Inside Asian Gaming

INSIDE ASIAN GAMING | January 2014 38 in 2013 from government regulators weakens these arguments significantly. A Matter of Opinion In addition to the first congressional hearing in November, Bitcoin is getting attention from regulators in several industries—the US Securities and Exchange Commission, the Financial Crimes Enforcement Network (FinCEN), the Federal Elections Commission and the New York State Department of Financial Services, to name a few. • Securities Exchange Commission Trendon Shavers is the founder and operator of Bitcoin Savings and Trust, which offered investors up to a 1% daily interest rate of return. On 23rd July, 2013, the SEC sued Shavers in federal court, accusing him of running a Ponzi scheme, using new investors to pay returns on previous investments and scamming investors out of Bitcoin valued at approximately $4.5 million. The SEC sought to freeze Shavers’ assets. Shaversarguedthatthecourtwaswithout jurisdiction over Bitcoin because the Bitcoin Savings and Trust transactions were not within the securities law of the United States. On 6th August, 2013, the court determined the BTCST investments constituted an “investment contract” and were “securities” under federal securities laws. Thus, the court had proper subject matter jurisdiction over the suit. In making this determination, the court found it “clear that Bitcoin can be used as money.” Thus, the BTCST investment was considered an investment of money. The court rationalized that Bitcoin can “be exchanged for conventional currencies, such as theUSdollar, euro, yen and yuan.Therefore, Bitcoin is a currency or form of money, and investors wishing to invest in BTCST provided an investment of money.” • Financial Crimes Enforcement Network On 18th March, 2013, FinCEN issued interpretiveguidancetoclarifytheapplicability of Bank Secrecy Act regulations to virtual currencies, such as Bitcoin. FinCENdetermined that “administrators” and “exchangers” of Bitcoin are subject to money services business registration because the term “money TECH TALK Can online gaming and casinos coexist? New study by AlixPartners shows the pros may outweigh the cons when it comes to online gaming impact on land-based casino visitation By Mike Sinoway and John Bonno , Alix Partners LLP T he legalization of online gaming across the United States is slowly becoming a reality. Nevada, New Jersey and Delaware have approved legislation legalizing online gaming activities. Assuming the results in those states are positive, as many experts expect, several other states will likely pursue legislation to legalize online gaming as well. As online gaming activity rises in the US, however, experts are divided on the impact online gaming will have on traditional brick- and-mortar casinos. One school of thought is that online gaming will cannibalize brick-and- mortar gaming activity. After all, if consumers have a finite gaming budget, it’s a lot easier and more convenient to wager in the comfort of their own homes than travel to a casino. Other experts, though, believe online gaming will create incremental exposure to gaming to consumers who may not have The method by which Nevada, New Jersey and Delaware have moved to legalize Internet gaming places Bitcoin Internet casinos in a tough position— continue operating under a cloud of legal ambiguity and uncertainty or find ways to adapt to the regulatory environment growing around them. As Bitcoin’s popularity increases, the former option becomes less and less of a possibility. >>>