News In Brief: September 16-September 20, 2024

A subsidiary of Major League Baseball’s players union has filed two lawsuits against four sportsbook operators, including market leaders FanDuel and DraftKings, claiming that the companies used player likenesses without permission.

MLB Players Inc. (MLBPI), which manages all commercial activities for the Major League Baseball Players Association (MLBPA), filed a federal lawsuit in the U.S. District Court for the Eastern District of Pennsylvania against DraftKings and bet365, as well as a state lawsuit in New York against FanDuel and Underdog Fantasy.

In the filings, MLBPI claims that the companies used player images on their sportsbook platforms despite not being licensed by MLBPI to do so.

“Defendants’ use of player images within their sportsbook platforms is not merely informational — it is promotional,” writes Jeffrey Kessler, an attorney representing MLBPI in the Pennsylvania filing. 

“Users could bet that the Phillies will beat the Marlins, or that Bryce Harper will hit more than two home runs in a given game, without seeing Harper’s valuable image,” Kessler wrote.

The filing points out that although the companies use player images for MLB players, they do not use images of NFL players in offering similar player proposition bets.

“And there is no other purpose for using popular MLB player names and images in advertising other than to increase the consumer appeal of the apps and draw users to make bets on the platforms, particularly given that the core information that bettors need in order to make informed decisions about placing sports bets is statistical data.”

The attorney general’s office is looking into whether new skill-game machines violate Virginia’s ban, despite Pace-O-Matic’s assurances that the games fully comply with the current statute.

“We are looking at whether this company is in compliance with the law,” Shaun Kenney, a spokesman for Virginia Attorney General Jason Miyares, said in an email Tuesday (September 17). 

The new Queen of Virginia, or QVS2, machines are cashless devices manufactured by Pace-O-Matic. The company did not disclose how many machines are already operating in Virginia. 

Rachel Albritton, senior director of communications at Pace-O-Matic, said in a statement that the company “has never and will never” operate outside the law.

“Virginia legal experts have thoroughly reviewed our new product and have confirmed that the games fully comply with current statute,” Albritton said. “We remain committed to working with the General Assembly and administration on legislation to regulate and tax skill games.”

The Richmonder, a Richmond-based news site, first reported that the main change with the machines is how cash is handled, with the customer telling a cashier at a convenience store or truck stop where a game is located that they want to play the skill game and hands over the currency.

The cashier then uses a remote touchscreen to give the player credits on the machine. The company claims the machines are legal because Virginia law defines a skill game as a device that “requires the insertion of a coin, currency, ticket, token, or similar object to operate, activate, or play a game.”

Sports-betting and casino operators in Illinois will need to adjust how they do business after regulators revamped advertising and marketing rules to protect minors and problem gamblers. 

The Illinois Gaming Board (IGB) last week approved stricter measures around wagering casino advertising and video gaming terminals (VGTs). The rules are similar to those implemented by Massachusetts and Ohio gaming regulators.

Previously, the IGB did not have guidelines for casinos and VGTs.

Marcus Fruchter, IGB’s administrator, said the new rules will provide uniform advertising regulations and standards across the markets the board regulates. 

The updated regulations ban operators from using the words or phrases “free, cost free, risk free,” and from promoting that wagering is “free of risk” in any way. Illinois also prohibited wagering advertising at venues whether the majority of attendees are likely to be under the age of 21. 

According to the regulations, sports-betting advertising is not permitted on any college campus, and cannot be published, aired, broadcast, displayed, or distributed on any college media outlets, such as newspapers.

College and university students or setting may not be depicted in advertising, and wagering messages and logos cannot be used on items such as clothes or toys that could appeal to those under 21.

“As part of the IGB’s ongoing work to reassess existing rules and measure the effectiveness of gaming expansion implementation, the IGB amended the current advertising and marketing rules for sports wagering to include additional safeguards and requirements and also make those rules applicable for the first time to casino gambling and video gaming,” said Fruchter.

Liberia’s House of Representatives is reviewing a new draft law that includes withholding taxes on gaming and betting to bolster state revenue. 

The Liberia Consolidated Revenue Code will be amended to be known as the Liberia Tax Amendment Act of 2024, when it is enacted, according to a social media post from the House of Representatives on September 11.

Under the proposed changes to gambling winnings, a payment to a non-resident of winnings from gambling within Liberia is required to withhold tax at a rate of 30 percent.

The proposed law “comes at the backdrop of decrease in the mid-year revenue performance which has resulted to a downturn prevailing economic conditions”, according to the House of Representatives. 

The financial need strengthens its likelihood of being enacted.

In Liberia, there is no publicly available gambling law. However, gambling activities are taxed and included in the countries’ tax framework.

Caesars Entertainment, which operates three casinos in Missouri, has donated $4.15m to a campaign opposed to an initiative supported by the state’s professional sports franchises.

Missourians Against the Deceptive Online Gambling Amendment was formed on September 10, which was followed the next day by a $1.3m donation by the Tropicana St. Louis, which is known as the Horseshoe St. Louis, according to a report filed with the Missouri Ethics Commission (MEC).

Caesars Enterprise Services donated $156,202, Harrah’s North Kansas City donated $1.4m, and Isle of Capri Boonville donated $1.3m on September 12. According to the MEC, a report needs to be filed within 48 hours if any contribution of more than $5,000 is received by any committee from any single donor.

As of Monday (September 16), Caesars was the only casino company to back the opposition to legal wagering in Missouri. 

On the other hand, Winning for Missouri Education has received more than $6.52m in contributions from DraftKings, FanDuel and Betfair Interactive U.S.

The measure sets the sports-betting tax rate at 10 percent and includes deductions for promotional play of up to 25 percent of the operator’s total cash received for a month and federal excise tax. Missouri’s four professional sports franchises, along with 12 casinos, could also operate retail and online sports betting.

Amendment 2 also would make two online betting platforms eligible to receive a license.

France’s Consumer Authority has cleared the acquisition of Kindred (Unibet) by France’s national operator, Française des Jeux (FDJ).

However, to mitigate the risk of creating a gambling conglomerate due to Kindred offering online sports betting, horseracing and online poker, FDJ will apply and supplement the same commitments it made in September 2023 to clear the acquisition of ZEturf, according to the authority's press release on September 13.

When FDJ acquired ZEturf it pledged not to exploit its monopoly gaming activities (lottery games online and at points of sale and sports betting at points of sale) for the development of competitive games (online horseracing and sports betting).

Additionally, FDJ has now made a new brand separation commitment that competitive games will eventually be marketed under one or more brands specific to them and not sharing a common root or logo with the FDJ or Parions Sport Point de Vente brands, or any other brand under which FDJ markets its monopoly games in France.

In light of the commitments made by FDJ, the authority cleared the transaction following the phase 1 examination.

In January 2024, FDJ made an offer, unanimously recommended by the Kindred board of directors, of SEK130 (€11.39) per share, which values the Stockholm-listed company at €2.6bn.

A prefiled House bill in Alabama seeks to increase the penalties for illegal gambling in the state, which are currently recognized and charged as a misdemeanor with lenient penalties.

House Bill 41, authored by Republican state Representative Matthew Hammett, seeks to change the classification of illegal gambling offenses from a Class A misdemeanor to a Class C felony.

According to the bill, people convicted of illegal gambling would face between one and ten years in prison, along with fines of up to $15,000. Currently, a Class A misdemeanor conviction for illegal gambling can be punished by up to one year in prison along with a fine up to $6,000.

Under the proposal, repeat offenders would face a Class B felony charge, which is subject to imprisonment between two and 20 years, as well as a fine of up to $30,000.

Hammett’s proposal would also specify that electronic games of chance, including electronic bingo, video lottery terminals and historic horseracing machines, are illegal gambling devices and prohibited by law.

Illegal gambling remains a problem in Alabama, with reports saying previously seized illegal gambling machines were discovered during police searches that were part of a criminal investigation. The machines were previously seized from locations that were shut down.

Bally’s Corp. and SC Gaming have terminated their agreement to build a $130m satellite casino in Centre County, Pennsylvania, the companies announced Friday (September 13).

After three years, since the deal was executed, Bally’s corporate long-term priorities have shifted elsewhere, prompting the Rhode Island-based company to exercise its option to end the partnership. Terminating the deal also allowed Bally’s to “allocate resources towards other priorities,” the company said in a statement.

SC Gaming confirmed that the casino project is on schedule and there was no impact from Bally’s decision on the project’s progress. The Category 4 casino was expected to open during the first half of 2026.

George Papanier, president of Bally’s, said as their “strategic focus evolves, we have made the difficult decision to conclude out relationship.” Bally’s had predicted that construction on the project would begin in 2025.

SC Gaming had already paid the $10m for the satellite-casino license. In July, Bally’s agreed to be acquired by its largest shareholder, Standard General, in a deal that valued the gaming company at $4.6bn, including debt.

Standard General had already owned nearly 23 percent of Bally’s and agreed to pay $18.24 per share in case for the rest of the shares it did not own.