IAG December 2015

INTERNATIONAL
BRIEFS
While some of the smaller fantasy sports sites such as
DailyMVP and DraftOps have shuttered their New York operations,
FanDuel and DraftKings have countered that their contests are
skill-based, have operated for a number of years and have attracted
investments from media companies and major sporting leagues
who have deemed them legal.
A lawyer for FanDuel, John Kiernan, argued that daily fantasy
sports are similar to a real life team manager successfully picking a
roster of players to increase the side’s chances of winning and were
therefore hugely skill-based.
Assistant Attorney General Kathleen McGee presented the
alternative argument that although compiling a strong roster
required skill, the result of any DFS contest was nevertheless reliant
on how the players performed in real life and was therefore subject
to factors outside the control of the DFS user.
DFS sites have enjoyed huge growth since the start of the
current NFL season after embarking on massive marketing
campaigns, however questions over their integrity emerged when a
DraftKings employee beat more than 200,000 other players to win
US$350,000 on rival FanDuel.
A number of US states are now contemplating regulation of
the DFS industry while a handful have banned them completely.
FanDuel has temporarily suspended operations in New York while
it argues its case.
Justice Manuel Mendez, who is hearing the case, said he
expected to arrive at a decision quickly.
It is estimated that the number of people playing DFS in the
USA and Canada has tripled in the past 10 years including a 25%
increase over the past 12 months to around 57 million participants.
Stay of execution for Atlantic City icon
Uncertainty continues to surround the future of Atlantic City’s
remaining casinos with Trump Entertainment Resorts – owner of
the Taj Mahal – looking to billionaire Carl Icahn to save the company
from bankruptcy.
In November, Trump Entertainment named its three man
executive team to lead the company ahead of Icahn’s takeover with
Mike Mellon appointed the Taj Mahal’s new general manager and
existing members of the board of directors David Licht and Michael
Elkins co-Chairmen of the board. Mellon will also assume the
company’s CEO role pending approval by state regulators.
The Taj Mahal very nearly joined the growing list of Atlantic City
casinos to close their doors earlier this year before Icahn agreed
to throw it another lifeline. Sister property The Plaza wasn’t so
lucky, shutting down just days after Trump Entertainment filed for
bankruptcy in September 2014.
It’s the fourth time Trump Entertainment has filed for bankruptcy
over the years and leaves the Taj Mahal as the company’s sole
remaining casino.
However, the Taj Mahal isn’t secure just yet with an appeals court
yet to rule on whether the casino must restore health insurance and
pension benefits to workers that it previously cancelled in October
2014.
Icahn has stated that such benefits are not feasible in Atlantic
City’s current gaming climate, adding he will likely withdraw
financial support – thus forcing the Taj Mahal to close – should the
court insist benefits be restored.
One matter no longer in front of the courts is the continuing use
of the Trump name after Donald Trump – who originally founded
the company – agreed to drop a lawsuit seeking to have it removed
as part of the Icahn deal.
Trump retains a 10% stake in Trump Entertainment but has had
no involvement in its operations for more than a decade.
Brazil to legalize gaming
Brazil could be the next country to legalize gaming with the first
meeting of the Special Committee on National Development in the
Brazilian Senate set to be the focus of its early discussions.
Gambling has long been illegal in the South American
powerhouse, but with the nation in the midst of an economic
crisis politicians have been actively investigating new methods of
stimulating the Brazilian economy. And unlike other countries said
to be considering similar moves, such as Japan, it appears as if
Brazil is ready to push forward with their plan.
A revised version of the gaming bill first presented by Senator
Ciro Nogueira in 2014 will be discussed by the Special Committee
with casinos, slot parlors, bingo halls and local lottery game “Jogo
do Bicho” among the main areas of interest.
Their aim is to finalize legislation defining exactly what types
of gaming would become legal in Brazil as well as setting out the
licensing and taxation criteria.
Senator Blairo Maggi, who revised Senator Nogueira’s bill
earlier this year, has described the process as “appropriate in order
to regulate gambling in the country.” He has previously pointed to
the fact that illegal gambling in Brazil is rife as a compelling reason
to legalize and regulate the industry.
The new legislation divides responsibility for various types
of gaming between state and federal governments with “Jogo do
Bicho” and bingo to be run by each individual state. The Central
Government would be responsible for regulating casinos including
the granting of casino licenses which would be for a period of 20
years.
The current proposal is to tax gross revenues from all gaming
operations at 7% in the states where they are located which would
generate billions of dollars of much needed revenue.
Brazil’s tourist industry has also expressed support for the plan
as a means of luring more visitors.
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