bank.

Finally, we have had several inquiries about using gift cards or re-loadable credit cards to fund an account.

These cards are becoming very popular because 1) they work and 2) they are easy to reload. Keep in mind that sportsbooks treat these deposits as credit card transactions so bonuses may be smaller and you will most likely have to fill out forms, as with any credit card transaction.

Our Advice: Re-loadable cards are a great method when they go through. Test out any new cards BEFORE you load it up with a bunch of money. AND, (very important) do not shred the card after you are done using it, while you are still playing. You may need to fax in the front and back of the card, just like with any Visa or MasterCard deposits.

Bottom Line: The re-loadable cards are growing more popular as they appear to be very effective. However, payouts can not be issued back to these types of cards, so be prepared for forms and potential delays due to getting the payout via another method.

Check back here frequently, as moving money to and from Internet gambling sites is in violation of the UIGEA. This means that until that law is repealed or changed, the payout situation and deposit method are going to be constantly in a stat of flux. If you play somewhere that has given you a fast payout, please post it in the comments below.

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Yesterday marked the rebirth of sports betting in Delaware. The NFL had their day in court and smoked the smallest state in the Union. The State and three state-approved racinos went ahead anyway. The existing three racinos dumped a reported total of 11 million into the betting facilities and September 10, 2009 may become a day sports bettors remember . . . with Parlay Cards, Teaser Cards, Super Teaser Cards and ‘off the board’ betting.

That’s right, the games are varied in nature. There are the Parlay Cards and Teaser Cards. Parlay Cards will be limited to $2-$100 bets, but the state will also take ‘off the board’ parlays with a $5 minimum and a $3000 max wager. ‘Off the board’ bets use updated lines from the electronic tote board, as opposed to the pre-printed parlay cards, but offer slightly lower payouts. The different types of cards resemble the ones that I saw all throughout my youth, but they all have ½-point spreads – there will be no pushes in Delaware. The Parlay Cards are just like any other and the two Teaser Cards are for either a point differential of 5-7 points or 9-11 points (Super Teaser). Both teaser cards are quite interesting because the points teased are not the same on each game or each card (the Teaser Card uses 12 points total and the Super Teaser , 20 points total). For example: in the Teaser Card for last night’s game (Steelers -6.5, again, there can be no even spreads), the Steelers were teased down to -1.5 (5 points) and the Titans were moved to +13.5 (7 points). The Dolphins/Falcons game is teased at an even 6 points on the Teaser Card but on the Super Teaser Card the Dolphins are given 9 points to leave them at +13.5 while the Falcons were granted 11 point to move their number to +6.5.

This is not the case on every game, but for certain games (especially those revolving around 3 or 7) it looks like the house is hedging a bit. After all, does anyone think that the Fins are going to lose by more than two touchdowns or that the Titans were going to get pasted last night? Obviously not Brandywine Gaming, who runs the backend lines and systmes forDelaware.

An example where the mighty number 3 comes into play reveals a bit more how Delaware is playing the game this time around. The line on the Parlay Card for the upcoming Rams/Seahawks snooze-fest is Seahawks -8.5. A six point teaser would bring the Seahawks margin of victory under the magic 3. The state apparently will have none of that type of advantage to the player and thus moved Seattle to -3.5 and the Redskins to +13.5 ( 7 points). In a bold showing, the Super Teaser will only allow the Chargers to be teased on Monday night down to -1.5, a mere 8 points. But, that does open the door a bit for Raiders bettors who are now getting 21.5 points on the Super Teaser card.

The bottom line is that each game must be looked at to play the teaser cards. It’s not as simple as putting in a 6 point teaser on the Internet and having every game calculated to 6 points right before your eyes. It also may give the Internet player an advantage seeing how the house is shading the line on a particular wager. One thing is for sure, the favorites are almost always going to be a bit pricier in Delaware.

We were particularly interested in the odds that the State was going to offer to gamblers. We figured to insure that the state would fill the coffers, players were looking at 5-1 or worse 3 team parlays. But the state can say they offer the highest parlay odds in the world – at least on three team parlays. The printed payout odds on the back of the card are 6.5 -1 for a 3-team parlay, 11-1 for a four teamer and 20-1 for five correct. The State offers all the way up to 10 team parlays, and these pay 800-1. Shocked, I knew immediately that the three team parlay were at very competitive odds. In fact, as-high-as-you-can-find odds. Offshore, only two outfits offer 6.5-1 on 3 teamers, BetOnline and Payoffs Plus. Interestingly, both used to offer 7-1 but those days are gone. Delaware even has very competitive odds the whole way up the board. Still, most offshore outfits will beat the odds offered by Delaware for 4, 5, 6 and even up to nine by a few bucks (12-1 on a 4 team parlay offshore vs, 11-1 in DE.). But if you play 10-team parlays, the Delaware Racinos would be heaven. No book on the Internet, comes close to 800-1 on a 10 teamer. I may just play one every week for two bucks…..at 800-1, as that is damn close to true odds. The highest we could find on this wager offshore is 642-1.

I once spoke with a book owner offshore after a weekend where the books went a bit sideways – some made a few bucks and some lost a few bucks. This particular owner sounded quite depressed on the phone. I said, “You sound down, from what I understand it was a pretty even weekend for everyone. Did you get creamed?” He replied in a montone voice – “10 team parlay” . . . But, Delaware does have a bit of a buffer. On the rules of the card it states that there is a maximum aggregate payout of $100,000 plus two times that handle for that week. By only offering parlays, I doubt that there will ever have to be some type of pari-mutuel payoff to players.

The teaser payouts in Delaware are also giving offshore books a run for the money. At 13 to 5 or +260 for a three-team 6-point teaser, those odds are really high. Offshore books generally pay anywhere from 3-2 to +180 for this same wager. And, they offer up to 12 team teasers in Delaware! And they pay out at 65-1! Again, as with parlays, the 4-8 team teaser can be gotten for a better price offshore. But, players who buy computer generated tickets looking to hit the big one, because that what this is all about, being a ‘lottery’, will have a shot at a pretty big payday on a similar type of longshot low money wager. And, I think the odds of hitting a 12-team teaser are better than hitting the daily number.

On Sunday, Delaware is giving it a go and so will we. I will be in front of the tote board in less than 48 hours. I will also be stepping outside the racino/sportsbook to provide live updates via our Facebook site. Feel free to check it out and get involved in the first legal sports betting east of the desert since the 70’s.…..perhaps a Facebooker will have a 10 teamer up their sleeve….

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With the advent of a new sports betting law in the state of Delaware, the NFL has come out with guns a blazin’. They are digging their heels in for a fight that they most likely will not win.

The most powerful league in all of sports told the justices the new law might soon be challenged in a state or federal lawsuit. “I think that it may not have such a long wait,” Nachbar said.

One key point is that the NFL feels that sports betting tarnishes the league’s image. In fact, NFL Commissioner Roger Goodell had written Delaware Governor Markell stating this as fact while this law was still being debated.

Sports Betting tarnishes the image of the NFL? Michael Vick doesn’t? Pacman doesn’t? Most recently, Donte Stallworth doesn’t? I think the Commissioner should look inside his own organization for tarnished images, not to Delaware lawmakers.

But I digress. The NFL is against gambling . . . or is it ?

It was announced earlier this week that the NFL is getting into bed with state lotteries as the league owners voted to allow teams to partner with lotteries across the country. So far, the New England Patriots have signed up and talks are ongoing in Michigan with the Lions, Minnesota with the Vikings and New York with the Bills, Giants and Jets. The Titans said they would consider a deal in Tennessee and the Packers are interested in Wisconsin.

The joint venture is a dramatic departure for the NFL, which has been staunch in it’s efforts against and affiliations with any type of betting or gambling.

At a press conference this week, NFL commissioner Roger Goodell said there was a distinction between Delaware’s sports gambling and the state lottery tickets.

“This would purely be scratch-off and chance games. They are not in any way connected to the outcome of our games. That is a critical feature for us,” Goodell said at the press conference. “We do think it is responsive to the pressures that states are feeling right now to help meet some of those budget shortfalls. It has been effective in other sports, and it is something that is a reasonable policy.”

Let’s face it, the NFL sees the lottery tickets as a way to make up for revenue lost from declining sponsorships and merchandise sales and diminishing corporate sky box revenue. This is a thinly veiled attempt for the NFL to promote the teams and to get a cut for licensing the team logos.

Shame on the NFL; Locking up the front door while opening the back door. Please Mr. Goodell, have the league take a stance. Are you for or against gambling?

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This week the tiny state of Delaware beat the odds and enacted a bill to allow sports betting. This one move forced the hand of the NFL who needed to come up with some kind of legal opposition to this new law. Since Delaware was grand-fathered in to allow sports betting, they could not use the Amateur Sports Gaming Protection Act . . . since Delaware has decided that initially the betting will be done via parlay cards, creating a sports betting ‘lottery’, the NFL could not argue that this violated the state constitution. So, the NFL, with its infinite wisdom and apparent willingness to look for a short-sighted victory, played the skill game card.

Hooray for the NFL!! Sports betting is now a game of skill (as if we all didn’t know that by now).

The NFL has argued before that betting on their games was pure chance. They have used this argument previously before the House of Representatives and during other court cases. According to the NFL no skills are required to win at sports gambling, until now. When no less an authority than the National Football League recognizes that sports betting is a game of skill, no further debate is really necessary, is it?

According to a brief filed in the Delaware Supreme Court, the NFL is prepared to argue that betting on their games requires skill, and that “Setting a point spread might make it more difficult for a bettor to decide which outcome to select, but does not render the game one of chance.” Yet the best quote “If a game is predominantly one of chance,” attorney Kenneth J. Nachbar wrote, “it will not matter who is doing the picking — a skilled expert, or a monkey choosing at random.”

I don’t know about you, but there are weeks every season where I think the monkey could do better than me at picking games!

Joe Brennan, the head man at the Interactive Media Entertainment & Gaming Association (iMEGA), told us via email that, “We thank the NFL for conceding the obvious, and hope that this point of view will be reflected across the board in their dealings with the gaming industry, both online and off.”

Why does this latest revelation from the NFL matter?

Gambling is loosely defined as wagering in which the outcome depends more on chance than skill. However, many states have statutes that specifically make betting on sports events illegal. Still, not every state specifically prohibits sports wagering or other ‘games of skill’.

Many state laws refer to “Lotteries” instead of “gambling.” Some state courts have held a lottery is defined the same way as gambling: “a wager where the person gets a reward in a manner predominantly determined by chance.” Other courts and laws specifically define “lottery” as you would think: a numbers style game of pure chance.

The NFL wants the Delaware Court to hold that sports betting is not a lottery but is gambling – it involves skill. By using a skill games argument in court, the NFL seems to have failed to see the risk that in many places not being a lottery is exactly the same thing as not being gambling.

Many people have mentioned to us that that a better argument would be that this violates the Federal Wire act of 1961. The Federal Wire Act criminalizes accepting a sports bet made across state lines (or more recently across country boundaries) via a communication device. In reality, it is the Amateur Sports Gaming Protection Act (ASGPA ) that makes the betting of games illegal. This 1992 law is what is basically keeping states from becoming bookies right now and is the law that gives four states, including Delaware, a carve out.

So, though the NFL may have opened the door in one way, the ASGPA might trump any movement from states that are not grand-fathered to allow sports betting. In the meantime, I have to work on my skills.

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