Inside Asian Gaming

MAY 2015 inside asian gaming 55 Gambling and the law as opposed to voting machines. Yes, there have been some well- publicized problems. But given the hundreds of billions of times buttons have been pushed and handles pulled on gaming devices, the incidents are extremely rare. If the states really wanted to make voting fast, accurate and secure, they should turn the running of elections over to casinos. This doesn’t mean gaming device manufacturers and operators couldn’t be even more careful. In England, where the jackpots are smaller, casinos have to pay off “winners” when there is a malfunction. Not surprisingly, British casinos have even fewer slot machine malfunctions. But casinos in the US do seem to care who is the legitimate winner more than some election officials seem to. Casinos also face the theoretical risk of losing not just money but their most valuable asset: their licenses. In practice, regulators rarely impose even substantial fines, let alone suspend or revoke licenses. But the threat is always there. The risk of being closed down is even greater when it comes to Internet gaming. On 21st February, 2013, Governor Brian Sandoval signed a bill explicitly allowing Nevada to enter agreements with other states to allow cross-border betting. This will permit pooling of players in states where Internet poker is legal. Delaware and Nevada have, in fact, announced that they have come to an agreement to take bets from each other. It will be interesting to see how they deal with the fact that not all operators will be licensed in both states. And the tax rates are different. The Nevada bill also included this language: “The Legislature hereby finds and declares that… A comprehensive regulatory structure, coupled with strict licensing standards, will ensure the protection of consumers, including minors and vulnerable persons, prevent fraud, guard against underage and problem gambling, avoid unauthorized use by persons located in jurisdictions that do not authorize interactive gaming and aid in law enforcement efforts.” Politically, it was very important that the first state-licensed Internet gaming operators met those standards. But was it also required by law? The Unlawful Internet Gambling Enforcement Act (“UIGEA”) expressly allows online wagers to be sent intra-state, but only if the bettor and operator are in the same state, the state has made the bet legal, and verifications are in place: “…age and location verification requirements reasonably designed to block access to minors and persons located out of such State; and appropriate data security standards to prevent unauthorized access by any person whose age and current location has not been verified in accordance with such State’s law or regulations…” Similar language applies to bets made between and among tribal Internet gaming operations. There is no similar language in the UIGEA about other interstate or even international Internet gaming. But this did not mean that Congress did not care about age and location verification for non- tribal, cross-border bets. It simply forgot to put it in. Remember, the UIGEA was put together overnight by the Republican leadership of Congress, without any hearings, or even having been proof-read. The UIGEA does require that an Internet wager not violate the laws of the jurisdictions where the operator is located, that is, where To see how careful the casino industry is compared with something that we would normally think is more important, look at the relatively few malfunctions there have been with slot machines as opposed to voting machines. Changes in the law trail changes in society. So, not only do we have anti-gambling laws that predate the invention of the Internet, we even have some that predate the telephone. And hidden among these ancient statutes are legal landmines.