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Posted on by Frank A. DiGiacomo

New Jersey Assembly Offers its Version of North Jersey Casino Expansion

Just days following a proposed amendment to the New Jersey State Constitution proposed in the State Senate and as detailed here , the New Jersey Assembly offered its own proposed Amendment to the Constitution which would also authorize up to two additional casinos in North Jersey.

Both Amendments propose no more the two casinos, each located in different counties and outside a 75 mile radius of Atlantic City.  The 75 mile radius restriction eliminates Monmouth Park Racetrack as a possible site for casino expansion.

The primary differences are as follows;

    • Applicant eligibility:  The Assembly version of the proposed amendment allows one of the two licenses to be awarded to an applicant with no current ownership or ties to an existing Atlantic City casino.  The Senate version of the amendment limits eligibility to (1) a currently licensed Atlantic City casino operating as of December 11, 2015; or (2) any person licensed as a principal owner (yet undefined) of a holder of a New Jersey casino license that was operating a casino which was conducting gambling on December 11, 2015 if that principal owner also holds a valid license to own and operate a casino in another jurisdiction with licensing standards similar to those in New Jersey.  The Assembly version only applies the Senate version’s proposed eligibility requirements to the “initial license.”  The current Atlantic City casino tie-in eligibility requirement presumably does not apply to the second license awarded.
    • Tax Allocation to Atlantic City.  The Assembly version of the proposed Constitutional Amendment allocates 35% of state tax revenuers from the two new casinos for purposes if the recovery, stabilization or improvement of Atlantic  City.  The Senate version  allocate 49% of such tax revenue for the recovery, stabilization or improvement of Atlantic  City.

The Senate and Assembly must agree on an identical version of the proposed Amendment which would have to be approved with 3/5 votes by both houses of the NJ Legislature or majority votes, twice over two years.  The votes have to be completed at least 90 days before going on the ballot of a state-wide referendum to amend the NJ State Constitution.

Posted on by Frank A. DiGiacomo

New Jersey Legislature Takes First Step To Authorize North Jersey Casinos

A Proposed Amendment to the New Jersey State Constitution will authorize two additional casinos in the State. The details of the Proposed Amendment are as follows:

  • No more than 2 casinos, each one to be located in different counties in State
  • New casinos must be located  outside a 75 mile radius from Atlantic City.
  • Eligibility for the license is limited to:
    • (1) a currently licensed Atlantic City casino operating as of December 11, 2015; or
    • or (2 ) any person licensed as a principal owner (yet undefined) of a holder of a New Jersey casino license that was operating a casino which was conducting gambling on December 11, 2015 if that principal owner also holds a valid license to own and operate a casino in another jurisdiction with licensing standards similar to those in New Jersey
  • Tax rate to be determined in subsequent legislation. 49% of such tax revenue for 15 years is dedicated for recovery , stabilization or improvement of Atlantic City.  2% of tax revenue dedicated to thoroughbred and standardbred  horsemen.
  • The Resolution has to be approved with 3/5 votes by both houses of the NJ Legislature or majority votes twice over two years. The votes have to be completed at least 90 days before going on the ballot of a state-wide referendum to amend the NJ State Constitution.

A copy of the proposed amendment can be read here: SCR 185.

Posted on by Duane Morris

Duane Morris Receives Corporate LiveWire’s 2016 Excellence in Gaming New Jersey Law Firm Award

Duane Morris LLP has received the 2016 Corporate LiveWire Excellence in Gaming Law Firm Award for New Jersey. The gaming awards look at the gaming sector as a whole and cover casinos, online and mobile gaming, as well as championing firms involved in
gaming law and regulatory compliance.

“We’re honored to receive this award,” said Hersh Kozlov, head of the firm’s Gaming Law Practice Group and managing partner of the Cherry Hill office. “We strive to provide our gaming industry clients with top-notch service and it’s gratifying to be recognized for the work we do.”

The Corporate LiveWire Awards represent the pinnacle of business achievement, recognizing the best in their respective fields. The awards cover the most important sectors of business, from finance advisories and funding providers to law firms and specialist advisory companies that deal with mergers and acquisitions.

For the full story, please see the press release on the Duane Morris website.

Posted on by Duane Morris

Duane Morris Partner Christoper Soriano to Speak at the 6th Forum on US Online Gaming

Duane Morris partner Christopher Soriano will be a speaker at the 6th Forum on US Online Gaming to be held on May 12-14, 2015, at the DoubleTree Suites by Hilton in New York City. Mr. Soriano will be a speaker for the “Pre-Forum Master Class: Interstate Gaming: How Can Cross-Border Capability Improve Liquidity?” on May 12 from 3 p.m. to 6 p.m.

Posted on by Duane Morris

Video Gaming Bill Reintroduced in Pennsylvania

Pennsylvania House Bill 808, introduced this week, would authorize video gaming machines for video poker, bingo, keno and other games in establishments with valid liquor licenses, such as restaurants, bars, taverns, hotels or clubs, in Pennsylvania. Similar legislation was introduced last year, and we provided an analysis of that bill here. In addition to providing an overview of the legislation, this Alert highlights the many similarities and distinct differences between House Bill 808 and last year’s legislation.

What’s Authorized

Licensed establishments with less than 2,500 square feet would be permitted up to five video gaming terminals. One additional terminal would be permitted for every additional 500 square feet, up to a maximum of 10 terminals. In comparison, last year’s legislation authorized up to only three machines at an establishment.

Maximum wagers are held to $2.50 with a maximum payout of $500 and a payout percentage of 85 percent. The only change from last year’s legislation is a reduction from $1,000 to $500 on the maximum payout.

To read the full text of this Alert, please visit the Duane Morris website.

Posted on by Duane Morris

Pennsylvania House Gaming Oversight Committee Introduces Bill That Would Allow Existing Casinos to Offer Internet Gaming

On February 25, 2015, John Payne, Chairman of the Pennsylvania House Gaming Oversight Committee, introduced a bill that would allow existing Pennsylvania casinos to offer Internet gaming to patrons in Pennsylvania. The Pennsylvania Gaming Control Board (PGCB), which currently regulates casino gaming in the Commonwealth, would be responsible for licensing and regulating Internet gaming, as well. Under the bill, only existing casino licenses, or their affiliates, will be eligible to offer poker and other casino style games over the Internet. The proposed legislation also calls for the licensing of “significant vendors,” which would include operators of interactive gaming systems on behalf of the existing licensees. Importantly, the proposed legislation does not include a “bad actor” provision that would bar individuals or entities previously associated with illegal Internet gaming activities from being licensed by the PGCB. However, applicants would still be required to satisfy Pennsylvania’s suitability requirements, and it remains to be seen what view the PGCB will take of applicants who may have previously engaged in unlawful Internet gaming activities.

Subject to the limits under federal law, the bill limits participation in Internet gaming to those physically present in Pennsylvania, or from states with which Pennsylvania negotiates an Internet gaming agreement. The bill contemplates a rapid implementation cycle by requiring the PGCB to decide a licensing application within 120 days of a proper application being submitted. The PGCB may also grant temporary authorization to any vendor upon the filing of a complete application.

To read the full text of this Alert, please visit the Duane Morris website.

Posted on by Adam Berger

Duane Morris Attorney Adam Berger Writes About the P.A. Gaming Industry

Associate Adam Berger in the Cherry Hill office wrote an article for the Philadelphia Business Journal titled “P.A. Gaming Industry at a Crossroads: Lessons from Atlantic City.”

As the song goes, Atlantic City didn’t know what it had until it was gone. In 2006, the city’s casinos brought in more than $5.2 billion in gaming revenue. In 2014, that number was down almost 50 percent, to $2.7 billion, and expected to fall even further in 2015, the first full year of operations following the closures of four casinos – Atlantic Club, Revel, Showboat and Trump Plaza.

Pennsylvania casinos, on the other hand, experienced their highest total gaming revenue of $3.15 billion in 2012. Gaming revenues declined slightly in the Keystone State during each of the next two years, down to just over $3 billion in 2014, but despite the recent declines, Pennsylvania remains the second largest gaming market in the nation, next to Nevada. It is from this point of strength that Pennsylvania needs to recognize what it’s got and not repeat the mistakes of its neighbor to the east.

So how did New Jersey allow its casino market to fall so far? Clearly the loss of New Jersey’s East Coast monopoly on gaming — as a result of the advent of casino gaming in Connecticut, Delaware, Maryland, New York and Pennsylvania — did not help. But this increased competition did not seal Atlantic City’s fate; rather, its fate was sealed during the preceding decades when Atlantic City casino operators failed to improve their properties and make Atlantic City a true and viable destination. Instead of making necessary capital expenditures and adding resort amenities, casino owners upstreamed profits while their properties slowly became outdated. The result was a city full of mostly unexciting casinos that offered little more than the slots-in-box style options found in neighboring states.

To read the full article, please visit the Philadelphia Business Journal website.

Posted on by Frank A. DiGiacomo

Pennsylvania Considering Video Gaming Machines Again?

On February 12, 2014, the Pennsylvania House of Representatives’ Gaming Oversight Committee held a hearing to receive testimony regarding the prospects of legalizing electronic gaming devices, i.e video gaming machines, in the Commonwealth. The hearing focused on gaming along the lines of what was raised in a prior session’s bill, (2014 House Bill No 1932), which sought to legalize video gaming machines for bingo, keno, blackjack and other games for use in establishments with valid liquor licenses, such as restaurants, bars, taverns, hotels and clubs.

With a looming budgetary deficit Pennsylvania legislators are exploring various ways to increase gaming related tax revenue, including potentially moving forward with internet gaming through its existing bricks and mortar casinos. This recent Gaming Oversight Committee hearing revisiting the video gaming machines issue would be another means through which to generate gaming based tax revenue. The hearing’s witnesses touted the jobs and tax revenues generated by Illinois which implemented video gaming machines in bars, restaurants, taverns and truck stops several years ago – (projected IL tax revenues in excess of $250 million in 2015). While Illinois has had success generating tax revenue and producing jobs with its video gaming machine roll out, the machines do compete, on a low end basis with the states’ existing casinos. While local municipalities in Illinois can opt out of the video gaming program that option may not exist in a Pennsylvania bill and opposition from Pennsylvania’s casino industry remains to be seen.

Also, if considering video gaming at bars and taverns Pennsylvania may be well served to learn from some of the mistakes made with the passage of last year’s Tavern games legislation. Tavern games, with its gaming regulatory scrutiny focused on the bars/tavern owners, rather than through the games’ owners and route operators, lead to cost issues and a reluctance to move forward which hampered widespread implementation of tavern gaming. In addition, while Illinois has had relative success with its multi-tiered system of manufacturers, distributors, operators and establishments, that system has one too many layers to operate as effectively as it otherwise could. Few recall Pennsylvania’s short-lived requirement of local suppliers of slot machines layered between the industry’s manufacturers and end user casinos. The removal of the local supplier requirement opened the way to the implementation of Pennsylvania casinos in 2006. Finally the Pennsylvania Gaming Control Board and its agencies are more than capable of regulating and rolling out video gaming should it become law. Bringing in other, less experienced state agencies, such as Liquor Control or the Department of Revenue would only further complicate and delay implementation should the law pass.

Posted on by Adam Berger

Bill Restricting Casino Gaming Operations in Pennsylvania Goes to Committee

Last week, a Pennsylvania bill, which would restrict the hours of operation of Pennsylvania casinos, was referred to the House Committee on Gaming Oversight. Specifically, House Bill Number 165 would require casinos in the Commonwealth to close between the hours of 2 a.m. and 6 a.m. In a memorandum accompanying the legislation, State Representative Will Tallman, a co-sponsor of the bill, suggested that closing the casinos for a couple hours each day would reduce the prevalence of problem gambling.

If this legislation were to pass, Pennsylvania would be an outlier in the region as casinos in neighboring states – including New Jersey, Delaware, Ohio and Maryland – maintain 24 hour gaming operations. Additionally, New York recently selected three upstate applicants to develop full-scale resort casino facilities, which are expected to open in the next couple years. Once open, each of these facilities will offer 24-hour gaming to patrons.

It will be interesting to see if the Pennsylvania House committee charged with overseeing the Commonwealth’s gaming industry will support this legislation – and add another hurdle to a casino industry that is already struggling to keep gaming dollars away from rival gaming markets – or if the committee will determine that the existing regulatory safeguards to prevent problem gambling are sufficient. Stay tuned for updates on this and other legislation affecting the Pennsylvania gaming industry.

© 2009- Duane Morris LLP. Duane Morris is a registered service mark of Duane Morris LLP.

The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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