Paul’s Wall May 9

 Paul’s Wall  May 9

Posted in today’s Morning Report is Margaret DeFrancisco’s video-recorded presentation from Smart-Tech NYC. It’s a story about a complex collaborative initiative, a new-age marketing and promotional campaign the scale and scope of which is quite amazing. Overcoming the obstacles and pulling together the different media production, distribution, and promotional components was not easy. But the results are making it all worthwhile. A very inspiring narrative to a very contemporary business strategy.

Two very interesting and important legal/political contests are unfolding, one in California and one in Minnesota. Finally, a political leader is putting her foot down and saying enough is enough to the expansion of Indian Tribal Gaming. The sovereignty of the Indian nations in the U.S. is deserving of the utmost respect. But that should not mean that the rights of states should be trampled by a misguided notion as to the entitlement of Indian nations to build casinos wherever they want to. In California, Dianne Feinstein, is trying to ensure that construction of a new Indian gaming casino be submitted to zoning and regulatory laws and comply with due process as determined by California laws. In Minnesota exists the most shocking circumstance of an estimated $1.5 to $2 billion a year Indian Tribal gaming industry that pays zero taxes to the state of MN. They have paid considerably to political campaigns and so wield political power in spite of that weirdly inequitable business relationship. And with what would appear to be absolutely no leverage, they are working hard to prevent the state of MN from authorizing the opening of a casino that would return some benefit to the citizens and the players of the state. According to a Minnesota Star Tribune Poll, a strong majority supports expansion of the state into all forms of gambling. “The poll found that 72 percent want to end the tribal monopoly that has restricted casino-style gambling in the state to 18 American Indian-run operations. Asked which type of gambling they preferred, 37 percent of respondents said that they want an all-fronts approach that includes video slots at bars, restaurants and racetracks and full-blown casinos in downtown Minneapolis and at the Mall of America.”  I wonder if maybe the residents of other states might be of the same opinion?.

Some might wonder what I have against the U.S. Indian Nations that I complain so much about Tribal gaming. My complaint is simple: The people who are contributing the billions of dollars in profits to Tribal gaming are not the indigenous people who live in the Indian Nation. They are the citizens of the states that surround the Indian nations. That the citizens of the state should be denied the economic benefits of the billion-dollar casino industry which they alone are driving is, in my humble opinion, a travesty of justice. The states should do two things. Find ways to compel the Tribal gaming interests to negotiate more equitable “compacts”. And build their own casinos which channel the economic benefit back to the taxpaying and playing public.

There is a third and perhaps more important action the states need to take and take right now. They need to get into the firmament of federal laws that states each have the right to determine the regulatory and tax framework for internet gaming as for all gaming within their own borders. States do not have the right to prevent internet gaming on Tribal Land. Similarly, states do not have the right to prevent Nevada casinos from offering internet gaming to people within the state of Nevada. But states do have the right to prevent operators based on Tribal land, or in Nevada, from exporting internet gaming into the surrounding states. Affirmation of states’ rights when it comes to internet gaming is so vital to a coherent regulatory framework that protects the citizens of the state, the financial interests of all state governments, and the players.

The fallout from the criminal indictments of the illegal i-gaming operators in the U.S. is starting to happen. Blanca Gaming of Antigua, parent company of Absolute Poker and UltimateBet which are under indictment in the U.S., has declared bankruptcy. Players’ funds will not be returned. How ironic that Antigua is the jurisdiction hosting one of the first companies to be indicted as a criminal enterprise and which proves the case by scamming hundreds of millions of dollars from U.S. players. This after UltimateBet.com of Kahnawake harbored a large-scale cheating ring just a few years ago. Antigua is the country that has been bloviating the loudest about the unfairness of the UIGEA and U.S. measures to protect its players from just these kinds of consumer fraud. Hopefully all this will put to rest those protestations and engage the international community in the serious business of enforcing the law instead of undermining it.   

Prohibition is so clearly contrary to the interests of everyone, including taxpayers, the general public, the state governments, and the players. Spain is the latest European country to implement a regulatory framework to intelligently control internet gaming. And Greek betting giant OPAP launched a number of online games recently to try to stem the gaming tide to offshore operators. Now that the District of Columbia is showing us the way in the U.S., let’s hope that other U.S. states take responsibility for properly regulating and taxing the internet gaming.

As gambling lawyer Fred Heather said Tuesday at the iGaming North America conference in Las Vegas, the legal action against PokerStars, Full Tilt Poker and Absolute Poker is not against online gambling but against illegality, bank fraud and money laundering. It is so unfortunate that the Poker Players Alliance (PPA) insists on miscasting this as an assault on i-gaming. It is disingenuous in the extreme, they know it, and they would do much better to embrace the progress made by the District of Columbia and to encourage others to follow suit.  I do not understand why they are defending the interests of those criminal enterprises and would point out to them that their loyal embrace of these tax-evading offshore interests that do nothing for the U.S. public other than flout our laws, is in serious conflict with the welfare of not just the U.S. public, but also the U.S. community of poker players.

Team Lottery has been integrating internet marketing and land-based retailing for years now, mostly in the form of Player Loyalty clubs, Second Chance Draws, and some exciting non-money games. Taking the next step towards offering a wider variety of i-gaming options will be a most exciting leap forward for the interests of all lottery stakeholders.    

Lottery Expo (Loews Miami Beach Hotel on September 20 to 22) is shaping up to be a great event. More info about the hotel room block and conference agenda will be posted in a few weeks.  So please mark your calendars. Thank you all for your input and support. We very much appreciate it and are dedicated to working hard to earn it. Please feel free to e-mail me at .