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Once A “Patron,” Always A Patron?

The Nevada Gaming Control Board (the “Board”) has been delegated the responsibility of resolving disputes between casino customers and the casinos pursuant to the process for patron disputes outlined in NGC Regulation 7A. This includes, for example, making determinations as to whether a jackpot was wrongfully withheld or in fact caused by a machine malfunction that voids the play. As the impartial gaming professionals, the Board acts as the neutral arbiter of these consumer and licensee protection cases. Courts have also given great deference to the findings of the Board by limiting the scope of appellate review of such patron dispute cases. This orderly process may be threatened, however, by an interesting “patron dispute” that has recently moved from the Board to Nevada’s Eighth Judicial District Court (the “court”) with the filing of a request for judicial review in the matter of Tsun Young v. Nevada Gaming Control Board and Hard Rock Hotel and Casino (Case A-18-775062-J), filed May 23, 2018. Tsun Young (the “Petitioner”) attempted to redeem six $5,000 denomination Hard Rock Hotel (the “Licensee”) chips for a total of $30,000 – first in January 2011 and then more recently in October 2016. These requests for redemption were denied by the Licensee. The Petitioner ultimately hired legal counsel and proceeded with the formal “patron dispute” procedures. (Normally, a licensee is required to inform the Board when there is a dispute...

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HOW TO BANISH THE BLACK MARKET AND ENSURE INTEGRITY: WHAT STATES LEGALIZING SPORTS BETTING FOR THE FIRST TIME CAN LEARN FROM NEVADA AND LEGALIZED CANNABIS STATES

Integrity, integrity, integrity. The integrity of the game is a top concern of regulators and the college and professional sports leagues as legalized sports wagering expands across the United States. But what steps can regulators take to ensure that the “fix” is not in on games being wagered upon? In theory and in practice, legalization of sports wagering provides a better framework to track and trace aberrations in betting patterns that may indicate game fixing. After all, if sports wagering is illegal, there is no one monitoring the action to ensure that those placing wagers are not being ripped off by game fixing. Once wagers are placed in a legal setting, you can bet that the legal bookmakers will be watching the betting patterns closer than anyone to make sure they are not being taken for a ride. And the veteran Nevada sports book operators who are sure to be running many of the books in newly legalized states have the experience in tracking the numbers to know when something is off. Indeed, Nevada sports books have long assisted regulators – and the leagues – in uncovering game-fixing schemes, such as the 1999 Arizona State Sun Devils point-shaving scandal, by tracking and notifying regulators when they have spotted irregular betting patterns. But what about the black market? In theory, the legalization and regulation of sports wagering should bring the...

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ME TOO: NEVADA REGULATORS SHINE A SPOTLIGHT ON THE SEXUAL HARASSMENT POLICIES OF GAMING LICENSEES

As the “Me Too” movement sweeps the nation, the topic of sexual harassment in the workplace has been put in the spotlight. And with the highly publicized situation involving casino mogul Steve Wynn, that spotlight is being focused on the gaming industry in a big way. Nevada’s regulators were quickly inundated by reports of sexual harassment after the Wynn situation became public. In response, Gaming Control Board Chair Becky Harris issued a notice to licensees on March 1, 2018, informing them that the Board would be enacting regulations or minimum internal control standards that set out procedures and requirements regarding licensees’ sexual harassment policies. In that notice, Chair Harris noted that “Sexual harassment continues to be one of the most frequent complaints raised in the workplace” and that “it is the policy of the Nevada Gaming Control Board to protect public confidence and trust in the gaming industry” and a licensee’s “policies, procedures and training related to sexual harassment in the workplace are relevant to the Board’s … policy goals” in this area. On May 3, 2018, the Board held a workshop to discuss some proposed amendments to NGC Regulation 5, which would add new requirements regarding sexual harassment policies for Nevada gaming licensees. The Board circulated draft regulations, which included requirements for licensees to adopt and maintain a comprehensive written plan addressing sexual harassment prevention that should include...

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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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Disclaimer

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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