Las Vegas Business Press: Issues shaping Las Vegas banking industry in 2017

Posted January 16, 2017 – 8:51am


GamblingCompliance: Nevada Governor Stresses State’s Leadership In Gaming


Nevada Republican Governor Brian Sandoval delivered his fourth and final State of the State address Tuesday, proposing an $8.1bn budget for the next two years and reminding lawmakers that the state’s fiscal health is tied to its tourism economy.

“With gaming legalized around the globe, we can never relinquish our position as the gaming and entertainment capital of the world,” Sandoval said in an hour-long speech to a joint session of the state legislature in Carson City.

“Competition is tough, so we must always be open to new ideas and opportunities,” the governor said. “Since last session, the state embarked upon a number of changes to gaming regulations, including the development of skill based games.”

Sandoval noted that the landscape of the gaming business is changing as a new generation grows up in a rapidly changing technology environment.

“As technology evolves, so must we,” Sandoval said.

Sandoval highlighted the efforts of the governor’s Gaming Policy Committee and gaming regulators in approving new rules to allow Nevada to become the “first and only state to allow wagers on esports.”

“We must ensure that the gaming industry is free to innovate and compete, while closely adhering to two ironclad rules; player protection and safeguarding Nevada’s reputation as the ‘gold standard’ in gaming regulation,” Sandoval said.

Editor’s Note: From GamblingCompliance’s Regulatory News Update

GamblingCompliance: Policy Groups Ask Trump Administration To Reject Federal Internet Gambling Ban


Eight groups, which describe themselves as free-market, limited government, and freedom-oriented organizations, sent a letter Thursday to Vice President-elect Mike Pence and Attorney General nominee Senator Jeff Sessions, asking to block demands for a federal prohibition on internet gambling.

“After a contentious election year, a divided nation looks to the new [Donald] Trump administration to make good on promises to ‘drain the swamp’ and change the way Washington does business,” according to the coalition’s three-page letter.

Led by Michelle Minton, a fellow with the Competitive Enterprise Institute, the coalition of groups urged “the new administration to honor that promise by refusing special interest demands for a federal ban on internet gambling.”

The letter was released two days after Sessions, a Republican senator from Alabama, told the Senate Judiciary Committee he would review the 2011 opinion by the U.S. Department of Justice (DOJ) that allows states to legalize and regulate internet gambling.

The opinion limited the scope of the 1961 Wire Act to sports betting. That decision opened the door to intrastate online gambling.

Since the DOJ’s opinion was released, New Jersey and Delaware have legalized full online casino gambling, while Nevada has legalized online poker.

“I would revisit it, and I would make a decision based on careful study,” Sessions told the committee during his confirmation hearing on his nomination to be the nation’s top law enforcement official.

Minton also mentioned a November 17 letter that ten Republican state attorneys general sent to Pence requesting a Trump administration help them “restore” the Wire Act to its original interpretation.

Nevada attorney general Adam Laxalt signed the letter that also asked the Trump administration to protect the rule of law, and not let “arbitrary decisions of individual government officials … create law.”

“We share this desire to protect the rule of law and the legislative process,” Minton and her co-signers wrote.

But the letter warns that reversing the DOJ’s current opinion on the Wire Act does not achieve those goals.

In fact, they “undermine years of legislative efforts and thoughtful legal decisions.”

The letter also argues that the original intent of the 1961 Wire Act was not to create a de facto prohibition on internet gambling, but to assist states in enforcing their laws against gambling and bookmaking.

Opponents of online gaming argue the 2011 opinion bypassed Congress.

Minton and others disagree, writing that “this is simply not true, and ignores the fact that Congress considered and rejected no fewer than five bills prior to 2011 to amend the Wire Act and make it applicable to all online gambling.”

The letter also highlights the failure of Congress to pass the Restoration of America’s Wire Act (RAWA), noting the measure has received only one hearing and faces continued strong Republican opposition.

Las Vegas Sands chairman Sheldon Adelson’s opposition to online gambling and his support of RAWA is well known in the gaming industry.

Adelson has supported organizations and politicians such as Republican Senator Lindsey Graham of South Carolina and Representative Jason Chaffetz, a Republican from Utah, who share his anti-online gambling views.

Last year, Graham sponsored RAWA in the Senate.

In an effort to pass RAWA, Adelson provided the funding for the Coalition to Stop Internet Gambling and contributed about $5m to Trump’s presidential campaign.

“Republicans have also been its most vociferous opponents,” the letter said. “Many have raised concerns that the bill violates the Tenth Amendment of the Constitution, undermining states’ authority to regulate intrastate commerce.”

Besides Minton, those who signed the letter were: Andrew Langer, president of the Institute for Liberty; David Williams, president of the Taxpayers Protection Alliance; Norman Singleton, vice president of policy, Campaign for Liberty; Andrew F. Quinlan, president of the Center for Freedom and Prosperity; Katie McAuliffe, executive director, Digital Liberty; Paul Guessing, president of the Rio Grande Foundation; and Tom Giovanetti, president of the Institute for Policy Innovation.


GamblingCompliance: Bills Propose Federal Gaming Tax For U.S. Operators


The American Gaming Association (AGA) is lobbying to eliminate a “misguided” provision in a recently introduced tax overhaul bill that would subject gaming companies to a 23 percent federal gaming tax, an executive with the trade group said Wednesday.

The suggested tax rate for companies offering games of chance is buried deep within 132-page bills introduced January 3 in the U.S. Senate and House of Representatives that would repeal the federal income tax, and abolish the Internal Revenue Service (IRS).

The bill would also create a national sales tax that would be administered primarily by the states.

Senator Jerry Moran, a Republican from Kansas, authored Senate Bill 18 that would impose a federal tax on state-regulated gaming operations for the first time.

Whit Askew, vice president of government relations for the AGA, told GamblingCompliance in an email that the organization is monitoring any newly introduced legislation that directly affects the gaming industry.

“While this provision is one small component of Sen. Moran’s broader tax legislation, AGA is already working with allies on Capitol Hill to push back on such misguided policy issues that could not only negatively affect gaming patrons and the industry, but also state and local governments,” Askew said.

Direct oversight and taxation of casinos and other gaming business have historically been left to state governments, and the U.S. gaming industry has traditionally bristled at the prospect of federal encroachment.

“AGA is also following up with Sen. Moran’s office to ensure his understanding of the positive economic impact gaming drives in Kansas and across the country,” Askew said.

The bill titled the “Fair Tax Act of 2017” has a section on gaming activities and defines games of “chance” as those that include bets or wagers involving “(1) a random or unpredictable event or (2) an event over which neither the gaming sponsor nor the person purchasing the chance has control over the outcome.”

The 23 percent tax would be applied to a gaming operator’s gross receipts, minus “total gaming payoffs to chance purchasers, and gaming specific taxes … imposed by the federal, state or local government,” according to the bill.

Moran is no stranger to trying to replace the income tax with a national sales tax, and his bill’s prospects are far from certain. In 2015, Moran introduced S. 155, which never made it out of the Senate Committee on Finance.

No hearing or vote on Moran’s new legislation has been scheduled.

Meanwhile, Representative Rob Woodall, a Republican from Georgia, introduced a similar bill — HR 25 — in the House earlier this month.

Woodall’s bill has been referred to the House Committee on Ways and Means, but no hearing has been scheduled.

He introduced the same bill — HR 25 — two years ago, but that measure was not enacted.