Monthly Archives: August 2011

GBGC article: Prospects For Online Gambling in the U.S. House of Representatives

Global Betting & Gaming Consultants has published an article outlining the course of action the U.S House of Representatives would if it were to approve internet gambling legislation by way of conventional procedure: Prospects for Online Gambling Bills in 112th US Congress.

The article is one half of a longer passage which goes on to analyze prospects for approval in the U.S. Senate as well. The passage is part of a highly informative 27-page report analyzing legislative proposals in the 112th U.S. Congress.

The report covers:

• The necessary divisions of power between the federal and state governments in regulating internet gambling.
• The current federal statutory framework.
• Key lawmakers in the 112th Congress.
• A thorough collection of lobbying spending reports for Q1 and Q2 of 2011.

Most notably, the report contains a side-by-side analysis of the House Bills (complete with citations) so that readers can see all of the ways in which the two proposals differ. The outline shows how each of the proposals deals with:

• Federal roles and authority
• State/Tribal roles and authority
• State/Tribal opt-out of the federal internet gaming program
• Special licensee restrictions
• Technical licensing requirements
• Licensing of suppliers and key personnel
• Enforcement against unauthorized providers
• Money transactions
• Customer protections
• Cheating and fraud
• Taxation
• Advertising

The report is available to GBGC’s platinum subscribers and additionally appears in the latest GBGC Interactive Gambling Report.

“Lottery Modernization” meetings postponed in D.C.

Although Washington D.C.’s “Lottery Modernization Act of 2010” has already been enacted into law, the D.C. Lottery has delayed implementing its plan for internet gambling in order to provide an opportunity for input from residents of the city.

Prior to the law’s enactment, public input was virtually non-existent. City of D.C. Council Member Michael Brown achieved enactment in December 2010 by attaching it to a larger bill amending the City’s 2011 budget plan. It is alleged that other Council Members hardly discussed the lottery provisions before approving the budget amendment, and some later claimed to be totally unaware they had enacted an internet gambling law.

Following a bit of public furor, the City Council held an informational hearing on June 29 at which several Members expressed disapproval. The D.C. Lottery responded by announcing a series of “community outreach meetings” to take place this month in each of the city’s eight wards. Recently D.C. Lottery postponed the meetings until next month because residents have complained that too few of them remain in the city during August.

The Lottery Modernization Act permits internet gambling by way of an amendment to the D.C. Official Code sections which deal with lotteries and number games. The definition of “a lottery or lottery games” now includes “games of skill and games of chance,” which can be operated on the internet as long as D.C. Lottery can verify customers’ location within the city.

The following is the text of the legislation approved by the D.C. Council as part of Bill 18-1100:

SUBTITLE J. LOTTERY MODERNIZATION ACT

Sec. 791. Short title.

This subtitle may be cited as the “Lottery Modernization Act of 2010.”

Sec. 792. The Law to Legalize Lotteries, Daily Numbers Games, and Bingo and Raffles for Charitable Purposes, effective March 10, 1981 (D.C. Law 3-172; D.C. Official Code § 3-1301 et seq., and 22-716 et seq.), is amended as follows.

(a) § 3-1313 is amended by adding a subsection (a) to read as follows:

“A lottery or lottery game is both games of skill and games of chance that are operated by and for the benefit of the District of Columbia by the Lottery and Charitable Games Control Board, however (i) where such games of skill and games of chance are offered via the internet, any technology employed for such play must confirm the play to be at all times within the District, provided however, such restriction shall not apply to the conduct of Fantasy Sports and sweepstakes style games, where such games are lawful, and (ii) that no method, media, or device for play of these games of skill and games of chance can violate the Johnson Act (15 U.S.C. 1171 et seq.) or any other federal statute.”

(b) The existing language in § 3-1313 shall be renumbered as subsection (b).

(c) a new subsection (c) is added to read as follows:

“The Board, through the Chief Financial Officer, pursuant to Title 1 of the District of Columbia Administrative Procedure Act, approved October 21, 1968 (82 Stat. 1204; D.C. Official Code § 2-501 et seq.), may issue rules to implement the provisions of this section, and may establish which games may be offered and additional terms and conditions for the conduct of the games not inconsistent with subsection (a) of this section, including the percentage of wagered amounts to be retained by the Board, minimum and maximum wagers, and time limitations for the games

Click here for the full text of the budget amendment in .pdf format: Bill 18-1100 (Lottery Modernization Act begins at page 36)

For more background, see:

Press Release: D.C. Lottery Reschedules iGaming Community Outreach Meetings

The Washington Times: D.C. Lottery schedules public meetings on online gambling

Proposed i-gaming pilot program for Massachusetts Lottery: “…evaluate new technologies, delivery mechanisms, sales channels, and other innovations.”

The Massachusetts legislature has advanced a cautious plan to let its State Lottery experiment with the internet as a delivery channel for its products. The plan has already received an informational hearing in a committee with members of both chambers of the legislature.

The bill would authorize the Massachusetts Lottery Commission to conduct a two-year “pilot program” to evaluate new “technologies, delivery mechanisms, sales channels, and other innovations.” The terms are probably intended to reflect a desire to limit offerings to traditional lottery-style numbers games—not to expand a new range of gambling opportunities.

The program probably will not produce explosive new revenue gains for Massachusetts, but nor is it intended to. The State Lottery already has exclusive control over the market for lottery products in Massachusetts, so it’s not as though new internet offerings will divert much revenue that would otherwise flow to offshore operators.

The real benefit of the pilot program is that it could help prepare the Lottery to compete on the internet on a broader scale at some later date if it becomes feasible.

State Treasurer Steve Grossman, whose department oversees the State Lottery, publicly opposes the pilot program, claiming it would violate federal law. But the Treasurer does not get to vote in the Legislature, and he is incorrect anyway (see 31 U.S.C. § 5362(10)(B); the term ‘unlawful Internet gambling’ does not include placing, receiving, or otherwise transmitting a bet or wager… initiated and received or otherwise made exclusively within a single State; … and the method… is expressly authorized by and placed in accordance with the laws of such State.).

State Senator Michael F. Rush introduced Senate Bill 132 in January, but he has since been called to Iraq by the Navy Reserves. His chief of staff appears to be managing the issue.

View the legislation at the website of the Massachusetts Legislature: Senate Bill 132.

See also: West Roxbury Patch: State Sen. Rush Wants to Create Online Gaming Pilot Program for Massachusetts,

State House News: While lottery sales are flat, Grossman sees online gaming pilot as unlawful