The U.S. national government and the iDEA group are locked in a legal dispute over the Wire Act interpretation.
The iDEA Growth commerce association, the most recent organization to back the spread of regulated online gaming across the nation, has launched a legal challenge to the Department of Justice’s (DoJ) revised interpretation of the Wire Act. Joining the fight against the revised Wire Act interpretation, Ifrah Law, representing iDEA Growth, filed a lawsuit against the DoJ in the New Hampshire District Court on February 25th. This week’s “State of the Union,” in collaboration with Segev LLP, centers on the latest legal challenges to the Department of Justice’s revised Wire Act interpretation, as well as recent developments in Virginia, Arkansas, Indiana, and other states. Jeff Ifrah, lead lawyer on the lawsuit filed by iDEA Growth, stated, “We are certain that the New Hampshire court will prioritize precedent over politics in making its ruling, which will have a substantial impact on a quickly expanding industry that promises significant economic advantages for states across the country.”
The judgment delivered on January 14th, 2019, disregards prior legal rulings and largely disregards the legislative background surrounding the Wire Act, which backs the 2011 memorandum.
This is the third organization to formally challenge the Department of Justice’s revised position on the Wire Act. The position asserts that the law applies to all types of gambling, not just sports wagering, as the 2011 opinion stated. The New Hampshire Lottery and its online lottery solutions provider, NeoPollard Interactive, have both filed legal actions. Meanwhile, the Attorneys General of New Jersey and Pennsylvania have also raised concerns about the judgment and sought guarantees from the Department of Justice that gambling ventures launched after the 2011 opinion were shielded.
Virginia is on the verge of gambling and casinos.
The Virginia legislature has passed a measure that would make sports betting legal and permit land-based casinos to operate within the state for the first time. Only Governor Ralph Northam needs to approve the legislation.
The state Senate approved the bill by a vote of 30-10, and the House of Delegates passed it by a vote of 64-27. The House later agreed to reconsider, but the bill still passed by a vote of 64-33. Governor Northam must now sign the bill for it to become effective.
The proposed legislation, drafted by Democratic Senator Louise Lucas, would permit casino gaming, but only in urban areas experiencing significant economic hardship. To qualify, a city must have an unemployment rate of at least 4%, a poverty rate of 20%, and a population decrease of at least 7% since 1990. Native American casinos would be permitted in cities with a population of at least 200,000, and where a substantial portion of local real estate is exempt from property taxes. Before a casino can open, local residents must vote in favor of the proposal.
The Virginia Lottery Board would oversee the market, and licensed casinos would be subject to a tax rate of 13% to 15% of their earnings.
The Kentucky House of Representatives has approved a measure.
The Kentucky House Licensing, Occupations, and Administrative Regulations Committee unanimously approved House Bill 175, with only one member abstaining. House Bill 175 would authorize Kentucky racetracks and stadiums to offer sports wagering in person, online, and through mobile devices. The bill also legalizes fantasy sports games and online poker.
The initial version of the legislation required a hefty fee for a sports betting license, along with an annual renewal fee. The tax rate for in-person betting would be set at 10.25% of the adjusted gross revenue from sports betting, while the tax rate for online or mobile betting would be 14.25%.
Kentuckys House of Representatives is currently examining a legislative proposal, House Bill 175. To be enacted, the bill requires a minimum of sixty votes from the one hundred members of the House. After this stage, the bill will be sent to the Senate for additional evaluation.
The gambling legislation in North Dakota is progressing.
House Bill 1254, which seeks to legalize sports wagering in North Dakota, has been approved by the state’s House of Representatives.
The bill passed the state House on its second reading with forty-six votes in support and forty-four against, but failed to pass due to the lack of a constitutional majority. However, after a reconsideration, the bill ultimately passed with fifty-two votes in favor and thirty-eight against.
House Bill 1254 mandates that sports betting be classified as a game of chance, and operators will be subject to varying tax rates based on the total revenue generated from sports betting. Operators with less than $1.5 million in quarterly revenue will pay a one percent tax rate, while facilities exceeding this threshold will pay a two and a half percent tax rate.
The legislation also stipulates that only one organization can hold a sports betting license concurrently, if they are closely associated.
The bill will be discussed when the North Dakota Senate reconvenes on February 27th.
Arkansas’s casino and sports betting regulations will be submitted to the Secretary of State.
The Arkansas Racing Commission’s rules on casino gambling and sports betting have been endorsed by the Joint Budget Committee’s Administrative Rules and Regulations Review Subcommittee.
In the past week, following approval from the Equine Racing Board, these regulations were presented to a specialized committee and accepted on February 26th. At this point, they will be forwarded to the Secretary of State’s office and will be officially implemented within ten days of being presented.
This extensive 314-page document outlines a thorough set of rules governing land-based gaming and sports wagering, proposals that will now be given to the state’s legislators for further examination.
This follows the document’s release in late January and an opportunity for the public to provide feedback on the proposed regulations.
It establishes a 13% tax rate on the initial $150 million in net casino gambling earnings, with any amount exceeding that figure being taxed at 20%. The gambling tax must be paid by the 20th of each month.
WatchandWager Secures California Extension
Webis Holdings’ subsidiary WatchandWager has renewed its online pari-mutuel wagering permit in California for a two-year period.
The permit, approved by the California Equine Racing Board (CHRB), was valid from 2019 to 2021 and permitted WatchandWager to continue accepting online pari-mutuel wagers from residents of the state. Webis specializes in pool betting and operates WatchandWager Cal Expo harness track in California, having previously received a three-month permit extension before receiving full approval.
Acquiring a California online gambling permit and a physical racetrack operational permit is a significant advantage for the enterprise, remarked Ed Comins, the President of WatchandWager.
Sports wagering authorization in Indiana is on the verge of becoming a reality.
The Indiana Senate has approved a measure that could legalize sports betting within the state, and the House of Representatives will now deliberate on the proposal.
Senate Bill 552 would authorize the state’s licensed gambling establishments to provide professional and collegiate sports betting commencing next year.
The Senate passed the measure by a vote of 38-11, forwarding it to the House for further consideration. The bill has received approval from the Senate Public Policy Committee.
The proposal could still be modified, but the current version stipulates that Indiana casinos will be permitted to offer sports betting in person or online to individuals aged 21 and older. The bill would also enable live table games at racetracks beginning this year.
Nevertheless, the bill does not permit wagering on esports content or any high school or youth sporting events.
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