See no gambling, hear no gambling, speak no gambling, think no gambling: A 10473

Epic Showdowns 23451208866_cc0bc9a8e0Comments on A 10473 New York State Assembly  “Relates to the registration and regulation of interactive fantasy sports contests”

Introduced by Mr. Pretlow May 27 2016

S 6793A was brought out  in the Senate by Mr Bonacic on May 24.  It is not a “same as” version but not very different.  Comments in the body of this post concern the Assembly version. Do not write to a Senator about the Assembly version.  See the appendix when  writing a Senator.  A letter can be done that can go to either chamber.

 Epic Showdowns

Coalition Against  Gambling in New York  (CAGNY), an all volunteer nonprofit  organization, urges every member of the NY State legislature to vote against the  bill if it comes to the  floor in his or her chamber and to vote no on any larger  omnibus bill into which A 10473  or S 6793A may have been  inserted late in the session.  Seven  really good reasons:

We will return to each of these in more detail below

  1. Assumes that entering contests in fantasy sports is not gambling,  attempting an end run around the NYS constitutional prohibition on gambling.  It  is gambling and internet gambling to boot.  Only a few states allow internet gambling though all but two now allow certain forms of gambling such as casinos, card rooms or state lotteries.
  1. Considers certain video games to be “sports events” and  players to be “athletes.”    The bill would allow entry (that is betting)  in a myriad of  “Interactive Fantasy Sports Contests.”  IFSC provide a vastly  greater platform  of events around the world than the stick and ball sports to which fantasy “sports” “contests” of  the big operators in the USA have previously been confined.  It would allow Daily Fantasy eSports (DFeS) without ever mentioning that term.
  1. Consumer protection has no watchdog,  Everything is based on self-report by “registrants” [operators]  to the Gaming Commission or by “authorized players” (bettors) to registrants.
  2. The drive to be “regulated” comes from companies that expect to profit from “regulation.”  They want to create a market.   Lobbying and outright corruption go hand in hand with such forces.  Draft Kings was getting ready last September to launch its own DFeS.
  3. Revenue to the state from licensing fees and from a 15% tax on what operators hold after paying out winnings would not be even enough to cover the cost of  “regulation.”  This is explicit in the justification section of the bill memo (see below),
  4. Legalizing internet gambling in NYS would not increase tourism, would not promote “economic development,”  would not provide “support  for education”  or “property tax relief.”   The proposed legislation is a concession to special interest groups who want to resume hustling New Yorkers.
  5. Expansion of gambling, particularly to the internet, worsens social injustice.
  1. Gambling or not?

This  dishonest bill  ignores the opinion of the NYS AG, shared by other states’ AGs and other parties  (football player Joe Namath, radio host Mike Francesca) that Daily Fantasy Sports as practiced by DraftKings and FanDuel is gambling.  It  does not even acknowledge  a controversy in NYS or in any state.  The bill avoids the issue by (a) limiting use of words that remind anyone of gambling and (b) implying that the AG’s complaint about DK and FD was related only to insider trading allegations. To illustrate (a), a text analysis:

  • Term or word                         number times used in text of bill

 

“gambling”                                          0

“gaming”                                             once   § 1401   ¶ 3

“internet”                                            0

“skill”                                                  0

“betting” or “bet”                                0

“wager”                                               0

“online”                                               once   § 1401   ¶ 8

“esports”  or e-sports or eSports         0

 

(b)   Watch the subtlety (deviousness) of the justification in the  bill memo, which opens by saying that the AG’s office began in October to investigate “into whether employees of the two biggest daily fantasy sports companies, DraftKings and FanDuel, were able to gain an unfair financial advantage in daily fantasy football contests by exploiting access to non-public data” and continues   “On November 10, the Attorney General’s office issued a notice to DraftKings and FanDuel demanding that they stop accepting wagers in New York.”  It never gives the reason for the demand, namely that the AG considered the operations of DK and FD to be forms of gambling, which with certain exceptions is illegal in New York State.  The justification  pretends that the AG’s objection was to charges of  insider trading.  The AG’s main  motivation,  however,  was not insider trading nor false advertising.  It is given in the office’s memorandum   below (italics added).

“The New York State Constitution has prohibited bookmaking and other forms of sports gambling since 1894. Under New York law, a wager constitutes gambling when it depends on either a (1) “future contingent event not under [the bettor’s] control or influence” or (2) “contest of chance.” So-called Daily Fantasy Sports (“DFS”) wagers fit squarely in both these definitions, though by meeting just one of the two definitions DFS would be considered gambling.  DFS is nothing more than a rebranding of sports betting. It is plainly illegal. 

  1. “Daily Fantasy Sports” becomes  “Interactive  Fantasy Sports Contests”

Since video game competitions are a booming activity around the world,  the bill would allow betting (or in DFS terms, paying to enter a contest) on a vastly greater platform  of events around the world than the stick and ball sports to which fantasy “sports” “contests” of  the big operators in the USA have been confined.  The bill is dishonest.  It uses  empty harmless-sounding terms (“interactive,”  “contests”) to hide a huge intended expansion of opportunities to “play” on the internet.  The most outrageous terminology calls video game players  “athletes”  so that competition in video games can be called a sports event.

http://www.legalsportsreport.com/4037/daily-fantasy-esports-market-overview/  Chris Grove on DFeS and the potential for growth September 18 2015.  Quoting below

“Daily fantasy eSports (DFeS) is essentially identical to the mainstream DFS product. The competition structure, lobby, promotions, and other core elements are more or less interchangeable.  The difference is that DFS players build rosters from athletes in stick-and-ball sports, while DFeS players build rosters from  athletes in eSports like Dota 2 and League of Legends.”

http://www.legalsportsreport.com/4025/draftkings-fantasy-esports/  Dustin Gowker posted Sept 18  2015 on the announcement that DK was preparing to launch its own DFes site.

http://edition.cnn.com/2016/05/29/sport/esports-revolution-revenue-audience-growth/   posted May 29  by a CNN writer describes the potential for growth.  League of Legends is a game that DK  had  its eyes on last September for  its  DFeS offering.  A quote from this is below.

“The eSports industry has been experiencing  double digit growth for several years and according to the research group Newzoo, it boasts a global community of 148 million enthusiasts. That number is projected to hit 215 million by 2019. Just one game — “League of Legends” — drew an audience of 36 million for its World Championship last year, that’s more viewers than the NBA Finals.”

  1. Consumer “ Protection”

The bill looks very consumer-protective, addressing many of the criticisms made of DK and FD, seemingly correcting those weaknesses.  For example,  it requires  that the mean and median net winnings of all players be made public and that “highly experienced players” be labelled as such.  It requires that payments be made to authorized players on time.

Loopholes abound.  Here are some

If someone becomes highly experienced in the future but was not on the registration date,  what mechanism ensures he will be labelled?  Who checks for omissions? Who checks for aliases?

Can college students on e-sports scholarships be picked for an IFSC team, or is their “sport”  a “collegiate sport” and therefore not eligible? Click here for more on athletic scholarships.

Persons under age eighteen are not supposed to be authorized. §1404 (b) (iii) says each registrant shall take all appropriate steps to confirm that  an individual opening an account is not a minor.

There is no definition of “appropriate.”  Is this an elaborate investigation  like New Jersey’s “Know Your Customer?”  Nothing is said.

Regulation, apparently on the honor system,  is based on self-report, of  registrants to “the commission”  [ the Gaming Commission without the  word Gaming] or of  “authorized players” to registrants.

The proposed  plan for voluntary self-exclusion has no supervision and no time frame.  Someone could self-exclude from one site,  then join another  tomorrow.  §1404 (d) reads enable authorized players to exclude themselves from contests  and take  reasonable  steps  to prevent such players from entering a contest  from which they have excluded themselves;

What are “reasonable” steps?  The  Upstate New York Gaming Economic Development Act of 2013 spells out more detail on self-exclusion than “reasonable steps.”

The use of scripts is prohibited.  (Section 1401 para 7)  Without these computerized routines for composing teams, sharks and minnows would be on nearly equal footing.  This would move things toward a truly fair game, closer to what seasonal fantasy sports were and are.   “Highly experienced players” (AKA sharks)  will not approve.  The use of scripts is hard to prove  though easy to suspect.   Scripts  will still be used sub rosa.  The proposed legislation says nothing about penalties.

4. Who is behind the insertion  of  eSports into  “regulation” of DFS?   The drive to  “regulate” comes from companies that expect to profit from “regulation.”  They want to create a  market much bigger than current DFS.   Lobbying and outright corruption go hand in hand with such forces.  Draft Kings was getting ready last September to launch its own Daily Fantasy eSPort (DFeS) with the video game League of Legends.

In Illinois last week  a similar bill was tabled by its sponsor for the current session because of allegations of proposed vote-buying by a FanDuel lobbyist whose hapless explanation (“corporate social responsibility goals”)  is here .

5. Revenue to New York State

Assuming “the commission” has the staff  to add regulating IFSC to its other duties, who is going to pay for the effort?    The Justification section of the bill Memo addresses the question.

“By registering and taxing interactive fantasy sports contests, this bill will also bring about a new and abundant source of revenue for New York State. Such funds will help [emphasis added] pay for the cost of regulation.”

How abundant will the funds be if they will not even cover the cost of regulation?  It they don’t, what source will?  This writer suspects that if this legislation passes not very much will be spent on enforcing regulations, and that some or most of the revenue will go  into the General Fund.  Realizing income to state coffers  by stinting on regulation of gambling is hardly a new concept but, sad-to-say, appeals to budget-makers.

Admitting  that legalizing internet gambling in New York State will not  pay for “regulating” internet gambling in New York State shows  that the  drive to legalize internet gambling in New York State is not to help all New Yorkers.  It is to help internet gambling special interests.

6. Tourism, “economic development” “support for education” “property tax relief”  CAGNY has long said that “benefits” such as the above to localities, regions or states are illusory,  really net losses when hidden costs are accounted for.  This opinion, I  admit, was was not shared by a number of  lawmakers who voted for “second passage” of the “casino amendment” in 2013 while saying “I don’t personally support casino expansion.”

Legislators who  previously voted to expand gambling in New York State because they believed the benefits to their constituents outweighed the costs can  vote their consciences against this  Interactive Fantasy Sports Contest legislation.   It  does not even pretend to offer any such economic benefits to the people of NY State.  Nor does it enjoy popular support.  A recent Siena poll showed 45% of respondents oppose legalization of Daily Fantasy Sports,  37% want it, 17% undecided.

Passage of this legislation is a handout from all New Yorkers  to corporate special interests that can’t even pretend their plans will improve the quality of our lives.

6. Social injustice Government-sanctioned predatory gambling wreaks hardship and suffering  not just on gamblers but on  their families, friends, relative, employers, employees, clients and more.  It contributes to social injustice.  The  60+ posts on this site pile up the evidence.

Permission is hereby given by the author, Stephen Q. Shafer  MD MPH,   to reproduce this text in whole or part as long as the permalink above is cited. The photo image is from flickerCC  title “Epic Showdowns” 95205711@NO2/23451208866.

Since publication on June 1 this post has been slightly revised.

Appendices

From § 1401 ¶ 8   The term  “Interactive fantasy sports contest” makes its debut in proposed legislation

18    8. “Interactive fantasy sports contest” or “contest”  shall  mean  any

19  online fantasy or simulation sports game or contest offered by an opera-

20  tor  or  registrant  in  which an authorized player manages a fantasy or

21  simulation sports team composed of athletes from an amateur  or  profes-

22  sional sports organization and which meets the following conditions:

23    (a)  the  value of any prizes and awards offered to authorized players

24  shall be established and made known to such players in  advance  of  the

25  contest, and such value shall not be determined by the number of author-

26  ized players or the amount of any entry fees paid by such players;

27    (b)  no  winning outcome shall be based on the score, point spread, or

28  performance of a single sports team, or any combination of such teams;

29    (c) no winning outcome shall be based solely on any single performance

30  of an individual athlete in a single sport or athletic event; and

31    (d) no game or contest shall be based on a prohibited sports event.

Comparing the Senate Version to the Assembly version:  The Senate version is not as sanitized as the Assembly version.  The word “gambling” is allowed, as is “gaming.”   “Internet” appears   The Senate version recaps and swallows whole  tortuous arguments by counsel for FD and DK that skill is material, making the process not gambling.  No mention  that the Attorney General has ever said a word about DFS.   The  Assembly version avoids all discussion of controversy as to whether DFS is gambling.

The Senate version offers  another gambit by DK and FD,  that since seasonal fantasy sports were carved out from the  UIGEA of 2006, Daily Fantasy Sports ( a later development) have been too.  This to me is like saying that cars with engines should be allowed into a soapbox derby as long as they have four wheels.

The Senate version  is even more vague than the Assembly’s on what sorts of “interactive fantasy sports contests:  would be allowed.  Neither version mentions eSports (video gaming).

The Assembly version prohibits high school sports; the Senate’s does not.

Senate: 15% tax on gross revenue from New York players  Assembly 15% on gross revenue, residence not mentioned.

Senate version even looser than Assembly on what “compulsive participants” might do to remove themselves.  Assembly calls them “compulsive players.”

Senate version more specific about how to keep minors out.

Both versions are vapid and vague about how to prevent use of scripts.  Neither prescribes punishment.

Both versions share a unilateral assumption that Daily Fantasy Sports is not gambling,  though they get there by different paths. The Senate version parrots Mssrs Mastro and Boies, counsel for two of the big companies.  The Assembly version is a thick  whitewash.  They are asking the legislature to make an end run  around the prohibition against gambling in the state constitution. Both versions provide paper-kitten protection against being hustled and fleeced. Neither version offers any benefit, credible or not, to the vast majority of New Yorkers.  Casino expansion and Lottery expansion have been sold to New Yorker by mirages. Promoters of “Interactive Fantasy Sports Contests”  (hitherto called internet sports betting)  don’t  offer mirages to the general population.   Could it be that  campaign contributions are  a better deal ? This legislation is for special interests.

Archives about the AG’s case against FanDuel and DraftKings

http://www.nytimes.com/2015/11/11/sports/football/draftkings-fanduel-new-york-attorney-general-tells-fantasy-sites-to-stop-taking-bets-in-new-york.html?_r=1   NY Times November 11,  the day after AG announced the cease and desist letter

http://www.nydailynews.com/sports/football/fanduel-draftkings-assure-users-remain-open-article-1.2431300   NY Daily News from November 11

http://www.nydailynews.com/opinion/editorial-fantasy-meet-reality-article-1.2431796  NYDN editorial says DFS is gambling.

http://www.nydailynews.com/sports/fantasy-sports-predatory-gambling-dangerous-article-1.2431896  sidebar by Stephen Shafer in Daily News article linked to above

http://www.ag.ny.gov/pdfs/DK_MOL.pdf complaint against Draft Kings submitted Nov 17, 2015

http://www.nydailynews.com/new-york/ag-schneiderman-bad-gamble-bluff-law-article-1.2441071  op- ed by AG Schneiderman November 19

http://www.nydailynews.com/opinion/fantasyland-n-y-bets-albany-casino-article-1.2652600 Daily News  holds its great position  May 31 2016

 

If the casino comes to town

DCIM100MEDIA

Aerial view of proposed Tyre casino site April 7 2015,

Remarks by Robert H. Steele   at the Stop Predatory Gambling National Day of Action event in Geneva NY,  26 September 2015,  Geneva is a few miles from Tyre, NY

“Although I’m from Connecticut, I should to tell you at the start that I feel a special connection to the Finger Lakes region for two reasons. First, because my wife went to Wells College on Lake Cayuga and I spent many, many enjoyable weekends here getting to know the area. And second, we in CT are very familiar with the Wilmorite group, because it financed an effort to open an Indian casino in Connecticut. That effort ultimately failed because the tribe in question could not prove it qualified for federal recognition.

I also appreciate your interest in my book – The Curse: Big-Time Gambling’s Seduction of a Small New England Town. The book is a fact-based novel set against the explosion of casino gambling in Connecticut during the 1990s, when Congress and the courts opened the door to the construction of the world’s two biggest casinos in the southeastern corner of my state.

In the end, The Curse is a cautionary tale about a small, quintessential Connecticut town that faces a Faustian dilemma in which it must choose between preserving its character and values or accepting an enormously seductive offer that would change the town forever – in other words, a story that has played out in one way or another in hundreds of communities across America and is playing out in Tyre today.

In 2013, the Institute for American Values, an independent think tank in New York, released a landmark report about the impact the spread of casino gambling is having on the nation.

The report began with this powerful statement:

“From time to time in American history, a new institution takes root across the country, and in doing so, changes the nation—changes the physical landscape of communities, impacts the patterns and habits of daily life, and affects citizens’ and communities’ economic outcomes…Something of this magnitude is now occurring in the United States. It is the spread of casinos.”

For many local people, the first thing that would probably come to mind in hearing this opening statement is the way Wilmorite’s proposed $425 million Tyre casino would impact the physical environment – including the nearby [Montezuma] National Wildlife refuge, federal and state protected species and habitat, as well as traffic congestion, noise, and air quality. The developer and key local officials evidently thought so little of these issues that they tried to get by with a slipshod environmental impact study, but in a stinging rebuff, the N.Y. State Court of Appeals ruled that their study did not meet state requirements.

As important as the environmental impact would be, however, I would like to zero in on the social and economic impact of what is being proposed for Tyre, using what is happening in Connecticut and elsewhere as background.

Connecticut’s two casinos, Foxwoods and Mohegan Sun, got off to blistering starts. With no significant competition other than in Atlantic City, 250 miles away, they quickly grew into the two biggest casinos on the planet, drawing more than half their combined customers from out of state, creating over 20,000 casino jobs, and sending hundreds of millions of dollars a year in slot revenues to the state treasury.

Today, however, the bloom is off the rose for Connecticut’s casinos as the Northeast fills up with competing casinos, fewer and fewer out-of-staters come to CT to gamble, and the out-of- state money that fueled CT’s gambling boom, and that of other early casino states, increasingly dries up.

Thanks to the growing competition, the combined revenue for CT’s two casinos is already down 38% from its peak. The casinos have eliminated 8,000 jobs and have been increasingly replacing full-time jobs with part-time jobs to reduce wage costs and eliminate medical benefits, while Foxwoods has stopped all profit-sharing payments to its tribal owners and is mired in debt.

The story is similar elsewhere, with growing competition cutting into the profits of casinos and changing the dynamics of the casino business in more and more states. For example, Delaware has had to put millions of dollars toward bailing out its 3 casinos, while New Jersey has spent hundreds of millions trying to prop up its casinos, only to see a third of them close in the past 20 months. In Ohio and Maryland, casino revenue is roughly 40% below original projections.

As the casinos’ profits slide, we have also been getting a clearer picture of the overall economic and social downside of what has happened in Connecticut.

First, with less out of state money coming in, an increasing percentage of the casinos’ profits and resulting state revenue is coming from the gambling losses of Connecticut residents, resulting in what Nobel Prize-winning economist Paul Samuelson called “the sterile transfer of money” from one group to another without creating any net new value.

Second, even with all the out-of-state money that came in in the past, the Connecticut casinos did little to create spin-off businesses, but did cannibalize other businesses.

One example of cannibalization actually involved a good friend of mine who owned one of the region’s most successful restaurants and who I never saw more excited than when one of the casinos opened nearby. He thought the casino would be great for his business, that with all the people coming down from Boston and up from New York, surely hundreds of them would stop at his restaurant every week.

Unfortunately, it didn’t work out that way, and I remember what he told me when he closed his restaurant because of competition from the casinos. “I have to admit,” he said sadly, “that I had no idea how the casinos actually work. But now I understand. People drive to the casinos, play at the casinos, go to shows at the casinos, stay at the casino hotels, eat at the casino restaurants, and then fill up their gas tanks at the casino gas stations and drive home. We as local merchants rarely see any of them.”

As casino mogul Steve Wynn once told a group of Connecticut businessmen when he was trying to put a casino in Bridgeport: “Get it straight, there is no reason on earth for any of you to expect for more than one second that just because (people come to my casino) they are going to run into your store or restaurant.”

And third, there is little evidence that casinos ultimately strengthen state or local government finances. Connecticut receives 25% of its casinos’ slots profits, which has provided the state with over $6 ½ billion in revenue in the past 22 years. Yet CT today is in the worst financial shape in its history, with a lagging economy and the third worst debt and unfunded liability ratio of any state.

And then there are the social issues.

For starters, the casinos have created a pervasive gambling culture in southeastern CT and they were followed by a steep increase in the number of CT residents seeking treatment for gambling addiction, with an attendant increase in debt, bankruptcies, broken families and crime.

One of the most remarkable findings from a 2009 state-sponsored study was that there had been a 400% increase in arrests for embezzlements in Connecticut since the casinos opened, a rate of increase 10 times the national average.

One of the embezzlers, incidentally, was my tax collector in the town of Ledyard, where Foxwoods is located. She stole $302,000 from tax receipts to play the slots at Foxwoods. And of course she didn’t win. Indeed, statistically it is almost impossible to win when the casino takes up to 10% of everything you bet over time. I should note that the embezzler, who was sentenced to prison, had a pristine record as an individual and public servant before she became hooked on slots.

There were so many embezzlement cases in southeastern Connecticut, in fact, that a columnist for the New London Day newspaper described the region as the embezzlement capital of America.

Recent embezzlement stories range from a Bridgeport elementary school principal charged with taking $10 thousand in student funds to gamble at Mohegan Sun to the chief financial officer of the town of Winchester, Connecticut stealing over $2 million from that town and losing much of it at the state’s casinos. The Winchester embezzlement was so serious that there was talk of the town having to temporarily close its school system.

Looking at crime overall, a 2014 study from Western CT State University shows that the number of violent crimes (including murder, rape, robbery and aggravated assault) increased in nearby towns after the casinos opened DESPITE A SHARP DROP in violent crime nationally and CT as a whole, while interviews with local police and judicial officials indicated increases in non-violent crimes such as prostitution and illicit drug use.

As far back as 1997, Congress became so concerned about the spread of casino gambling that it set up a National Commission to study the issue. Based on its findings, the Commission recommended that there be a moratorium on opening new casinos until the government could get a better handle on their social and economic costs.

But the recommendation was never implemented, and casinos have continued to multiply as state governments have invited them into their states to raise revenue without having to openly raise taxes.

In the process, casino gambling has become a $67 billion industry, with casinos arguing that they spur economic development and provide state and local governments with much-needed money.

But both economic studies and experience refute those arguments.

In fact, looking at all the evidence, the 2013 Institute for American Values report concludes that the regional and local casinos springing up across the nation drain wealth from communities, weaken nearby businesses, hurt property values, and reduce civic participation, family stability, and other forms of social capital that are at the heart of a successful society.

At this point, one might think states would begin to recognize the shortsightedness of depending on casino revenue. But that’s not what’s happening. Instead, state after state has become so hooked on casino money that it is seeking to expand gambling either to increase gambling revenue or replace the gambling revenue it is losing to cross-border competition.

And that is precisely what is happening in CT. The state began by increasing Foxwoods’ and Mohegan Sun’s FREE PLAY ALLOWANCE so they could beef up promotions and attract more customers; the state legalized the casino game KENO for restaurants, bars, and convenience stores, and the legislature has passed a bill which would allow construction of the state’s third casino and which could quickly lead to two more casinos after that.

Casino expansion advocates argue that the so called “convenience” casinos would help keep CT gamblers from going to MA and NY to gamble and thereby protect CT casino jobs and revenue. What they carefully avoid discussing, is that one or more new casinos would create thousands of new Connecticut gamblers and encourage current Connecticut gamblers to gamble more frequently, leaving CT residents with even less money for other goods and services and further adding to the state’s social problems.

Moreover, with both government and investors constantly pushing for new ways to make money from gambling, there is no reason to think that CT’s gambling expansion would stop there.

For example:

Video slots are beginning to spread beyond casinos into local neighborhoods in many states. There are now some 12,000 video slot machines at so-called “lottery delis” in Oregon, and more than 20,000 video slots at bars, restaurants, truck stops, fraternal clubs, gaming cafes, and even 2 flower shops in Illinois.

Next, there is a strong effort underway to expand legalized sports betting in the United States, including on daily Fantasy Sports.

And finally, thanks to a 2011 U.S. Justice Department ruling, New Jersey, Delaware, and Nevada have legalized in-state online betting for their casinos, and other states, including NY, are considering legalizing Internet gambling as well.

In short, the lesson across the country, and the lesson we are increasingly learning in Connecticut, is that each new expansion of legalized gambling is followed by increased pressure for still more gambling, and the only way to stop it is for individual citizens like you and me to stand up and say to our government leaders: STOP!

STOP trying to expand gambling in my state and trying to bring it into my community.

Stopping it is admittedly an enormous challenge – a true David and Goliath fight. The casino developers and gambling promoters have enormous financial resources which they use to dominate the public debate, gain political and government support, and overwhelm the opposition, while average citizens typically have little money with which to fight back.

For instance, in last fall’s statewide referendum in Massachusetts on whether to repeal the law allowing casinos in that state, casino interests ran a reported 4,000 TV ads in the last month of the campaign in a successful effort to kill repeal, while those supporting repeal were unable to afford any TV time. Then this summer, the developer seeking to put a casino in Brockton, MA reportedly outspent a coalition of churches, civic groups and individuals by 450-1 in order to win a narrow victory there.

Yet, remarkably, casino opponents have recently won important victories in which they (1) stopped casinos from being legalized in New Hampshire, (2) defeated efforts to expand casino gambling in Rhode Island and (3) beat back casino proposals in Newport, RI; in West Springfield, Palmer, Milford, Tewksbury, Worcester, and East Boston, MA; and in Albany, East Greenbush, and Tuxedo, NY.

One of the saddest aspects about your battle against the proposed Tyre casino is the extent to which the developer has gone to try to keep you from speaking out against its proposal. Here is a giant real estate corporation which is spending a fortune on an army of designers, engineers, lawyers, consultants and publicists to break into Tyre to further enrich itself, yet criticizes Casino Free Tyre for trying to raise a modicum of money to defend its town.

It is truly an act of monumental hypocrisy and demonstrates how worried the developer is about your ability to persuade others to actively join your fight and demonstrate to the State Gaming Commission how strong the opposition among everyday citizens is to the proposed casino. Hopefully the casino advocates’ tactics will encourage you to redouble your efforts to speak out, to recruit your neighbors, to reiterate your opposition to the casino to the Gaming Commission and town and county officials, and to support Town Board candidates who oppose the casino.

In defeating the casino in Palmer, MA, opponents used the slogan “The more you know about casinos, the less you’ll like them,” and used every possible means to explain to the community what casinos are really all about.

The opponents did a particularly good job of getting across the predatory nature of casinos, pointing out that multiple independent studies show that roughly half of a typical casino’s gambling profits come via problem gamblers, whether the money is their own, or they have begged, borrowed, or taken it from others. In other words, that the casino industry’s very business model is dependent upon preying on addicted gamblers.

That’s the nature of the business they want to bring to your community.

Palmer’s slogan pretty much said it all. “The more you know about casinos, the less you’ll like them.”

Thanks very much.”

Permission is hereby granted to reproduce the above text  in whole or in part as long as the permalink is cited and the speaker, Robert H. Steele, is credited.

Mr. Steele, a Connecticut businessman, is a former Representative to Congress from Connecticut who recently joined the Board of Stop Predatory Gambling.

Online Poker Hearing Misses the Point

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The New York State Senate website has announced that the Senate Racing, Gaming, and Wagering Committee will ‘discuss the future of online poker in New York State’ at a hearing scheduled for 1:00 p.m. on September 9, Wednesday. ORAL TESTIMONY BY INVITATION ONLY

Coalition Against Gambling in New York believes that there should be no future for online poker.  Not invited to speak, we submit the statement below to  the record:

No form of internet gambling is now legal in NY. State Senator John  Bonacic’s bill S 5302 proposes to legalize internet poker. The upcoming  hearing looks like a shout-out to gambling interests*, including the Poker Players’ Alliance.  The Senator seems indifferent to social and constitutional legal issues about internet gambling.  According to Tight Poker,   his concern is how   it might profit NYS to legalize  i-poker ASAP.

Online poker is the thin end of the “legalization” wedge because some savants hold there can be enough skill in poker to make it  not gambling. They note that  a star  player may   win big over time, unlike a slot machine user. The vast majority  of players who aren’t stars, however, are certainly gambling. Outside “World Series” tournaments that draw skilled peers, the consistent big winners are sustained by  the predictable losses of the less apt, the more chance-tossed.

Ominously, were i-poker  “legalized,” other on-line games would likely follow. First would come those that have less, but still some, element of decision-making skill relative to chance than does poker. Later, with these precedents, would come casino “games” of pure chance, which everyone agrees are gambling.

If stymied by a future ruling that i-poker is gambling, the Senator may try a different tactic.   He knows that unless a bill to rebuild the longstanding federal ban on internet gambling passes soon, each state may make its own laws about internet gambling (except on sports). He may anticipate that the Legislature would concede him i-gambling after the trite argument that “Other states will be doing it; so, we should too and before them.” New York, however, has a constitutional prohibition against all types of gambling other than those that have been allowed in by amendment, most recently casinos. The Legislature has shown itself ever ready to re-define words like “lottery,” but it cannot amend the Constitution.  That would require a vote of the people, who have shown no special desire for internet gambling.

Article 1 § 9 . . .no lottery or the sale of lottery tickets, pool-selling, book-making, or any other kind of gambling, except lotteries operated by the state and the sale of lottery tickets in connection therewith as may be authorized and prescribed by the legislature, the net proceeds of which shall be applied exclusively to or in aid or support of education in this state as the legislature may prescribe, except pari-mutual betting on horse races as may be prescribed by the legislature and from which the state shall derive a reasonable revenue for the support of government, and except casino gambling at no more than seven facilities as authorized and prescribed by the legislature shall hereafter be authorized or allowed within this state; and the legislature shall pass appropriate laws to prevent offenses against any of the provisions of this section. (Amendment approved by vote of the people November 5, 2013.)

Sen. Bonacic will perhaps argue that i-gamblers can be required (the NJ model) to be registered with an  in-state casino, which they need never visit again.   He may assert that when “Prop 1” passed in 2013  it  implied this easy fix.  Plainly it did not.

Or, less likely, the Senator might try to graft internet gambling onto the New York State Lottery, requiring participants to register with a racino, not a licensed casino.

There are many arguments against i-gambling that we don’t take up here. Our focus today is on the wrongness of hearings that have nothing to do with whether internet poker should be made legal and everything with “When do we start?”  . Mr.  Bonacic acts as if legalizing internet poker in New York State is a mere formality, like closing a business deal with allies. Such arrogance should be called.

[*] In August, Tight Poker interviewed Sen. Bonacic about who had been invited to testify orally. “ ‘Lawmakers and various representatives of the gambling industry will be present at the hearing.’ Bonacic said: ‘I’m bringing in Caesars and MGM plus all of my [emphasis added] casinos, racinos, and OTBs. We are going to have a discussion on the pros and cons of moving the legislation.’ ”

Permission to reproduce this in whole or in part is hereby granted by cagnyeditor as long as the permalink above is cited.  The Trojan Horse painting is by Tiepolo.

Two Downstate Racinos Are Downstate Casinos Now

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        For  practical purposes, there are at least two non-tribal full-service casinos operating today in New York State. If that surprises you, read on.   The facilities at Aqueduct  and at Yonkers call themselves casinos yet pose as “racinos.”  In my opinion they are real casinos, cleverly disguised as “racinos.”   They don’t have human croupiers or dealers, but offer table games in which the outcome of a play is governed by the same  laws of physics that determine the outcome of a throw or spin  by a human being.  Such table games are billed as part of lottery.  I say  they are illegal.  What’s your opinion?   

     An editorial in the New York Daily News May 5 showed that at Resorts World Casino (Aqueduct Racino) “electronic table games” of craps, Bo-Sic, roulette,  and baccarat are bringing in a good part of the “video gaming” revenues. 

http://www.nydailynews.com/opinion/playing-games-law-article-1.1334713

     I am not a lawyer, but was persuaded by the carefully-researched editorial and by my own reading of the opinion of the Appeals Court in 2005 that these games are not permitted under the present New York State Constitution.  Though operated by NYS Lottery, they do not meet the definition of “lottery” in the same way as do video lottery terminals (VLTs).

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Gov. Cuomo tips his hand on amendment for casinos

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Gov. Cuomo tipped his hand a little in SOS yesterday.  He  wants for now (1) no new casinos in NYC (2) three  “upstate,” another four in future (3) locations and scale to be decided by a Gam[bl]ing Commission he will appoint.  I thought the first-passage bill in 2012 said “as prescribed by the legislature,” which seems cut out of the deal.  If the amendment proposal goes to referendum, how much devil will be in the details?

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