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Now That PASPA Has Fallen, What Does This Mean For The States?

Now that the Supreme Court has ruled that the Professional and Amateur Sports Protection Act (“PASPA”) is unconstitutional commandeering, a number of states are rushing to pass laws to legalize and regulate sports betting within their borders. Some, such as New Jersey and Pennsylvania, are well down the path, with potential to have operational sports pools by football season. With estimates of illegal sports wagering equating to between $50 billion and $450 billion of wagers placed annually, states, and the professional sports leagues, are eager to get a share. But many may be disappointed when they realize that sports pools generally run on a razor-thin margin and are offered by Nevada casinos primarily as an amenity for their guests. Data from Nevada shows that since 1984 and through 2017, Nevada books average a win of about 4.52% annually, and an unexpected sporting outcome – such as if the Vegas Golden Knights were to win the Stanley Cup – can send sports pools into the red. What does this mean for states that are eyeing legalizing sports betting as a way to boost state coffers? Well, for one, it means that states should temper some of the rhetoric of large tax windfalls from sports wagering. It also means that states should carefully weigh foisting additional fees on sports wagering operations, if one of the policy goals of a state is...

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How The Ninth Circuit Big Fish Casino Decision Could Impact Online Free Casino Offerings Across The U.S.

Virtually every significant gaming operator in the United States has some form of “free to play” online casino offering. Because no purchase is necessary to play (no consideration) and no valuable prizes are offered (i.e., you cannot trade your free play credits for a comped hotel stay), these offerings have generally met with green lights from state gaming regulators. Enter the Big Fish Casino decision: On March 28, 2018, the 9th Circuit Court of Appeals released an opinion that found the Big Fish site to be an illegal gambling game under Washington law. If the Big Fish casino offers free play, how did this happen? The Big Fish Opinion Similar to most online “free-play” casinos, the Big Fish site uses virtual coins as the basis for game play. The virtual coins, which are issued for free at signup and replenished for free at periodic intervals, cannot be converted to money or valuable prizes through the Big Fish site. If a player runs out of virtual coins, the player cannot play games on the Big Fish site until the virtual coins are again replenished. As mentioned, replenishment occurs at various times for players with a zero balance, but players may also purchase virtual coins as a convenience rather than waiting. The state of Washington, however, has a very liberal definition of “thing of value” for the purposes of consideration in...

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PROPERTY TAXES: ARE CASINOS PAYING MORE THAN THEIR FAIR SHARE?

As the proliferation of casinos continues throughout the country, the valuations they once commanded in property assessments (personal or real) has arguably declined. Newer facilities, or those built in the last 10-15 years, often had property tax agreements associated with their construction. The older agreements, depending upon the “success” of the casinos, may prove to be reverse or negative agreements (i.e., if they were assessed properly on the assessment rolls or grand lists, they would be paying less in property taxes than what results from the agreements). Thus, like many properties (e.g., generation plants) that have similarly entered into property tax agreements lasting decades, a review of those agreements as they age is imperative to ensure they continue to result in equitable property tax treatment. Similarly, older casino facilities built prior to the era of property tax agreements used to encourage their construction may also be paying inequitable property taxes as the gambling market becomes more saturated. Owners that aggressively manage their property taxes achieve valuations more in line with realistic values of the real and personal property in the marketplace. Simply put, being aggressive in managing property taxes is a necessity for competitiveness in the marketplace. Property taxation, especially in states having greater dependence on it for revenue generation, often is excessive when the property owner fails to have a program that annually monitors valuation changes in the...

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NEVADA’S GAMING POLICY COMMITTEE PASSES A RESOLUTION REGARDING MARIJUANA AND THE GAMING INDUSTRY

by Jennifer Gaynor, Kate Lowenhar-Fisher, Greg Gemignani, and Jeff Silver On March 5, 2018, Nevada’s Gaming Policy Committee convened briefly to pass a resolution that provides clarity for Nevada gaming licensees regarding the interactions they may and may not have with the state-legal marijuana industry. This meeting followed from the discussion and testimony received at the last Gaming Policy Committee meeting in November 2017. As discussed in our article “Nevada’s Gaming Policy Committee Convenes to Discuss Marijuana and the Gaming Industry,” at that meeting it was made clear that gaming licensees have a sometimes-tricky line to walk in order to remain in strict compliance with state and federal law in a state where both medical and recreational marijuana are legal. The three key issues discussed in the November meeting and dealt with in the Resolution include: The propriety of events on the premises of a licensed gaming establishment that cater to or promote the use, sale, and cultivation or distribution of marijuana; The propriety of a licensee contracting or maintaining a business relationship with an individual or entity engaged in the sale, cultivation, or distribution of marijuana; and The propriety of a licensee receiving financing from or providing financing to an individual, entity or establishment that sells, cultivates, or distributes marijuana. The resolutions adopted on March 5 include that Nevada gaming licensees: shall not directly “participate in the marijuana...

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THE MORE THINGS CHANGE, THE MORE THEY … CHANGE: RECENT DEVELOPMENTS IN TRADE SECRETS PROTECTION AND NON-COMPETITION LAW

By: David J. Houston and Angelina Irvine, with contributions by Sara H. Jodka, Kenneth K. Ching, and David G. Bray Executive Summary and Takeaway: Trade secrets and confidential information are receiving increasing protection in many states, and as more states perceive this as a “business friendly” issue, this trend will continue and expand. Non-competition provisions, while generally enforceable, are being scrutinized more closely by state legislatures and courts. The best way to ensure that your enterprise is in as strong a position as possible is to review relevant policies and contracts to this specific end. Specifics of these changes are outlined for all states in which Dickinson Wright has offices. If you have questions, please contact your Dickinson Wright lawyer or the authors. Introduction – Why Do You Care? “There are only two categories of companies affected by trade-secret theft: those that know they’ve been compromised and those that don’t know yet ….” —Eric Holder, former U.S. Attorney General “Uber and Waymo Settle Trade Secrets Suit [for $245M]” – New York Times, Feb. 9, 2018 Trade secret and non-competition laws are closely related, and those tools may work synergistically for the enterprise seeking maximum protection from unfair trade or business practices. Establishing a protectable interest in a “trade secret” typically requires a high proof threshold involving the business significance of the information or material and its consistent treatment by...

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The Gaming and Hospitality Practice blog is published by Dickinson Wright PLLC to inform the public of important developments within the firm and practice areas. The content is informational only and does not constitute legal or professional advice. We encourage you to consult a Dickinson Wright attorney if you have specific questions or concerns relating to any of the topics covered in this blog.

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