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Florida Sociologist Argues that Lawmakers Restrict the Rights of Online Gamblers

by Hillary LaClair, Senior Editor April 17, 2009 According to the South Florida Sun-Sentinel, the state Legislature has initiated talks about expanding gambling in Broward and Miami-Dade counties. While online casino gambling advocates have consistently argued that the industry could bring U.S. states billions in tax revenue each year, the state has argued for more land-based casino gambling and less online casino gambling. A speaker at a Florida anti-gambling rally this week said that he would prefer a law against online gambling rather than a law that would allow it while the state argues for more physical casinos to be built. Sociologist Harold Peterson made a statement against the anti-gambling rally, claiming that many U.S. citizens have the attitude that laws in the country either permit or forbid activities, such as gambling online. Peterson notes that the rally showed assumptions about freedom and legislation that U.S. residents did not always have. “The popularly held belief in the U.S. that laws are made to both allow and deny privileges is a very recent state of mind. The populace has accepted it because it is numb with an overwhelming flow of new law by legislators who feel that if they aren’t churning out volumes of regulations, they aren’t doing their jobs,” said Peterson. “But freedom and liberty mean unbound by the restraint of law, able to choose whatever path one desires. The idealized version of the US as ‘the land of the free’ can only exist when lawmakers put harsh limits upon themselves, only passing such measures as those that are virtually universally demanded.” Peterson continued to explain that the United States does not, in fact, prohibit any form of online casino gambling outside of the state of Washington, but rather that the UIGEA (Unlawful Internet Gambling Enforcement Act) applies to the financial transactions of such wagers. Still, he notes that citizens are not aware of the legal statues of online casino gambling. Legislators do not have to pass a law that allows internet gambling because these activities are not in violation of any U.S. law. “Casino smoking is another example of mistaken assumptions. Some feel the law is changing in many states, from laws permitting smoking to laws denying that right. But the actual change is from no law, which means everyone is free and at liberty to enjoy his own decision, to a law constricting behavior.” While the state of Florida has openly opposed an American’s right to gamble online, it also has begun to push for more land-based casino gambling – harboring the same consequences that the U.S. has attempted to protect its citizens from in banning online gambling transactions. The State Senate has proposed that the Seminole Tribe’s seven casinos in the state be permitted to add craps and roulette to their gaming roster, putting them on par with Las Vegas casinos and raising $400 million annually for Florida. Peterson continued to say that the Constitution is only a few pages long, and that the laws passed that restrict citizens’ rights consist of an eight-hundred page long list. “Every word entered into federal and state statutes represents a tiny piece of lost freedom, of liberty surrendered. The people need to be aware of this, and demand that each act be passed only because it is essential, that the cost paid in infringement on freedom be worth whatever gains the bill grants,” Peterson concluded.

If You Can’t Beat ’em Join ’em

by Hillary LaClair, Senior Editor
April 21, 2009

               According to several racetrack owners, online casinos make for “unbeatable competition” as horse racing wagers slow down with the economic climate. Many racetrack owners have setup slots games and video lottery terminals within their building claim in an attempt to hold up against the virtual competition. U.S. racetrack owners are one of the few that have been exempted from U.S. laws banning the financial transactions of online gambling, but according to a Canadian horse racing venue, Woodbine Racetrack, $200 million is lost each year to online casino gambling.

                Statistics show that of $865 million spent on horse racing wagers at Woodbine, one if five dollars is spent in online casinos that would have otherwise gone to the racetrack. Racetrack owners have been forced to consider establishing online racetracks as a means to compete with the online casino craze.

                “If we don’t offer customers exactly what they want, they have so many opportunities to get around us and bet offshore,” said Woodbine Entertainment Group Vice President, Jane Holmes. “It is a huge impact. It’s not just horse racing wagering. Some people have moved to online poker.”

                Holmes has called for lawmakers to create stronger bans against internet casino gambling, perhaps ignoring free trade agreements that have resulted in federal litigation for similar legislation. The E.U. recently found the U.S. guilty of offshore trade violations with its Unlawful Internet Gambling Enforcement Act that has consistently targeted foreign markets, and may pursue legal action if an agreement is not reached.

                OCA gaming analyst, Sherman Bradley, believes that the recent trends in land-based horse racing wagers is the result of changing times, however. “If you sell spaghetti out of a can, and then people desert you and flock to a restaurant that sells awesome homemade spaghetti, it wouldn’t make sense to ask legislators to ban homemade sauce,” opined Bradley. “Instead, you’d have to find ways to upgrade your product.”

                According to Bradley, Holmes has admitted that online casinos and other gambling sites offer advantages over their land-based counterparts, such as better payouts percentages (due to the lack of maintaining a physical location), that have led to the popularity and success of the online casino industry. Racetrack owners should therefore consider opening the doors to online customers, as they are one of two forms of gambling that are legally able to operate on the internet in the U.S. and Canada.

                “Convenience, freedom to smoke, no parking, traveling or entry fees, and great odds are all factors in people choosing online casinos over land-based gaming,” said Bradley. “Trying to prevent it is like forcing people to travel by locomotive while planes are whizzing overhead.”

                Several racetracks in the U.S. have made efforts to allow casino gambling in the tracks in order to compete with the industry. Recent state legislator talks in Florida about expanding gambling in the state have been opposed by the staunch Republican belief that such gaming is immoral. As a result, land-based casinos throughout the U.S. have been forced into bankruptcy as the online market continues to flourish.

Casino Intensity’s Very Own Sheri B. Earns $16502 at Bodog

by Hillary LaClair, Senior Editor
April 20, 2009

Casino Intensity would like to congratulate our player, Sheri B. from Michigan, for her $16,502 in winnings in the Food Fight online slots game at Bodog Casino. Food Fight is a 5-reel, 9 payline slots game that offers wagers of $0.01, $0.05, $0.25, $0.50, $1 and $5.

                The slots game combines a number of foods to load up on ammunition for the fight. Players that combine three pieces of an ice cream cone or lemon meringue pie receive a bonus cash prize. By lining up food icons on any of the nine pay lines, players are able to win cash. Players that receive the ice cream or pie are entered into the bonus round where they may “get revenge on those people from {their} past.” By choosing a “victim,” players may proceed with splattering opponents with various types of food and earn coins for each person hit. Once the target is missed, the bonus game will end but the earnings are kept. The amount won in the bonus round depends on the amount wagered.

                Bodog offers a wide array of casino games that can be accessed at www.bodoglife.com., including Blackjack, Baccarat, Caribbean Hold’em, Caribbean Stud, Craps, American Roulette, European Roulette, Let ‘Em Ride, Pai Gow Poker, Tri-Card Poker, Three Card Rummmy, 20 online slots games, 18 video poker games and two specialty games: Keno and Mystic Shuffle Hi-Lo.

                Casino games at Bodog are available in play money and real money versions, flash format and downloadable format as well as via mobile phone.

Florida Sociologist Argues that Lawmakers Restrict the Rights of Online Gamblers

by Hillary LaClair, Senior Editor
April 17, 2009

According to the South Florida Sun-Sentinel, the state Legislature has initiated talks about expanding gambling in Broward and Miami-Dade counties. While online casino gambling advocates have consistently argued that the industry could bring U.S. states billions in tax revenue each year, the state has argued for more land-based casino gambling and less online casino gambling.

A speaker at a Florida anti-gambling rally this week said that he would prefer a law against online gambling rather than a law that would allow it while the state argues for more physical casinos to be built.

Sociologist Harold Peterson made a statement against the anti-gambling rally, claiming that many U.S. citizens have the attitude that laws in the country either permit or forbid activities, such as gambling online. Peterson notes that the rally showed assumptions about freedom and legislation that U.S. residents did not always have.

“The popularly held belief in the U.S. that laws are made to both allow and deny privileges is a very recent state of mind. The populace has accepted it because it is numb with an overwhelming flow of new law by legislators who feel that if they aren’t churning out volumes of regulations, they aren’t doing their jobs,” said Peterson. “But freedom and liberty mean unbound by the restraint of law, able to choose whatever path one desires. The idealized version of the US as ‘the land of the free’ can only exist when lawmakers put harsh limits upon themselves, only passing such measures as those that are virtually universally demanded.”

Peterson continued to explain that the United States does not, in fact, prohibit any form of online casino gambling outside of the state of Washington, but rather that the UIGEA (Unlawful Internet Gambling Enforcement Act) applies to the financial transactions of such wagers. Still, he notes that citizens are not aware of the legal statues of online casino gambling. Legislators do not have to pass a law that allows internet gambling because these activities are not in violation of any U.S. law.

“Casino smoking is another example of mistaken assumptions. Some feel the law is changing in many states, from laws permitting smoking to laws denying that right. But the actual change is from no law, which means everyone is free and at liberty to enjoy his own decision, to a law constricting behavior.”

While the state of Florida has openly opposed an American’s right to gamble online, it also has begun to push for more land-based casino gambling – harboring the same consequences that the U.S. has attempted to protect its citizens from in banning online gambling transactions. The State Senate has proposed that the Seminole Tribe’s seven casinos in the state be permitted to add craps and roulette to their gaming roster, putting them on par with Las Vegas casinos and raising $400 million annually for Florida.

Peterson continued to say that the Constitution is only a few pages long, and that the laws passed that restrict citizens’ rights consist of an eight-hundred page long list.

“Every word entered into federal and state statutes represents a tiny piece of lost freedom, of liberty surrendered. The people need to be aware of this, and demand that each act be passed only because it is essential, that the cost paid in infringement on freedom be worth whatever gains the bill grants,” Peterson concluded.

US DoJ Files Motion Opposing iMEGA’s Attempt to Obtain Information on Lottery Ban

by Hillary LaClair, Senior Editor
April 16, 2009

              The U.S. Department of Justice has defended its position to withhold information regarding credit card companies having blocked online lottery ticket purchases – despite the fact that these transactions are exempted from the UIGEA’s ban on internet casino gambling. iMEGA filed a motion with the U.S. 3rd Circuit Court of Appeals to have the information provided, which the DoJ has countered with a motion opposed the addition of such court records.

                iMEGA’s defense attorneys that call for the appeal of the UIGEA (Unlawful Internet Gambling Enforcement Act), has consistently argued that the ban on online casino gambling is too vague for the financial institutions left to enforce it to determine what does and does not constitute “unlawful internet gambling.” The court records showing the recent blocks of online lottery tickets provides iMEGA with substantial evidence that these arguments are legitimate – which is why the pressure group believes that the DoJ has chosen to withhold the information.

                Lead attorney with the DoJ, Nicholas Bagley, wrote in a motion opposing the addition of the information, “This material was not before the district court…and is not germane to iMEGA’s facial constitutional challenge to the Unlawful Internet Gambling Enforcement Act of 2006. Because this is not an ‘exceptional cas{e}’ that would warrant supplementing the district court record…the government opposes the motion to supplement.”

                “The regulations didn’t exist two years ago when this was brought to the district court,” added Joe Brennan Jr., chairman of iMEGA. “The regulations did not go into effect until Jan. 19, 2009, more than two years after they were due, and two years after we filed in district court. Should the government get credit for dragging its feet on this?

                “Now you see the negative effect this law was destined to have. It has led to over-blocking, even of transactions like state lotteries and horse racing, that have been given specific exemptions by this law. I know that the DoJ doesn’t like to lose, but to suggest that this is not ‘germane’ to the case – how the law actually works in the real world – is simply ridiculous.”

                The supplemental material, which includes four on-line articles, a record of a conference call between the Treasury Department and the North American Association of State and Provincial Lotteries, a final rulemaking from the Treasury Department and internal operational guidelines from Visa International is relevant to iMEGA’s case that states that the vagueness of the ban on online casino gambling would lead to confusion from the banks and other financial institutions that have been forced to ensure the law’s enforcement.

                iMEGA is not the only organization that has had issue with the U.S. Department of Justice. Earlier this year, Party Gaming co-founder Anurag Dikshit, was forced into a settlement by the DoJ – which pursued legal action against the company despite its having pulled out of the U.S. market in 2006 when the UIGEA was put into motion. Meanwhile, online casinos and other internet gambling establishments have continued to operate unlawfully in the U.S. with no consequence.

                iMEGA was founded in 2007 as a professional association dedicated to the continued growth and innovation of the internet – including online casino gambling and other forms of virtual entertainment. The non-for-profit pressure group is headquartered in Washington DC and seeks the constructive engagement with government at federal and state levels to ensure the challenges of online medium are addressed with “full participation of the people and companies that have built the Internet into the powerful influence of society it has become.”

US DoJ Refuses to Provide Documentation on Unlawful Lottery Purchase Ban

by Hillary LaClair, Senior Editor
April 15, 2009

                The U.S. Department of Justice has declined to provide iMEGA, the Interactive Media Entertainment & Gaming Association, with information about blocked sales of state lotteries online by credit card companies in the company’s lawsuit with the U.S. 3rd Circuit Court of Appeals.  Perhaps due to the threat of the UIGEA, Visa and Mastercard have begun to deny state lottery purchases over the internet using the same text that applies to online casino gambling. However, the Unlawful Internet Gambling Enforcement Act specifically exempts online state lotteries from the law which prevents financial institutions from accepting payment for virtual gaming.

                The loss of Visa and Mastercard payments has cost New Hampshire and North Dakota a great deal in state lottery funding which is put toward, educational systems, road construction and similar federal programs.  In New Hampshire alone, online lottery tickets account for 24% of the industry’s revenue.

                “Credit card companies are finding out when their customers sign up for the online subscription service that it is a state lottery and coding their transactions as betting,” said Donna Thronson, director of communications for the North Dakota Lottery.

                In 2006, when the UIGEA was passed, the U.S. federal government placed banks and other financial institutions with the responsibility of enforcing the ban against internet casino gambling. Since its reintroduction late last year, the government has threatened the banks with more severe consequences if they do not comply.

                iMEGA has asked the DoJ to submit the information it has on the blockage of internet lottery purchase as a crucial evidence in its case against the UIGEA (iMEGA v. Keisler, et al), where it claims that the legislation has led to “overblocking” of online gambling transactions. The DoJ has since declined to provide the information, alleging that it was “inappropriate absent unusual circumstances.”

                The decision to withhold this information from iMEGA, evidence that gives the pressure group a great deal of clout in its case, has frustrated those involved in the case – including iMEGA chairman, Joe Brennan Jr., an active supporter of online casino gambling.

                “The Justice Department doesn’t think that there is anything ‘unusual’ about credit card companies blocking purchases that are clearly allowed by the very law they’re trying to defend?,” asked Brennan Jr. “The New Hampshire lottery is losing a quarter of its sales even though they’re supposed to be protected by this law. I’m not a lawyer, but that seems like ‘unusual circumstances’ to me.

                “It’s our right and it is consistent with the rules on supplementing the record to have this information added. Since the last brief was submitted to the court, the final regulations for UIGEA were published and have gone into effect, and as a result, the state lotteries – which are exempt from this law – have been affected. The Court should, and would, want to consider this.”

                Brennan Jr. believes that the DoJ has withheld this information because it proves the inefficacy of the ban on online casino gambling. iMEGA is not prepared to let this matter drop. Instead its legal team has prepared a formal motion to subpoena the information which is expected to be filed within two days.

               “I’m not surprised the DoJ does not want this Court to have this information. It’s proof of what iMEGA has said from the beginning: this law is so vague the banks and credit card companies would wind up blocking every gaming transaction – even the exempted ones – rather than risk violating the law,” Brennan Jr. concluded. “It’s no longer just a theory. It’s a fact.”

 

The EU May Not Have Pressured the US Into Compliance with WTO Laws

by Hillary LaClair, Senior Editor
April 14, 2009

             After the European Commission’s formal investigation against the United States found that the U.S. was guilty of discriminating against offshore online casinos, the Commission filed a report claiming that it could take legal action. The findings in the report show that the treatment of offshore online casinos by the U.S. blocks the market access for casino operators and is in violation of the World Trade Organization agreements. Recent trends imply, however, that the U.S. may take threats of WTO arbitration with a grain of salt.

                Before taking legal action, members of the European Union have decided to ask the U.S. to open its doors to online casino operators as a settlement agreement. But a trade expert believes that lax prosecution of recent cases by the EU will not cause the U.S. to feel pressured to comply.

                Dr. Stephen Woolcock of the London School of Economics told Gambling Compliance that the EU investigates several complaints each year but that it rarely decides to pursue any such cases with the World Trade Organization.

                “The Trade Barriers Regulation is not a very sharp instrument to get the US’ attention,” said Woolcock. “The EU has never really used it very aggressively.”

                Because trade representatives have already said that they would rather negotiate with the U.S. than pursue legal action, Woolcock believes that the U.S. may view this as an empty threat.

                    "The European Commission investigation further highlights the need for the Obama Administration and Congress to regulate Internet gambling not only to protect consumers, but in order to restore integrity to the international trade system," said Jeffrey Sandman, spokesperson for the Safe and Secure Internet Gambling Initiative, upon the report’s filing. "The Obama Administration should seek to forge a new direction on Internet gambling, rather than keeping in place a protectionist trade policy that hypocritically discriminates against foreign online gambling operators."

                A source stated that bilateral talks were most likely to ensue because “a case would take a very long time tied up at the WTO.”

                The EU is not likely to accept a situation in which the U.S. continues to pursue European online casinos for activities in the U.S. when the U.S. is bound by international trade agreements to allow unrestricted competition in services.

                Representative David Blunkett MP of the UK Parliament commented, “"I fully support the call by the EU Trade Commissioner, Cathy Ashton, for urgent U.S. action to regularise the trade relationship, respect WTO rules and to regulate online gambling. This would provide not only fair competition, but protection for individuals and families, and a legal basis on which substantial revenue could be raised at a time of considerable pressure on public finances.”

                Finally, newly appointed U.S. Trade Representative Ron Kirk openly supports free trade agreements and it is believed that he will devote himself to upholding WTO regulations. If nothing else, offshore casinos that have undergone litigation with the U.S. Department of Justice can expect to maintain a market without further harassment from the U.S. court system.

Instrastate Online Gambling May Pass Before the UIGEA is Repealed

by Hillary LaClair, Senior Editor
April 13, 2009

              It is beginning to look as though the decision to allow intrastate online gambling will be made before a decision to allow or repeal the UIGEA is made. While the Unlawful Internet Gambling Enforcement Act specifically prohibits intrastate online casino gambling transactions, individual U.S. states have every right to regulate and license online gambling websites within their borders. California, for example, has prepared a bill that would license online casino gambling and Texas, New York, Florida and New Jersey have are in various stages of similar legislation.

                Washington is the only U.S. state that specifically prohibits online casino gambling, but the UIGEA has put several states into the thinking that they do not have the right to regulate the industry within their own borders. Vermont, North Dakota and New Hampshire have placed blocks on internet lottery purchases, despite that form of online gambling having been exempt from the UIGEA.

                In California, New Jersey and a handful of other states, talks have ensued over the possible regulation over online casino gambling. Should these states institute systems for regulating online casinos, the UIGEA will become more of a hindrance to U.S. law than ever before, and perhaps give internet gaming advocates the case they need to have the law overturned.

                Meanwhile, April is upon us, and it has been one month since Congressman Barney Frank vowed to reintroduce legislation that would overturn the ban on internet gambling in a “couple weeks.” Many online casino gambling advocates have grown increasingly frustrated with Frank who has been an opponent of the UIGEA since its inception.

                “Representative Frank has been battling for us and has tried several times to have the new law overturned,” said online player Max E. “But I know I had hoped that he would have already succeeded this way I can play at whatever casino I want.”

                As the UIGEA is still in motion, more casinos have exited the U.S. market, leaving many American gamers disenfranchised with the Congressman in his attempts to repeal the ban. The U.S. Department has been consistent in its fight against online casino gambling, bringing legal action against online casino operators – even those that exited the market with the inception of the UIGEA in 2006.

                “I only play at online casinos on a casual basis,” said Fran H. “Some of the casinos I play at I can’t send my friends to, because they don’t accept US players anymore. I wish it wasn’t like this.”

                The last major action of Representative Frank’s proposed legislation, HR 6870 or the Payments System Protection Act, was in October of last year. The bill was introduced “to ensure that implementation of proposed regulations under subchapter IV of chapter 53 of title 31, Unites States Code, does not cause harm to the payments system,” and to ensure that upon the effective date of its passing the UIGEA “shall cease to apply.”

                Frank, the chairman of the Financial Service Committee, is expected to introduce the legislation again later this month for further review. Frank can be reached via e-mail for any casino gambler wishing to contact the Congressman for more information by accessing www.house.gov/frank/contact.html. 

Harrah’s Entertainment Reduces Debt by 2.3 Billion Dollars

by Hillary LaClair, Senior Editor
April 10, 2009

                Harrah’s Entertainment was able to gain a temporary stay of execution this week, reducing its debt load by $2.3 billion in a program that ended Tuesday. Experts are unsure, however, if that amount will be enough to keep the company out of bankruptcy court.

                Gaming analyst Barbara Cappaert reported last month that Harrah’s would file for bankruptcy by the end of the year. “We think this latest restructuring is an attempt to rearrange the deck of chairs on the Titanic,” she said.

                Harrah’s announced last month that it would swap an undisclosed amount of debt for $2.8 billion in lower value interest notes that would grow in nine years. Apollo Management and TPG Capital, Harrah’s parent companies, have offered to exchange the notes for $250 million, or 37 cents on the dollar for notes tendered by December.

                Bond analysts said on Thursday that they are examining the exchange details and will release reports later to discuss the effect that the swap will have on the company’s liquidity. The exchange accounts for $3.4 billion in new 10 percent notes that will mature in 2018 when issued.  A subsidiary issued an additional $297 million in notes for the $442 million in bridge loans that the company repurchased.  Most of the share holders that exchanged notes held notes that matured in 2015 and beyond. The new debt has a longer maturity date.

                Harrah’s Entertainment said in mid-March that it may not be able to generate enough cash flow or secure additional loans to service its debt. The company said that revenues last year dropped 10.3 percent to $10.13 billion. This resulted in cash flow decreasing by 16 percent, from $2.81 billion in 2007 to $2.36 billion last year.

Cryptologic Offers Call of Duty Themed Slots Game

by Hillary LaClair, Senior Editor
April 9, 2009

               CryptoLogic Limited, a popular online casino brand and software provider, announced a lineup of new online casino games that will feature popular gaming theme, Call of Duty 4: Modern Warfare. Additionally, Millionaires Club III, Samba Nights, Reel in the Cash and Penguins in Paradise, Double Deck Blackjack, renewed versions of Single Deck and Progressive Blackjack have all been made available to players at Intercasino.com, Casinojoy.com and Dtdcasinos.com

                The Call of Duty 4 slots game is based on the best-selling, first person shooter video gaming that has sold more than 12 million copies. It is a 25 payline slot games with sleek graphics, smooth animation and sound effects that will be familiar to any fan of the game. As part of a bonus of the slots game, the software provider has included an interactive round where players become SAS soldiers and terminate enemies to win free games and prizes.

                The highly anticipated Millionaires Club III is the latest addition of Cryptologic’s record-breaking slots game that offers a number of bonus rounds to earn cash prized. The series has in the past resulted in some of the largest jackpots in the online casino industry – including a world record win of $8 million two years ago. The new version offers 20 paylines that trigger a bonus game when three or more logos appear. Players must find three jackpot tokens to enter the jackpot round.

                “With this launch, CryptoLogic demonstrates its ability to create innovation in the online slot category through unique spin mechanisms and functionality – while always staying true to the essence of every brand,” said Cryptologic Vice President, Justin Thouin. “This demonstrates why Cryptologic is the partner of choice to the world’s largest entertainment brands.”