Daily Fantasy Sports Scandal Could Influence Future Online Poker Legislation Posted on October 7th, 2015 by Daniel Ryder New York Attorney General Eric Schneiderman is going after the daily fantasy sports market, but in the end his investigation could aid in online poker receiving more support for state regulation.
ByThe Illinois Senate passed an online gambling bill (SB208) on Wednesday. To pass into law, though, the Illinois House of Representatives and Governor Bruce Rauner have to approve the measure.
Still, Wednesday’s vote is a cause for celebration among online gambling advocates. Illinois’s state legislature is considering an online gambling bill seriously for the first time. Two separate Illinois online gambling bills have proposed amendments to change the online gambling laws.
Most insiders still believe the two bills, SB209 and SB1805, have little chance of passage in 2017. Illinois politics is unpredictable at times and most US states need to make up budget shortfalls, so online gambling legislation might gain support as the summer session reaches adjournment.
In the space below, I discuss all of the bills on the docket, though SB 208/HB 479 appears to be the proposal with the best change of succeeding.
Senate Bill 0208 (HB 479)
Senate Bill 208, also known as House Bill 479, is sponsored by State Senators Kwame Raoul (D-Chicago), Napoleon Harris III (D-Harvey), and Cristina Castro (D-Elgin). The bill amends the Riverboat Gambling Act to provide for license holders to attain an online gambling license, too.
To attain a license, the operator would have to pay a one-time $10 million fee. Operators would receive a rebate on the licensing fee, so their first $10 million in taxes would be considered the fee itself.
The tax rate on gross revenues is 15%. That is a much lower tax rate than the bill passed in Pennsylvania Senate earlier this month, so the operators should receive a windfall from online gambling, if the bill passes.
Senate Bill 1805
SB1805 also attempts to amend the Riverboat Gambling Act. The sponsors of the bill including State Sen. Dave Syverson (R-Rockford) and Sen. Pamela J. Althoff (R-McHenry) in the Illinois Senate. The version of the bill in the Illinois House of Representatives is sponsored by Michael J. Zalewski (D-Riverside).
Senate Bill 1805 involves land-based gambling in the state, but it has provisions which include online gaming. Under SB1805, the Illinois Gaming Board would oversee licensing under this proposal, which has a variety of stipulations designed to help U.S. Armed Services veterans. The Gaming Board would use “good faith affirmative action to recruit, train, and upgrade veterans of service…in all employment classifications”. Licnesees would file an annual report on its use of veteran-owned businessness in the industry.
Daily Fantasy Sports Regulations
Both bills legalize daily fantasy sports. Attorney General Lisa Madigan (D) banned online daily fantasy sports in early 2016, though she suggested the state legislature pass regulations to legalize the hobby once again. SB1805 and SB208 each would make gaming on sites like DraftKings and FanDuel legal in Illinois.
Senate Bill 1667
A third bill, SB1667, is a daily fantasy sports bill. State Sen. William R. Haine (D-Alton) and State Sen. John G. Mulroe (D-Chicago) are the co-sponsors of SB1667. Like SB1805, Rep. Michael J. Zalewski is the sponsor in the House of Representatives.
Update on House Bill 479 (SB208)
On Wednesday, the Illinois Senate approved Senate Bill 208, which sometimes is referred to as House Bill 479 in the Illinois media (and gaming media). The bill passed by a 42-10 margin, suggesting widespread bipartisan support in the Illinois Senate.
Local media believes the negotiations in the House of Representatives are going to be much tougher, so the possibility that the bill passes is going to be smaller. Those people point to the failed daily fantasy sports bill in 2016, which passed easily in the Senate, but failed to pass muster in the House.
Online Poker Compact with Illinois
The gaming media should not overlook the possibilities, if Illinois passes an online poker bill. SB208 allows for the state to negotiate an interstate poker compact, if its regulators so choose. Illinois is one of the “big states”, so its inclusion in any online poker compact would be a game-changer.
If Illinois signed on to the interstate compact between Nevada and Delaware, the player liquidity in the resulting network would increase by several factors. The playing community, selection, and guaranteed prize pools would increase significantly. That, in turn, would mean more players in each state would be likely to register accounts, thus boosting the player liquidity even more.
Possibilities for Interstate Poker Compact
An Illinois-Nevada-Delaware compact might convince New Jersey to join the compact itself, because Illinois would give the Division of Gaming Enforcement a boost to its efforts. If such a combine gathered momentum, revenues would increase and states like Pennsylvania and California might pass online gambling legislation.
In short, Illinois’s Senate vote on Wednesday might be the spark needed to start momentum towards a significant, highly profitable online poker compact.
Related Articles
This week's installment of Inside Gaming shares news of a new daily fantasy sports site launched by a famous poker pro and his partner, tells of developers' efforts in Iowa to build a new casino in Cedar Rapids, and reports on the Bay 101 in San Jose at last making a planned for move across the street into a new facility.
Phil Galfond Launches New DFS Site, Draftboard
We've enjoyed watching Phil Galfond play pot-limit Omaha on Poker After Dark this week via PokerGO. The poker pro finds his way into the 'Inside Gaming' line-up this week as well with news of a new daily fantasy sports site launched by Galfond and CEO Dan Quinn called Draftboard.
The new DFS site opened for business on Wednesday and offers players similar games as ones found on DraftKings, FanDuel, and other popular sites.
However, as Galfond explains in a post on his poker training site, Run It Once, the new site hopes to improve on existing offerings with added features designed to make things less daunting for the recreational DFS player.
In his post Galfond notes how on most sites the DFS pros are able 'to enter additional line-ups with no degradation in skill,' drawing a contrast with online poker where at a certain point players who multi-table cannot add additional tables without lessening their edge.
Allowing multi-entry is something of a necessity for DFS sites looking to increase prize pools and payouts, Galfond acknowledges. However, Draftboard hopes 'to allow users to multi-enter while not putting single entry users at a disadvantage' via what it calls 'Fair Match' games featuring separate lobbies for 'Rookie' ($1-$5) and 'Veteran' ($10-$50) games. Players are allowed only to enter contests in one of the lobbies each day for each sport.
In other words, players are prevented from playing both low and high buy-in contests in the same sport on the same day. Other features of the site include random opponent selection (to avoid pros targeting certain opponents) and a special multi-entry system matching first entries with other first entries, second entries with second entries, and so on.
Also distinguishing Draftboard is its 'Live' section allowing players to follow the action with real-time animations that resemble 'game cast' screens for following games online. It's a feature Legal Sports Report says 'obviously far outpaces the in-contest experience you'll find at any other DFS operator.'
The site is giving new sign-ups a dollar to try out the site, which currently is only offering NFL games. Draftboard is also taking a 'legally conservative approach in the US' says Legal Sports Report, not offering games in U.S. states where there are DFS regulations and where 'the site is either applying for licensure or waiting for the economics to make sense.'
In September 2016, Galfond announced plans to launch an online poker site which currently remains in development.
Cedar Rapids Casino Proposals Meet Resistance from Current Iowa Operators
Three years ago, a bid to build a casino in Cedar Rapids, Iowa was rejected by state regulators, a decision made in part because of marketplace concerns expressed by other casinos.
Thus the scene was a familiar one this week at a public hearing in Cedar Rapids involving regulators, where several different proposals for casinos in the state's second-largest city were discussed with operators of casinos speaking out against such plans, reports The Gazette.
Daily Fantasy Sports Sites
'Nothing has changed in this market and we urge you not to grant Cedar Rapids a license,' said Dan Kehl, CEO of Elite Casino Resorts, to the Iowa Racing and Gaming Commission. Elite Casino Resorts operates two casinos in Davenport and one in Larchwood.
The commission traveled to Cedar Rapids to hear three different proposals followed by a public hearing. The proposals included one from Wild Rose Entertainment for a $40-$55 million 'boutique' casino, one for a $105-$118 million casino proposed by Peninsula Pacific and Cedar Rapids Development, and a third from those same two groups for a $165-$187 million project.
The latter, largest proposal is 'nearly identical to the project rejected by a 4-1 gaming commission vote in 2014 based largely on projections it would cannibalize other casinos,' reports The Gazette.
Besides the practical, economic objections additionally raised by representatives of casinos in Tama, Waterloo, and the Quad Cities, opposition was expressed at the hearing by one pastor representing 'a handful of local residents opposed to any casino' as being 'a sin.'
Other officials representing Cedar Rapids and Linn County also expressed opposition, something Gaming Commissioner Jeff Lamberti said would be taken into consideration but would not ultimately determine whether or not a license would be granted. A decision is expected to come in November.
New Bay 101 Casino Opens in San Jose
Finally, the popular Bay 101 Casino in San Jose, California has found a new home right across the highway from its former facility, with today marking the grand opening of the new modernized casino, reports The Mercury News.
The new $53 million building covers 68,000 square-feet on North First Street and features a streamlined architectural look, added lighting, and higher ceilings. The Asian-themed Province restaurant additionally highlights dining options in the new facility.
Also making the move is the Bay 101's famed poker room, home of the annual World Poker Tour Bay 101 Shooting Star series that will continue to be held going forward.*
The casino includes 49 gaming tables (the maximum allowed by city law), offering pai gow poker, blackjack, EZ baccarat, and Texas hold'em. Free wi-fi, deposit boxes, and 40 high-definition TV screens are among the other services and conveniences.
'We're confident our patrons will enjoy the casino's contemporary design, high-tech amenities and easily accessible parking options,' said Bay 101 general manager Vincent Shaw.
The Bay 101 is one of two card rooms available to poker players in San Jose, the other being just up the street at the Casino M8trix.
First opened as the Sutter's Club in 1929, San Jose's oldest card room closed in June 1992. Then after new developers sought to reopen a new site, a contest was held resulting in the new 'Bay 101' name being used for the reopening in late 1993. Plans for the across-the-street move began in 2013.
Daily Fantasy Sports Rankings
*Ed note: While earlier reports on the Bay 101's move suggested the WPT event would continue to be held, that has not been confirmed.
Online Fantasy Sports Betting Sites
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