Industry News of the Day for April 15, 2021

By iDEA | April 15, 2021

iDEA Growth Members News:

  • Gambling Compliance, 4.14.21 – Black Friday And The Historic Decade It Has Wrought (Jeff Ifrah quoted; full text included below)
    • The online gambling world stood still ten years ago today as the U.S. Department of Justice froze the websites of offshore poker websites, terminating one era and inadvertently commencing another.
  • SBC Americas, 4.14.21 – PGA TOUR and DraftKings extend commercial links to allow market access in Arizona
    • The PGA TOUR and DraftKings Inc have confirmed that they will expand their existing commercial relationship to provide DraftKings market access for retail and mobile sports betting in Arizona, pending regulatory approvals.
  • iGB North America, 4.14.21 – DraftKings secures Arizona market access with expanded PGA Tour deal
    • Sports betting and daily fantasy sports operator DraftKings has expanded its partnership with golf’s PGA Tour to secure market access in Arizona.
  • Legal Sports Report, 4.14.21 – ARIZONA SPORTS BETTING HUB ON A GOLF COURSE? DRAFTKINGS ON THE FIRST TEE
    • The Arizona sports betting law is still waiting for a gubernatorial signature but DraftKings is already making moves in the state. The operator announced Wednesday it plans to open a “ first-of-its-kind” sportsbook on-course at TPC Scottsdale.
  • Sports Handle, 4.14.21 – Which Books Will Be In Arizona? Bet On BetMGM, DraftKings, FanDuel, And William Hill
    • With sports betting nearly legal in Arizona — we’re all really just waiting for Gov. Doug Ducey, who authored the legislation to sign the bill — one of the pressing questions is this: Which operators will find access into the state? At this point, it appears four national companies — BetMGM, DraftKings, FanDuel, and William Hill — have already secured deals for market access through either tribal deals or commercial partners.
  • SBC Americas, 4.15.21 – Sportradar agrees multi-year sports betting partnership with TwinSpires
    • Sports betting and entertainment product and services provider Sportradar has agreed a multi-year sports betting partnership in the US market with TwinSpires, the online sports betting arm of Churchill Downs Incorporated launched in Michigan in January 2021.
  • SBC Americas, 4.15.21 – Continent 8 Technologies appoints Chad Ives to grow presence in US igaming sector
    • Continent 8 Technologies has appointed Chad Ives as Sales Director as it moves to expand further into the US igaming market.
  • iGB North America, 4.15.21 – Sportradar scores sports betting partnership with CDI’s TwinSpires
    • Sportradar has entered a multi-year sports betting partnership with TwinSpires, the online sports wagering division of Churchill Downs Incorporated (CDI).

Arizona:

Alabama:

Maryland:

New York

Texas:

North Carolina

Ohio:

Washington:

Iowa:

Illinois:

Virginia:

West Virginia:

Tennessee:

  • TN Bets, 4.15.21 – Judge Blocks Another Hearing On Tennessee Sportsbook License
    • It looks like TN Action 24/7 has secured another preliminary win in court. According to the Associated Press, a county judge has blocked the Tennessee Lottery from holding another suspension hearing this week regarding the sportsbook’s license, which it temporarily suspended last month before the judge ordered it reinstated.

 

Black Friday And The Historic Decade It Has Wrought

Gambling Compliance

April 14, 2021

By Tony Batt

The online gambling world stood still ten years ago today as the U.S. Department of Justice froze the websites of offshore poker websites, terminating one era and inadvertently commencing another.

The day of April 15, 2011 became known as Black Friday, and its sudden and drastic crackdown fundamentally and forever changed the online gambling industry.

“Black Friday was like a bomb exploding across the iGaming terrain,” said Behnam Dayanim, a gaming attorney with the Washington, D.C. firm of Paul Hastings.

Preet Bharara, the leading U.S. attorney for the Southern District of New York, or Sovereign District of New York as it is sometimes called because of its independent tendencies, ordered the seizure of the dot.com addresses of the three top U.S.-facing online poker sites for violating the Unlawful Internet Gambling Enforcement Act of 2006, among other federal charges.

Those three companies — PokerStars, Full Tilt and Absolute Poker — ceased accepting U.S. players and terminated ad campaigns in the United States, resulting in cancellations of poker games on television which had become a mainstay.

About 76 bank accocnts in 14 countries also were frozen, including an unknown amount of player funds.

Two of 11 defendants eventually would be sentenced to prison for illegal processing payments.

In September 2020, PokerStars co-founder Isai Scheinberg became the last of the 11 defendants to be sentenced.

Scheinberg, 74, received a sentence of time served after eluding federal authorities for more than eight years before his arrest in June 2019 in Switzerland.

Jeff Ifrah, founder of the online gambling industry association iDEA Growth and a former legal representative of online poker companies, said Black Friday “put an end to the belief that an official grey gambling market in the U.S. was possible.”

The toll of Black Friday trickled down from operators themselves, to a supporting network of affiliates and poker media companies, to individual poker players.

“For me, personally, it was really difficult,” said Aviel Rubin, a computer science professor who teaches poker classes at Johns Hopkins University in Baltimore, Maryland.

“I was on sabbatical, living in Israel, and I played on Full Tilt regularly. Black Friday was the end of that, and I had almost no place to play poker until I came back to the U.S.,” Rubin said.

Before Black Friday, online poker was the leading edge for internet gambling, with Las Vegas casino companies eager to ink partnerships with the leading offshore operators and secure a federal regulatory framework for the activity.

A decade later, the poker segment continues to struggle as just a handful of states have legalized online gaming and virtual slots and other casino games rule the day.

“Black Friday popped the poker balloon,” said Dan Walsh, a lobbyist at Farragut Partners in Washington, D.C. who represented PokerStars.

Rubin, the Johns Hopkins professor, said he will “never play high stakes cash games online due to the fear of collusion and other forms of cheating.”

Nevertheless, Rubin said he expects more states to legalize and regulate online poker as software becomes more reliable and secure.

In the wake of Black Friday, the gaming industry discovered new ways to fill the void left by online poker.

Within a year after Black Friday, the same Justice Department that had crushed poker operators, declared the U.S. Wire Act of 1961 does not prevent states from regulating online casino, poker and lottery games.

“Black Friday ushered in an intense state lobbying effort by the then-shuttered and remote gaming industry. That effort paved the way for not only regulated iGaming but also sports betting,” said Ifrah, the iDEA Growth founder.

New Jersey, Nevada and Delaware acted swiftly to legalize internet gambling and eventually formed an interstate compact to bolster player liquidity for peer-to-peer poker games.

Although online poker games accounted for a tiny fraction of regulated internet gambling revenue in 2020, there is some hope that the addition of Pennsylvania and Michigan, which have also legalized online gaming, to multi-state poker networks could inject more life back into the U.S. poker market.

“The push for state regulation over the industry was a direct consequence of Black Friday and the new belief that the future of regulated gaming did not go through the U.S. Congress but through the state capitols of each and every U.S. state,” Ifrah said.

The trauma of Black Friday also helped spawn a movement to legalize and regulate fantasy sports, begetting DraftKings and FanDuel among other ambitious upstarts.

Then came the landmark 6-3 decision by the U.S. Supreme Court on May 14, 2018 ending a federal ban on sports betting and allowing states to legalize and regulate the industry.

Less than three years later, almost half of the 50 U.S. states are accepting bets and more are on the way.

The era of online poker that ended a decade ago has been replaced by the new era of sports betting.

Still, it is a point of frustration for industry advocates why internet gaming, which is more lucrative that online sports betting, continues to lag behind sports wagering in expansion.

Amid all the excitement about the sports-betting market, the gambling industry should not forget the lessons of Black Friday, according to Ryan Rodenberg, an associate professor at Florida State University and a sports-betting scholar.

“The massive crackdown on poker websites ten years ago was followed shortly thereafter by a smaller scale online sports-betting shutdown dubbed ‘Blue Monday,’” Rodenberg said.

Blue Monday occurred on May 23, 2011 when the U.S. attorney’s office in Baltimore seized nearly a dozen online gambling domain names after a two-year sting operation.

“This likely put offshore [sportsbook] operators and bettors with large account balances on notice that the specter of a federal probe is always a possibility,” Rodenberg said.

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