The Sacramento Bee reports that Senator Dianne Fienstein (from San Francisco), wrote Attorney General Eric Holder, asking him to support a bill to ban online gambling. This is the same politician that thinks the Second Amendment should be stripped away, so your right to keep and bear arms would be removed, although she would still be able to keep hers.
Somehow in her weird view of the world, internet gambling is a huge threat to the US, but all those hundreds of thousands of invaders streaming in to the southern US, with their gang members and diseases aren't.
What is wrong with these people? Oh, that's right, she's from San Francisco. Never mind.
California - truly the land of fruits and nuts...
Showing posts with label Wire Act. Show all posts
Showing posts with label Wire Act. Show all posts
Thursday, July 31, 2014
Saturday, February 22, 2014
Nevada Gambling Hypocrisy On Parade
Here are a couple of recent stories that highlight the hypocrisy that arises when you deal with an industry that has a strong regulatory component. These stories are in addition to my recent post regarding casino heavy hitters fighting each other over expanded gambling, which you can see here.
The first story details the news that Nevada's senators (one Democrat, one Republican) are teaming up to introduce a bill to outlaw all online gambling in the US except for poker. Why? Because they are trying to stop the "wild West" of gambling. You see, yes they are doing this to protect their Nevada casinos, but you shouldn't only think of their more noble motives of protecting YOU from evil gambling. As you of course may realize, Nevada only offers good and pure gambling...so that's OK and should be protected.
This bill is going to be bi-partisan because, let's be clear, the Democrat, Harry Reid, isn't very popular among Republicans, which is probably an understatement. He needs his fellow Nevada senator, a Republican, to help weasel this bill through. Of course, the bill would also have to get through the House of Representatives, but one step at a time.
My view is that this bill shouldn't get through the Senate, but it indeed may. When? After the November elections during Congress' lame duck session. This bill will be inserted into another bill that due to its content would be deemed a "must pass" bill. Think of something like a bill to authorize the budget for the armed forces, or removing a tax impediment for disabled elderly people. No one will stop those bills, so Harry Reid as Senate Majority Leader will add this bill to that one and force people to vote for this or they will be viewed as hating old people, the military, etc. Watch for the news on this bill to go very quiet until after the election, then watch these lame duck bills come up in November and December. The article on this bill can be found here.
Now, where's the hypocrisy? Well the Nevada view that their gambling is good and everyone else's is bad is hypocritical, but let's add in the other story to buttress the hypocrisy. This story discusses how Nevada regulators are allowing slot players to use prepaid access cards. Now similar means are used for sportsbook and poker players, but doing this with slots isn't exactly the same. It would take some time for a sportsbook player to place their wagers, similar with a player in a poker game. Slot machines are fast. You can get a new spin about every 6 seconds if you're fast enough. Also, sports betting and poker have a skill component, where a slot machine does not.
Here's a quote from the article:
"Here’s how it would work: A player who wants to use an access card in a slot machine would first have to register at a casino with identification that verifies a player’s address and date of birth. Registration would also tie a player to a casino’s loyalty card. Players could then load the cards at their banks by transferring funds from a checking or savings account. Harry Hagerty, president and chief financial officer of Sightline, said his company’s agreement with banks puts limitations on the amount of money that a player could load to an access card — a maximum of $2,000 a day, $4,500 a week and $10,000 a month, and the most a player could put on a card at any time is $25,000. Regulators also said a player wouldn’t be able to use the card for at least 15 minutes after transferring the funds."
Wow, very responsible of Nevada to make sure the maximum on a card is $25,000 and they have a whole FIFTEEN MINUTE cooling off period. (sarcasm alert)
Here's the Nevada hypocrisy. One the one hand, they want to make it easier for people to spend their money on slot machines, ahem, THEIR slot machines, which they must think is a good thing. On the other hand, they are seeking to pass a federal law to outlaw online slot machines, because those are generally not Nevada slot machines, which of course must be assumed to be bad.
So, in essence, NO NO NO don't put your money in those non-Nevada slot machines because they are bad and evil because they are electronic and online and you could go through your money very fast. Put your money in our slot machines because we're pure and decent and we limit the money you have on your prepaid card to $25,000 dollars! Right, I stand corrected thinking about this...no hypocrisy here! (sarcasm alert)
The first story details the news that Nevada's senators (one Democrat, one Republican) are teaming up to introduce a bill to outlaw all online gambling in the US except for poker. Why? Because they are trying to stop the "wild West" of gambling. You see, yes they are doing this to protect their Nevada casinos, but you shouldn't only think of their more noble motives of protecting YOU from evil gambling. As you of course may realize, Nevada only offers good and pure gambling...so that's OK and should be protected.
This bill is going to be bi-partisan because, let's be clear, the Democrat, Harry Reid, isn't very popular among Republicans, which is probably an understatement. He needs his fellow Nevada senator, a Republican, to help weasel this bill through. Of course, the bill would also have to get through the House of Representatives, but one step at a time.
My view is that this bill shouldn't get through the Senate, but it indeed may. When? After the November elections during Congress' lame duck session. This bill will be inserted into another bill that due to its content would be deemed a "must pass" bill. Think of something like a bill to authorize the budget for the armed forces, or removing a tax impediment for disabled elderly people. No one will stop those bills, so Harry Reid as Senate Majority Leader will add this bill to that one and force people to vote for this or they will be viewed as hating old people, the military, etc. Watch for the news on this bill to go very quiet until after the election, then watch these lame duck bills come up in November and December. The article on this bill can be found here.
Now, where's the hypocrisy? Well the Nevada view that their gambling is good and everyone else's is bad is hypocritical, but let's add in the other story to buttress the hypocrisy. This story discusses how Nevada regulators are allowing slot players to use prepaid access cards. Now similar means are used for sportsbook and poker players, but doing this with slots isn't exactly the same. It would take some time for a sportsbook player to place their wagers, similar with a player in a poker game. Slot machines are fast. You can get a new spin about every 6 seconds if you're fast enough. Also, sports betting and poker have a skill component, where a slot machine does not.
Here's a quote from the article:
"Here’s how it would work: A player who wants to use an access card in a slot machine would first have to register at a casino with identification that verifies a player’s address and date of birth. Registration would also tie a player to a casino’s loyalty card. Players could then load the cards at their banks by transferring funds from a checking or savings account. Harry Hagerty, president and chief financial officer of Sightline, said his company’s agreement with banks puts limitations on the amount of money that a player could load to an access card — a maximum of $2,000 a day, $4,500 a week and $10,000 a month, and the most a player could put on a card at any time is $25,000. Regulators also said a player wouldn’t be able to use the card for at least 15 minutes after transferring the funds."
Wow, very responsible of Nevada to make sure the maximum on a card is $25,000 and they have a whole FIFTEEN MINUTE cooling off period. (sarcasm alert)
Here's the Nevada hypocrisy. One the one hand, they want to make it easier for people to spend their money on slot machines, ahem, THEIR slot machines, which they must think is a good thing. On the other hand, they are seeking to pass a federal law to outlaw online slot machines, because those are generally not Nevada slot machines, which of course must be assumed to be bad.
So, in essence, NO NO NO don't put your money in those non-Nevada slot machines because they are bad and evil because they are electronic and online and you could go through your money very fast. Put your money in our slot machines because we're pure and decent and we limit the money you have on your prepaid card to $25,000 dollars! Right, I stand corrected thinking about this...no hypocrisy here! (sarcasm alert)
Friday, January 25, 2013
Daily Fantasy Sports Websites Generating Questions
The Las Vegas Review Journal exposed a sensitive question in their story that coincided with the Fantasy Sports Trade Association winter conference. They took a look at the fantasy sports websites that focus on short-term or "daily" pay-to-play fantasy games and questioned whether the marketing tactics used by these sites blurred the perception line between legal skill gaming and online sports betting, currently not allowed in the US per the UIGEA and Wire Act.
If you look at the typical daily fantasy sports website, you would have a difficult time differentiating them from online gambling sites. This is bad news since fantasy sports is a game of skill and is NOT considered gambling.
In addition, some of the customer acquisition and retention aspects of these sites seem awfully similar to what online gambling sites offer. Terms like signup bonuses, rakeback and rebate are common. Some sites have also set up affiliate programs similar to online gambling sites as well as provide referral bonuses where individuals receive either a flat payment or a recurring revenue stream from their referrals' play.
Again, fantasy sports games are legal, but if regulators get the impression that these kind of sites are really no different from online sports betting, there could be bad news for the offending sites. The better answer is to ensure your look, feel and operation is well within the legal safe harbors. It doesn't mean that sites can't incorporate some marketing tactics common to other sites where it makes obvious sense, but in moderation.
The question that didn't get mentioned in the article, but could be an even bigger issue for the daily fantasy sports sites is the issue of income reporting for tax purposes. Lots of money is risked and won every day. For this kind of activity, just earning a net win of $600 for the year could trigger IRS reporting requirements. Some of the customers on these sites might win that much per day. Fantasy sports sites that play for money need to make sure their regulatory compliance processes are sufficient to not allow large amounts of contest winnings to go unreported.
If you look at the typical daily fantasy sports website, you would have a difficult time differentiating them from online gambling sites. This is bad news since fantasy sports is a game of skill and is NOT considered gambling.
In addition, some of the customer acquisition and retention aspects of these sites seem awfully similar to what online gambling sites offer. Terms like signup bonuses, rakeback and rebate are common. Some sites have also set up affiliate programs similar to online gambling sites as well as provide referral bonuses where individuals receive either a flat payment or a recurring revenue stream from their referrals' play.
Again, fantasy sports games are legal, but if regulators get the impression that these kind of sites are really no different from online sports betting, there could be bad news for the offending sites. The better answer is to ensure your look, feel and operation is well within the legal safe harbors. It doesn't mean that sites can't incorporate some marketing tactics common to other sites where it makes obvious sense, but in moderation.
The question that didn't get mentioned in the article, but could be an even bigger issue for the daily fantasy sports sites is the issue of income reporting for tax purposes. Lots of money is risked and won every day. For this kind of activity, just earning a net win of $600 for the year could trigger IRS reporting requirements. Some of the customers on these sites might win that much per day. Fantasy sports sites that play for money need to make sure their regulatory compliance processes are sufficient to not allow large amounts of contest winnings to go unreported.
Saturday, June 9, 2012
You Can Bet on Sports Where?
In the United States, sports betting is greatly restricted by law. The two key federal laws are the Professional and Amateur Sports Protection Act (PASPA) and the Wire Act. This does not mean that sports betting does not occur in the US, it's just that the vast majority is done illegally. Approximately $2.5 billion is wagered on sports each year in Nevada, but that is a pittance compared to the upwards of $500 billion of sports wagers each year in the US. There are efforts to expand legal sports wagering in the US at the state level, particularly in New Jersey and California. You can find posts on those efforts here and here.
Other countries are actually farther ahead of the US in recognizing the fact that sports betting is here, it's big and it's permanent. A colleague sent me some pictures of a sports wagering outlet in a place about as out of the way from the US as possible - Bishkek, Kyrgyzstan. Where is that? About 300 miles northeast of Afghanistan! Kyrgyzstan is located on the western border of China. See for yourself...Google Maps / Bishkek
What is interesting is the globality of sports wagering AND the reality that English is truly the world's language. Not that knowing multiple languages isn't useful, but an English-only speaker by and large could get by in many more places than you might think.
Other countries are actually farther ahead of the US in recognizing the fact that sports betting is here, it's big and it's permanent. A colleague sent me some pictures of a sports wagering outlet in a place about as out of the way from the US as possible - Bishkek, Kyrgyzstan. Where is that? About 300 miles northeast of Afghanistan! Kyrgyzstan is located on the western border of China. See for yourself...Google Maps / Bishkek
What is interesting is the globality of sports wagering AND the reality that English is truly the world's language. Not that knowing multiple languages isn't useful, but an English-only speaker by and large could get by in many more places than you might think.
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