States Most Likely to Legalize Sports Betting in 2019: Jeff Ifrah Joins Other Experts in Handicapping the Odds for Sports Handle
Online gaming today is possible and safe thanks to the latest technology, especially the sophisticated function of geolocation.
Geolocation is defined as the technique of identifying the geographical location of a person or device by means of digital information processed online. Online gaming companies have refined the process to a precision that would have been unheard of just five years ago. But because the technology is so new, it is often misunderstood and misinterpreted.
When the House Judiciary Committee heard testimony regarding the current and future role of online gaming in America following the Supreme Court’s overturn of PASPA, the conversation veered toward the ludicrous whenever geolocation came up.
Testifying before the House, former Attorney General of Nebraska Jon Bruning imagined a world where betting companies could use “geolocating” to encourage underage gambling.
“[I]magine they decide to target 15-year-olds in the Milwaukee area right now. Which you can do, with geolocating, and they decide to target them for online gambling,” he said.
Bruning’s fictional world fundamentally misunderstands how geolocation works and why gaming companies use it. Geolocation cannot pinpoint people of certain ages, and even if it could, that isn’t how gaming companies use it. Rather than a marketing method, geolocation is a technique to ensure compliance and safety.
In the world of online gaming, the primary application of geolocation technology is to determine if a bettor’s device is within state borders. Online gaming is not legal in every state, and companies face fines if they allow people to play outside of legal areas. Many companies use technology like GeoComply to stay on the right side of the law. How accurate is this technology? Reporters who tested it found that their poker apps only started to work when they were 100 feet inside the Nevada state border with California.
A more common approach used by gamers seeking to avoid state boundaries is the use of a virtual private network (VPN) or fake location apps. Called “spoofing,” this tactic disguises their actual location and transmits a different, false location from their own device to the server.
David Briggs, the chief executive of GeoComply, told The New York Times recently that “If anyone was ever to engage in any type of nefarious activity, this would be the worst place to do it….Because we got you.”
A more common approach used by gamers seeking to avoid state boundaries is the use of a virtual private network (VPN). Called “spoofing,” this tactic disguises their actual location and transmits a different, false location from their own device to the server.
How does geolocation software defend against these bad actors who try to spoof their location so they seem to fall inside legal boundaries? And how does this work in a state with more densely populated borders than Nevada? When iDEA Growth conducted an independent study to explore those questions, researchers found that, according to the New Jersey Gaming Enforcement Agency, geolocation was working fine for 98% of users within New Jersey and no reported cases of users being able to spoof their location from out of state. Another reason people can’t use a VPN or other location spoofing tool to convince software they are located in New Jersey when they are not is the fact that the Division of Gaming Enforcement checks and rechecks a bettor’s location at least every 20 minutes. Technologically, it’s far more difficult to location spoof with when constant checks are implemented.
If anything, the New Jersey geolocation compliance software is too exacting. The study’s remaining 2% of users who were not able to be located effectively when they were within New Jersey weren’t bad actors who managed to sneak in, but actually people within the state who were false negatives (people inside the state who were incorrectly rejected). Instead of risking the chance of illegal betting outside of state borders, the geolocation technology errs on the side of caution by using a buffer zone. New Jersey’s dense borders create the need to be particularly vigilant about keeping out would-be bettors who are simply near the state.
Lawmakers who don’t understand how geolocation works should listen to the experts. In order to remain compliant, gaming companies contract or employ some of the leading geolocation experts today. If legislators want to know more about the safety and accuracy of geolocation, maybe next time instead of speculating, they could ask some of them to testify.
iDEA Growth Founder Jeff Ifrah Shares iGaming Expertise at Conference in Arizona with State Attorney General, the NFL and Others
On November 18, founding member of iDEA Growth, Jeff Ifrah, spoke at the State Government Affairs Council’s Leaders’ Policy Conference in Scottsdale, Arizona. Moderated by Arizona Attorney General Mark Brnovich, Jeff shared his expertise alongside the NFL’s Jonathan Nabavi, Nevada Gaming Control Board Chairwoman Becky Harris and NYX Gaming Group’s Quinton Singleton during a panel discussion on the future of legalized sports betting.
In front of state legislators, policy advisors and other members of national sports leagues, including the NFL, Jeff discussed the economic opportunities sports betting and online gaming could provide to states that chose to consider legalizing the industry.
“Legalized gaming is creating jobs and driving explosive growth in state tax revenue,” Jeff commented on Sunday. “We’ve seen record profits in New Jersey and consumer response is set to continue to exceed our expectations. I hope we’ll see that one day here in Arizona also.” Jeff explained to lawmakers that, in many regards, online gaming is much safer than playing at a brick and mortar casino.
“There are a lot more protections when gaming goes online. Not only do consumers have to provide a legitimate form of payment when gaming online, they also have to go through stringent identity checks.”
As a preview to the conference, Jeff spoke with the Phoenix Business Journal and the Casa Grande Dispatch.
iDEA Growth is swiftly becoming known as the voice of the online gaming industry, providing documented evidence of the taxes and jobs that come from this entertainment, and the success of consumer protection regulations and technology in safeguarding both the consumer and the games. In the past week alone, iDEA members have spoken to legislators and have been quoted in media outlets around the country on the economic benefits of online gaming and sports betting.
As previously announced, here are some of this week’s high-profile iDEA speaking engagements and how they were received in the mainstream media:
Legislators in Illinois are working on a draft sports betting bill which may come before the state’s General Assembly early next year.
On Oct. 17, Jim Ryan of Pala Interactive represented iDEA and gave testimony before the Illinois General Assembly on the economic benefits of legalized sports betting. Other witnesses included representatives from casinos; state representatives Lou Lang (D- Skokie) and Mike Zalewski (D- Cooke County), fantasy sports operators, the mayors of East St Louis and Des Plaines, Lindsay Slader of Geocomply, prospective licensees, gaming opponents Illinois Family Action, the Chicago Cubs, the MLBPA, and the NFLPA.
The media covered this hearing, and Jim Ryan’s testimony, extensively in the St. Louis Post-Dispatch, State Journal-Register, Rockford Register Star, Online Poker Report, iGaming Business, Sports Handle, ABC 20, Illinois News Network, and Fox 25.
On Oct. 17, The Council of the District of Columbia’s Committee on Finance & Revenue held a Public Hearing on Bill 22-944, the “Sports Wagering Lottery Amendment Act of 2018.” iDEA founding member Jeff Ifrah provided testimony to the Committee, chaired by Councilmember Jack Evans. Other witnesses included Counsel for DraftKings, the NBA, MGM Interactive, and other concerned parties.
Following his testimony, Jeff was interviewed by Fox 5 and NBC 7 with coverage to come. Both WJLA-TV ABC 7 and Legal Sports Report (articles here and here) have already published coverage of the hearing.
On Oct. 9, George Sweny of the Stars Group represented iDEA at the invitation of Ohio State Senators John Eklund and Sean O’Brien at a roundtable discussion on sports betting and online gaming. This event generated media coverage in Sports Handle and Gaming Today, with mentions in both the National Football Post and CDC Gaming.
On October 18, Jeff had a 30-minute follow-up call with State Senator John Eklund. The Senator stated the legislature will reconvene after Election Day and invited iDEA to submit studies on online gaming to be considered prior to the next Senate testimony. The Senator also requested information on the online tools available to monitor consumer spending beyond their means and also to prevent underage gaming. iDEA was then invited to return to Columbus to provide more information once the majority of Senators are back in the area after Election Day.
On October 12, 2018, Kentucky’s Interim Joint Committee on Licensing, Occupations, and Administrative Regulations held a hearing on sports betting, to which iDEA submitted written testimony and the Executive Summary of our Economic Benefits study.
iDEA member Mark Hemmerle will attend a hearing on sports betting on Friday, October 19 in Indiana, another state considering the introduction of a sports betting bill in the future.
iDEA continues to make our members’ voices heard across the U.S this fall, educating audiences interested in the positive potential for sports betting and online gaming for their communities.
- October 18: Jeff Ifrah is meeting with Congressional Quarterly Magazine for a profile on iDEA Growth Association.
- November 17-20: Jeff Ifrah will speak at SGAC’s Leaders Policy Conference in Scottsdale, AZ
- November 27-28: iDEA is a sponsoring the ICE Sports Betting Conference in NYC
On Oct. 17, Jeff Ifrah, a founding member of iDEA Growth, testified before the Council of the District of Columbia’s Committee on Finance and Revenue in their Public Hearing on Bill 22-944, the “Sports Wagering Lottery Amendment Act of 2018.”
Jeff explained the economic benefits that other states have derived from the legalization of sports betting and online gaming, and the successful regulatory and technological safeguards that other states have put into place to activities and safeguard consumers.
For Jeff’s full testimony, click here.
Ohio lawmakers are preparing to introduce sports betting legislation in the state. But first, they want to hear from the experts. On Tuesday, lawmakers John Eklund and Sean O’Brien (D-District 32) hosted fact-finding meetings with industry experts and stakeholders.
George Sweny of the iDEA member company the Stars Group gave testimony on the economic benefits of online gaming and effective regulatory safeguards. iDEA will be following up with lawmakers with the results of its 2016 iGaming study in New Jersey, as well as our model legislation to better aid lawmakers with their upcoming draft.
After the meeting, Senator Eklund observed that “rather than trying to prevent sports betting in Ohio, the groups were more about being mindful of how to help and/or prevent issues from arising.”
To learn more about iDEA’s work in Ohio, read the full story on Sports Handle.
National acceptance of sports betting and online gaming is spreading. The experienced perspectives of our members and our collective empirical research have made iDEA Growth a valuable resource and authority for lawmakers and government officials, who frequently request our professional opinions on implementing and legislating sports betting across the United States. The experts at iDEA are often asked to speak at events in order to educate industry leaders, legislators and consumers on the economic benefits of rationally regulated online gaming and the technological safeguards which protect the customer and the games.
See below for a calendar of our upcoming speaking engagements.
October 8-11: Global Gaming Expo – Las Vegas, NV
iDEA is a sponsor of this year’s Global Gaming Expo (called G2E for short), the largest gaming trade show in North America. Additionally, iDEA founding member Jeff Ifrah will be speaking on a panel about mobile gaming called “Mobile Gaming: The Next Big Thing for Indian Country?” The panel will cover the growth of mobile gaming in worldwide markets, and how businesses can take advantage of this boom swiftly and legally.
October 9: Ohio State Senators Eklund & O’Brien Roundtable – Columbus, OH
Ohio is one of the ten US states that has introduced a sports betting bill but has yet to make any mention of mobile provisions. George Sweny of Stars Group, a member of iDEA, has been invited to participate in this roundtable discussion with Ohio State Senators Eklund and O’Brien. The roundtable will delve into legalized sports betting, online mobile gaming, and the opportunities they may bring to the state.
October 17: Illinois General Assembly – Springfield, IL
Illinois is one of the seven US states that has introduced a sports betting bill with language about mobile use. At noon on the 17th, the Illinois General Assembly will hear testimony from iDEA member Jim Ryan of Pala Interactive on the economic benefits of online gaming. This will be a joint hearing between the Gaming Subcommittee and the Revenue & Finance Subcommittee.
October 17: Council of the District of Columbia’s Committee on Finance & Revenue
On the same day in Washington, D.C., founding member Jeff Ifrah will provide testimony to the Council of the District of Columbia’s Committee on Finance & Revenue. According to Legal Sports Report, sports betting could become legal in the district as soon as 2019. Jeff will offer his expert legal advice regarding D.C. Bill 22-944, commonly called the “Sports Wagering Lottery Amendment Act of 2018,” with a focus on mobile gaming.
November 18: SGAC Leaders’ Policy Conference, Scottsdale, AZ
iDEA founding member Jeff Ifrah will speak at the State Government Affairs Council’s (SGAC) upcoming conference in Scottsdale, Arizona. Jeff will participate as a speaker on the topic of what states need to consider when they’re moving toward sports betting legalization.
November 27-28: ICE Sports Betting USA Conference, New York, NY
iDEA Growth will sponsor this groundbreaking sports betting conference. We have been invited to appear on a panel entitled “Mobile wagering – a key component of your sports betting success.” The panel will discuss the size of the sports betting marketplace globally, while indicating how much states stand to gain by legalizing it.
For more information about any of the events listed here, please get in touch with iDEA Growth.
Between the scheduled Congressional testimony of a potential Supreme Court justice accused of sexual assault and the Deputy Attorney General’s meeting with the U.S. President expected by many to fire him, Thursday is shaping up to be a big news day. Amidst all the drama on the Hill, there will also be a hearing taking place in front of the Subcommittee on Crime, Terrorism, Homeland Security, and Investigations on the topic of online gaming and the possible revival of the federal Wire Act.
In today’s hyperbolic political climate, one wonders whether the hearing will echo the last time this same subcommittee discussed the subject in 2015, an event later described as running “the Gamut from Informed to Insane.”
Expected to testify this week are Jocelyn Moore of the NFL, Sara Slane of the American Gaming Association, Jon Bruning of the Coalition to Stop Online Gaming, Becky Harris of the Nevada Gaming Control Board, and Professor John Kimdt of the University of Illinois. Professor Kimdt, by the way, has made it his life’s work to outlaw gambling of all types; he has a “dubious” reputation amongst academic researchers, and was held at least partly responsible for sending the 2015 hearing “off the rails.” The NFL of course was one of the original plaintiffs in the case challenging sports betting in New Jersey.
That case, Murphy v. NFL, represents the massive change in the gaming landscape since the previous congressional hearing on the subject of federal regulation. In Murphy, the Supreme Court ultimately ruled that states – not the federal government- have the right to decide whether to allow legalized sport betting within their borders. Many expect this interpretation to apply as well to other forms of betting, including online.
As Grover Norquist, president of Americans for Tax Reform, wrote in The Hill yesterday, the Supreme Court decision made clear “that all 50 states have to be treated the same, and that the federal government could not tell the states what to legalize or ban. While gambling can be a contentious issue, this makes it even more appropriate for states to decide, rather than a ‘one size fits all’ federal approach.”
Trying to revive the federal Wire Act, legislation originally intended to target organized crime during the Kennedy administration, ignores the current judicial, regulatory and economic climate. Mobile entertainment offered within a strict regulatory framework on the state level has been shown to protect consumers while allowing them to play games and place bets from anywhere. Online safeguards allow for real-time tracking and age monitoring tools, and stringent auditing and constant monitoring track and prevent online fraudulent activity.
New Jersey is a prime example of rational regulation of online gaming that has effectively implemented these processes. Research there shows that online gaming provides significant economic benefits through increased tax revenue and jobs. With all states now able to decide whether to allow legalized sports betting within their borders, the general online gaming market is poised for significant large-scale growth.
New Jersey’s legislation actually considered the Wire Act’s prohibition against interstate transmissions of money for gaming purposes and specifically included provisions in its state law to exempt intermediate routing across states from creating federal jurisdiction. This may be the wave of the future for state sports betting bills.
Stay tuned for news on whether the hearing on Thursday addresses the millions of dollars currently being collected every month by states enjoying the benefits of online gaming and wagering, and the benefits flowing to their communities from the increased jobs and tax revenue. Reviving outdated federal laws will only create an impediment to this growing industry.
One of the biggest hurdles for online gaming and sports betting has been the fact that many credit cards will not process transactions related to online casino and poker sites. That situation appears to be changing as DraftKings Sportsbook in New Jersey recently joined FanDuel, Caesars online casino and SugarHouse Sportsbook in allowing consumers to use Paypal, one of the largest and most trusted electronic wallet services in the world.
The credit card situation has been a challenge in the Garden State, one of the first to allow legalized online gaming. Legal online casinos still experience up to 50% decline rates with credit cards; when customers try to input their credit card number to play online games or place bets, their cards are declined. This puts a big damper on the appeal of online gaming.
Online gaming profits have been impressive, but the potential income to the state without this challenge could have been even higher.
The New Jersey Division of Gaming Enforcement’s August financials reported that $95.6 million was wagered on sporting events in the state that month, up from to $40.6 million in July. Gross revenues totaled $9.2 million for the industry in August, with revenues of $16.5 million since June 14, the first day of sports betting in the state. How much more could have been earned if customers had easier ways to place their bets?
As online wagering gains acceptance as a profitable and secure form of entertainment, the original hesitation on the part of banks and payment processors to facilitate participation should begin to abate and barriers to consumers may give way more convenience.
Many major card-issuing banks initially decided not to allow transactions related to legal online gaming because they thought the regulatory and privacy risks outweighed any potential financial benefits. Some major banks still decline transactions with online wagering companies including Bank of America, Capital One, Wells Fargo, TD Bank, Union Bank and Huntington Bank.
A variety of alternative payment options arose to fill the void, and this sector of the industry has grown extensively, with bettors using options like eChecks or prepaid cards. Other alternatives include eWallets, Neteller and PayNearMe, in addition to wire transfers, online bill pay, and plain old cash at land-based casinos. Some pioneering companies are exploring the use of cryptocurrencies and tokens through the blockchain.
The addition of the powerful PayPal brand will help address customer dissatisfaction with previously cumbersome payment procedures, and may encourage new gamers to give it a try. Its influence and trusted status may further influence other financial entities to trust online gaming and permit more customers to get in on the fun.
Sports betting is now legal in six states and online sports betting is legal in five. As states continue to roll out legislation to enact legalization, a series of best practices has emerged. Our members at iDEA Growth have been involved in the creation of legislation and regulation in all six states, not to mention additional states that are still undergoing the process.
Now, we’ve put our collective success together to combine the best practices we’ve seen during this process. Our model legislation serves as a guide for state lawmakers legislating online gaming and offers a place to start when they begin drafting effective legislation.
Our model bill is based on key learnings and provides best practices for states, particularly on how to replicate the outcomes and success of New Jersey and Pennsylvania. iDEA’s experience working with key legislators, head regulators and members of the executive branch in states to advise on the online gaming industry has informed these practical solutions and a roadmap to a more successful legislative process.
Visit our model legislation page to learn more and download the PDF.