John Brennan, a staff writer for The Record, was a panelist for Duane Morris’ event “The Future of Sports Betting” on April 27, moderated by partner Christopher Soriano. Mr. Brennan’s column today, about the notorious poor luck of professional sportswriters and sports executives at fantasy leagues in their own sports, mentioned the event, sharing a story told by panelist Andrew Brandt of ESPN. The firm thanks Mr. Brennan and Mr. Brandt for their participation in the event.
Duane Morris, the Sports Business and Leadership Association and the Sports Lawyers Association will be hosting the roundtable discussion, “High-Stakes Games: Betting on Sports,” on Thursday, January 26, 2017 in Miami, Florida. This in-depth roundtable discussion will focus on the key issues and high stakes of sports betting and will feature sports and gaming industry executives, lawyers and pro-team executives. Duane Morris partner Christopher L. Soriano, of the firm’s Cherry Hill office, will moderate the discussion.
- Eric Frank, Director, Legal Affairs, Amaya
- Myles Pistorius, Senior Vice President and General Counsel, Miami Dolphins
Topics to be discussed include:
- The current state of sports betting in the United States
- New developments in gaming law
- The pro team’s view on expanding sports betting
- Online and offshore wagering on games
Duane Morris Sports Practice AdvantageSM
Duane Morris attorneys have extensive experience representing clients doing business in sports. Whether pursuing new opportunities or investments, enforcing contracts or agreements or protecting clients’ rights, the firm’s lawyers understand the unique issues presented by operating in the industry, including the importance of establishing and maintaining relationships, controlling sensitive information, maintaining privacy and confidentiality and achieving goals in tight time frames.
About the Sports Business and Leadership Association
The Sports Business and Leadership Association (“SBLA”) is a non-profit charitable organization whose members are professionals working in the sports business industry. The SBLA’s core mission is to organize an affinity group of legal professionals working in the sports business industry and to educate them on trending sports business issues and concerns. The SBLA’s goal is to raise money to provide underprivileged children with the financial means to attend a summer sports camp at a university (the “SBLA Scholarship Program”).
About the Sports Lawyers Association
The Sports Lawyers Association (SLA) is a nonprofit, international, professional organization whose common goal is the understanding, advancement and ethical practice of sports law. There are more than 1,000 current members: practicing lawyers, law educators, law students and other professionals with an interest in law relating to professional and amateur sports.
Duane Morris attorneys Christopher Soriano and Adam Berger of the firm’s Cherry Hill office will present a webinar, “2016: A Year to Hold’em or Fold’em,” hosted by the NJ State Bar on December 9, 2016. The webinar will offer retrospective on this year’s key legal issues in the gaming industry.
Topics to be discussed include:
- The recent decision shooting down sports betting in casinos
- Impact of the North Jersey gaming referendum on the future of the racing industry and on the Atlantic City casino market
- Online gaming developments
- Fantasy sports legislation/regulation
- Issues surrounding the potential closing of Monmouth Racetrack
To register for the webinar, please visit the NJSBA website.
Dealing another setback to New Jersey’s long running battle to implement sports betting at casinos and racetracks in the state, the Third Circuit Court of Appeals has again ruled that the state’s latest effort to implement sports betting runs afoul of the federal Professional and Amateur Sports Protection Act (PASPA).
Briefly, PASPA prohibits a state from “authorizing by law” sports betting. New Jersey previously challenged the constitutionality of the statute, arguing that PASPA impermissibly commandeers a state to implement a federal regulatory scheme because the state legislature has no choice but to keep sports betting illegal in the state. The Third Circuit concluded that states had options, even considering that a state may repeal its prohibitions in whole or in part.
New Jersey then repealed its criminal prohibitions on sports betting to the extent those apply to casinos and racetracks. New Jersey took the position that this partial repeal did not amount to a prohibited “authorization” because there is a distinction between authorizing and repealing. The Third Circuit disagreed, but later agreed to review the case en banc.
Today, the en banc court, in a 10-2 vote, reaffirmed its prior position that New Jersey’s partial repeal amounts to an authorization prohibited by PASPA. The court backpedaled from its earlier opinion: “To the extent that in Christie I we took the position that a repeal cannot constitute an authorization, we now reject that reasoning.” The court also continued to hold that states have more options under PASPA other than a total repeal of prohibitions on sports betting and maintaining those prohibitions as they currently exist. “To be clear, a state’s decision to selectively remove a prohibition on sports wagering in a manner that permissively channels wagering activity to particular locations or operators is, in essence, “authorization” under PASPA. However, our determination that such a selective repeal of certain prohibitions amounts to authorization under PASPA does not mean that states are not afforded sufficient room under PASPA to craft their own policies.”
But the Court did not illustrate any meaningful options that a state has, other than to repeal its prohibitions on sports betting to the extent that they prohibit small bets between family and friends. This is not an economically meaningful option, nor is stopping small bets among friends and family members a law enforcement priority. “We need not, however, articulate a line whereby a partial repeal of a sports wagering ban amounts to an authorization under PASPA, if indeed such a line could be drawn. It is sufficient to conclude that the 2014 Law overstepped it.”
In dissent, Judge Julio Fuentes, the author of Christie I, concludes that the state’s repeal comports with the Court’s direction in Christie I and is therefore not a violation of PASPA. He opined that there is a meaningful legal difference between authorizing and repealing and that New Jersey’s law does not grant any permission to anyone to do anything; instead it is a “self-executing deregulatory measure.”
Judge Thomas Vanaskie authored a separate dissent, arguing that PASPA is unconstitutional. In probably the most powerful language anywhere in the majority or dissent, Judge Vanaskie states:
This shifting line approach to a State’s exercise of its sovereign authority is untenable. The bedrock principle of federalism that Congress may not compel the States to require or prohibit certain activities cannot be evaded by the false assertion that PASPA affords the States some undefined options when it comes to sports wagering.
Judge Vanaskie concludes that PASPA was intended to have the states implement a federal legislative program, and is, therefore, unconstitutional.
It remains to be seen whether New Jersey will seek certiorari from the US Supreme Court or try another means of repealing, or whether these decisions lead to a federal dialogue on a solution to sports betting. With a multi-billion dollar unregulated and untaxed sports betting market in the United States, and a federal statute that dates back to before the prevalence of internet wagering, it is probably time to consider whether the status quo remains the best option.
On June 22, 2016 the Pennsylvania General Assembly passed a sweeping expansion of gambling . The bill, which must be passed by the state’s Senate and signed by the Governor, would allow for internet based gambling, daily fantasy sports, slot machines at off-track betting parlors (“OTBs”), slot machines at airports and even paves the way for legalized sports betting, if, and when that is allowed under federal law.
- Pennsylvania would be the fourth state to allow legal internet gambling (Internet gambling is currently legal in New Jersey, Delaware and Nevada);
- Internet gambling would be offered through the Commonwealth’s current, licensed casinos with each casino paying an $8 million license fee to offer internet gaming;
- Age and geo-location controls will be required – players must open an account, be 21 or over and must be located within PA while participating in internet gambling;
- The tax rate on internet gambling revenue would total 16%;
- Participating casinos would not be allowed to reduce their number of slots machines their existing b casinos
Daily Fantasy Sports
- Bill allows current DFA operators like FanDuel and Draft Kings to obtain a license to offer DFS without partnering with a PA casino; DFS operators would pay 5% of its revenues ( after player payouts) to the state;
- DFS players must be 18 yo or older;
Slots at OTBs
- PA’s 5 racetrack casinos would each be permitted to have up to 4 off-track betting parlors with up to 250 slot machines per OTB;
- Each such OTB must be outside a 50 mile radius of an established PA casino;
- There is a $5 million licensee fee for each OTB with slots;
Slots at Airports
- Casinos can seek permission to install slot machines at airports; the PA Gaming Control Bd can set limits on the number of slot machines l allowed;
- License fees for such operations would be $5 million in Philadelphia; $2.5 million in Pittsburgh; and $1 million a each at the four other international airports in PA;
Expansion of Current Resort Casinos
- Current Category III casinos in PA can expand their max slot machines counts from 600 to 850 and table games from 50 to 65;
- There is also a relaxation in the requirement that casino patrons be customers of other amenities;
- If a current Category III casino and all three changes it so would requires $4.5 million is additional license fees.
- The bill instructs the PA Gaming Control Bd to develop regulations to allow for sports wagering if, and when the federal government permits such sport betting
Duane Morris associate Adam Berger of the firm’s Cherry Hill office spoke at the 2016 Jeffrey S. Moorad Sports Law Journal Symposium, held earlier this month in Villanova, Pennsylvania. Mr. Berger participated in a panel discussion on “Daily Fantasy Sports: A Legal View.” This year’s symposium, A Changing Game: Challenging the Status Quo in Sports Law, analyzed the hard-hitting legal and business issues in sports today.
Daily fantasy sports—a hot-button issue from a legal, regulatory and business perspective—was the headline topic for the roster of industry leaders. The discussion also included the evolution of the NCAA’s legal and business landscape and a view of pro sports from one of the nation’s top agents and a two-time Super Bowl champion.
To view the Sports Law Symposium program, please visit YouTube.com.
Duane Morris partner Christopher Soriano of the firm’s Cherry Hill office appeared on a recent broadcast of the “Wagner & Winick on the Law” radio program, during which he joined co-hosts Dean Mitchel Winick and Professor Stephen Wagner, both of Monterey College of Law, to discuss the interplay of federal and state laws in the United States related to regulating gambling and how many of these laws are outdated. A sampling of the topics discussed include Internet gaming, office brackets, fantasy sports, casinos and the lottery.
Within the context of the NCAA March Madness Tournament, Mr. Soriano provided insights on the gaming law implications of office bracket tournaments, which, as in most instances where people put in money on the results of a sporting event, are illegal for the most part. Mr. Soriano also commented on the developing area of fantasy sports and the important distinction to be drawn between games of skill and games of chance. For example, the traditional season-long fantasy sports contests are considered legal because skill is involved; while daily fantasy contests have been viewed as being illegal games of chance. Therefore, where is the line between when something is a contest of skill and when it is a contest of chance?
To listen to the radio program in its entirety, please visit the Recent Podcasts, Webcasts and Audio section on the Duane Morris website.
On Monday, three-fifths of each house of the New Jersey legislature passed resolutions that will put a question on the ballot in November asking voters if they want to expand casino gaming outside of Atlantic City. As we previously posted here and here, the North Jersey casino proposal will allow for two casinos to be located at least 72 miles from Atlantic City, in separate counties. The minimum investment required for a North Jersey casino will be $1 billion. Current Atlantic City casino owners will be given an exclusive period of 60 days to submit bids for the two North Jersey casino licenses before bidding is opened up broadly. Current owners of Atlantic City casinos may partner with other investors/developers to submit a bid for a North Jersey casino license.
If New Jersey voters pass the referendum in November, the legislature will then need to adopt enabling legislation. This legislation will provide the details for the bidding process and the tax rate for North Jersey casinos. Atlantic City casinos currently pay an effective tax rate of 9.25% on gross gaming revenue. North Jersey casinos likely will be required to pay a significantly higher rate, perhaps in excess of 50%.
We will provide updates as developments occur.