cause us to go on the defensive?
•
With all due respect to the Flat Earth Society, there’s overwhelm-
ing evidence throughout the world that internet gaming poses no
risk to consumers, to the need for security and integrity, and for
the application of a comprehensive Responsible Gaming agen-
da. In fact, the internet provides a basis for far better control than
does the land-based retail channel. Geo-location technology and
other tools enable a high degree of control. For instance, I was
in Bulgaria last week where they are in the process of building
a very robust system for not only knowing who their players are
but being able to tax them in a multi-jurisdictional environment.
Bulgarian players that are playing in Bulgaria are taxed accord-
ing to Bulgarian tax structures; and Europeans residing outside
of Bulgaria can play in Bulgaria and be taxed according to their
own country’s tax structures. Now if they can do it in Bulgaria,
why can’t we do it in Michigan?
•
The Canadian experience is quite a bit different from the U.S.
First, the fact that we are ten provinces instead of fifty states
may make it easier to forge agreement on the issues. But I think
the key factor is that the gaming legislation in Canada is really
crystal clear. The criminal code clearly establishes that the prov-
inces control all types of gaming, gambling, and lottery. That
applies regardless of the channel of communication and distri-
bution. And it has been a matter of public policy that one of the
primary objectives is to channelize the activity of gambling. So,
for instance, a primary reason for us to regulate internet gaming
is to give the consumer a safe and secure place to play lottery
and casino-style games online. The alternative to regulation,
from our point of view, is that the consumer who is determined
to play online is forced to play on the websites of illegal opera-
tors. The result of that is that the consumer is not protected, the
government is unable to tax the revenues, and the illegals profit
because they don’t pay taxes. That is why we think it is better
public policy to regulate the internet gaming industry.
•
I would point out that was basically the original rationale for
starting lotteries in the U.S.—to channel the illegal numbers
gaming revenues over to a legal channel that captured the eco-
nomic benefits for society, and to protect the consumer from
the criminal elements that were operating the numbers games.
So, yes, that same reasoning as applies to the Canadian situa-
tion should also apply to internet gaming in the U.S. right now.
•
One of the keys to success in the political arena is to have at
least one leader in the state legislature who is a champion, a
big supporter for, the lottery. The lottery director can’t lobby
on behalf of the lottery. We need to depend upon our legisla-
tors and the governor’s office to be our advocates and support-
ers, and our defenders if that’s what is needed.
•
The European situation is very complicated. I would just affirm
that you are right to be concerned about the interference of the
federal government into the regulation of gambling. The regu-
latory confusion in Europe can all be traced to one thing – the
reluctance of the European Union Commission to acknowledge
simply and once and for all the final authority of the member
states as regards to all matters of regulation and taxation of
gambling. We have a term called ‘subsidiarity’ that essentially is
comparable to the U.S. concept of states’ rights. The EU Com-
mission, like the U.S. federal government, should defer to the
rights of its member states to decide matters of regulation and
taxation of gambling and lottery. The EU Commission, though,
has asserted itself into the regulatory policies of gambling and
lottery and that has caused profound problems. The fact that
there is confusion about what the member states are or are not
allowed to do creates many problems. Perhaps the most pressing
problem now is that illegal operators are able to capture more
and more of the market because the member states do not have
the authority and the clear legal basis for stopping them. You do
not want to repeat our mistakes in the U.S.
•
There is the long historic precedent of leaving gambling mat-
ters to the sensibilities of states and allowing them to decide for
themselves all of the terms and conditions in which gambling
takes place within their borders. But from a purely legal point
of view, Congress does have the constitutional right to rule on
matters of interstate commerce. We would argue that transac-
tions that originate and terminate within the jurisdiction do not
constitute interstate commerce. But others would argue that it
does and the U.S. Congress could decide that it does constitute
interstate commerce and that they want to regulate it.
•
The problem is that lotteries are being attacked with such well-
funded PR and lobbying campaigns. We’re up against huge
money. Sheldon Adelson (multi-billionaire casino magnate)
has so much money and he’s willing to spend it to accom-
plish his goal of prohibiting internet gaming and completely
reshaping the way the entire industry is regulated. This has
become a battle that is different than anything that we have
fought before. Fortunately, there is lots of opposition to these
bills that he is sponsoring. And we need to continue to speak
out and harness every resource we have to defeat these efforts
to undermine the ability of lotteries to succeed. Thankfully,
these bills are so bad, so egregiously contrary to the interests
of the states, it is hard to fathom how governors and state at-
torney generals will stand by to let it pass. But it could happen
if the political firepower of the states is not mobilized to stop
the federal government from over-stepping its authority.
•
Given that i-lottery and i-gaming and geo-location technol-
ogy is working so well in jurisdictions all around the world;
given all the advantages that the internet offers to create a more
healthy and sustainable gaming culture—I do not understand
why the U.S. federal government thinks it should change the
system of states being allowed to properly regulate internet
gaming. Why should critical public policy decisions like these
be driven by a multi-billionaire whose company, Las Vegas
Sands, has just been penalized $41 million for money laun-
dering? Hopefully, our representatives in Congress will, in the
end, not be swayed by campaign contributions and choose in-
stead to protect the interests of their constituents and vote to
preserve the rights of states to regulate the industry to serve the
interests of society and Good Causes.
u
Public Gaming International • September/October 2014
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