State of the Union: Wire Act, Indiana, WV and more

11 April 2019

This week's State of the Union, in partnership with Segev LLP, covers the latest twist in New Hampshire's challenge to the revised Wire Act opinion, Indiana closing in on legal wagering, West Virginia's first six months of legal sports betting and more.

DoJ still assessing legality of state lotteries

The Department of Justice (DoJ) has claimed that its revised stance on the 1961 Wire Act did not address the legality of interstate and online lotteries, with a review into the matter ongoing.

The claim, supported by a memo from Deputy Attorney General Rod Rosenstein, suggests that the DoJ is still examining whether state lottery operations should fall under the Wire Act's jurisdiction. As a result, the Department claims that there are no grounds for a legal challenge, which should therefore be dismissed. 

Rostenstein’s memo states that Department of Justice attorneys should refrain from enforcing the revised Wire Act stance, which states that the legislation applies to all forms of gambling and not just sports betting, on state lotteries until the review is concluded.

Should the DoJ rule that interstate lottery operations come under the jurisdiction of the Wire Act, Rosenstein says state lotteries will be given a 90-day window in which to ensure their operations are compliant with federal law.

Indiana sports bill set for House vote

Indiana’s House Ways and Means Committee has advanced a sports betting bill to the House floor, but with a number of further amendments.

Senate Bill 552 passed the latest Committee by a vote of 17-6 and will now head to the House floor for further debate. Should any more changes be required, the bill would return to the upper chamber before moving on the Governor’s office for sign-off.

The bill has already been amended a number of times in the legislature process, including at the House Public Policy Committee stage last month, having already gained approval from the Senate in February.

Among the latest amendments made by the House Ways and Means Committee is a measure to establish a tax rate of 9.5% of sports betting revenue for operators that secure a licence in the new market.

The licence fee has also been cut to $10,000 (£7,650/€8,870) from the $100,000 that had previously been set out, while 3.3% of tax revenue collected from sports betting revenue would be used to address problem gambling in Indiana.

WV sports betting revenue passes $10m
The first six months of legal sports betting in West Virginia has seen the state’s licensed operators generate revenue of $10.1m (£7.7m/€8.9m), with the Penn National Gaming-operated Hollywood Casino at Charles Town Races leading the market.

Customers wagered $99.3m since the market opened on September 1, 2018, winning $87.4m.

The Charles Town venue was responsible for the bulk of handle and revenue, with stakes for the casino totalling $68.6m, from which it generated revenue of $7.5m.

This set it far ahead of the second most popular venue for sports betting, Eldorado Resorts’ Mountaineer Casino, which contributed revenue of $1.2m from $11.8m in stakes.

Delaware North’s Wheeling Island Hotel-Casino-Racetrack came a distant third with revenue of $574,910.68, followed by another Delaware North property, Mardi Gras Casino and Resort ($514,775.38) and the Greenbrier ($352,147.44).

Second sports bill in play in Ohio
Two lawmakers have introduced a new bill in Ohio that would lead to the legalisation and regulation of sports betting in the US state.

The submission by State Representatives Dave Greenspan and Brigid Kelly has come less than a month after another sports betting bill, Senate Bill 111, was put forward by Senators John Eklund and Sean O’Brien.

However, SB111, which would permit the state’s 11 casinos and racinos to offer sports wagering, has not been put before any committees so far, raising concerns that the bill is already running out of oxygen.

House Bill 149, the new proposal from Greenspan and Kelly, would allow the Ohio Lottery Commission to regulate sports betting in Ohio. Among the requirements would be the addition of two individuals to the commission, bringing the total number to 11, and ensuring that at least three members have specific experience in the sports wagering industry.

A new Sports Gaming Advisory Board would also be created to research and develop recommendations for the commission over a three-year period. The board would consist of 11 members, seven of whom would be appointed by the Governor, two by the Senate and two by the House.

Newgioco to power betting at Montana’s Northern Winz
Betting technology supplier Newgioco Group has agreed a multi-year deal to provide its ELYS sports betting platform to the Chippewa Cree Tribe and its Northern Winz Casino in Montana.

Sports wagering is not yet legal in the US state, but existing tribal laws enable recognised tribes to offer gambling services including sports betting.

Consumers in Montana will now be able to place legal wagers on a wide range of sports event at the Northern Winz Casino in Box Elder.

“Newgioco’s management team worked closely with our representatives for several months and demonstrated a considerable shared-vision to help our council fully understand the unique aspects and risks of this new business line for our community,” Northern Winz Casino general manager, Raymond Parker, said.

Arkansas proposal puts 4 multi-channel permits up for grabs
Lawmakers in Arkansas are to run the rule over a new bill that would legalise online and mobile sports wagering in the US state.

Introduced by Senator Will Bond, Senate Bill 669 sets out plans for the Arkansas Racing Commission to award up to four sports betting licences to venues across the state, with a limit of one licence per county.

Licences will only be awarded to venues located in a county with a population of more than 25,000 people, while the facility must be based at least 75 miles away from the closest casino These licences would cost $1,000 (£758/€890), half of which would be refunded to the applicant should their bid be successful.

Venues that secure a licence may also be permitted to partner with an out-of-state vendor in order to offer sports wagering services to consumers in Arkansas. Third-party interactive wagering platforms would be required to pay an annual operation fee of $10,000.

Also known as the Athletic Event Wagering Act of 2019, the bill also sets out how operators that secure a licence would face a tax rate of 12.5% of gross in-person sports betting revenue and 13.5% on mobile betting revenue.

Montana House Committee passes sports bill
SB330 has continued its progress through the Montana legislature, after being passed by the House Business and Labour Committee Tuesday (April 9).

The bill was passed with unanimous support from the committee, having already been passed by the State Senate earlier this month.

SB330, which is also known as the Montana Sports Betting Act, aims to permit land-based and online wagering.

However, it requires that all online players register in-person, either by travelling to a land-based casino or by registering via a licensee’s interactive platform while on premises.

A licence fee of $1,000 is also proposed, before taxes on sports betting revenues.

Two additional bills, HB475 and HB725 have been passed by the House, and are due to be discussed by the Senate Business, Labor, and Economic Affairs Committee at a hearing later today (April 10)