Jersey Gamblers Support Sports Betting; 23 Problems with Adelson’s Knock on Internet Gambling; New Bill Seeks NJ Expansion

 

nj gamblers

 

55% of N.J. gamblers support legalizing sports betting

 

by Staff & Wire Reports www.gamingtoday.com  

Gamblers in New Jersey are willing to bet on new forms of gaming, with the vast majority of casino gamblers expecting to play in Atlantic City this year, according to a poll released today by the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism (www.stockton.edu/levenson) at The Richard Stockton College of New Jersey.

Eighty-one percent of the 690 New Jersey adults interviewed who gambled in Atlantic City casinos in the last year say they intend to visit Atlantic City as many times this year as they did last year. Another 10 percent plan to visit more often. Only 7 percent intend to visit less.

Fifty-five percent of gamblers support legalizing sports betting. More than one in five (21.5 percent) say they would be more likely to bet on sports events if they could do so legally in New Jersey. Currently, sports betting is illegal in all but four states: Nevada, Delaware, Montana and Oregon. Some officials in New Jersey are seeking to overturn that federal ban.

Two and one-half percent (2.5) of New Jersey gamblers have gambled online on Atlantic City casino websites since it became legal in the state on Nov. 26. However, 7 percent say they intend to gamble on an Atlantic City casino website in the coming year. That would be nearly triple the percentage that has participated during the initial days of online gambling.

“These numbers are promising for Atlantic City,” said Dr. Israel Posner, director of the Lloyd D. Levenson Institute. “Visitors from New Jersey are willing to come back to Atlantic City just as often or more often this year than they did last year. Interest in online gambling is growing and should continue to grow once marketing efforts and promotions take off.”

The poll of 690 New Jersey adults was fielded for the Lloyd D. Levenson Institute by the Stockton Polling Institute. Its margin of error is plus or minus 3.7 percentage points and is larger in sub-categories. Both landlines and cell phones were called by live interviewers calling from the Stockton College campus in Galloway, NJ.

Football is the clear choice of sports bettors, with 88 percent having bet on pro football in the last year. College sports was next highest at 45 percent, followed by pro basketball (43 percent), pro boxing (30 percent), pro baseball (29 percent), pro hockey (28 percent), and pro soccer (9 percent.)

Pennsylvania casinos continue to represent the strongest competition to Atlantic City’s gaming industry, with 28 percent of New Jersey-based casino gamblers having crossed the Delaware River. Thirteen percent have gambled in Nevada casinos. But only 8 percent say they gambled in New York. Nearly 5 percent patronized casinos in Florida, followed by 3 percent in Delaware and 2 percent in Maryland. About 11 percent gambled in casinos outside of the United States.

The lottery is the most popular form of gambling. Eighty-nine percent of gamblers in New Jersey played it in the past year. Only 11 percent say they bet on horse racing.

Contact us at Publisher@GamingToday.com.

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sheldon adelson 14

 

23 Fundamental Problems With Adelson’s Latest Swipe at Online Gambling Regulation

  By Chris Grove www.onlinepokerreport.com  

The last time that representatives of the Sheldon Adelson-backed Coalition to Stop Internet Gambling (CSIG) penned an op-ed for The Hill, I suggested Mr. Adelson seek a refund due to quality concerns.   Yesterday brought another missive from CSIG, credited to former NY Gov. George Pataki and James Thackston in USA Today, even more fraught with errors, omissions, misrepresentations and straw man arguments galore.   Here is a (non-exhaustive) list covering 23 of the most substantial problems with the piece.   Why lead with the truth when you could lead with something scarier?   Let’s start with the first paragraph:

Online gambling might be coming to a computer near you, and while it may seem like the only risk is on the player, the FBI fears it will be used by terrorists and organized crime rings to launder money.   Problem #1 sits right at the top, where the duo warns that “online gambling might be coming to a computer near you.”   Online gambling – in unregulated, unlicensed form – has already come to a computer near you and has been there for well over a decade. If you believe that online gambling presents the threat that the authors describe, then regulation is the only sensible answer to that threat.

Problem #2 is a bit more damning: While Pataki, et al. claim that the FBI “fears” online gambling will be used by terrorists, the FBI never mentions terrorists or terrorism in its letter.   Nor could I find any reference to terrorism funding in the myriad press releases from the FBI covering the various online gambling indictments secured by the agency.   What the FBI actually said   The op-ed continues, and so do the issues:   In a September 2013 letter to Congress, the FBI warned that while many industries are vulnerable to money laundering, Internet gambling goes a step further by providing an anonymous forum for bad actors to move money undetected.

Problem #3 is the Pataki, et al. claim that the FBI has “warned” about the dangers of online gambling.   A warning implies a proactive statement or action by the FBI. But what Pataki, et al. are referring to is an FBI letter (read it here) written in response to a Congressional request for information about the possibility of money laundering via online gambling.   I feel confident in my recollection that there were not any “warnings” issued by the FBI when New Jersey, Nevada or Delaware were considering online gambling regulation, nor when all three states launched regulated online gambling sites.

And with Problem #4 we again find Pataki and Thackston mischaracterizing the FBI letter by implying that the FBI believes online gambling “provides an anonymous forum for bad actors.”   The phrase the FBI actually used: “increased anonymity,” which is miles away from the completely “anonymous forum” Pataki, et al. assert.   Read the whole FBI letter here. And then read why their letters are an obvious argument for regulation, not against it.   Fact: regulated online gambling sites require customers to provide social security numbers, utility bills, voided checks and submit to a variety of other identification verification procedures before creating an account or depositing and withdrawing funds.   Again, it’s the unregulated online casinos and poker rooms – which require few to none of those steps – where the threat exists, if it exists at all.

Problem #5 is that the FBI admits in their letter that everything they describe is preventable, saying: “Many of these methods could be detected and thwarted by a prudent online casino […] some sophisticated methods would be difficult to readily identify or deter.”   Of course, this bit was omitted by Pataki, et al. And it’s obvious why.   Difficult does not equal impossible. It just equals difficult. And there is a massive financial incentive for casinos and their technology partners to accomplish difficult things in the regulated market for online gambling.

Problem #6 is that despite billions of dollars in regulated online wagering spread over several years in regulated international markets, there has yet to be one documented case of the purported threat CSIG describes.   The FBI doesn’t cite one. CSIG can’t cite one. It’s 100% hypothetical.   Won’t somebody think of the innocent Americans?   It gets worse:   So, could innocent Americans find themselves gambling with dangerous criminals or terrorists and unknowingly help them move money? In New Jersey alone, which just legalized Internet gambling two months ago, the number of accounts has already reached nearly 150,000. And Internet gambling is rapidly expanding across the country, with other state legislatures looking at it this session.   Even a novice high school debater would probably blush at the boldness of the first line.

Problem #7 is that innocent Americans cannot find themselves in the situation described.   There’s a reason why Pataki and Thackston can’t bring themselves to actually answer their ridiculous rhetorical question affirmatively. It’s naked fear-mongering that they don’t even bother to attempt to support.   In fact, the far-fetched scenario for laundering money they later outline makes it clear that “innocent Americans” can’t “help” criminals move money. They’re an impediment to criminals moving money.   The paragraph wraps up with another staggering misrepresentation of reality.

Problem #8 is the assertion that regulated online gambling is “rapidly expanding across the country.”   Except that only a tiny sliver of the population has access to regulated online gambling, while the whole country has access to unregulated sites. And the idea that the expansion is rapid is false on face. The debate over regulating online gambling in the U.S. has been going on for more than a decade.   Writing something down doesn’t make it true   I’m going to group the next four sections  of the op-ed together. They basically outline Thackston’s theory of how money could be laundered using online poker. Review it for yourself and then consider the following:

•Problem #9: None of Thackston’s work has ever, to the best of my knowledge, been peer-reviewed or published in any of the dozens of academic journals covering gambling.

•Problem #10: Thackston has never produced any actual, tangible examples of the hypothetical crimes he describes.

•Problem #11: The amounts of money Thackston describes moving are miniscule relative to the amount of effort required to move them. In one example, Thackston outlines a system that requires 4 money launderers and 128 “mule” accounts to move $50,000. And, remember, taxes and pay for the mules have to come out of that money as well.

•Problem #12: Thackston never identifies who his money “mules” are. Here’s why: They don’t exist. To move a lot of money, you can’t use mules with low income, or the sudden flow of seed money and gambling winnings will stick out like a sore thumb. It’s also hard to imagine using mules in a high income bracket, because you wouldn’t be able to provide the necessary financial incentive to get them to commit multiple felonies. But remember, Thackston’s premise requires hundreds of mules just to move five figures (pre-cost).   Logic dictates that launderers seek the lowest-friction route to clean money possible.   So let’s compare laundering money at regulated online casino with the process of laundering at a physical casino to quickly illustrate why no “resourceful” (as the FBI letter describes them) money launderer would choose the online option:

•Problem #13: Laundering online is high-cost. You have rake, you have the fact that subtle collusion and chip-dumping will often result in losing pots to players outside of your scheme and you have the taxes on the winnings that now must be paid as online casinos issue W2Gs to the players and the IRS. You also have the cost of getting the cash to the mule in the first place and then getting the cash back to the launderer. Of each dollar you launder, what exactly is left after all of that? And how much better would you do walking into a casino with cash and walking out with winnings?

•Problem #14: Online laundering results in an insane number of points of possible exposure. Money goes to the mule, into a bank account, to the online site, is passed from mule to launderer, is cashed out, is removed from bank and transferred back to the launderer. That’s seven transfers, five of which leave a clear and permanent digital trail, compared to two transactions at a casino with little or no paper trail.

•Problem #15: You can’t move very much money via regulated online poker. When you start talking about games involving thousands of dollars – the minimum necessary to move any significant amount of money – you’re talking about a very narrow band of games and players. To collude and chip-dump at these games would require extreme caution simply because you can’t hide in the crowd. And to be properly bankrolled – necessary to successfully affect the collusion – you’d need to move ridiculous amounts of money to your mules as a precursor to the laundering, exacerbating problem #14. Of course, live casino play doesn’t suffer from the same problem of producing a permanent record of your play.   Thackston’s scenario may be possible. But in the real world, we don’t make policy based on what’s possible. We make policy based on rational calculations concerning plausibility, risk and reward.   It’s also possible that money launderers use eBay and Amazon to launder funds. In fact, doing so would require a third of the steps and a much smaller team of “mules.” And, as the FBI notes, banks and physical casinos can and do serve as “venues for money laundering.”   But we’re not shutting down Amazon and eBay. And we’re not closing down the banking system or shuttering physical casinos.   Why? Because we’ve determined as a society that those risks are acceptable and that regulators and law enforcement can be trusted to do their jobs and ferret out the illicit use if and when it occurs.   Seriously, guys, that’s not what the FBI said   It gets worse:   We should take the FBI at its word. There are sophisticated technologies that can be employed by terrorist groups and criminal organizations to move money undetected, conceal their physical locations, and entangle unwitting online players.   It would be nice if Pataki and Thackston took the FBI at its word. But they don’t. Instead, they resort to putting words in the mouth of the FBI. Remember:

•Problem #16: The FBI letter never mentions terrorism. Nor has the FBI ever linked unregulated online gambling to terrorism in the various indictments the agency has secured. Nor did the FBI issue any warning regarding terrorism when New Jersey, Nevada and Delaware launched regulated online poker games.

•Problem #17: The FBI never claimed that laundering would be “undetectable.” Remember, the furthest they went was to say detection could be “difficult.”

•Problem #18: Hate to beat a dead horse, but neither the FBI or CSIG provides one tangible example of this happening in the unregulated market, let alone the regulated one. If it’s such a threat, why isn’t it happening?   You forgot to mention how online gambling funds Obamacare   Pataki, et al. save the best-worst for last:  The FBI’s warning is part of a growing body of evidence that demonstrates the dangers the expansion of Internet gambling poses to our national security. Internet gambling is moving full tilt without any consideration of the many and varied law enforcement impacts. Congress needs to do the responsible thing to protect American families and the innocent bystanders caught up in criminal schemes online. It must move swiftly to restore the long-standing federal ban on all forms of Internet gambling.

Ah, Problem #19, the mythical “growing body of evidence.” Was their trouble that there was simply too much evidence to choose from? Is that why they failed to include any of it? I suspect not.

And the familiar boogeyman of Problem #20: the danger to “national security.” If it wasn’t for those pesky facts.   Like that the FBI never linked regulated online gambling to any sort of national security threat. Like that unregulated online gambling exists in all 50 states and has easier linkage with international groups. Like that the FBI and the DHS did not intervene to stop regulated online gambling in any state so far and has given no indication that they plan to do so.   Pataki et al. couldn’t help slipping a reference to “full tilt” in there, which I appreciate. But

Problem #21 is that Internet gambling regulation is moving at a snail’s pace, not at full tilt. The debate has been ongoing since before the UIGEA passed.   We’ve had over a decade to consider the law enforcement impacts. They have been considered. Some of the most trusted and vetted regulatory agencies on the planet have considered them and acted accordingly.

And, of course, that leads to Problem #22. Pataki et al. want us to be concerned about the “many and varied law enforcement impacts.” But besides money laundering, which is basically a non sequitur, and “terrorism,” which law enforcement clearly doesn’t see as a concern, they don’t take the time to list any of those impacts, their scope, their likelihood and so on.   The pièce de résistance comes when Pataki et al. call for a restoration of the “long-standing federal ban on all forms of Internet gambling.”

Problem #23: There was never such a thing (that’s not what the Wire Act did or does). And it doubtful that Congress actually has the authority to enact such a thing.   Who loses if CSIG wins   Like any new policy, online gambling regulation should be debated. But CSIG doesn’t want a debate of facts and logic.   They want to create an echo chamber of misrepresentation and fear. And that does a disservice to Americans who are asking for nothing more than the ability to play poker and casino games in a safe, regulated environment online.

Chris Grove – Chris is the co-founder and an editor of OnlinePokerReport.com. He’s written for dozens of gambling publications and has been involved with various aspects of the online poker industry since 2004.

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nj expansion

New Jersey Bill Calls For Internet Gambling Expansion

 

Proposal Would Not Allow Combining Player Pools For Poker, Though

by Brian Pempus  www.cardplayer.com     

A new bill in the New Jersey legislature calls for a massive expansion of the existing real-money online gambling in the state, which kicked off late last year.

Senate bill No. 980 would “authorize permits for certain New Jersey casinos for interstate and foreign Internet wagering.” In other words, those who have been approved for intrastate online gambling could elect to expand their offerings, under specific conditions.

The bill must pass the Senate and General Assembly, and then be signed by the governor. Chris Christie has a lot on his plate at the moment due to a scandal, but he is a big supporter of online gambling in the Garden State. It is reasonable to expect him to sign.

Right now, it is sitting with the Senate State Government, Wagering, Tourism & Historic Preservation Committee. It’s unclear when a vote will be held on the proposal.

According to the bill, there would be an annual tax on interstate or foreign Internet wagering gross revenues in the amount of 15 percent. That money would go to the New Jersey Casino Revenue Fund. In addition, the companies offering games from New Jersey to other jurisdictions must comply with the tax laws and regulations in the other jurisdiction.

All of this would require a partner jurisdiction to have legal web gambling as well.

The legislation would call for New Jersey gaming regulators (The Division of Gaming Enforcement) to draft rules overseeing the expansion of Internet gambling.

All casinos licensees permitted to conduct interstate or foreign Internet wagering must have their servers within Atlantic City. Regulators want to be able to inspect them.

The bill does not mean that online poker players in New Jersey could be playing against players from other countries. In other words, no combined player pools leading to bigger tournaments and more cash game action on a specific site. Ray Lesniak, the sponsor of the bill, told Card Player late last year that “right now, federal law would preclude international players playing online against New Jersey players.”

The bill appears designed for casino firms and their technology partners.

Lesniak wants to make New Jersey the “mecca of Internet gaming.” In other words, a hub that is attractive for firms across the globe. The idea is to get more investment into Atlantic City, which has seen gaming revenues plunge drastically since 2006.

Domestically, just New Jersey, Nevada and Delaware have legalized online gambling. There has been the expectation that the three will eventually partner up. More states are expected to take a look at online poker in 2014. Pennsylvania might have the best chance at getting something done, but it’s possible zero legalize this year.

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