Legalized casino gambling and sports wagering are approaching the finish line in Virginia following the recent passage of two bills by the Virginia General Assembly. Senate Bill 36 and House Bill 896, both awaiting the signature of Virginia Governor Ralph Northam, would permit five land-based casinos, online sports betting and up to 2,000 additional historical horse racing machines.
On May 29, 2019, the Pennsylvania Gaming Control Board approved a Change of Control petition for the sale of Sands Bethlehem Casino Resort. Two days later, on May 31, 2019, Wind Creek Hospitality officially acquired the casino from Las Vegas Sands Corporation for $1.3 billion, as the transaction closed on Friday. The casino resort facility, which is located in the Lehigh Valley of Pennsylvania, will operate as Wind Creek Bethlehem, and will include amenities such as a 282-room AAA Four Diamond hotel, a 183,000 square foot casino floor featuring slots, table games, and electronic table games, numerous food and beverage outlets, a retail mail, and a multi-purpose event center.
The closing of the transaction comes after approximately fourteen months of regulatory review and, most recently, the PGCB’s approval of the transaction. Duane Morris represented Las Vegas Sands in the transaction, providing gaming regulatory and real estate guidance and assistance in other areas, including serving as co-counsel before the Board for Wind Creek Hospitality. Duane Morris attorneys who assisted on this matter include J. Scott Kramer, Greg Duffy, Frank DiGiacomo, Chris Soriano, and Adam Berger.
On May 29, 2019, at a special hearing convened for this purpose, the Pennsylvania Gaming Control Board approved a Change of Control Petition authorizing the transfer of the entirety of Las Vegas Sands Corporation’s interest in Sands Bethworks Gaming LLC’s to Wind Creek Hospitality, an instrumentality of the Poarch Band of Creek Indians. The Board’s Order, beyond approving the change in control, allows the casino facility to change its name to Wind Creek Bethlehem, reflecting the casino’s new ownership.
Subject to the Board’s conditions, Wind Creek Hospitality is able to acquire all of the interest in Sands, including its licenses, which include a Category 2 License, a Table Games Certificate, and Interactive Gaming Certificates. The Board’s decision comes after over a year of regulatory review.
Scott Kramer, Duane Morris, appeared for joint petitioner, Sands Bethworks Gaming LLC. Also, Duane Morris served as co-counsel before the Board for Wind Creek Hospitality.
Pennsylvania State Police seized 414 illegal gaming machines in southwestern Pennsylvania in 2018.
Currently, people can gamble at state-regulated casinos, through the Pennsylvania Lottery, for horse races and, after the expansion of the law last year, online and at some truck stops. But the changes didn’t include gaming machines in bars and restaurants. In those venues, if a game is mostly chance, like a slot machine, it’s illegal. But if it requires skill, like poker, it’s legal.
To read the full text of this article, please visit the WESA 90.5 website.
On January 14, 2019, the U.S. Department of Justice published a legal opinion that may restrict online gambling. The opinion, dated November 2, 2018, (although only now published) reconsidered the DOJ’s 2011 opinion that declared the Wire Act (18 U.S.C. § 1084) only applied to sports gambling. After the release of the 2011 opinion, several states, including New Jersey, Delaware and Pennsylvania, launched or moved forward with intrastate online lottery, casino gaming and poker. The new opinion, however, somewhat clouds the landscape regarding these operations. Online gaming businesses would be well advised to quickly determine whether their operations comply with the DOJ’s new reading.
The reconsideration stems from one phrase in the Wire Act: “on any sporting event or contest.” In 2011, the DOJ opined that the Wire Act was ambiguous and “that the more logical result” was that the phrase “on any sporting event or contest” applied to the entirety of the Wire Act, thereby prohibiting only the transmission of “bets or wagers” or “information assisting in the placing of bets or wagers” across state lines, if the bet or wager were on a sporting event. This logic follows in part from the Act’s legislative history, which reveals that Congress’ overriding goal in passing the Wire Act was to stop the use of wire communications by organized crime for illegal sports gambling. In 2018, the Supreme Court of the United States, in Murphy v. Nat’l Collegiate Athletic Ass’n—a decision that paved the way for states to authorize sports betting, in dicta—noted Congress’ original intent in characterizing a general federal approach to gambling: Operating a gambling business violates federal law only if that conduct is illegal under state or local law.
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
Under a compromise reached by the New Jersey Senate and Assembly leadership the proposed state Constitutional amendment will be put to a vote in both bodies which would allow two additional casinos in the northern part of the state. Under the compromise current Atlantic City casino license holders would have and inside track and have six months to submit proposals to build the new casinos, and their plans must call for investing at least $1 billion in each facility.
If that criteria isn’t met, those without Atlantic City licenses can bid to build the new North Jersey casinos. They would also be required to invest at least $1 billion for each facility
It appears the proposed amendments will not be voted on in this current legislative session which ends on Tuesday, January 12, 2016 and 12:00 noon, but rather in the new session which begins thereafter. As such both the Assembly and Senate will be required to pass the amended proposal with 3/5th majorities for the proposed amendment to be on the November, 2016 ballot.
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.
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.