COMING TO
AMERICA
"I THINK THE REGULATORY
AGENCIES, AT LEAST IN NEVADA,
UNDERSTAND EUROPE AND
UNDERSTAND THAT COUNTRIES LIKE
BELGIUM HAVE FLAUNTED EU LAW.
SO THEY DON’T HOLD IT AGAINST
OPERATORS LIKE BWIN.PARTY"
- FRANK SCHRECK, GAMING LAWYER
licence. More recently, Caesars Interactive CEO
Mitch Garber’s career history at PartyGaming and
Optimal Payments was put under scrutiny by the
Massachusetts gambling regulator.
And these examples are just a drop in the ocean
compared to all the suitability questions being posed
by regulators and internally at operators. After
all, no one can risk being turned down in public
and selecting a ‘clean’ partner is right at the top of
operator’s wishlist.
To add to the confusion, states have generally
taken a different stance on the matter of who
should be eligible for a licence. Nevada’s so-called
‘bad actor’ clause initially prohibited post-2006
operators for five years. New Jersey initially
included a provision addressing those who
“knowingly and wilfully offered, accepted, or made
available bets, wagers, or stakes” bets post-2006.
This was seen as a means of blocking the likes of
PokerStars and Full Tilt, a move almost all other
operators would have been keen on, but it was cut
from the bill in December last year.
Another example came in the form of Illinois’
failed egaming bill which, having initially gone to the
extreme of blocking operators that had accepted bets
in the past 10 years, was altered in March to only
include operators actually convicted of doing so.
And so it goes on. The main problem for those
hoping to enter the market is the uncertainty the
lack of uniformity creates. If Garber’s past can be
questioned as such, what precedent does that set for
other US jurisdictions? Nevada, recognised to be as
tough on suitability as they come, saw no issue with
Garber and neither did New Jersey. And as states
look to compact in the future, how does this disparity
in suitability in standards help or hinder that?
It’s a situation which breeds uncertainty and has
kept many operators and suppliers on high alert over
how their activities in certain grey markets will be
viewed by American regulators.
Nevada-based gaming lawyer Frank Schreck is
slightly more optimistic. Discussing the incident
in February in which bwin.party CEO Norbert
Teufelberger was detained by Belgian police over his
company’s continued, unlicensed presence in the
country, he told eGR sister publication eGR North
38
America: “I think the regulatory agencies, at least
in Nevada, understand Europe and understand that
countries like Belgium have flaunted EU law. So they
don’t hold it against operators like bwin.party as they
understand that EU law prevails and some countries
aren’t following it.”
Nevada’s Gaming Control Board chairman
A.G. Burnett believes regulators are putting strict
licensing rules in place for good reason. “Suitability
lies with what our investigators find and how the
company responds to that,” he says. “We define
suitability in the same general context as in the
land-based space. The applicant, be it an entity or
an individual, must have those characteristics we
deem worthy of whatever approval they are seeking.
Some of these characteristics include honesty and
integrity, for example. In my personal opinion, I
feel the laws [blocking post-UIGEA operators] also
covertly show deference to the federal government,
and a respect for its earlier attempt to do the same
thing.”
For most European operators this won’t be an
issue; however, given the lengthy, intrusive and
STATE
MISSISSIPPI
STATUS:
POPULATION (M)
GDP PER CAPITA (000s)
3M $54
MARKET SIZE ($)
800
700
600
500
400
300
200
100
0
SOURCE: EILERS RESEARCH, LLC
$90
www.egrmagazine.com