Posts Tagged ‘License’

GAN Receives New Jersey Online Gaming License

 GAN Receives New Jersey Online Gaming License

B2B internet gaming software developer GAN – once known as GameAccount Network – announced last week that it has been granted an online gaming license by the New Jersey Division of Gaming Enforcement (DGE). GAN initially applied back in 2013, so this has been a long time in coming. The company contends that not only does this now allow it to offer online gaming in New Jersey, but also makes it look better for potential licensing in other states.

In a press release, GAN CEO Dermot Smurfit said:

We have long maintained that a key benefit of choosing GAN is the guaranteed integrity and strong compliance profile of our current and historic business activities, clean source of investment funds and the unquestioned suitability of our major shareholders, directors and employees to be licensed in New Jersey. Here is the proof of those long-standing statements. GAN has been thoroughly and professionally investigated by the NJDGE and we welcome the grant of our first privileged gaming license in the United States. In the heavily regulated world of Internet gaming, the significance of this gaming license cannot be underestimated and is a major asset for our Company and will deliver our shareholders significant value over time.

GAN has already had a presence in New Jersey, as it has been Betfair Casino’s software provider since November 2013. GAN ran slightly afoul of state regulations in the middle of last year when it unintentionally activated a new version of its mobile Android software for Betfair before it had been sufficiently tested, allowing six players from outside of New Jersey’s borders to gamble for real money. Fortunately, the DGE said that less than $ 350 was wagered in total and GAN got the problem fixed, so in the end it wasn’t that big of a deal. Nonetheless, GAN was fined $ 25,000.

GAN also partnered with the Borgata Hotel Casino & Spa to offer its “simulated gaming” product in early 2016. As it sounds, “simulated gaming” is a fancy term for “play money gambling.” Like other play money gaming products on social networks, though, players can purchase additional chips for real money.

Offering play money gaming is not a big deal, but it may have been important in order to get GAN’s foot in the door for a future real money gaming opportunity with Borgata. Smurfit said at the time:

Our strategic market positioning is to serve as an enterprise-level solution for either Simulated Gaming or real money Regulated Gaming and, in certain circumstances, our single technology platform may serve both requirements. In 2016 Simulated Gaming will be served to the majority of Borgata’s patrons who live out-of-State and, in the event GAN receives Borgata’s consent to commence operations is equally capable of simultaneously serving real money Regulated Gaming to the Borgata’s patrons resident in New Jersey.

Borgata’s online poker room is currently powered by PartyPoker, but considering GAN’s new license and the deal struck between GAN and the Borgata last year, could a change be in the future for Borgata? One would think that with WSOP/888 and PokerStars present in New Jersey that GAN isn’t about to strike out on its own, so it will be interesting to see what it decides to do with this new found power.

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Bill in Michigan Would License Online Casino Gaming and Poker – With A Catch

 Bill in Michigan Would License Online Casino Gaming and Poker – With A Catch

After the U. S. Department of Justice issued their famous dictate in 2011 that the Wire Act of 1961 only applied to sports betting, many thought there would be a stampede towards individual states offering online gaming and poker to their constituents. After all, with rising budget deficits and few areas to further tax (or to even raise taxes at all), local and state governments had to find other ways to raise revenues for their coffers. As we’ve seen, however, that expected stampede has been more like a Sunday stroll, with only three states – Delaware, Nevada, and New Jersey – stepping up to pass online gaming regulations.

This doesn’t mean that other states haven’t at least thought about acting. Some shockingly have actually put up bills (sorry, a bit of sarcasm there) for passing regulations on the industry. But, as of yet, there isn’t another state that has joined the trio from 2013. To demonstrate how illogical it has gotten when it comes to passing online gaming and poker regulations, we look towards Michigan for the latest in the legislative world of online gaming politics.

Until late last year, Michigan wasn’t even on the radar for those looking at which state would be the next to pass online gaming regulations. After passing online lottery sales in 2014, the state sprung to life in October 2016, with Michigan State Senator Mike Kowall stating that a bill regulating online gaming and poker regulations could “still pass.” While that bill did make it out of its Senate committee, it did not come to the floor of the Michigan Senate for a vote and, perhaps more importantly, it didn’t have companion legislation in the Michigan House for consideration.

Now, according to Crain’s Detroit Business journalist Lindsay Vanhulle, the Michigan Legislature is trying to accommodate their desire for more money for government while quelling the cries from those anti-gaming forces who would normally look to shut them down. The plan would utilize the three commercial casino gaming outlets licensed by the state – the Motor City Casino, the MGM Grand Detroit, and the Greektown Casino, all located in Detroit – and the Indian casinos as the outlets for online casino gaming. There is one catch that would make the Michigan online industry much different from the others.

Under the legislation being discussed, those in Michigan would be able to access online gaming and poker, but it would only be if they were physically located on a casino property in the Wolverine State. There are a few reasons for this caveat in the Michigan regulations. One is the state casinos and the Indian casinos aren’t happy about potentially losing some of their revenues to online gaming (estimates say that Detroit alone could lose between $ 1.5 and $ 4.5 million if the law passed). If the players were at least on the casino grounds, there could be revenue generated for the casino from other streams (restaurants, shopping, etc.). This doesn’t make much sense to…well, anyone who is talking about the Michigan regulations.

Since players are already in a casino, why would they want to play online? This was a question posed by David Schwartz, the director of the Center for Gaming Research at the University of Nevada-Las Vegas, when contacted by Vanhulle. “Would you drive to Home Depot to use Amazon to buy something?” Schwartz is quoted by Vanhulle. “I probably wouldn’t, as nice as Home Depot is. I want the convenience of getting something at home.”

The biggest issue seems to be avoiding the constituents of Michigan, however. The state Constitution was amended in 2004 with a clause that required any new gaming expansion – be it live or online – to be put up for referendum to Michigan voters. It would be necessary for those voters to approve of the action by majority vote. The only clause that works around that amendment is if the gaming comes from any of the state operations or the Indian casinos – those arenas can do seemingly whatever they want without approval from the citizens.

Whether this or any legislation in the state of Michigan moves forward is highly unlikely. Although they can talk a good game, politicians in Lansing are going to have a tough road getting the Michigan casino industry to give up any of their profits. It will also be difficult to get through anti-gaming forces, which are being led by anti-online gaming crusader Sheldon Adelson, to even reach the voters for their opinions. As such, don’t expect Michigan to become the fourth state with online gaming and/or poker anytime soon.

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PokerStars Earns Czech Republic Gaming License

 PokerStars Earns Czech Republic Gaming License

PokerStars announced on Tuesday that it has received a license to operate its online casino and poker room in the Czech Republic, the first site to do so under the country’s new gaming laws. The license was granted January 28th and should be ready to go within the next few days.

“We are very proud to be the first online casino and poker operator to be awarded a license and support the newly regulated Czech market,” said Guy Templer, Chief Operating Officer, in a press release. “This underscores our commitment to supporting local regulations and obtaining local licenses wherever possible.”

PokerStars said that it “will offer Czech players a wide range of poker games and tournament formats across its shared global liquidity,” so it appears that there will be no ring-fencing; Czech players will be able to play with people on other PokerStars sites.

The new gaming laws to which PokerStars referred were signed by Czech President Miloš Zeman in July 2016 and took effect January 1, 2017. Online gambling operators are now required to hold a Czech gaming license in order to offer their services to residents of the country. While some sites might choose to risk operating without a license, PokerStars did not.

PokerStars also might be one of just a few who decide to apply for a license. Under the new law, operators must pay a tax of 35 percent of gross gaming revenue from any game that uses a random number generator (RNG). As online poker uses an RNG, PokerStars will be hit with this tax (as well as on its casino games). On top of that, there is still the 19 percent income tax rate.

This was all be design, too. Andrej Babiš, the Czech Finance Minister who introduced the online gambling proposals in 2014, is actually very much against online gambling. But rather than trying to ban it and run into pushback or other problems that could result from a prohibition, he decided to legalize it, but tax operators up the wazoo. That way, operators might just self-ban. He actually wanted the gaming tax to be 40 percent, but backed off ever so slightly.

Babiš once told Business Week, “The indirect costs for the state stemming from such gambling are several times higher than the revenue it collects. That should be made even.”

At the end of December, UK gaming giant William Hill told its Czech customers that “following recent regulatory developments” it was going to stop serving Czech players and all current Czech accounts would be closed. Players were still able to withdraw their funds. William Hill left the door open for a possible future return, saying in an e-mail to its affiliates, “….we are confident that we will have the opportunity to work together in the future.”

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NJ Senate Passes Bill to Suspend Trump Taj Mahal Casino License

 NJ Senate Passes Bill to Suspend Trump Taj Mahal Casino License

The New Jersey Senate passed a bill on Thursday designed to keep billionaire investor Carl Icahn from re-opening the Trump Taj Mahal for five years. The bill, S2575, was affirmed by a vote of 29 to 6 (with 5 not voting) and would amend the portion of the state law that details how someone could be disqualified from acquiring a casino license in the state.

The Trump Taj Mahal closed on October 10th after 26 years in operation. Since February, it has been owned by Carl Icahn and his, company, Icahn Enterprises. Trump Entertainment Resorts, the previous owner of the casino (and now a subsidiary of Icahn Enterprises), went into bankruptcy in September 2014; Icahn, its largest debt-holder, agreed to take it over when it came out of bankruptcy in February.

During the bankruptcy proceedings, the Unite Here Local 54 union lost its healthcare and pension benefits. After unsuccessful attempts to negotiate with Icahn to regain their benefits, more than 1,000 Trump Taj Mahal workers went on strike in early July. A month later, Tropicana Entertainment, which operates the casino, announced that the casino would close, citing profitability issues stemming from the strike.

There has been some thought that Icahn might try to re-open the Trump Taj Mahal at some point on his own terms, skirting the union in the process, and this bill aims to prevent that. The amendment reads:

Notwithstanding the provisions of any law, rule, or regulation to the contrary, the substantial closure of a casino hotel facility by the licensee occurring on or after January 1, 2016 shall disqualify the licensee from continuing to hold that license and shall constitute sufficient cause for revocation of that license, except that such substantial closure shall not impact any other pre-existing casino license held by the licensee. The division shall determine what constitutes a substantial closure of a casino hotel facility pursuant to this section.

The disqualification would be in effect for five years.

Democratic Senate president Steve Sweeney, the sponsor of the bill, told the Associated Press, “Casino owners shouldn’t be manipulating the system and exploiting bankruptcy laws as a way to break unions and take away the rights and benefits of the workers. Atlantic City’s gaming industry is obviously experiencing the difficult challenges of competition from other states, but the answer is not to engage in practices that punish the workers.”

Tropicana Entertainment president Tony Rodio, who has served as Icahn’s mouthpiece during the labor ordeal, believes the bill could scare off other companies who may want to open for business in Atlantic City:

I don’t see any reason for anyone to want to invest in the casino industry in Atlantic City given this adversarial investment climate being created by some leaders of our state Legislature, the same ones who are supporting the North Jersey gaming referendum that will certainly result in the closure of many more Atlantic City casinos and future disqualification of their present owners under this bad legislation. It also raises serious questions why anyone would want to invest in the State of New Jersey at all if the State legislature moves forward with this business, job and growth killing legislation.

The bill still has to go the state Assembly. According to the AP, Governor Chris Christie would likely veto the bill should it get to his desk.

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NJ Gaming Director Issues Notice About License Applicants Operating in Grey Markets

 NJ Gaming Director Issues Notice About License Applicants Operating in Grey Markets

On Wednesday, New Jersey Division of Gaming Enforcement (DGE) Director David Rebuck issued a “Director’s Advisory Bulletin” in order to address how his department will handle online poker operators who offer their games in “grey markets.” These grey markets are jurisdictions in which online gaming is not explicitly forbidden, but also in which there is some question as to the games’ absolute legality.

This is an issue in New Jersey because when starting up their internet gaming operations, many Atlantic City casinos did not want to build software platforms from scratch. Instead, they opted to partner with companies that already had established platforms that were being used for online gambling around the world. Caesars, for instance, partnered with 888 Holdings and uses the same software for that is used on the international site. Similarly, the Borgata partnered with to use the partypoker software. Some potential software providers, though, operate in countries that are considered grey markets, bringing into question whether or not what they are doing is kosher enough for them to obtain an internet gaming license in New Jersey.

Wrote Rebuck in the Bulletin:

These cross-border Internet gaming operations have caused uncertainty with gaming regulators regarding the legality of Internet gaming operations of their licensees in foreign jurisdictions and how those activities should be considered when evaluating suitability for licensure. This uncertainty in the minds of casino regulators is the result of a variety of factors: legislative bodies that failed to enact laws specific to online gaming, confusion regarding the applicability of existing land-based gaming laws to Internet gaming operators, in-personam jurisdiction issues inevitably created by the borderless nature of the Internet, and the lack of affirmative, concrete actions by the foreign government indicating whether it opposes Internet gaming by its citizens.

He followed that up by confirming that companies that operate in “black markets,” that is, jurisdictions in which online gaming is absolutely, explicitly illegal, “will not be able to establish the ‘good character, honesty, and integrity’ required for licensure in New Jersey.”

He added that New Jersey licensees are also not permitted to operate in places where online gambling is legal if they have not been granted the proper license in that jurisdiction.

Rebuck went on to say, essentially, that it can be dangerous for a government to try to view another country’s regulations through the wrong color glasses. Things are complicated. He continued:

It is in this context that the Division finds itself attempting to articulate a licensing standard that fulfills its regulatory responsibilities under the Act while also giving proper deference to the sovereignty of other jurisdictions. After careful consideration of the various issues implicated in its decision the Division, in assessing the legality or Internet gaming in a foreign jurisdiction, will not adopt a standard that could erroneously substitute its own judgment for that of another sovereign jurisdiction’s executive, legislative or judicial authority. The state of the law in many jurisdictions is constantly evolving and often defies a clear categorization, making it extremely difficult for the Division to adopt a more stringent approach.

He concluded that each potential licensee will be evaluated on a case-by-case basis. If they are operating in black market jurisdictions, they won’t get licensed. If the New Jersey DGE deems the places the applicant operates as being grey market, then the applicant can still be eligible.

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