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// PUBLIC GAMING INTERNATIONAL // September/October 2016
PANEL DISCUSSION
Moderator:
Gordon Medenica
Director of the Maryland Lottery
& Gaming Control Agency
Panelists:
Mark Hichar
Partner, Hinkley, Allen Law Firm,
Chair of Gaming Law Practice
James Maida
Co-Founder, Chief Executive
Officer & President, Gaming
Laboratories International (GLI)
Lynne Roiter
Corporate Secretary and Vice
President of Legal Group,
LotoQuébec and General
Secretary of the World Lottery
Association (WLA)
Philippe Vlaemminck
Managing Partner, Pharumlegal
Group, Legal Counsel
to Lotteries on Matters
of European Union
Regulatory Laws
Following is an edited synopsis
of the panel discussion held
at PGRI SMART-Tech on April 7
in New York. You can view a video
of the complete presentation at
www.PGRItalks.com.
Edited by Paul Jason, PGRI.
Gordon Medenica:
Our discussion today is not just about the current state of regu-
latory issues. Our real purpose is to look at how new game concepts are challenging the
conventional legal definitions of gambling, how new distributional models are disrupting
the barriers that control the way consumers access new and different games, and what this
all means to state government lotteries.
We are all wondering what the impact of Daily Fantasy Sports (DFS) will be. Is this an
audience that comes from the unregulated markets and so does not affect Lottery? Even
though that may be the case, won’t it open the door to further regulatory change that
could impact Lottery? And how might it alter the play-style of twenty-somethings who
will eventually become thirty-somethings who have traditionally been the ground floor for
our customer base?
Let’s start by asking Mark to give us an overview of the legal and regulatory environment
and perhaps his thoughts about how the role of DFS fits into the larger picture of sports
betting in general, and also its potential impact on Lottery.
Mark Hichar:
I think it would be helpful to start with some statistics and put things
into proper context and perspective in order to understand the impact that DFS has had
in the U.S. market. During the first three or four months of the NFL (National Football
League) season, fans could not escape the relentless advertising of DFS. The televised
games were inundated with DFS commercials. Beer used to dominate TV advertising and
it was completely overshadowed by DFS. I commute sometimes into the Boston South
Station where the entire train station was draped with advertisements for DFS. That might
cause one to think that DFS is a huge industry within the United States, commensurate
with the huge advertising budget it seems to have. Looks can be deceiving. In 2015 total
wagers on U.S. lotteries was $74 billion. By contrast total entry fees for DFS, based on
the turnover of the two companies which dominate the DFS market (FanDuel and Draft
Kings) totaled $3 billion. So … $74 billion for total U.S. Lottery sales; $3 billion for Daily
Fantasy Sports sales. Illegal sports betting has been estimated by the American Gaming
Association to be approximately $148 billion in 2015, twice the sales of U. S. Lottery and
some 50 times the annual sales for DFS. The Fantasy Sports Trade Association estimates
that in 2015 there were 56.8 million Fantasy Sports players, of which less than 5% played
DFS. The rest were participating in what’s known as traditional fantasy sports. That is a
season long variety which doesn’t advertise, is not so much gambling as DFS, and is pretty
much still a hobbyist’s game. The debate over the issues and how to regulate the indus-
HOW REGULATORY
CHANGES ARE
CONVERGING WITH
TECHNOLOGY,
THE INTERNET, AND
CHANGING CONSUMER
BEHAVIOR TO UP-END THE
GAMES-OF-CHANCE AND
LOTTERY MARKET-PLACE
Continued on page 48