State-federal relations committee atlantic city, new jersey
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| NATIONAL COUNCIL OF LEGISLATORS FROM GAMING STATES
STATE-FEDERAL RELATIONS COMMITTEE ATLANTIC CITY, NEW JERSEY JUNE 7, 2013 3:00 P.M. – 4:30 P.M. The State-Federal Relations Committee of the National Council of Legislators from Gaming States (NCLGS) met at the Water Club at Borgata in Atlantic City, New Jersey, on Friday, June 7, at 3:00 p.m. Rep. James Waldman of Florida, NCLGS president, presided in the absence of the committee chair.
Rep. Helene Keeley, DE Rep. John Viola, DE Rep. Janet Cruz, FL Rep. Joe Gibbons, FL Rep. Dave Richardson, FL Rep. David Santiago, FL Rep. Dennis Keene, KY Rep. Lois Delmore, ND Rep. Dom Costa, PA Rep. Maria Donatucci, PA Rep. Nick Kotik, PA Rep. James Dunnigan, UT
Susan Nolan, Nolan Associates, NCLGS Executive Director MINUTES The Committee accepted the minutes of its last meeting on January 4, 2013, in Las Vegas, Nevada. INTERNET GAMING REPORT ON STATE AND FEDERAL INITIATIVES/DIFFERING STATE APPROACHES Jennifer Webb of GamblingCompliance said that on June 6, 2013, a bill to legalize all forms of Internet gambling at the federal level was introduced by Rep. Peter King. She said, however, the bill is not widely supported and is unlikely to pass. She said that Rep. Joe Barton is expected to introduce a poker-only bill in the coming weeks. She said the Barton bill would garner more support than the King bill, but is also unlikely to pass. Ms. Webb reported that three states, Nevada, Delaware, and New Jersey, had enacted laws to permit Internet gambling under certain circumstances. She stated that the first U.S.-based Internet poker website went live in Nevada on April 30, 2013. She stated that just before the end of the 2013 Nevada legislative session, legislators voted to amend the interstate compacting portion of the state’s Internet poker law. She noted that Nevada’s population was only about 3 million, so the state would need to pool liquidity with other jurisdictions. She stated that the amended law broadens the types of jurisdictions that Nevada could compact with, allowing liquidity agreements to be inked with states, tribal governments, and foreign governments. She said that previously only agreements with other states were permitted. Ms. Webb said that the Delaware Gaming Competitiveness Act was passed in June 2012, which allows for casino-style gambling, as well as poker games, to be operated online through the state lottery in conjunction with the state’s three racetrack casinos. She stated that casino-style games were expected to go live before the end of 2013, but that poker was to be delayed until agreements for pooling liquidity could be reached with other jurisdictions. She noted that the state hopes to see at least $7.75 million in tax revenue on an annual basis once games are fully operational. Ms. Webb stated that New Jersey legalized intrastate Internet gambling in February 2013. She said that the new law allows for both casino games and poker to be operated via the state’s land-based casino licensees. She said that New Jersey regulators were required by the law to set a go live date on or before November 26, 2013, though the date could be pushed back for good cause. She stated it would likely be 2014 before live play begins in New Jersey. She noted that like Nevada, the New Jersey law has broad compacting language, allowing for liquidity sharing agreements with not only states, but potentially tribal and foreign governments. Ms. Webb stated that New Jersey Governor Chris Christie had allotted for $180 million in annual tax revenue in his budget, but she cautioned that actual tax revenue was likely to be considerably lower, at around $60 million annually. Ms. Webb reported that in three states, California, Massachusetts, and Pennsylvania, legislation to legalize some form of Internet gambling was pending. She noted that in California two bills were seeking to allow poker-only Internet gaming. She stated that legislation was unlikely to move forward this year, but California was a key state to watch because of its large population base. She said that in Massachusetts there are two Internet gambling bills pending. She said that because Massachusetts is just getting land-based casinos off the ground it will likely be some time before online gaming moves forward. Ms. Webb stated that in Pennsylvania, in addition to legalization measures there was legislation to explicitly ban Internet gambling pending. She stated that Pennsylvania was likely to wait and see if online gambling was successful in New Jersey before pushing forward with any potential Internet gambling laws. She stated that in Hawaii, Illinois, Iowa, Mississippi, and Texas legislation to permit Internet gambling had been introduced in 2013, but had already failed. She stated that the Louisiana state legislature passed a bill to study Internet gambling. Ms. Webb noted the following trends in Internet gambling in the first six months of 2013: Three states considered legislation to authorize Internet poker. Six states considered legislation to legalize games beyond Internet poker. One state passed legislation to legalize Internet gambling. Seven of ten proposed bills included provisions on interstate Internet gambling. Five proposed bills sought to restrict the ability of off-shore operators that previously took wagers from U.S. players from being licensed. Every bill introduced in a state with land-based casino operations required some tie to the state’s land-based market. Every bill included some form of problem gambling protections. Ms. Webb also noted multiple notable developments in the Internet lottery She said that Illinois and Georgia had commenced online lottery ticket stales in 2012 and both states were looking to expand their programs. She noted that Illinois needed legislative authorization to commence Internet lottery ticket sales, however Georgia’s existing statute permitted Internet ticket sales without specific legislative approval. She stated that in Maryland, Michigan, Ohio, and Oklahoma legislation to prohibit the sale of lottery tickets over the Internet had been introduced. Ms. Webb stated that legislation had been introduced in Florida and New Jersey that would legalize Internet lottery in those states. She said that in Florida such legislation might be considered in 2014 and in New Jersey Internet lottery legislation was unlikely to be considered in the near future. She said that Kentucky, Michigan, and Pennsylvania were also exploring the possibility of launching Internet ticket sales, however all states had seen at least some opposition to Internet lottery programs from land-based lottery retailers and others. Ms. Webb said there had been two noteworthy developments in the tribal Internet gaming. She stated that in May 2013, the Tribal Internet Gaming Alliance (TIGA) released a draft treaty seeking member tribes to offer Internet gaming through TIGA. She said that TIGA would only permit Class II Internet gambling on tribal lands, but that it may consider off-reservation gaming moving forward. She said that other organizations were also pushing similar initiatives. Ms. Webb stated that on April 5, 3013, the Cheyenne and Arapaho Tribes reached an agreement with Oklahoma Governor Mary Fallin’s office hat would allow the tribes to operate limited Internet gambling outside the U.S. She said the agreement came out of a dispute over a free-play website the tribes were offering and that the agreement was being reviewed at the federal level. In response to a question from Rep. Santiago regarding player jurisdiction, Ms. Webb said that players must be physically present in a state where Internet gambling is legal to play. She said that, for example, a Florida citizen could fly to New Jersey for vacation and play while in New Jersey, but not while physically in Florida. She stated if Florida entered into an agreement with New Jersey that allowed players in Florida to play on New Jersey websites it would most likely be legal under federal law, but without such an agreement federal law clearly prohibited interstate gaming. Sen. Geller said that right now there are three very different models for legalized Internet gambling that have been enacted at the state level. He stated that, in his opinion, something akin to the New Jersey model is the best option for states. He said he believes that players should be required, initially, to register in person at a gaming facility to help alleviate concerns over underage gambling. He stated that he thought it was important to add problem gambling protections like? limiting factors, such as duration of play limits and caps on losses. Sen. Geller said, in his opinion, he thought that an option for boosting job creation would be to require online table games to be live dealer table games that were simulcast onto the Internet, from where additional players could join the game. He stated that legislative models needed to work with the bricks and mortar casinos to be successful and create jobs. UPDATE ON AGE VERIFICATION AND GEO-LOCATION ISSUES Gary Ehrlich, Vice President of Catania Gaming Consultants, addressed Sen. Geller’s comments regarding in-person registration at casinos for online gaming accounts. He said that there are methods for people to register online that are secure, that verify age, and verify location. He said that these technologies are being used today in multiple other industries, such as banking, and by the government, as well as for online gambling in Europe. Mr. Ehrlich said that three ways that companies geo-locate are (1) triangulation by mobile phone, (2) wifi network database verification, and (3) IP addresses. He said that in general the IP method is used with one or both of the other two methods to geo-locate location. Mr. Ehrlich said that age verification is usually done as part of an identity verification process. He said that four ways that companies can verify age and identity are (1) government and commercial databases, (2) knowledge based authentication questions, (3) customers scan or mail paper documents such as a passport to verify, and (4) face-to-face verification, such as Skype. He noted that commonly these methods are used in combination so they are very reliable. Mr. Ehrlich stated that companies often use credit agencies to verify age and identity. He said that this is an issue because when you look at a credit report you can see the name of the company that requests an inquiry, which could raise privacy considerations. He said also that a high number of inquiries could lower one’s credit rating. He commented that it may be a wise policy decision to require in gaming regulations that consumers must be notified that security checks may have a negative impact on their credit rating. In response to a question from Rep. Waldman regarding finger print technology, Mr. Ehrlich said that it can be used now but the pervasiveness of at-home fingerprint scanners is fairly low. He said that in the future this might become a more viable option. UPDATE ON INTERNET “SWEEPSTAKES” AND RELATED LEGISLATION Eli Nortelus of Akerman Senterfitt discussed the Florida experience with electronic sweepstakes cafes. He said electronic or Internet sweepstakes cafes are establishments that host computers in which patrons can play sweepstakes games that resemble casino-style games. He said that early in the year a moratorium bill was being considered, but that in March a number of indictments were handed down against cafe operators. He said that following this, the Florida legislature decided to ban the cafes. Mr. Nortelus said that the Florida ban could have unintended consequences because it contained very broad language and redefined many requirements for skill games, amusement games and sweepstakes. He said that adult arcade, software companies, and other entities are suing, saying that the law should be invalidated. He noted that Georgia and North Carolina have both banned Internet sweepstakes cafes, Ohio has renewed a moratorium on new cafes, and New York has legislation pending to ban the cafes. He noted that Florida’s law was the broadest among the mentioned states. Rep. Keeley said that, like Florida, Delaware is having a similar issue involving VFWs operating slot machines and other gaming machines. She said that Delaware, however, is looking to allow the operations instead of banning them. TRIBAL GAMING Jason Giles of the National Indian Gaming Association (NIGA) gave background on the history of Indian gaming, noting that large scale tribal gaming operations were originally established in the late 1970s. He said that Indian Nations are sovereign governments and gaming is considered an activity of the sovereign governments. He said that in 1987, the U.S. Supreme Court ruled that states did not have regulatory control over Indian lands and in the wake of that decision the Indian Gaming Regulatory Act (IGRA) was passed. He said that IGRA is the statutory basis for the operation of Indian gaming as a means of promoting economic development, self-sufficiency, and strong tribal governments. Mr. Giles provided the following statistics on Indian gaming in the U.S.: There are 247 tribes in 28 states engaged in gaming. Tribal casinos generate about $27 billion in gaming revenues annually. Tribal casinos and related enterprises provide over 700,000 jobs. States were paid $2.5 billion in taxes, regulatory payments, and revenue sharing in 2011. Local non-tribal governments received more than $100 million for gaming tribes in 2011. Approximately 70 percent of all Indian gaming revenues are generated by 17 percent of tribal gaming facilities, or about 40 tribes. INTERNET GAMBLING Mr. Giles stated that in 2010 NIGA member tribes adopted a resolution regarding Internet gambling. He said that NIGA does not oppose or support Internet gambling. He said NIGA supports tribal sovereignty and providing positive economic options for the benefit of Indian country. He said that any federal legislation on Internet gambling must at a minimum meet six principles: The sovereign rights of Indian tribes must not be subordinate to any non-federal authority. Internet gambling authorized by Indian tribes must be available to customers in any locale where Internet gaming is not criminally prohibited. Tribal gaming revenues must not be subject to state taxes. Existing tribal government rights under Tribal-State compacts and IGRA must be respected. Any legislation must not open up IGRA for amendments. The National Indian Gaming Commission (NIGC) should be the federal body responsible for working with tribes on Internet gaming. Mr. Giles noted that NIGA opposed previous federal bills floated by Senators Harry Reid of Nevada and John Kyl, now retired, of Arizona. He said that NIGA opposes the current federal bill that was introduced by Rep. King. He said that NIGA will continue to oppose any federal Internet bills that do not adhere to the six principles NIGA has adopted. Mr. Giles stated that while three states have legalized Internet gambling, none of those states have gaming tribes operating within their states. He said from the state perspective, if a state with tribes—both gaming and non-gaming—is thinking about legalizing Internet gambling it needs to bring the tribes to the table for discussion. He said that any state, or federal Internet gaming must continue to offer economic benefits for tribes. TRIBAL GAMING REGULATION Dan Little, Associate Commissioner of the National Indian Gaming Commission (NIGC), said that under federal law, tribal governments— like state governments—have the sovereign right to conduct gaming on their land if they so choose. He said when IGRA was created in 1988, it conferred several responsibilities on the NIGC, including approving tribal gaming ordinances, approving management contracts, conducting background checks, inspecting gaming operations, and monitoring a tribe’s use of gaming revenues. He said that NIGC also works with other federal agencies, such as the FBI, regarding criminal issues that might arise related to Indian gambling, and with the Department of Interior on issues regarding gaming-eligible lands. Mr. Little said that IGRA prohibits gaming on Indian land acquired after October 17, 1988, the date that IGRA was adopted, unless the land falls under certain exceptions. He said that the exceptions include lands acquired in trust as part of (1) the initial reservation of an Indian tribe under the federal acknowledgment process, (2) settlement of a land claim, (3) restoration of lands for a landless tribe, and (4) the so-called two-part determination. He said the two-part determination is a process under which tribes that need more economically viable lands for operating gaming can obtain those. He said, however, it is a hard test to meet and is rarely used. Mr. Little stated that over the past three years NIGC has conducted a review of all their regulations and standards. He said as a result of that review the NIGC has ended up making updates to many regulations and standards. He said that all the updated standards are on the NIGC website. He said that the NIGC is committed to carrying out IGRA goals and objectives. He said that the NIGC has seven regional offices and approximately 120 staff. He said that the annual budget for the NIGC is about $19.5 million and the NIGC is fully funded by fee assessments on tribal gaming operations. In response to a question from Rep. Keeley, Mr. Giles addressed online payday lending operations being conducted on tribal lands. He said that he does not believe that any tribal governments have endorsed these online lending operations, but that some tribal members may be operating payment processing centers on reservations lands. ADJOURNMENT There being no further business, the meeting adjourned at 4:30 p.m. © National Council of Legislators from Gaming States (NCLGS) k:/nclgs/2013/8001018 Directory: Minutes Minutes -> City of rising star regular meting thursday, july 14, 2016 Minutes -> Iccf congress, seixal, portugal 5th to 12th October 2002 Minutes -> New jersey state interscholastic athletic association 1161 Route 130, po box 487, Robbinsville, nj 08691 League/Conference Officers Meeting Summary October 15, 2015 Minutes -> The anson county board of commissioners Minutes -> Mascac annual meeting Minutes -> Approved May 2, 2009 Speed Skate New Brunswick Athlete Development Committee Minutes -> Present: Chairman/Town Mayor Minutes -> Cacc director’s council may 24-25 2010 12 noon caesar’s, Atlantic City, nj Minutes -> Massachusetts State Collegiate Athletic Conference Spring Athletic Directors Annual Meeting Monday – Wednesday, May 23-25, 2011 Massachusetts Maritime Academy Bay State Conference Center Buzzards Bay, Massachusetts present Minutes -> Athletics Committee Meeting Tuesday, December 6, 2011 Download 36.2 Kb. 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