Security & Safety:HD Surveillance & Training Casino Slip ...

SHAPING THE FUTURE OF AMERICAN GAMING LAW

AmericanSecurity & Safety: HD Surveillance & Training � Casino Slip & Fall Accidents

GamingLawyerVOLUME 13 • NO. 1

SPRING 2017

INTERNATIONAL MASTERS OF GAMING LAWPUBLICATION

IN LOUISIANAChanges on the Horizon?

RIVERBOATGAMING

NEW DEVELOPMENTSIN JURISDICTIONS:

Illinois Video Gaming ContractsThe Swedish Gambling Monopoly

New Gaming Regulation in the Czech Republic

IMGL Officers

Michael E. ZatezaloPresident

Kegler, Brown, Hill & Ritter Co.,L.P.A.

Columbus, Ohio +1 614 462 5400

[email protected]

Jamie NettletonFirst Vice PresidentAddisons LawyersSydney, Australia+61 2 8915 1030

[email protected]

D. Michael McBride III Second Vice PresidentCrowe & Dunlevy, P.C.

Tulsa, Oklahoma+1 918 592 9824

[email protected]

Quirino ManciniSecretary

Tonucci & PartnersRome, Italy

39 06 322 [email protected]

Justin FranssenAssistant SecretaryKalff Katz Franssen

Amsterdam, Netherlands31 20 67 60 780

[email protected]

Marc H. EllingerTreasurer

Blitz, Bardgett & Deutsch, L.C.Jefferson City, Missouri

+1 573 634 [email protected]

Marie JonesAssistant TreasurerFox Rothschild LLP

Philadelphia, Pennsylvania1-609-572-2259

[email protected]

Douglas L. Florence, Sr.Vice President, Affiliate Members

AvigilonLas Vegas, Nevada

[email protected]

Keith C. MillerVice President, Educator

Drake University Law School Des Moines, Iowa+1 515 271 2071

[email protected]

Joerg HofmannImmediate Past President

MELCHERS law firmHeidelberg, Germany

[email protected]

Morten RondeDirector of Education and Association Development

International Masters of Gaming Law

[email protected] 208 87210

Sue McNabbExecutive Director

International Masters of Gaming Law

[email protected]

1-702-375-5812

Jamie NettletonFirst Vice President


www.imgl.org �

D. Michael McBride IIISecond Vice President


Justin FranssenAssistant Secretary


Marie JonesAssistant Treasurer

Douglas Florence Sr.Vice President, Affiliate Members


Sue McNabbExecutive Director

Morten RondeDirector of Education andAssociation Development

INTERNATIONAL MASTERS OF GAMING LAW

Keith C. MillerVice President, Educator

Contents SPRING 2017VOLUME 13 • ISSUE 1

SHAPING THE FUTURE OF AMERICAN GAMING LAW

AmericanSecurity & Safety: HD Surveillance & Training � Casino Slip & Fall Accidents

GamingLawyerVOLUME 13 • NO. 1

SPRING 2017

INTERNATIONAL MASTERS OF GAMING LAWPUBLICATION

IN LOUISIANAChanges on the Horizon?

RIVERBOATGAMING

NEW DEVELOPMENTSIN JURISDICTIONS:

Illinois Video Gaming ContractsThe Swedish Gambling Monopoly

New Gaming Regulation in the Czech Republic

4 Message from the PresidentBy Michael E. Zatezalo

5 Letter from the EditorBy Sue McNabb

15 Members in the News

Gaming Law & Policy:

6 Riverboat Gamingin Louisiana—Changes on the Horizon? By Ronnie Jones

Personal Perspective:

12 Tattoo You The Biggest Criminals Wear Ties – Not TattoosBy Richard Schuetz

16 The Casino Gaming Industry:A Generational PerspectiveBy Glenn E. Wichinsky

New Developments in Jurisdictions:

20 Legal Issues for Nevada Businesses Related to the Legalization of Recreational MarijuanaBy Jason Bacigalupi, Glenn Light, Mary Tran & Karl Rutledge

24 Tribes and Cannabis Where Things StandBy Adam Crepelle

27 On Law and Politics of theSwedish Gambling MonopolyBy Ola Wiklund

30 The New Gaming Regulationin the Czech Republic By Jakub Kolomicenko

32 Power Play Illinois Gaming Board Granted Exclusive Jurisdiction to DetermineValidity of Video Gaming ContractsBy William Bogot

Departments

Columns

4

5

40 CubaCasinos Past, Casinos Future (?)By William N. Thompson

Features

35 HD Video Surveillance & TrainingHow the Trend is Impacting Legal and Regulatory Decisions for Dispute and Claims ResolutionBy Douglas Florence Sr., Marisel Melendez and Ronald Flores

37 Casino Slip and Fall AccidentsHow Not to Gamble With Safety By David B. Willis

New Developments: Security & Safety

PHOTO BY THE LAS VEGAS NEWS BUREAU

Message from the President

4 AMERICAN GAMING LAWYER • SPRING 2017

>>

Extending the Reach of the IMGL Brand

IMGL STARTED THE NEW YEAR WHERE ITleft off in 2016 by offering its Masterclass atthe National Council of Legislators from Gaming

States (“NCLGS”) at the NCLGS winter meeting in Scotts-dale, Arizona, on January 6-8, 2017. The IMGL Master-class included panels on the role of Regulators, TribalGaming Legal Issues with States, andeSports and were well received.

On February 3, 2017, IMGL and thelaw firm of Kalff Katz & Franssenhosted a pre-ICE gathering of gamingofficials and industry representatives atthe Industrieele Groote Club in Amster-dam, Holland. Over 150 guests attendedthis invitation only gathering. JustinFranssen, IMGL Assistant Secretary andGeneral Member from Holland, was thehost and did a fantastic job. Featuredspeakers were Erwin van Lambaart,CEO of Holland Casino, Peter-Paul deGoeg, Managing Director of Lottomateand Marja Appelman, head of the Hol-land Casino Commission. It was a veryinformative meeting and great network-ing event.

Then it was on to London for theAnnual ICE conference (February 7-9) inLondon, England, at the ExCel center. IMGL once againheld a Masterclass at ICE which was very well attendedwith 221 attendees (extra chairs needed to be brought intothe conference room!) and included panels on worldwidedevelopments, anti-money laundering and the effect thatBrexit and the election of Donald Trump would have onthe gaming industry. IMGL also had its annual ICE re-ception at Merchant Taylors’ Hall in London and experi-enced the largest crowd ever to attend the reception. Our

thanks to member Tony Coles and his firm Gordon Daddsfor co-hosting the reception. It was not only a great loca-tion but a fascinating historical venue.

However, perhaps the biggest news of the new year isIMGL’s entering into a Memorandum of Understandingwith Clarion Event Limited which gives IMGL the option

to conduct Masterclasses at all Clarionevents. We are very excited about thispartnership and the opportunity to ex-tend the reach of the IMGL brand. Ifany of our members are interested inparticipating or organizing any of theseMasterclasses, please contact Joerg Hoff-man, our past President, who is coordi-nating our Masterclasses and ourExecutive Director, Sue McNabb. Wehave posted on the IMGL website a listof the confirmed future IMGL Master-classes for 2017 as well as the Clarionevents where IMGL will have the optionof conducting a Masterclass.

The IMGL spring conference willbe held in Miami, Florida, this year andtakes place on May 10-12, 2017, at theTurnberry Isle. If you have not madeyour reservations to attend, I would sug-gest you do now. It should be another

great conference and offers a side trip to the Gulfstreamracetrack on Saturday, May 13, with a private suite at thefinish line for IMGL guests to enjoy the day. I encourageeveryone to make plans to stay in Miami over the weekendand enjoy the Day at the Races. Finally, our fall conferencewill be held in Copenhagen, Denmark, September 10-12,2017. Please mark your calendars accordingly. As you cantell, 2017 will be a very busy and exciting year for IMGL. Ilook forward to seeing many of you in Miami. �


By Michael E. Zatezalo

Perhaps the biggestnews of the new yearis IMGL’s entering intoa Memorandum ofUnderstanding withClarion Event Limitedwhich gives IMGL the option to

conduct Masterclassesat all Clarion events. We are very excitedabout this partnershipand the opportunity toextend the reach of the IMGL brand.

”

“

AMERICAN GAMING LAWYER • SPRING 2017 5

SHAPING THE FUTUREOF GAMING LAW

American Gaming Lawyeris published two times a year by the

International Masters of Gaming Law. It is distributed to more than 10,000

gaming professionals around the world.

VOLUME 13 • ISSUE 1

© 2017 International Masters of Gaming Law. AllRights Reserved. American Gaming Lawyer is aregistered trademark of the IMGL. No portion ofthis publication may be reproduced without ex-pressed written permission of the Publisher.Not responsible for typographical errors.

IMGL OFFICERS


Jamie Nettleton1st Vice President

D. Michael McBride III2nd Vice President


Justin FranssenAssistant Secretary


Marie JonesAssistant Treasurer

Douglas Florence Sr.VP Affiliate Members

Keith C. MillerVP Educator Members


www.imgl.orgINTERNATIONAL MASTERS OF GAMING LAW

EXECUTIVE DIRECTORSue McNabb

DIRECTOR OF EDUCATIONAND ASSOCIATION

DEVELOPMENTMorten Ronde

EDITORSue McNabb

CONTRIBUTING WRITERSJason Bacigalupi

William BogotAdam Crepelle

Douglas Florence Sr.Ronald Flores Ronnie Jones

Jakub Kolomic�enkoGlenn Light

Marisel Melendez Karl Rutledge

Richard SchuetzWilliam N. Thompson

Mary TranGlenn E. Wichinsky

Ola WiklundDavid B. Willis

DISTRIBUTION

AD SPACE RESERVATIONSContact Sue McNabb at

[email protected]

Letter from the Editor>>

The current edition of American GamingLawyer is an interesting, eclecticassortment of articles ranging from“Personal Perspectives” to Interna-

tional Jurisdictional Updates, with many hot topicsin between.

The issue opens with an excellent history ofgaming in Louisiana, discussing the impedimentsto future economic development which are exacer-bated by Louisiana’s stagnant gaming statutes.Chairman of the Louisiana Gaming ControlBoard, Ronnie Jones, presents a perfect balance ofthe historical development of gaming in Louisianabased on a combination of his personal experiencein law enforcement and his enlightened economicdevelopment views that could lead the industryout of its current malaise and into a positiverevenue future.

Under “Gaming Law and Policy,” the issueincludes two “Personal Perspectives” that providethought provoking insider views on aspects of theevolution of gaming. Richard Schuetz offers arefreshingly humorous assessment of the oftenludicrous breadth, and illogical process, ofsuitability applications required by gaming juris-dictions. The second “Personal Perspective” is apiece by Glenn Wichinsky which presents athought provoking discussion of the evolution ofcasino gambling and the impact of different gen-erations on gambling, games, and casino develop-ment. The cocktail attire and tuxedo elegance ofthe past juxtaposed to the untucked shirts, beachwear and gym styles of today’s gamblers canmake the admirers of a bygone era nostalgic forthe glitz and glamor of centuries past!

The next pair of articles is a fast forward tovery recent changes in law regarding legalizedmarijuana and the parallels to regulated gaming.First, Bacigalupi, Light, Tran, and Rutledgediscuss the potential minefield of state marijuanalaws versus federal laws as related to the highlyregulated gaming industry. The authors have pre-sented well-researched information with interest-ing questions related to potential problems raisedby the conflicting laws, with thoughts for futurediscussion. Next Adam Crepelle – a member of theUnited Houma Tribe and award winning film-maker - provides an overview of the potential ofthe cannabis industry on tribal economic develop-ment, pointing out parallels to the development ofgaming in Indian Country.

The Jurisdictional Updates section has dis-cussions of recent developments in internationaljurisdictions. Dr. Wiklund presents a detailed analy-sis of Swedish gambling law, focusing on the pro-portionality test and its parallels between alcoholand gambling policies. Jakub Kolomicenko presentsan overview of the recent 2017 Czech Gaming Act,

with a candid discussion ofthe potential negativeeffects of the law. An updateon Illinois discusses arecent decision of the Illi-nois Supreme Court, J & JVentures, which establishedthe Illinois Gaming Board’sexclusive jurisdiction over“use agreements” for videogaming machines. Author William Bogot offershis assessment of the prospect for future litigationraised by the Illinois Supreme Court’s decision.

The next pair of articles focuses on security,surveillance and safety issues for gaming proper-ties. Florence, Melendez and Flores discuss the fastpaced developments in IT and high definition videotechnology which greatly enhance casino securityand surveillance capabilities. The authors have sub-stantial experience advising the gaming industryon potential security issues and how lax securitycan negatively impact revenue streams and com-promise the property. Switching to safety issues,David Willis points out litigation trends faced bycasino properties, which are often viewed as theproverbial “deep pockets” by some attorneys andpatrons. Willis focuses on the prevention of slipand fall cases, and offers practical approaches tominimize or prevent costly litigation and best prac-tices that can be taken should an accident occur.

The final article, authored by longtimeAmerican Gaming Lawyer contributor WilliamThompson, presents an enthralling history of therise and fall of gambling in Cuba. Professor Thomp-son weaves through Cuba’s turbulent political his-tory of dictators, mob bosses and other dubiouscharacters. Professor Thompson’s article is a perfectlead in to the IMGL spring conference in Miami,which sits a mere 90 miles from the shores of Cuba,but which is decades apart in development.

Finally, I would like to thank the many con-tributors to the Spring 2017 edition of AmericanGaming Lawyer. We appreciate your support ofIMGL’s educational mission. �

Sue McNabb has worked with the state legislature and served as Assis-tant Attorney General for the Louisiana Department of Justice and asan attorney for the Louisiana Legislative Auditor. She has an exten-sive background in corporate law in the private sector where she workedas General Counsel of an INC 500 Company and as Vice President ofAdministration with a national not-for-profit corporation.

Sue served on the board of directors of the Louisiana Association on Compulsive Gambling and was formerly a member ofthe board of the National Council on Problem Gambling. She alsoserves on the board of the Louisiana Center for Women in Govern-ment and Business and was appointed by Governor Bobby Jindal toserve on the Louisiana Women’s Policy and Research Commission.She received the IMGL president’s award for 2013. She currentlyserves as the Executive Director of the IMGL.

GamingLawyer®American

Sue McNabb


>>GAMING LAW & POLICY

Early proponents of gaming in Louisiana recognized that folks fromLouisiana liked to gamble. They always had. Lest we forget, it wasLouisiana that brought the country its worst gambling scandal in history in

the form of the Louisiana State Lottery Company. First chartered in 1868 it wasnicknamed the Golden Octopus for its reach into virtually every other state.Headquartered in Louisiana, it sold 90% of its tickets to residents outside thestate’s boundaries. Not surprisingly its operation was corrupt from the outset. Itwas profitable not only for the operators but it was just as lucrative for the politi-cians on the payroll. It was so successful that extra train cars had to be addedto move tickets and money in and out of the New Orleans-based offices. After22 years and facing increasing political and social pressure, the operation movedoffshore and outside the reach of federal authorities.

By Ronnie Jones, Louisiana Gaming Control Board Chairman

Riverboat Gaming in Louisiana—Changes on the Horizon?

Editor’s Note:This article has been edited with the permission of the author fromits original submitted form to reduce its size for publication in this printed format. The originalunedited article can be viewed in its entirety online at imgl.org.

“Twenty years from now you will be more disappointed by the thingsyou didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails.”

— H. Jackson Brown, Jr.

Present day legislative pro-ponents of gaming understoodthe reticence of some of theircolleagues. They knew they hadto package the product in a waythat made it attractive to the state’s citizens.Perhaps more importantly they had to providefellow legislators with political cover. Gam-bling lobbyists had to pivot from the good ver-sus evil argument to one of economicdevelopment. This had to be about jobs andtrickle-down opportunities. The strategy theproponents had settled on was a template usedin other jurisdictions—riverboats. It was leftto Representative Heitmeier and his co-spon-sors to paint a romanticized picture of gam-ing—reminiscent of hoop skirts, moss drapedtrees and the genteel old South.

Heitmeier and his cohorts knew that manyof the opponents of gambling would never beconvinced to legalize “the despicable and addic-tive vice” no matter the lure of jobs or eco-nomic prosperity. They would be “no” votesregardless. But there were some legislatorswho were not predisposed one way or the other.They had no hardened position on the proposal.So to ensure passage and convince those in themiddle, bill sponsors promised that theLouisiana State Police would be designated asthe chief licensing and regulatory arm of thestate. At several opportunities during the con-tentious debate, State Police representatives tes-tified in committee hearings that, if properlyfunded and staffed, the agency was up to the taskof regulation.

What the legislators initially envisionedand finally proposed translated into legislativeintent and statute. A riverboat casino would bea paddlewheel-driven vessel with a minimumlength of 150 feet and “of such a type anddesign so as to replicate, as nearly as practica-ble, historic Louisiana river-borne steamboatpassenger vessels of the nineteenth centuryera.” And they had to be sufficient in designand propulsion that they could navigate theauthorized navigable waterways of the state.The deal had been struck and the votes werefavorably cast for passage.

The legislature limited thestate’s new casino market to 15licenses and, whether inadvertentlyor intentionally, they established a

Balkanized system for accepting,reviewing and issuing licenses.

Those early years have been variously describedby participants and observers. Perhaps themost accurate description from my view on theinside was that it was a slow motion trainwreck.

First came the convoluted licensingprocess. The law seemed to be clear to StatePolice administrators who believed that the Acthad delegated to them the responsibility forreviewing license applicants and then awardinglicenses to those most deserving. Others, how-ever, countered that was an oversimplificationof legislative intent. Never mind that the lan-guage was straightforward and clear. The lawhad also created a Riverboat Gaming Commis-sion, and its political appointees were not aboutto permit a bunch of “traffic cops” to make suchweighty decisions. And so it came to pass thatthe process was hijacked before it really gotstarted.

The Commission created, with question-able legal authority, something called a Certifi-cate of Preliminary Approval for applicantsthey viewed as most deserving of a license. Inso doing the Commission created an A-list ofpreferred licensees before State Police couldeven finish the review process. That A-list car-ried political momentum and virtually shovedaside the objectivity and independence troop-ers sought to exercise in making selections. Itshould surprise no one that while manynational players in the industry were shut outof the licensing process, those with local con-nections and consultants seemed to be givenpreferential and more favorable treatment bythe Commission.

Few in Louisiana were surprised severalyears later when Edwards was indicted for im-properly influencing the licensing process andassisting his friends and associates. Some werepaid quite well for their counsel and activist

Continued on next page


Chairman Jones is in his 42nd year of public service inLouisiana. His previous experience includes a 32-year career in the Louisiana StatePolice where he served as theagency's Deputy Superintend-ent and managed legislationwhich originally legalizedgambling in Louisiana. As a senior policy advisor tothe Superintendent, he played akey role in creating the initialgaming regulatory structure.He also has extensive experi-ence in the academic sector in both public and private universities. He was appointedChairman of the Gaming Control Board in 2013.

Ronnie Jones



roles in facilitating and guiding applicants to a successfullicense award. For his part, Edwards had escaped convictionin two previous federal trials and most political observersbelieved him too smart for federal prosecutors to succeed on athird try. But his luck ran out in 2000. Four years after leav-ing office Edwards was found guilty on 17 of 26 counts infederal court, the most serious convictions being conspiracyand racketeering. A prominent state senator and one ofthe appointees to the Riverboat Gaming Commission wereacquitted. Edwards’ son, Stephen, was convicted on a numberof counts for acting as an intermediary between license appli-cants and state officials.

Despite the disputes that arose between State Police andthe Riverboat Gaming Commission and the over-involvementof the state’s chief executive and his friends, family and asso-ciates, one by one, licenses were awarded. Those propertieslucky enough to earn a license scrambled to acquire vessels,execute contracts with dock boards and begin work on land-side infrastructure. One grand opening followed another. Rib-bons were cut and local politicians competed to take credit forthe anticipated boon to area economies. Jazz bands led excitedcustomers up gangplanks. But what many of the eager gam-blers didn’t initially realize was that they would be on a boat—a boat leaving the dock, a boat from which there was no escapeuntil it had completed its legally required “sailing” requirement.Lost in the exhilaration and anticipation of legalized gamblingin the state was the fact that the legislature had not just au-

thorized gambling, they had authorized riverboat gam-bling. The collective groan was immediate.

So while the right to legally play slots and shootcraps had finally been approved, it had come with con-ditions. By law the legislature had required that theriverboat casinos ply the navigable waters to whichthey were assigned. The operative word there is “ply,”as in move around in the water. Boats were requiredto conduct two-hour cruises away from the dock and,except for 45 minutes before and after the cruise, gam-bling could be conducted only when the vessel was un-derway. Operators and patrons alike expressed dismay.

The degree of influence casino operators hadover their maritime crews in those early days maynever be fully known. But vessel captains through-out the state began to cite weather, water obstacles andintemperate tides as impediments to sailing. There wasno limit to their doomsday maritime imagination.

Troopers who were assigned to see that the laws were enforcedand the regulators found themselves in a fog of authority. Theywere reluctant to second guess experienced maritime captains.If, for example, the captain asserted that sailing might imperilthe vessel or passengers, who were troopers inexperienced inmaritime matters to insist otherwise? State prosecutors in atleast two areas of the state grew increasingly suspicious ofriverboat operators and perhaps troopers as well. Grand juriesand indictments were promised if State Police didn’t carry outits legal responsibilities. The threat of malfeasance chargeswas sufficient to get everyone’s attention.

As an agency, State Police was struggling to fulfill its legalresponsibilities, but it was understaffed and underfunded.Legal challenges proliferated. Those in charge at State Policefound themselves overwhelmed and besieged on several fronts.They lost more administrative and legal battles in those earlymonths than they won. Troopers were frequently summonedto the Governor’s mansion where Edwards sought to controlmore and more of the regulatory process. The superintend-ent and his personnel were publicly cast as being ill-trainedand inappropriately delegated such an important regulatoryrole by none other than their own boss, Governor Edwards.

But in time, sanity and stability were restored and a mod-erate retooling of the original law came in 1996 at the direc-tion of Governor Mike Foster. The legislature consolidatedregulatory authority into one board and finally lifted therequirement that vessels sail. The boats would be permitted toremain dockside permanently, but still had to be on water.Other vestiges of the original law remained in force, such asthose limiting the size of the gaming floor and retaining therequirement that each “boat” have an operable paddlewheel.But the changes permitted capital reinvestment into new prop-erty designs abandoning the traditional riverboat template thatwas originally required.

The Golden Nugget in Lake Charles opened in December 2014.Recent reports suggest that the Nugget has drawn thousands of newcustomers from south Texas to southwest Louisiana and has fueledsignificant growth in the area’s customer base. As a result LakeCharles has now surpassed the other riverboat markets in the state interms of gaming revenue.

Continued from previous page


The current placement of casino properties in Louisianacreates roughly four “regional” markets—New Orleans, BatonRouge, Lake Charles and Shreveport/Bossier. The predomi-nance of properties in northwest Louisiana was by design, andit was a gaming board acknowledgement of the early potentialstrength of that market. But nothing lasts forever, and thenorthwest Louisiana market base has begun to erode.

A large proportion of the customer base for the Shreve-port/Bossier market had been the Dallas/Ft. Worth metropol-itan area. In 1992 tribal gaming in Oklahoma (Texas’ neighborto the north) was populated with mostly small time operationsand posed no immediate threat to northwest Louisiana. No onecould have predicted the aggressive expansion of tribal casinosin Oklahoma. The Oklahoma Tribal Gaming Association in anannual report for 2016 noted that state has 114 tribal casinooperations, and it cites a total economic impact for Oklahomatribes of $7.2 billion in annual operations and construction. Ashort drive up the Interstate from Dallas takes one to Thack-erville, Oklahoma, and home to WinStarWorld and Casino Resort with more thanone-half million square footage of casinospace. The impact on Louisiana’s northwestmarket has been profound. According to theLouisiana State Police, since peaking in 2008Shreveport/Bossier revenue is down by 18.7%or almost $159 million. That’s a net loss ofapproximately $31 million in fees to the state.

Further south, with the opening of theGolden Nugget in Lake Charles in December2014, all 15 licenses are now in commerce forthe first time since Hurricane Katrina. Recentreports out of Lake Charles suggest that theNugget has drawn thousands of new customersfrom south Texas to southwest Louisiana and

has fueled significant growth in the area’s customer base. As aresult Lake Charles has now surpassed the other riverboat mar-kets in the state in terms of gaming revenue. SouthwestLouisiana casino revenue was up in 2016 by 36%.

While the Golden Nugget is no doubt a crown jewelamong all Louisiana riverboats, the state has nothing to com-pare to WinStar. Our properties are considerably smaller andin some cases considerably older. In fact the construction anddesign of the 15 “boats” runs along a continuum in terms ofappearance. At one end we have first generation boats, whichare of the classic design contemplated in the 1991 law. All aremulti-level, although gaming is not necessarily conducted onall levels. First generation boats are berthed in a variety oflocations including the Mississippi River, the Red River andother canals and lakes. Some are freestanding vessels with onlya boarding platform connecting to dockside facilities, and thetransition from dockside to boat is obvious to the patron.


Horseshoe Casino & Hotel is a stationary boat in Bossier City. The casino’s29,601 square foot gaming space features 1,372 gaming machines and fifty-fivetable games, as well as 610 luxurious rooms.

Margaritaville Bossier City (left) and L’Auberge Baton Rouge are two examples of what engineering and architectural innovation have broughtto the market. At such newer casinos, a customer would never know that he or she had actually boarded a boat.



Others connect more seamlessly to amenity properties. At the other end of the continuum is the latest generation

of boats which, except for a legally required paddlewheel, donot look much like boats at all. In some locations, one wouldhave to look high and low for the paddlewheel, but the law stillrequires its existence and troopers must certify that it is oper-ational. The Golden Nugget, L’Auberge Baton Rouge andMargaritaville are examples of what engineering and archi-tectural innovation have brought to the market. The GoldenNugget, for example, has a cement hull. None of these “boats”are going to be navigating any waterways, but all comply withthe law and all rest (at least in part) on water, sometimes sittinginside cofferdams. At such newer casinos, a customer wouldnever know that he or she had actually boarded a boat. In be-tween those two extremes are hybrid vessels, which also comein a variety of designs.

The older first generation boats in particular present theirown set of unique challenges for operators. Operators incursubstantial costs associated with maintaining vessels such ashull and propulsion system maintenance. Many are required tohave captains and other maritime crew available around theclock. There are docking issues, ramp and boarding issues,ventilation issues and silting/river hazards issues. Even thenewest generation vessels must comply with many of thecostly maritime requirements.

Safety has been and will continue to be a top priority forregulatory authorities and property owners. All understandthat boats present safety issues not associated with land-based

facilities. Northwest Louisiana experienced two serious RedRiver flooding events in 2016, and both events required exten-sive reconfiguration of boarding platforms at considerable costto the properties and considerable effort on the part of regula-tors. Facing potential shutdown in gaming activities, the affectedproperties adjusted, acquired the necessary inspections andapprovals, and remained open.

Our board is keenly aware of the potential dangers posedby vessels berthed in waterways heavily populated and navi-gated by industrial traffic. Their vulnerability should concernus all, the legislature included.

Louisiana remains as one of the last states which ties gam-ing to boats. Virtually every other state has abandoned therequirement. Our neighbors to the east made adjustments totheir law as far back as 2005. Prior to that, casino propertiesin Mississippi had to be floating, albeit permissibly on barges,but floating nonetheless. The change in the law permitted casi-nos to move out of the water, and the law for two coastal coun-ties was further revised after Katrina, authorizing casinos tomove 800 feet inland from the mean water line.

Despite the complications for riverboat operators posed bya body of law now more than 25 years old, overall gaming rev-enues in the state continue to constitute a huge part of thestate’s economy. Gaming in the state in 2015 generated over$3.2 billion in revenues and over $729 million in state and localfees. Those figures are only surpassed by revenues in 2006 and2008, when they surged during post-Katrina and post-Gustavperiods, and the figures for 2015 represent a 58% increase over2014. Out of all forms of gaming, riverboats constitute the


Safety has been and will continue to be a top priority for regulatory authorities and property owners. In 2016, the Red River experienced two serious flooding events forcing casinos in Shreveport to undergo extensive reconfiguration of boarding platforms to remain open.

largest percentage of the gaming market in Louisiana, andtheir role as primary contributors to gaming revenue ensurestheir long-term viability and economic potential critical to thestate’s revenue stream.

We know that the primary reason for legalization of river-boat casinos was economic development, and no one can denythat the goal has been accomplished. Riverboat gaming hasgenerated more than $27 billion in gross revenue and morethan $6 billion in fees for local and state government since2000. The casinos act as an economic generator for the stateproviding employment to more than 20,000 individuals, mostlyLouisiana residents. The annual working payroll exceeds $348million. In a recent three-year period, riverboat casinosinvested more than $45 million in capital improvements. Thoseimprovements translate into jobs and goods and services. Eventhough 2016 riverboat revenues were down by 2.7% comparedto the previous year, they still managed to provide $688 millionin revenue.

I think state and local elected officials understand the im-portance and value of riverboat gaming in Louisiana. I thinkthey also understand that competition for the gaming customeris only going to become more challenging. Neighboring mar-kets continue to evolve, and it has become evident to manyLouisiana policy makers that current law and regulations areoverdue for review. Those concerns over economic develop-ment complacency and outdated law were likely motivatingfactors which lead to passage of Senate Concurrent Resolution17 and creation of our study group.

Senator Ronnie Johns (Lake Charles) recognizes that river-boat gaming is an industry that was created to promote eco-nomic development and opportunity. He and his colleaguesintroduced and passed the concurrent resolution creating theLouisiana Riverboat Economic Development Task Forceduring the 2016 regular legislative session.

The Task Force is charged with reviewing current river-boat gaming law and regulation and making recommendationsfor changes to the legislature. The group’s composition isdiverse and includes representatives from the legislature, theoffices of governor and lieutenant governor, the Departmentof Economic Development, the Louisiana State Police, theAttorney General and the industry. Meeting the second Tues-day of every month (except when the Legislature is in session),the Task Force has already begun the process of hearing fromowners and stakeholders. Meetings are streamed live on theLegislature’s website, and previous meetings are also archivedthere. All documents and presentations generated by the TaskForce can be found through a link on the Gaming ControlBoard’s homepage (http://lgcb.dps.louisiana.gov/).

Thus far members have been provided with a history ofthe industry’s development in Louisiana and the current reg-ulatory framework. They were also briefed on the state of cur-rent and emerging gaming technologies by representatives of

Gaming Laboratories International. A series of presentationsby licensee CEOs is underway with Boyd Gaming’s Presidentand CEO, Keith Smith, and Pinnacle Entertainment’s AnthonySanfilippo making early appearances. The Executive Directorof the American Gaming Association, Geoff Freeman, visitedwith the Task Force at the January meeting, and the CEOs ofTropicana Entertainment, Caesars and Landry’s (GoldenNugget) are scheduled to be heard in the months ahead.

We anticipate that in the fall of this year the Task Forcewill wrap up its work with testimony from problem gamblingtreatment advocates, maritime consultants and the CoastGuard. At the appropriate time, local chambers of commerce,port officials and political leaders where boats are located willhave an opportunity to address the Task Force.

The group hopes to have all testimony concluded by theend of 2017 and will begin the process of crafting recommen-dations to offer the legislature.

I cannot predict what path the Task Force or the Legisla-ture will pursue. Early in the game, a primary issue of discus-sion has been the whole riverboat concept. We’ve also heardfrom industry representatives about the manner in which com-plimentary items are taxed in Louisiana and the size of gam-ing space, a finite compact area that was designed for a fairlystandard size slot device. We know that to attract patrons toLouisiana properties, casinos will have to be competitive interms of new device technology.

Senator Johns’ resolution designated me as the group’schairman and while I’m honored to serve in that capacity, I can-not be the flag bearer for legislative change. I am the chiefregulator. I cannot lead the charge; I can only facilitatethe discussion and provide guidance and counsel to the process.The gaming industry and its supporters must do the hard workof urging legislative change.

A longtime friend (journalist and author) questioned myleadership role on the Task Force suggesting that as the Gam-ing Control Board chairman I should “just regulate based oncurrent law.” While I agree that I must fulfill my fundamentalresponsibility as regulator, I also know that if in fact riverboatgaming is about economic development, I believe I can ethi-cally navigate the role of regulator and that of facilitator of theTask Force’s deliberations. Philosophically, I brought to thisposition a belief that if regulation is carried out in a fair andtransparent manner and licensees understand what the rulesare and follow the law, we can create a regulatory environmentthat promotes not only the state’s economy, but the industryas well. In the end the state’s citizens can rely on my vigilantoversight as a regulator. Perhaps if the Task Force is success-ful the state’s citizens can also enjoy the benefits that the asso-ciated economic development can bring to every corner of thestate. Twenty years from now I don’t want to be disappointedby the things I didn’t do. �



>>GAMING LAW & POLICY: PERSONAL PERSPECTIVE

This entire process really went onsteroids when I was invited to be on theboard of directors of Shuffle MasterGaming. Once I accepted this appoint-ment I met two of Shuffle’s lawyers, whoin concert with three additional staffmembers were my escorts through theapplication process in a large number ofjurisdictions around the world. Thisincluded far away places like New Zealand,Australia, and across Europe. It includedtribal commissions across the UnitedStates and the First Nations in Canada, as

well as a number of state gaming regula-tory agencies. Even more interesting,these applications were all different, somein minor ways, and some in significantways.

Back in the day, I seem to recall thatthe state of New Jersey won the title oflongest application, and one of the river-boat states printed its application on a lightpink paper I was supposed to use, but thepoint was that the applications were oftendifferent, and besides this being a pain, itcarried with it certain risks.

Every gaming application I have everseen, and I have seen a lot of them, containsthe stern warning that a failure to answera question truthfully can affect the out-come of the suitability finding. Furthermore,one quickly learns in this industry that ifyou get crosswise with one jurisdiction itcan have implications in other jurisdic-tions, that is, it can domino. This realitybecame a real concern to me because witha great many different and unique appli-cations, the possibility existed that I couldbecome confused as to exactly what a par-ticular jurisdiction wanted in response to aquestion. Nevada had been in the gam-bling regulatory business for a great manyyears, and there was a substantial amountof institutional knowledge around withrespect to how they wanted things done,and how each question was to beanswered. In many of the new juris-dictions, however, this was not the case.This made the experience somewhatdaunting.

Ijoined the casino industry as a dealer at Harrah’s Club in Reno in the early1970s. As I continued to move up through the ranks of the business I cameto discover the necessity of being licensed as a key employee, and this

process carried with it the requirement to fill-out a somewhat involved applica-tion. My first experience with the background check and the application was inNevada, and as I began to migrate across the United States as a casino exec-utive in other jurisdictions, I soon had the opportunity to experience applicationsfrom these other states and that was always interesting.

By Richard Schuetz

TATTOOYOU

In response to this absence of applicationharmonization, a number of responsible peoplein different jurisdictions began working togetherto develop a more uniform product, and the endresult of this experience was the Multi-Jurisdic-tional Personal History Disclosure Form. Thisushered the dawn of a new age in the gamblingapplication in the early 2000s, and those involvedshould be proud of their efforts at this Herculeantask. This was a material leap in sanity for allinvolved in the industry, and those facilitating thisadvancement should be recognized as the van-guard of a better harmonized regulatory environ-ment. While the end product was lengthier thanany of the composite parts, one should expectthis, for the effort was to provide a comprehensivelist of questions. In addition, because of the par-ticular nuances of each jurisdiction, many alsorequired a supplemental form to accompany theMulti-Jurisdictional form. This would includeaspects unique to the state or country, such asimmigration status and related disclosures, tax-ation issues, and how the release of personalinformation was to be handled and acquired.

When one views the Multi-Jurisdictionalform, the first instruction, listed as I.a., is:

You must make accurate statements and includeall material facts. Any misrepresentation, or the fail-ure to provide requested information, may result in thedenial of your application.

This instruction is probably the most im-portant that there is on the application. Then,on page 4 of the application comes the followingquestion:

DO YOU HAVE ANY SCARS, TATOOS,OR OTHER DISTINGUISHING MARKSAND/OR CHARACTERISTICS? IF SO,PLEASE DESCRIBE.

Following this question, in the event theapplicant missed this theme with instructionsI.a., comes the following warning:

IMPORTANT

FAILURE TO ANSWER ANY QUESTIONON THIS FORM COMPLETELY AND

TRUTHFULLY WILL RESULT INDENIAL OF YOUR APPLICATION.

What I would like to suggest here is that thisquestion probably does not belong on an appli-cation to determine if someone is suitable to par-ticipate in the gambling industry.

To address the low fruit on this tree first, let’sstart with the listing of scars. The most obviousscar on many men is a circumcision, a scar that iscarried by more than 80% of the US males betweenthe ages of 14 and 59. Several points here:

� I doubt that most men possessing this scarhave listed it on their multi-jurisdictionalapplications, and I have never heard of aninvestigator checking the veracity of anapplicant’s response in this area.

� I have never had a legal counsel I wasworking with on an application ask me directly whether I was so scarred, or madeany effort to acquire this information (to my knowledge).

� I also can’t believe that, as threatened inthe application, that the failure to answerthis question “completely and truthfully”will result in a denial of the individual’ssuitability. In fact, I am very much of theopinion that there are many individualsworking within our industry, who are quitehonest and honorable, and who are beingquite useful and productive, who have notincluded this fact about their anatomy onthe application. I also doubt that theindustry will be ravaged by a purge ofthose that have declined to list this infor-mation. No, they will continue along as alicensed member (no pun intended…okay,pun intended) of the industry, havingknowingly or unknowingly provided anerror of omission on the application, andno one really cares.

Beyond this example, there are many otheradditional reasons why an inquisition into thescar landscape of an individual’s body is proba-bly inappropriate. This would include certainissues surrounding the privacy of medical infor-mation that can often be revealed by scars. Moreimportantly, what great insight is gained fromthe knowledge of the scars on one’s body indetermining the suitability of an applicant for agaming license? I know of no instances in all oflicensed and regulated gambling where a scar hascome into play regarding the determination ofsuitability of an applicant. “Damn, but for that



Richard Schuetz was appointed as the Executive Director of the BermudaCasino Gaming Commissionon September 1, 2015, following a four-year engage-ment as a commissioner for theCalifornia Gambling ControlCommission. Prior to this, Mr. Schuetz has served in positions ranging from blackjack & dice dealer, to Executive Vice President, to President & CEO of casinoresorts in numerous jurisdic-tions. Mr. Schuetz has workedas a senior executive in thegaming markets of Las Vegas,Atlantic City, Laughlin,Reno/Tahoe, Minnesota, Mississippi, and Louisiana. Mr. Schuetz has lecturedthroughout the world on the topics of gaming, gaming regulation, and casino market-ing and has published over 80 articles in these areas.

Richard Schuetz

The opinions expressed in this article are his alone, and do notnecessarily reflect the position ofthe Government of Bermuda, theBermuda Casino Gaming Com-mission, or any other entities or individuals within that country.The author is also sincerely appre-ciative of the help he received fromhis friends and colleagues through-out the gaming world in develop-ing this article, understanding thatany and all errors are his own.

14 AMERICAN GAMING LAWYER • SPRING 20171As of March 10, 2016.

>>GAMING LAW & POLICY: PERSONAL PERSPECTIVE

scar, I could have been a contender,” is a sentence never utteredin the world of regulated gambling, at least to my knowledge.

And so too it is with tattoos. The presence of a questionconcerning tattoos originates from law enforcement, often thesource for human resources as a regulatory agency is initiallyconstructed. There was a day when the adornments of one’sbody with tattoos was a sign that the person was certainly notmainstream, and as such, potentially suspect. Furthermore, itwas once apparently true that people with tattoos were morelikely to have had an adverse experience with the law enforce-ment or the judicial system, but today tattoos are sported by amore broad-based demographic. There is also the argument thata tattoo might provide some insight into a criminal investigation.In some traumatizing crimes, such as a rape, the victim mayremember little, but will recall a distinctive tattoo or marking,and in this sense that information could prove of value in solv-ing a crime where such a bit of evidence could prove pivotal. Butin a regulatory environment we are talking about suitability andnot crime solving, and we are also talking about a modern worldwhere a tattoo is more the rule than the exception.

There are those who might argue that a tattoo can pro-vide certain insight into a gang or group affiliation, but if thebackground investigation is unable to ascertain that the indi-vidual was a member of the Sinaloa Cartel, the Crips, or theKKK, without the knowledge of the applicant’s skin markings,well, that agency is probably lost as an investigatory entity any-way. Also, one would suspect that if the applicant did havesome great statement on his or her body of their homage towhite supremacy, to Carlos the Jackal, or whatever, he or shewould probably lie about such a memorial emblazoned upontheir body on the application, and I know of no regulatoryagency that employs a body viewing process to audit scars andtattoos of all applicants. And if an applicant can fool an in-vestigatory agency into believing that he did not belong to agang or mobbed-up entity simply by keeping his shirt on, well,again, those investigators are so lost that nothing will probablyawaken them.

More importantly, this type of information simply is notthe business of the government. Let us just imagine that a verymodern and respected general counsel, during her collegeyears, may have had a spring break experience that ended up ina tattoo parlor, and maybe at the time it seemed quite brilliantto have a small heart placed on her inner thigh. Do we believethat this individual is going to faithfully disclose this bit ofinformation to be incorporated on a suitability application tobe memorialized on a government database? Or imagine theIvy League graduate who may now be a chairman of the board,who, in a college-drinking episode had “Yale Sucks” put on his

butt. Do we really believe that this is critical information todetermine his suitability, and that he is going to faithfully dis-close such a bit of information for many a bureaucrat to share?(One can only imagine the repercussions if it were the case thatthe head of the regulatory body had in fact graduated fromYale). The point is, it is foolish to ask this question, and it iseven more foolish to expect the applicant to answer it honestly.No, the point is that scars should have never been an area ofinquiry, and the relevance of tattoos should be assigned to abygone and antiquated era.

Regulatory cooperative efforts that attempt to enhanceharmonization tend to be accretive in nature, implying that if anerror is to be made it will be to include more, not less. Further-more, in the United States, regulatory agencies aremonopolies, and monopolies tend to be very slow to change andinnovate. Finally, as regulatory agencies are formed in moststates, they draw heavily from law enforcement to fill theirranks. It is these conditions that have probably assisted in reg-ulators from across the United States asking inappropriatequestions concerning scars and tattoos that do not reallyadvance the exploration of suitability, and least in this day andage. We often do things because we do things. One would hopethat as we mature as regulators that we would become better atdeveloping a public policy calculus that weighs the intrusive-ness of the inquiry against the potential gain from the infor-mation acquired, but these types of mature discussions arerather quite rare. This results in what my favorite gamingattorney refers to as voodoo regulation, that being we do thingsbecause we say we can, not because they build better regula-tory schemes. Asking about scars and tattoos in this day andage is contrary to all things that a regulatory agency shouldstand for in that it potentially encourages evasion and deceptionupon the honest, and that is a terrible thing for a regulatoryentity to encourage. Furthermore, these questions providelittle insight into the whole question of suitability.

A cornerstone of the US regulatory model is theimportance of the suitability of the participants, and this isfor two good reasons. The first is that the best model wehave of determining future behavior of an individual is pastbehavior, and so by only allowing people to participate whohave not been mischievous in the past, we reduce the risk ofthere being future mischief within the industry. In addition,suitability is important because the background of the par-ticipants can shape the image of the industry, and thisindustry best flourishes when it is considered to have a cleanand positive image. Neither of these important goals isadversely affected by eliminating questions about the char-acteristics of one’s skin, for in this day and age it is a wasteof time and patently annoying. �


“Damn, but for that scar, I could have been a contender,”is a sentence never uttered in the world of regulated gambling, at least to my knowledge.

IMGL wishes to thank the springconference co-chairs, committeemembers, the moderators and the

panelists for the contribution of theirtime and efforts in putting together the

excellent educational opportunitiesIMGL is proud to provide at the

Spring 2017 conference.

I N T E R N A T I O N A L M A S T E R S O F G A M I N G L A W

www.IMGL.org

Daniel WallachShareholder

Becker & Poliakoff, P.A.

Marc C. DunbarPartner

Jones Walker

SPRING CONFERENCE CO-CHAIRS

Turnberry Isle MiamiMiami, Florida • May 10-12, 2017

MEMBERS IN THE NEWS

The University of Nevada, Las Vegas, recently appointedBrett Abarbanel as the International Gaming Institute’s newdirector of research.

Abarbanel studied statistics and architecture at Brown before pursuing graduate degrees in hotel/hospitality adminis-tration at UNLV. Combine this with a childhood near a horsetrack and a friend who knew poker, and this is how Abarbanelbecame the perfect combination of spectator and participant,scholar and lifelong student. Her path has prepared her well forher new role predicting and progressing the gaming and gam-bling research that will keep UNLV at the forefront of the field.

Abarbanel focuses on all the latest and greatest in thegaming and gambling industry, including eSports, regulationand policy, and developments in consumer behavior.

She states regarding the new UNLV e-sports lab, “E-sports has been around for a while but really boomed in thelast couple years. Because we’re UNLV and in Las Vegas, wewant to look at e-sports as it’s relevant to gambling and howthose worlds interact and collide, so we’re building out an e-sports space that could exist within a casino.”

Rutledge named GamingLaw Committee chair ofABA Business Law Section


Karl Rutledge of Lewis RocaRothgerber Christie LLP has been appointed as chair of the GamingLaw Committee of the American Bar Association Business Law Section.Rutledge is a partner in the GamingPractice Group in the firm’s Las Vegas office. He focuseson Internet gaming, sweepstakes, contests, privacy policiesand website terms and conditions.

His one-year term as chair of the ABA Business LawSection Gaming Law Committee begins immediately. Rutledge previously served as the Committee’s Directorof Programs.

“I’m honored to be selected to lead the Gaming Law Committee. As the industry grows it’s imperativethat we understand the importance of working with counterparts in other areas of the business world to improve each others’ understanding of our impact on thecountry’s economy,” said Rutledge.

UNLV Appoints Brett Abarbanel as the New Director of Research, International Gaming Institute

The Casino Gaming Industry—A Generational Perspective


My father, Mickey Wichinsky, was anearly pioneer of the Nevada gamingindustry and began his journey throughthe gaming industry at the Sands Hoteland Casino in Las Vegas in the mid-1950s.During my early teen years, I would travelto Las Vegas to visit him and stay at theSands Hotel. These were the times of theRat Pack, with Frank Sinatra, Dean Mar-tin and Sammy Davis Jr., often in plainview on the casino floor and hotel prem-ises where they entertained friends andguests.

Dress attire was more formal andclassy in the hotels during this era and thecasinos preferred to cater to the highrollers. Guests were paged over the publicaddress system when they were receivinga phone call through the hotel operator.

Cellular technology and smart phoneswere in the unimaginable future, and theyounger generation had not become whatrock star Tom Petty calls “palm gazers.”

This was a time where people wentto majestic hotels and elegant casinos tobe seen and entertained. A walk throughthe now extinct Riviera Hotel and Casinoevidenced brilliant plush red carpets andcrystal chandeliers. Patrons were ex-pected to conform to a dress code. Therewas live entertainment and headliners toenjoy, with musicians and live orchestrasaccompanying them in their showroomperformances.

Times have now changed: the namesof headline entertainers are no longer asprevalent on hotel signage as they oncewere; orchestras are no longer a fixture of

live entertainment venues; and the observeddress code that is now more commonplacewith many guests and patrons in a hoteland casino involves wearing tee shirts,shorts, a baseball cap and carrying a canof beer.

Gaming, in some manner and fashion,has always had an attraction in society. Tosome, it was an opportunity to becomelucky at a game of chance and to walkaway with unexpected riches. To others,it can be a means of escaping the chal-lenges we face in life, to place cash orother monetary consideration into a gam-ing device and to press a button endlesslyinto the day or evening while staring intosome foreign or distant space. Yes, thereare still serious gaming players that youwill observe in the casinos, but there arealso many casino guests and patrons whosit in front of a gaming machine and playthe game just to pass time. Often, whensuccessful in winning their jackpots, manydo not even fully comprehend why theyeven won. It is entertainment at somelevel within a person’s own mind.

As a second generation gaming executive, I have witnessed incredible

changes in the casino gaming industry. While these changes have often

been difficult for me to fully take in and comprehend, I think they can be

best understood by taking a long view of how the casino industry has evolved.

By Glenn E. Wichinsky

Glory Days: At the height of its glory in the 1950s, the Sands Las Vegas hosted its share of high profileguests including Rat Packers (pictured left to right) Peter Lawford, Frank Sinatra, Dean Martin, Sammy Davis Jr. and Joey Bishop.

GAMING LAW & POLICY: PERSONAL PERSPECTIVE


My father devoted fifty years to thegaming industry. Although I followed inhis footsteps and have been activelyinvolved in the gaming industry for overthirty years, I am not a gambler. Maybe Ihave placed $10 once in a while in a videopoker machine with an attempt to hit aroyal flush, but never more than that. Thereason was a basic principle that my fathertaught me. This was the setting and lessonthat I was given:

When I was seventeen years old, I

was sitting in the coffee shop of the Star-dust Hotel with my older brother Steve. Ispent most of my childhood years inMiami and I was visiting Las Vegas. Wewere sharing some time together overvanilla milkshakes. Steve asked me to lookup at the wall of the restaurant at what hereferred to as a Keno Board. He asked, “Didyou ever play Keno?” I had never heard ofit before. Although I was underage at thetime, he gave me a Keno card and blackcrayon and instructed me to place an X

over eight numbers. He explained that if Imatched at least five of the eight numbers,I would win money. I didn’t give it muchthought, marked off eight numbers, andreturned the marked card to my brother,who gave the Keno card to a Keno runneralong with a $1.20 bet.

When the game began, I watched thetwenty called numbers begin to appear onthe lighted display, one at a time. I told himthat I had five matching numbers, then six,and then seven of eight! My brother

PHOTOS BY THE LAS VEGAS NEWS BUREAU

The early days of Vegaswas a time when peopledressed to the nines tobe seen and entertained

at elegant casinos.

grabbed my stamped Keno card from me, looked in amazementat the Keno board which had displayed the results of that par-ticular game, and literally ran across the casino floor to redeemthe winnings at the casino cage. He returned to the restaurantwith $2200 in his hand and then gave me about $300. He saidsomething about having to pay taxes!

I saw my father that evening and told him what had occurred.I thought he would be happy for me, but he wasn’t. What followedwas the one and only time in my entire life my father ever repri-manded me. He made it unmistakably clear that if you want to besuccessful in the gaming industry, you don’t gamble! This is nodifferent that if you owned a liquor store and acquired a desirefor drinking alcoholic beverages, he said. Over his years in LasVegas, he told me, he had seen too many people shatter their livesbecause they could not limit their gambling.

My father then told me about some people I knew who hadoperated small, wonderful restaurants in Las Vegas that wewould often frequent. There was a small speakeasy-type Italianrestaurant on the east side of Las Vegas. The owner/chef madespectacular, authentic entrees and posted his daily menu by handon a blackboard. But his restaurant had closed. He had lost hiscustomers not to competition or a decline in the quality and serv-ice. Rather, his restaurant closed because he had acquired a gam-bling addiction and spent his profits in the casinos. When helacked money to purchase food supplies and merchandise for hisrestaurant, he began to approach his regular customers for per-sonal loans. Ultimately, my father told me, his gambling addictioncost him his business. This same scenario played out far too oftenin Las Vegas and elsewhere, and my father was adamant abouthow his children should never partake in the industry that they

rely upon for their income, their career, and their future. So today, I continue to actively participate in the gaming

industry as a gaming attorney, gaming executive and consultant.But the conflict about gambling which was planted in my mindmany years ago is still present. Though some may think it isparadoxical to avoid gambling when I earn my living from it,my father’s lesson was a powerful one.

CHALLENGES AHEAD FOR THE GAMING INDUSTRYThe casino audience is changing by the minute. With some trep-idation, industry leaders are exploring ways to attract the nextgeneration of gamblers, the Millennials. What will it take toentice these people into spending their “discretionary dollars” intraditional casinos? Is the answer social gaming mobile apps andother online applications? The gaming industry knows thatfiguring this out is vital to the future of the industry.

The gaming industry maintains that almost all gaming andcasino players can be financially responsible and can self-regu-late their gambling conduct. The gaming industry refers to thisconcept as “responsible gaming.” Can people truly regulate howmuch money they will spend in pursuit of gaming or entertain-ment value in a casino? Many of us can, but sadly we know thata portion of gamblers cannot resist the urge to play one morehand or one more game. This issue continues to be researchedand actively addressed each day in our industry. I will reserve myopinion on this issue for another time.

If we view the desire to gamble from a generational perspec-tive, we can chart a course beginning with the era of my grand-parents. My grandparents came to the United States at the turn ofthe 20th century from Eastern Europe. My maternal grandfa-

ther, I have been told, boarded a passenger vesselin Holland to come to America. At the time, he hadabsolutely nothing to his name. However, after play-ing in card games on the vessel during a three weektransatlantic journey to America, he had enoughmoney in winnings upon arriving at Ellis Island inNew York to begin his trade and business as a bar-ber. By gambling, he had nothing to lose, and every-thing to gain.

My grandparent’s generation enjoyed theexcitement of horse racing and its social environ-ment. Spending a day or evening at the racetrackwas both a form of gambling and a type of socialconnection. They would study the past perform-ance of the horses and jockeys and make the besteducated guess on who would win.

But as we know, over the years, there has beena decline in interest in the horse racing industry.This began with my parent’s generation who enjoyedthe casino gambling and live entertainment scenewhich was prevalent in the 50’s and 60’s. A day ofsitting in the stands at the race track on a long, hotafternoon lost much of its appeal.

With the decline in revenues at the race trackscame attempts to save the horse racing industry withthe introduction of “racinos.” Racinos are casinoswhich operate at regulated horse racing venues.

In a way to attract the Millennials, GameCo’s debut of its Video Game Gambling Machine (VGM) provides gamers with the opportunity to gamble playing video games at the casino for the first time ever. The premier game, titled “Danger Arena” is a first-person action video game in which player skill determines the payout.

PHOTO BY TOM BRIGLIA/PHO-


GAMING LAW & POLICY: PERSONAL PERSPECTIVE


While racinos have not saved the traditionalhorse racing industry, they have providedsome level of revenue to those who rely on thehorse racing industry as investors, partici-pants or employees.

My parent’s generation as well as many“baby boomers” continue to frequent casinosto play table games or the gaming machinesoperating on the casino floor. But as this pop-ulation demographic ages, and the need toaddress medical bills and other issues facing asenior population increases, the industry fearsa decline in revenues from the traditional reg-ulated state casino gaming venues. In fact, inlooking at the preferences of Millennials, thecasino gaming industry accepts as inevitablethat gaming revenue will be supplanted by thedollars generated through the entertainmentactivities that Millennials favor over gambling.

As Millennials spend their discretionarydollars in nightclubs and drink, hopefully, in aresponsible manner, they will establish theirown social culture just as my parent’s genera-tion did in casinos, and my grandparent’s gen-eration did at horse tracks. We have taught ourchildren to be responsible, to seek a goodeducation to launch their lives and careers, andnot to spend their money recklessly. Theirfocus is to be successful and to be financiallyresponsible. Maybe we did too good a job rais-ing our children to become responsible youngadults. Whether the traditional casino gamingindustry that we continue to work withintoday will suffer as a consequence is still to bedetermined.

There have been industry efforts over theyears to seek enhancements to the traditionalgaming venue to generate new and sustainingrevenues. Gaming companies are pursuingmobile gaming to generate additional incre-mental gaming revenue from patrons whowish to gamble while having a meal in a hotelrestaurant or laying out at the hotel pool.

Some companies dream of establishing“in-room gaming” so that guests can operate agaming device from their hotel room that linksthem to a game on the casino floor. Most ofthese efforts have created considerable noisebut little significant additional revenues totraditional land based casinos.

The latest effort to address the loss ofseniors and Baby Boomers in the traditionalcasino market is to attract the Millennials withskill-based gaming devices. This initiative isbased on the belief that younger gamblers willsimply not be satisfied with feeding slotmachines money without any control over theoutcome. After all, these are people who grewup playing video games where skill was verymuch a determining factor in winning orlosing.

As the industry attempts to address thepotential for this form of gaming, questionshave been raised: how do we determine thelevel of skill that needs to be incorporated intothe game to make it appealing to the videogame generation? If Millennials prefer theirgaming to incorporate some element of com-petition, the traditional gaming casino floorwill need modification. Separate gaming areaswith displays and competitive tracking ofscores will be needed. What about the ex-tended “play cycle” that would be necessary tooffer someone a truly challenging skill-basedgame that would be interesting and entertain-ing? A less frequent play cycle traditionallyequates to lower gross gaming revenues. Pos-sibly the value element to the casino operatoris based upon a time play with revenuesachieved periodically throughout the cycle ofthe customer playing the skill-based gamingdevice.

The gaming industry will continue toevolve. Those who work within our industrymust exhibit the creativity, ingenuity andtalent once seen as exclusive to the computerindustry. There are challenges ahead, and itwill be essential to “think outside the box” andto be realistic in our strategic approach. Justas the gaming industry changed from mygrandparent’s generation, to my parent’s gen-eration, and so on, the casino gaming industrywill need to transform itself once again tomeet these generational challenges. �

Acknowledgment: The author expresses his thanks and

appreciation to Keith Miller, Distinguished Professor of

Law, Drake University Law School, Des Moines, Iowa,

for his valuable assistance in the finalization and submission

of this manuscript for publication.

Glenn Wichinsky is recognizedfor his specialization in thefields of Gaming Law, Gaming Regulation and Compliance and InternationalBusiness Development. He is alicensed attorney in the states ofNevada and Florida, a longterm member of the Interna-tional Masters of GamingLaw, an AV rated preeminentattorney by Martindale-Hubbell, and is also a secondgeneration Nevada gaming executive.Glenn was conferredhis Juris Doctor degree from theUniversity of the Pacific, McGeorge School of Law inSacramento, California. He received his Bachelor ofArts degree from the Universityof Miami (FL). [email protected]

Glenn E. Wichinsky

The gaming industry willcontinue to evolve. Those whowork within our industry mustexhibit the creativity, ingenuity

and talent once seen as exclusiveto the computer industry. Thereare challenges ahead, and it willbe essential to ‘think outside the box’ and to be realistic in

our strategic approach.

“

”


>>NEW DEVELOPMENTS IN JURISDICTIONS: NEVADA

Legal Issues for Nevada BusinessesRelated to the Legalization of

Recreational MarijuanaBy Jason Bacigalupi, Glenn Light, Mary Tran and Karl Rutledge


However, this explosive industry posesserious legal risks, given that marijuana remainsan illegal Schedule 1 controlled substance underfederal law.7 This risk is compounded in thehighly-regulated Nevada gaming industry, asboth the Nevada Gaming Control Board(“Board”) and Nevada Gaming Commission(“Commission”) have clearly and unambigu-ously stressed that Nevada gaming licenseesmay not engage in unlawful activities of anykind, under either state or federal law. Addi-tionally, the new law raises issues generally withemployers in the state. This article will providea brief overview of the new law, how Nevadawill regulate the industry, and the possibleeffects the recreational marijuana industry willhave on Nevada’s gaming industry and employ-ers in general.

Although medicinal marijuana was legal-ized in 2000, the Nevada legislature did not passa law authorizing the establishment and regula-tion of commercial medical marijuana establish-ments (i.e., cultivation, production, dispensaries,and independent testing laboratories) until2013.8 In November 2014, state and local regu-lators granted 372 provisional certificates tomedical marijuana establishments, 55 of whichwere granted to dispensaries.9 The first dispen-sary opened in 2015 in Sparks, Nevada,10 andthere are currently 49 certified dispensaries inoperation within the state – with 40 in SouthernNevada.11

Summary of the Regulation of Marijuana ActThe Act authorizes the operation of recreationalmarijuana establishments.12 Persons 21 and oldermay purchase, possess, and consume up to oneounce of marijuana or one-eighth ounce ofconcentrated marijuana.13 A person may alsocultivate up to six marijuana plants for personaluse (up to 12 plants at one time per residence).14

However, personal cultivation is not allowedwithin 25 miles of a retail marijuana storelicensed pursuant to the Act, which severelylimits the geographic scope of this provision.15

Additionally, it remains unlawful for marijuanato be smoked or consumed in public places, inretail marijuana stores, or in moving vehicles.16

The Act was effective January 1, 2017, andthe Nevada Department of Taxation (“Depart-ment”), which will be the regulating authority,has until January 1, 2018, to develop regulationsfor the recreational marijuana industry.17 TheDepartment has begun developing temporaryregulations and intends to hold a public work-shop in early 2017 to adopt temporary regula-tions to allow for the issuance of recreationalmarijuana licenses.18 The Department willbegin developing permanent regulations inspring 2017.19

As soon as the Department begins accept-ing applications, they will only grant licenses tocurrent medical marijuana state registrationcertificate holders (i.e., cultivation, production,dispensaries, and independent testing laborato-ries) for a period of 18 months.20 The numberof licenses issued will also be limited by countypopulation. For instance, Clark County mayissue up to 80 licenses for retail marijuanabecause it has over 700,000 residents.21 Forcounties with populations between 100,000 and700,000, up to 20 licenses may be issued.22

It is anticipated that applicants will undergoextensive background investigations, similar tothe current process for the medical marijuana,liquor and gaming industries. This includeswhether the applicant has any associations withorganized crime, and an evaluation of theirhonesty, integrity, financial resources (includingthe source of funds for their enterprise), andbusiness experience. As with any other privilege

Jason Bacigalupi is an attorney in Lewis RocaRothgerber Christie’s Gamingpractice group in the firm’sLas Vegas Office. He focuseson existing or potential gam-ing businesses (including related transactional issues),interactive gaming, contestsand sweepstakes.

Glenn Light is a partner in Lewis Roca RothgerberChristie’s Gaming practicegroup in the firm’s Las VegasOffice. He focuses his practiceon land-based and interactive casinos, horse racing, sports betting, sweepstakes and contests.

Jason Bacigalupi

Glenn Light

Nevada voters overwhelminglyapproved Question 2, the Regula-tion and Taxation of Marijuana Act

(the “Act”), on November 8, 2016. In doingso Nevada, along with California, Maine andMassachusetts, joined Alaska, Colorado,Washington, and Oregon in legalizingrecreational marijuana under state law.Additionally, while recreational marijuana isnow legal in 8 states, medicinal marijuanais legal in over 20 states.5 Legalized mari-juana therefore has become the fastest-growing industry in the U.S., with someanalysts projecting sales to reach $22billion by 2020.6


>>NEW DEVELOPMENTS IN JURISDICTIONS: NEVADA


license, any omissions or inaccurateresponses will likely bar a finding ofsuitability for the applicant to hold arecreational marijuana license.

Impact on the Nevada Gaming IndustryNevada gaming regulators have previ-ously expressed a clear and unambigu-ous policy regarding state legalizedmedicinal marijuana. In brief, whethermedicinal or recreational, state legalizedmarijuana and the Nevada gaming indus-try do not mix and there must be noconnection whatsoever between the twoindustries. When the regulations author-izing the commercial cultivation and saleof medical marijuana were enacted, theBoard issued an industry notice provid-ing guidance to the gaming industry(“Notice”).23 The Notice clearly statedthat although the Nevada legislature hadauthorized commercial medicinal mari-juana, it is still illegal under federal law.

Therefore, “any investment or involve-ment by gaming licensees or applicantswould tend to reflect discredit upon gam-ing in the State of Nevada.”24 Accord-ingly, in hearings since the Notice, theBoard has made it clear that any indi-vidual involved in the gaming industry(including a spouse) may have no con-nections with a medical marijuana busi-ness. This includes serving not only as amember of the business, but as a land-lord or lender to that business.

After the Act was passed, the Boardheld a workshop to discuss concerns andanswer questions that gaming licenseesand other interested persons had inregard to recreational marijuana and theNevada gaming industry. This includedsecurity (potential for patrons to smokemarijuana in parking lots), privacy (howto restrict patrons from smoking in hotelrooms), what constitutes a public area(whether a private gaming salon or con-ference room is a public or private area),and employment. In underscoring the

importance of maintaining the reputa-tion of the gaming industry, the Boardreiterated that licensees are barred fromdoing, or having any connection whatso-ever with those who participate in activ-ities that violate federal (or any) law. Thisstems from Nevada Gaming Commis-sion Regulation 5.011(8), which requireslicensees to comply with all federal, stateand local laws, including not permittingor encouraging felonious acts on theirproperties.25 Thus, licensees remain liablefor any actions of tenants and thirdparty providers on their property. Toanalogize, Board Chairman A.G. Burnettstated that if state law allowed SEC andAML violations, the Board and federalgovernment retained jurisdiction toinvestigate and enforce violations offederal law.26

Immediately following the work-shop, the Commission discussed the Act.The Commission agreed with the analy-sis of the Board – if it violates federallaw it would tend to reflect discredit ongaming in Nevada. Commission Chair-man Tony Alamo asserted at the hear-ing, “[t]here is no way that I feelcomfortable and in my role as a regulatorcould allow that a licensee allow undertheir knowledge a felonious act occurringanywhere within their sidewalks.”27

During the course of the Commis-sion’s discussion, Board Member TerryJohnson also asked the Commission forguidance on how to handle employmentregistration appeals of employees test-ing positive for marijuana use. Commis-sioner John Moran stated the issueswould have to be played out judiciallybefore any guidance could be issued tothe Board. The Commission also high-lighted that the Act does not prohibit aprivate employer from having a work-place policy in which marijuana use isprohibited, including requiring randomdrug tests. Chairman Alamo noted thatrecreational marijuana is a complicatedissue, and licensees will need to look toevolutions in federal law and anticipatedcourt decisions. The Commission


The Commission agreed with the analysis of the Board – if it violates federal law it would tend to reflect discredit on gamingin Nevada. Commission Chairman Tony Alamo asserted at the hearing,‘[t]here is no way that I feel comfortable and in my role as a regulatorcould allow that a licensee allow under their knowledge a feloniousact occurring anywhere within their sidewalks.’

“

”


encouraged licensees to meet with the Boardto discuss their specific circumstances.28

General Employment IssuesThe Act also has implications for employersoutside of the gaming industry. While the Actallows employers to have workplace policiesand allows employers to fire employees forusing marijuana, there will certainly be devel-oping case law interpreting the scope and anypossible exceptions or guidelines regardingthese issues. Thus, Nevada employers shouldseek advice from knowledgeable employmentattorneys in order to keep ahead of, and incompliance with, this developing area of law.

ConclusionIn sum, whether medicinal or recreational,Nevada gaming regulators have expressed thesame view regarding state legalization ofmarijuana — it may have no connection what-soever with the gaming industry. However,these licensees will still encounter issues as thedrug will be more easily accessible, and needto be mindful of marijuana use by theiremployees, patrons, persons enjoying theirentertainment venues, and convention/trade

show attendees. This will include clear poli-cies barring the use of marijuana at theirproperties. Enforcement of this policy willprove challenging given the various methodsthat marijuana can be ingested — whether inedible form, concentrates, and electronic ciga-rettes that are extremely difficult to detect.The Board will likely evaluate a potentialviolation based on the totality of the circum-stances involved, so licensees should takeserious steps to mitigate their risk. Moreover,the risks are not limited to the gaming industry,as there are serious concerns for generalemployment law as well.

The knowledgeable attorneys at LewisRoca Rothgerber Christie have extensiveexperience in assisting gaming companies, aswell as employers in every industry, with theseissues. If you have any questions or would liketo consult with one of our attorneys, pleasecontact us. �

Disclaimer: This article has been prepared forgeneral information purposes only. The informa-tion presented is not legal advice, is not to be actedon as such, may not be up-to-date and is subject tochange without notice.

Mary Tran is an associate inthe Gaming Practice Groupin the Las Vegas office ofLewis Roca RothgerberChristie. Her practice focuseson commercial and interac-tive gaming along with contests and sweepstakes.

Mary Tran

Karl Rutledge

Karl Rutledge is a partner inLewis Roca RothgerberChristie’s Gaming practicegroup in the firm’s Las Vegas office. He focuses on Internetgaming, contests, sweepstakes,privacy policies, and websiteterms and conditions.

5 State Marijuana Laws In 2016 Map, GOVERNING, http://www.governing.com/gov-data/state-marijuana-laws-map-medical-recreational.html.

6 California, Nevada and Massachusetts Vote to Legalize Recreational Marijuana, THE GUARDIAN, https://www.theguardian.com/us-news/2016/nov/08/state-ballot-initiative-election-results-live-marijuana-death-penalty-healthcare.

7 See 21 U.S.C. § 801, et seq. 8 Voters approved of medical marijuana use in 2000 and patients cultivated their own marijuana until 2015. Medical Marijuana

Program Timeline, NEV. DIV. OF PUB. AND BEHAVIORAL HEALTH, http://dpbh.nv.gov/Reg/MME/MME_-_Home/. 9 Id.10 Id.11 Open Dispensaries List as of December 13, 2016, NEV. DIV. OF PUB. AND BEHAVIORAL HEALTH, http://dpbh.nv.gov/uploadedFiles/

dpbhnvgov/content/Reg/MedMarijuana/OpenDispensaryList25.pdf.12 Initiative to Regulate and Tax Marijuana, http://nvsos.gov/sos/home/showdocument?id=3294. 13 Id. at Sec. 6(1).14 Pursuant to Sec. 6(2), of the Initiative to Regulate and Tax Marijuana, such cultivation must take place within a closet, room,

greenhouse or other enclosed area with a lock or device to restrict access of unauthorized persons.15 Id. at Sec. 14(a)(1).16 Id. at Sec. 14(2). 17 News Release, Dep’t of Taxation, Nevada Department of Taxation Prepares for the Regulation of Recreational Marijuana

(Nov. 10, 2016), https://tax.nv.gov/uploadedFiles/taxnvgov/Content/TaxLibrary/Rec%20Marijuana%20Release.pdf. 18 Id.19 Id.20 Initiative to Regulate and Tax Marijuana, supra note 8 at Sec. 10(2).21 Id. at Sec. 10(5)(d)(1).22 Id. at Sec. 10(5)(d)(2).23 Notice #2014-39, NEV. GAMING CONTROL BD. (May 6, 2014), http://gaming.nv.gov/modules/showdocument.aspx?documentid=8874.24 Id.25 NGC Reg. 5.011(8).26 Transcript of Nev. Gaming Control Bd. Workshop (Nov. 17, 2016).27 Transcript of Nev. Gaming Comm’n Meeting (Nov. 17, 2016).28 Id.


>>NEW DEVELOPMENTS IN JURISDICTIONS: TRIBAL GAMING

Tribal Cannabis BasicsAt the outset, it is important to note thatthe cannabis industry is about more thangetting high. Though marijuana is aschedule I drug under federal law,3 theU.S. government holds a patent on med-ical marijuana,4 and 28 states permitmedical marijuana.5 Hemp comes fromthe same plant as marijuana but containsminimal levels of tetrahydrocannabi-noids (THC), the substance that getspeople high. Hemp has countless indus-trial uses and is nutritious too.6

Though federally recognized tribeshave a direct government-to-govern-

ment relationship with the UnitedStates, tribal marijuana policy will likelybe driven by states. If a state prohibitsan activity, tribes within its borders areforbidden from partaking in it. If a stateregulates an activity, tribes within thestate are allowed to craft their ownrules for it. This is how tribes got intogaming.

An analogy between cannabis andgaming can be made, but it probablydoes not work. Gaming is not prohibitedby federal law. “All parts” of cannabisplants are.7 Nevertheless, a few tribeshave entered the cannabis industry.

Tribes and Cannabis so far In 2015, the Flandreau Santee SiouxTribe attempted the most ambitioustribal foray into the cannabis industry.The tribe is located in South Dakota—astate that prohibits marijuana in allforms.8 Undaunted, the Santee Siouxattempted to open the United States’first marijuana resort. A bitter standoffwith the state attorney general and fed-eral law enforcement ensued. It resultedin the Santee Sioux agreeing to destroytheir crop. Chillingly, two non-Indianconsultants who worked with the tribeon the venture were indicted by SouthDakota on conspiracy charges.9

Federal, state, and local law enforce-ment raided the Pit River Tribe andAlturas Indian Rancheria marijuanaoperations in July of 2015.10 Pit Rivermet with state and local officials abouttheir crop, but the meetings were notfruitful. Indeed, Pit River was accused bya tribal government insider of “thumb-ing their nose at the Modoc County

Tribes &Cannabis

WHERE THINGS STANDBy Adam Crepelle

Cannabis is the most exciting economic opportunity for tribes since gam-

ing. The cannabis industry is expected to grow by up to 700% by 2020.1

Some project the market will be worth $50 billion by 2026.2 However,

raids on tribal cannabis operations have dampened the enthusiasm that originally

surrounded the industry. This article discusses major events in the tribal

cannabis industry to date and provides policy recommendations for tribes.


Sheriff.”11 The local U.S. Attorney’s Office alsoadvised the tribes against cultivating mari-juana.12 The operation did not have the supportof tribal citizens either; in fact, an Alturascitizen asked the federal government to termi-nate the crop.13 Moreover, the amount of mar-ijuana grown by the tribes greatly surpassedthe legal amount in nearby counties.14

A federal court struck down the Menom-inee Indian Tribe’s hemp venture in 2016. TheMenominee legalized hemp production andwere cultivating it for research in conjunctionwith the College of the Menominee Nation asstates are allowed to do under the AgriculturalAct of 2014. The tribe allowed a BIA agent tocollect samples of the crop. The agent’sobservations during the collection caused thefeds to raid the Menominee. The tribe arguedit should be treated as a state, but the courtruled that tribes were not defined as states forpurposes of the Act. Additionally, the tribeargued that Wisconsin law did not apply onits reservation. The court agreed; neverthe-less, the court held that the tribe could notcultivate hemp because it is illegal in Wiscon-sin.15 However, the court did note that the fed-eral government’s raid and destruction of thetribe’s crop seemed “abrupt” since injunctiverelief was available.16

Alexander White Plume succeeded inhaving a decade long injunction prohibitinghim from cultivating hemp lifted—“the onlyone of its kind in history”—in 2016. The courtbased its decision on the changing nationalview of hemp “as a viable agricultural crop.” Itdid not address whether the 1868 Treaty ofFort Laramie granted White Plume the rightto grow hemp. It also did not examinewhether the Agricultural Act equivocatestribes with states.17

Some tribes have entered the marijuanaindustry with little controversy. Washingtonhas legalized recreational marijuana, and threetribes have entered recreational marijuanacompacts with the state.18 The PassamaquoddyTribe has received a hemp cultivation licensefrom Maine.19 The Navajo are cautiouslyentering the hemp industry,20 and the LasVegas Paiute Tribe is in the process of openinga medical marijuana center.21 Both tribes arecarefully crafting cannabis regulations.

Moving Forward with CannabisTribes must develop robust regulatory frame-works for their cannabis operations. To date,the only federal guidance tribes have receivedon cannabis is the Wilkinson Memorandum.22

It provides tribes with eight general principlesto apply to their cannabis ventures. The fol-lowing guidelines for tribes are drawn fromthe tribal cannabis projects discussed above:

� The cannabis operation needs to besupported by the tribe’s citizens.23

� Local non-Indian law enforcementmust support the tribal cannabis operation, at least tacitly.24

� Cannabis must be legally transportedoff the reservation.25

� Indian consultants are preferable tonon-Indian consultants.26

� Cannabis cultivation conditions mustmeet safe workplace standards.27

� Environmental conditions must becontrolled in order to regulatecannabis THC levels.28

� Out of state vehicles on a reservationwhere cannabis is being grown suggests leakage.29

� Armed security guards should not beused to protect cannabis ventures.30

Even if a tribe manages to avoid havingits cannabis growth raided, conflicts betweentribal and state cannabis law are likely to arise.Indian country criminal jurisdiction is alreadyconvoluted, so it is difficult to imagine cannabislaw enforcement going smoothly absent inter-governmental cooperation. Taxation has longbeen a source of contention between tribes andstates; accordingly, tribal-state disputes overcannabis taxes are easy to envision.

Until Congress or the courts provide clearrules, tribes interested in pursuing cannabisrelated ventures should compact with the sur-rounding state. Having to compact underminestribal sovereignty, but the compact can becooperative rather than adversarial. For exam-

Adam Crepelle is an attorney, an enrolled citizen of the United HoumaNation, and the former vicepresident of the California Indian Law Association. He has published articles on awide array of topics includ-ing tribal recognition and violence against AmericanIndian women. Adam is alsoan award winning film-maker. His film, IndianSanta, screened at numerousvenues including the Ameri-can Indian Film Festivaland the Smithsonian Institution’s National Museum of the American Indian.

Adam Crepelle


>>NEW DEVELOPMENTS IN JURISDICTIONS: TRIBAL GAMING


ple, the compacts Washington has enteredwith tribes create an alliance wherebythe tribes and state will defend the com-pacts against third party challenges.31

ConclusionTribes looking to enter the cannabisindustry must weigh several policy con-siderations. Substance abuse is a plagueupon Indian country. Increasing theavailability of marijuana could exacer-bate the problem; alternatively, mari-juana could be viewed as a lesser evilthan other drugs. The cannabis industryis predominately cash due to banking

laws, and large amounts of cash floatingaround a reservation could spark crime.Many tribes have outrageous povertyand unemployment rates, so the riskmay be worth the revenue. Each tribe

will have to answer these questions foritself.

Cannabis can further the federalIndian policy objectives of promotingtribal sovereignty and economic devel-opment—just like gaming.32 Success inthe cannabis industry is not predicatedon tribes being located near large popu-lation centers. Moreover, it is the onlyviable crop on some reservations.33

Cannabis also offers tribes the ability toreturn to their agricultural ways anddevelop natural products. Tribes trans-formed the gaming industry. They cantransform the cannabis industry too. �


1 http://www.forbes.com/sites/debraborchardt/2016/12/12/the-cannabis-market-that-could-grow-700-by-2020/#55976d971ed32 https://www.bloomberg.com/news/articles/2016-09-12/cannabis-industry-to-expand-to-50-billion-by-2026-analysts-say3 https://www.dea.gov/divisions/hq/2016/hq081116.shtml4http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PALL&p=1&u=%2Fnetahtml%2FPTO%2Fsrchnum.htm&r=1&f=G&l=50&s1=6630507.PN.&OS=PN/6630507&RS=PN/6630507; http://www.denverpost.com/2016/08/28/what-is-marijuana-patent-6630507/

5 http://www.ncsl.org/research/health/state-medical-marijuana-laws.aspx6 http://www.forbes.com/sites/phillempert/2015/04/20/do-you-really-know-the-differences-between-hemp-and-weed/#6455712559637 21 USC 802(16). 8 https://www.mpp.org/states/south-dakota/9 http://www.thecannabist.co/2016/08/15/south-dakota-tribe-marijuana-consultants-jonathan-hunt-plea/61130/10 https://indiancountrymedianetwork.com/news/politics/pot-raid-has-pit-river-tribe-fuming-rips-bia/11 http://www.huffingtonpost.com/entry/pit-river-marijuana-raid_us_55a938cfe4b0f904bebfe52a12 http://www.cannalawblog.com/cannabis-on-native-american-lands-lessons-from-the-pit-river-raid/13 https://turtletalk.files.wordpress.com/2015/07/affidavit-in-support-of-alturas-pit-river-search-warrant-7-8-2015.pdf14 https://indiancountrymedianetwork.com/news/politics/pot-raid-has-pit-river-tribe-fuming-rips-bia/15 Menominee Indian Tribe of Wisconsin v. Drug Enforcement Administration and United States Department of Justice, Case No. 15-CV-1378 (E.D. Wis. 2016). 16 Id. at n.1.17 United States v. Alexander White Plume, et al., Civ. No. 02-5071-JLV (D. S. Dakota).18 https://www.newcannabisventures.com/washington-signs-3rd-tribal-compact-as-puyallup-tribe-to-open-cannabis-testing-lab/19 http://www.pressherald.com/2016/07/11/development-of-hemp-as-cash-crop-in-maine-starts-slowly/20 http://www.forbes.com/sites/debraborchardt/2016/10/24/navajo-tribe-signs-its-first-hemp-growing-contract/#26720b55158521 https://www.merryjane.com/news/las-vegas-paiutes-tribe-gets-into-the-medical-marijuana-game; http://www.ktnv.com/news/paiute-tribe-close-to-launch-

ing-large-scale-marijuana-operation22 https://www.justice.gov/sites/default/files/usao-wdwa/legacy/2014/02/14/DAG%20Memo%20-%20Guidance%20Regarding%20Marijuana%20

Related%20Financial%20Crimes%202%2014%2014%20%282%29.pdf23 https://turtletalk.files.wordpress.com/2015/07/affidavit-in-support-of-alturas-pit-river-search-warrant-7-8-2015.pdf at 7-8 (9.). 24 https://turtletalk.files.wordpress.com/2015/07/affidavit-in-support-of-alturas-pit-river-search-warrant-7-8-2015.pdf at 7 (8) 25 https://turtletalk.files.wordpress.com/2015/07/affidavit-in-support-of-alturas-pit-river-search-warrant-7-8-2015.pdf at 10 (14) (noting a driver leaving

the Altruras grow site had marijuana in the vehicle on a California roadway, but he did not have a valid medical marijuana authorization)26 https://turtletalk.files.wordpress.com/2015/10/menominee-hemp-warrant.pdf at 11 (f)27 https://turtletalk.files.wordpress.com/2015/10/menominee-hemp-warrant.pdf at 12 (m)28 https://turtletalk.files.wordpress.com/2015/10/menominee-hemp-warrant.pdf at (r and s)29 https://turtletalk.files.wordpress.com/2015/10/menominee-hemp-warrant.pdf at 16 (z)30 https://turtletalk.files.wordpress.com/2015/10/menominee-hemp-warrant.pdf at 14(u)31 http://lcb.wa.gov/publications/Marijuana/Compact-9-14-15.pdf at p.10 H.3.; https://assets.documentcloud.org/documents/2699297/

Puyallup-Tribal-Compact.pdf at p.10. C.32 25 USC 2701(4).33 See for example, U.S. v. White Plume, 447 F.3d 1067, 1076 (8th. Cir. 2006) (noting, “We are not unmindful of the challenges faced by members of the Tribe to

engage in sustainable farming on federal trust lands. It may be that the growing of hemp for industrial uses is the most viable agricultural commodity for thatregion.”).

Until Congress or thecourts provide clear rules,tribes interested in pursuingcannabis related venturesshould compact with the

surrounding state. Having tocompact undermines tribalsovereignty, but the compactcan be cooperative rather

than adversarial.

“

”


Back in the day, the marketing budget ofthe state controlled gaming servicesreached new heights every year and therange of products offered grew broaderand broader. This market strategy stillprevails. The Government policy came tocreate a culture of gambling. This culturetogether with a world class level of Inter-net penetration, a flourishing climate fortech innovations, access to venture capitaland a lenient stock market, were to setstrong incentives for the establishment ofhighly successful private gambling opera-tors such as Betsson, Unibet and manyothers, all established abroad targetingSwedish customers. These companies arefounded, run and owned by Swedish privategroups and corporations. Today, Sweden isone of the most competitive onlinegambling markets of the world. Theonly remains of the public monopoly isthe marginalized prohibition to promoteparticipation in gambling arranged inother EU member states (the marketingprohibition).

The Lotteries Act (Sw. Lotterilag(1994:1000)) prohibits the arrangementof unlicensed lotteries and the promotionof participation, in commercial opera-tions or otherwise for the purpose ofprofit, in unlawful domestic lotteries orforeign lotteries.

Gambling companieslicensed or authorized else-where within the EU (allreferences made to the EUalso includes the EEA) can,however, more or less freelypursue an Internet-basedgambling business on theSwedish market. Swedishauthorities acknowledgethat Swedish residents areunimpeded to participate inforeign gambling and that online gamblingoperators duly licensed or authorized inanother EU member state are allowed tooffer such services.

Moreover, the Swedish Governmenthas expressed that the Lotteries Act doesnot have exterritorial application. Hence,Swedish authorities lack jurisdiction toenforce the Lotteries Act to undertakingsand individuals outside of Sweden.

Gambling services can consequentlybe offered cross border to Swedish cus-tomers without violating Swedish law.Also, the room for maneuver for marketingand promoting activities that target theSwedish market is extensive. Marketingthrough cross border-media such as televi-sion commercials and web marketing islegal. Given the inherit limitations of thesystem for administrative and criminalsanctions, sponsoring of sports events,point efforts in display media and othercommercial marketing co-operations couldbe carried out without risk of sanctions, ifstructured properly.

Hence, what is in essence left of theSwedish gambling monopoly is the prohi-bition to promote participation in gamblingarranged in another EU member state.According to a vast body of case law fromthe Court of Justice of the EuropeanUnion (CJEU), the crucial legal questions

pertinent to assess the EU law-compatibil-ity of the major remains of the Swedishgaming monopoly and the prohibitionagainst promotion in Section 38 of the Actare the following: the Swedish State’s mar-gin of appreciation when restricting thefreedom to provide services in the gamblingarea, the proportionality-test and otherrestrictions in the State’s margin of appre-ciation, the actual purpose and justificationof the restrictions, the channeling-argu-ment and gambling advertisement, andfinally gambling addiction and justificationsof public health. Due to the limitedspace assigned to this piece, I will mainlyfocus on the issue of law, policy and facts inrelation to the proportionality-test. In alitigation context, the legal question in anutshell is: If the Government can’t provethat the policy in reality limits gamblingand that the marketing prohibition has pos-itive effects on public health, the policyconstitutes an illegal restriction on thefreedom to provide services granted by theEU Treaty.

The analysis of the EU law compati-bility needs to be done in the legal-politicalcontext of the tradition of Swedish publicmonopolies. Therefore, I cannot disregardthe case law of the CJEU regarding otherSwedish public monopolies. The highly

One of the most prevailing

Swedish myths is that the public

Swedish gambling monopoly is

designed to limit gambling and thereby

prevent detrimental public health effects.

Nowadays, there is an overwhelming

consensus that, during the last 20 years

or so, there has never been a true pub-

lic ambition to limit gambling.

ON LAW AND POLITICSOF THE

SWEDISH GAMBLING MONOPOLY By Ola Wiklund

Jurisdictional Update: Sweden



relevant comparison between the Swedishalcohol monopoly and the gaming monop-oly is central. The comparison is above allessential for the understanding of the roleof the principle of proportionality.

In Gourmet, a prohibition againstadvertising of alcohol products wasdeemed a disproportionate restriction ofthe freedom to provide services and struckdown by the Market Court (last instance,case 2003:5) after a preliminary rulingrendered by the CJEU (Case C-405/9).

The Swedish Government has con-stantly held that Gourmet cannot serve asauthority in cases concerning restrictionsin the gambling area since the sale ofalcohol is permitted in Sweden and that theoffering of gambling services is not. Thisargument cannot be accepted.

Gambling services are not prohibitedin Sweden. The state-owned companiesoffer a wide and well-developed range ofgambling services. The public monopolyhas through intense and active marketingover the years allowed the gambling marketto flourish. It is also legal to offer gamblingservices to Swedish customers from foreignjurisdictions.

Sweden has a state-monopoly forretail sales of alcohol in place which issafeguarded by harsh restriction on privateimports, availability, marketing and con-sumption. These restrictions stand in starkcontrast to the gambling restrictions.

Therefore, it is relevant to make a legaland factual comparison between the Gourmetcase and the restrictions in place on the gam-bling market for the purpose of establishingwhether they are proportional or not.

In Gourmet, the Government rightlyinvoked the public health

argument. There existsstrong empirical evi-

dence for public health risks in connectionto the consumption of alcohol.

According to the Government and itspublic authorities, The Swedish NationalInstitute of Public Health (SNIPH) andThe National Board of Health and Welfare(NBHW), there are no coherent opinionson whether addiction to gambling consti-tutes a serious health problem. However,the detrimental effects of drinking arefirmly scientifically established. Vast sumsare therefore spent to prevent negativehealth effects of drinking. The figure onspending to combat the negative healtheffects of gambling is miniscule in com-parison.

The overwhelming majority of gam-bling services offered by the State compa-nies are not subject to any significantrestrictions. They are in principle freelyoffered by these companies and their mid-dle men which consist of privately ownedbetting shops. Even though some restric-tion of fine tuning character has beenintroduced, it is still possible for an under-age teenager to spend vast amounts ofmoney on public gambling services offeredby the State companies through the privategambling shops. The governmental super-vision of the numerous and geographicallyscattered gambling shops is still negligible.

The state-owned companies are someof the largest buyers of advertising on theentire Swedish advertising market. This isstill the case after some minor cuts as aresult of the doubts and critique expressedon the legality of the restrictions expressedby domestic courts (notably the SupremeAdministrative Court) and authorities suchas the EU-commission. The marketing ofthe public gambling services embraces allmedia: papers, TV, PR, sponsoring, edito-rial content, specially produced TV-pro-grams, and so on. No specific restrictions

on gambling marketing applicable to theState-owned companies exist.1

This policy, aimed at increasing gam-bling in society has been consistent over theyears. It has led to increased availabilitythrough the introduction of new productsand development of old ones. As a directconsequence gambling in Sweden haspeaked and is now an integral part of thepublic culture. Consequently, the State rev-enue from gambling has struck new recordlevels. It is difficult not to conclude that theprime objective of the Swedish policy is toencourage consumers to gamble andthereby strengthen the State’s purse.

The discrepancies between theSwedish alcohol and gambling policy arestriking. It is therefore highly relevant tolook closer on the proportionality-testconducted in Gourmet. The Market Courtconcluded that since the Swedish consumersalready have access to many sources ofalcohol marketing, the prohibition haslimited effect in relation to the purpose ofprotecting public health.

If this test is applied to the gamblingmarket, which is flooded with gamblingadvertising, it is evident that the prohibi-tion against marketing of foreign gamblingservices lacks any public health effects. TheGovernment and the Swedish GamingAuthority (Sw. Lotteriinspektionen) pres-ent no evidence whatsoever to sustain thepositive public health effects of the prohi-bition to promote participation in foreigngambling services offered on the Internet.

The fact that the Swedish Govern-ment and its responsible health authoritieshave no recourse to scientific evidenceconcerning the causal link betweengambling advertising and negative effectson public health, and doubts whether a con-nection even exists, makes the conclusioninevitable: The Swedish prohibition in

Jurisdictional Update: Sweden


The overwhelming majority of gambling services offered by the State companies arenot subject to any significant restrictions. They are in principle freely offered by thesecompanies and their middle men which consist of privately owned betting shops. Eventhough some restriction of fine tuning character has been introduced, it is still possiblefor an underage teenager to spend vast amounts of money on public gamblingservices offered by the State companies through the private gambling shops.

“

”


Article 38 of the Lotteries Act against adver-tising of foreign gambling services does notsurvive the proportionality-test.

In this context it is important to note thatthe Swedish Government has not considered ifthere exist less restrictive means than the Statemonopoly (market regulation, licenses, enhancedsupervision and control) to meet the suggestedobjective of public health.

To conclude, the legal and factual compari-son between Gourmet and the case of the legalityof the gaming monopoly is indeed relevantbecause it reveals profound and importantdiscrepancies with crucial significance for theassessment of the proportionality of the restric-tions of freedom to provide gambling servicesin Sweden.

But let us take the alcohol-comparison onestep further. The CJEU’s judgement in theRosengren case (C-170/04), a case that also con-cerned the Swedish alcohol monopoly, focusedon the relevance of the proportionality-test.The Rosengren case was about the Swedish reg-ulations for private importation of alcoholic bever-ages, namely, the regulations which hinder theselling from over the border of alcoholic bev-erages to private persons residing in Sweden.The CJEU defined, differing with two generaladvocates, a monopoly’s special function verynarrowly.

The Court pointed out that a monopoly’sspecial function according to the law on alco-hol consists of a sole right to sell alcoholicbeverages to consumers in Sweden, excludingrestaurants. With that it could be stated that asole right did not cover the importing of namedbeverages. The CJEU thus found that privateimport limits did not affect the monopoly’s exer-cise of their special function, and consequentlydid not have anything to do with the existenceof the monopoly.

The Court subsequently tried the privateimport regulations against the background ofthe proportionality principle and did not approvethe Swedish regulations. The Rosengren caseshows that the proportionality principle has alarge significance as a compliment to the prin-

ciple of equal treatment. In the judgement, theCJEU ruled that the Swedish prohibitionagainst private imports is based on social policyconsiderations and would not lead to dis-crimination or indirect protection of domesticproducts. Thus, the Swedish regulations werejustified as being in the public interest and inkeeping with the principle of equal treatment.

However, in performing a proportionality-test, the CJEU went further and investigatedwhether the Swedish policies were effective inrelation to their original purpose. It was in thissense that the Swedish system could not bejustified. According to the CJEU, the prohibi-tion against private importing could not bejustified for public health reasons when the stateretail monopolist Systembolaget in any casewas obligated to meet customers’ demand forimported products. A complete prohibitioncould not either be justified on the basis of agecontrol since in part Systembolaget deals witha very broad sphere of people and in part becauseit accepted less than 100% control of age whenit delivered goods to end customers throughmiddlemen.

The Rosengren case further shows with alldesired clarity that the Court’s rulings that werefounded on articles 28 EC and 31 EC are essen-tially different. In the Franzén case (C-189/95),which was confirmed in the Hanner Decision (C-438/02), the CJEU considered it sufficient todetermine that the equal treatment principle, in-cluding the structural guarantees for equaltreatment, were respected. The proportionalityprinciple became only relevant outside of thearea applicable to Article 31.

The CJEU normally turns over the finaldecision regarding the assessment of propor-tionality to the national courts. The ratio behindthe CJEU’s turning over of the proportionalityissue in its preliminary rulings is that within theframework for those proceedings it is not com-petent to speak on issues of national law.According to the preliminary ruling remedy, theCourt may only interpret EU Law and review itsvalidity. It is the national courts that are to apply

1 In the late 1990s, the state controlled operators were the largest investors of the entire Swedish advertising market. Presently, the same companies are the single largest investors of marketing on the gaming market. See annual reports of Svenska Spel and Lotteriinspektionen 2013-2015.

2 The relevance of the judgment in Sjöberg and Gerdin (joined cases C-447/08 and 448/08) is therefore limited. It neither assessed the proportionality on the basis of facts nor in relation to the invoked grounds for justifications: public health and public order. No proportionality-test was performed by the CJEU.

3 The freedoms legal base are presently: Articles 26 (internal market), 49 to 55 (establishment) and 56 to 62 (services) of the Treaty on the Functioning of the European Union (TFEU).

Dr. Ola Wiklund has been legalcounsel for major online gamingoperators since 2003. His sectorexpertise ranges from commercialand regulatory to M & A. He’s giving strategic regulatoryand commercial advice to globalcorporates in the sector. He’s thehead of Hansen Law’s Maltaoffice. He has also acted as counsel in proceedings before theEuropean Courts in Luxemburgand has represented clients in theEuropean Commission and theSwedish Competition Authority.

Ola Wiklund

Continued on page 39


Quick overviewBefore the 1st of January 2017, gaming andlotteries were regulated in the Act No.202/1990 Coll., on lotteries and other simi-lar games. Despite many amendments (intotal 15 amendments) it was obvious that the26-year-old regulation was no longer able torespond to the dynamic and fast growingmarket as is the gaming market. Withrespect to that, the Ministry of Financedecided to prepare the completely new regu-lation for this subject area of business.

The new regulation of gaming in the

Czech Republic consists of three separatelaws. It is the Act. No. 186/2016 Coll., ongambling (“Gaming Act”), the Act. No.187/2016 Coll., on gaming tax and the so-called Amendment Act, Act. No. 188/2016Coll., which promotes the newly adoptedregulation into other related prescriptions.

The mentioned package of new legis-lation has been approved by the Chamber ofDeputies, approved by the Senate andsigned by the President and went into legalforce as of 1st January 2017. The biggestnews which this new regulation of gamingin the Czech Republic brings is (i) enablingnon-Czech operators and (ii) (finally) en-abling on-line gaming.

The Czech market is strictly licenced.The licence is issued by the Ministry ofFinance, and it is illegal to operate on themarket without the gaming licence. Also, theonly valid gaming licence is the one whichhas been issued by the Ministry of Finance.Therefore, holders of licences issued by theUK, Maltese or any other regulatory agencycannot operate on the Czech market andmust apply for the Czech licence.

Those operators who will try to oper-ate without a valid licence will be punished

with a fine up to EUR 2 million, injunctionof operation or seizure of items. Comparedto previous legislation, the merit of the ad-ministrative offences has been extended andnow contains more than 70 different admin-istrative offences. In some cases, accordingto the Czech criminal law, operating withouta valid licence could be considered as a crim-inal offence. It is fair to say that the new reg-ulation could be considered as very strict.

Besides that, the Ministry of Financewill create a “black list” of illegal operatorsand then will require Internet serviceproviders and payment providers to blockthose black-listed operators. This provisionbrought big attention in the Czech Republicbecause some interest groups think that thisprovision is against the freedom of Internetand tried to remove it from the Gaming Actby the complaint to the Constitutional Courtof the Czech Republic. So far, this grouphasn’t been successful.

Conditions for the licenceAccording to the Gaming Act, the Czechgaming market will be formally opened forbusinesses located not only in the CzechRepublic. With respect to that, applicants

The former Czech gaming legisla-

tion violated EU law in not enabling

entities from other EU countries to

operate gaming in the Czech Republic,

so the Czech Republic was essentially

forced to offer a piece of the Czech

market to foreign casino operators. But

is this accurate? Let’s take a closer look

at the conditions of the new gaming

licence in the Czech Republic.

THE NEW GAMING REGULATIONIN THE CZECH REPUBLIC

An opportunity for non-Czech casino operators?

By Jakub Kolomicenko

Jurisdictional Update: Czech Republic


for the Czech gaming licence may be eitherfrom the Czech Republic but also legalentities having their registered office in theEuropean Union, or in a country that is acontracting party to the Agreement on theEuropean Economic Area.

Besides the mentioned above, theapplicant must have:

• Transparent ownership structure;

• Proper organizational structure;

• Satisfaction of material, personneland organizational requirements;

• EUR 2 million of its own equity;

• No debts towards public authoritiesand a clean criminal record;

• No liquidation or bankruptcy;

• Security deposit of approximatelyEUR 2 million (amount of depositdepends on type of operating games,as specified below);

• No disturbance of public order; and

• Proper operation of gaming guaranteed and appropriate technicalequipment ensured.

According to the Gaming Act thelength of the application process should notexceed 60 days. However due to the lack ofsecondary legislation, serious delays in amatter of months are expected. To the dateof drafting this article, only one gaminglicence has been issued and the rest arepending. The secondary legislation shouldhave been effective during summer 2016;however the deadline has been extended tosummer 2017. The current situation is con-fusing when both operators and the Min-istry of Finance do not know what shouldbe required. Licences issued before theeffective date of the Gaming Act were notextended, supplemented or prolongedwhich means that the existing authorisa-tions will remain valid. But once theirvalidity expires, such operators must applyfor a licence under a new legislation.

For operators of bingo, technicalgames and live games, the so-called two-phase authorisation scheme is required.First, such operators must obtain thelicence from Ministry of Finance (the basiclicence), and then a permit to locate thegaming room. Such permit is granted bythat municipal authority in whose districtgambling games will be operated.

GamesThe Gaming Act defines what is gamblingand states the types of gambling gameswhich can be operated in the Czech Repub-lic. The games are: a lottery; an odds bet; atotalizator game; a bingo; a technical game; alive game; a raffle and small size tournament.

The list stated in the Gaming Act isexhaustive, i.e. it may not be expanded oraltered, and for this reason no other gam-bling games may be organised.

The DepositAs mentioned above, the deposit should bepaid together with the general gaminglicence. And on top of that, for the land-basedoperators, there is also the second deposit forgambling premises location licence.

The amount of the deposit is deter-mined from the type of the game but formost of the games the amount is from EUR1 – 2 million per each type of game. So, forexample for an online casino with technicalgames and live games the deposit is EUR 4million. The funds must be deposited to aspecial account of the Ministry of Financeor as a bank guarantee that will be acceptedby the Ministry. The deposit placed into thespecial account of the Ministry must remainin the account in full during the entire periodof the basic licence.

A similar approach is used in the caseof a deposit for gambling premises locationlicence. The deposit could be deposited tospecial account of the Ministry or the bankguarantee could be used. The amount isagain determined by the number of casinosor gaming halls and the average amount isEUR 1 million.

Protection of playersThe Gaming Act establishes a meticulousprotection of players. Only Czech residentscan have a full customer account. Especiallywith on-line gaming it is unusual. Duringthe registration, their personal informationshould be checked and compared with thedatabase to prevent from gambling: minorsunder 18, those who will be in insolvency,are on benefits or have a court ordered banon playing.

Furthermore, all information related tothe operation of any gambling game mustbe easily accessible in the Czech language.For the type of game, where it is possible,the operator is obligated to allow the playerto set self-limiting measures protecting play-ers from harmful effects of gaming. The

individual player can set up his own limitsfor losses over a certain period as well as hisown exclusion from gaming. Other obliga-tion of the self-measures for the operator isto allow each player to set a maximum bet-ting limits and losses. When these limits aremet, the operator has an obligation to pro-hibit the player from further participation.

TaxesThe taxation of income from gambling wasa big issue during the whole legislativeprocess. Firstly, it was suggested that thegaming tax for casino games should be 40% from the gross gaming revenue. How-ever, an amendment has been approved sothe gaming tax has been set on 35 % fromgross gaming revenue for technical gamesand 23 % for sports betting, lotteries, livecasino games, horse betting and bingo. Ontop of all that, there is a basic 19 % corpo-rate income tax, which makes the taxationof gaming in the Czech Republic one of thehighest in whole Europe.

SummarySo, what is the conclusion of this article andthe answer to the opening question?

As it has been mentioned above, theprinciples of the new regulation containnumbers of problematic provisions. I am surethat most of the gaming lawyers welcomeregulated markets. And I also believe thatclearly and fairly set regulation is the waygaming should progress. However, in thecase of the Czech Republic, I unfortunatelybelieve that the new regulation is not fair andis definitely not clear. Due to huge set-upfees, deposits and taxation, the Czech Repub-lic will be a playground for a few major play-ers and will not be so attractive for other smallercompetitors or start-ups, not to mention the lackof secondary legislation and overall uncer-tainty that one must face with the applica-tion for a licence. I am afraid that the newlegislation will not bring more income to thestate treasury but will lead to the growth ofthe grey and the black market. �

Jakub Kolomicenko is Head of legaldepartment in company EndorphinaLtd., which develops on-line casinogames. Jakub started his practice as acorporate lawyer and member ofCzech Bar Association but then hechanged his focus and as an in-housecounsel specialises on IP law and all

aspects of gaming law namely licensing, regulations andcompliance. He can be reached at [email protected] skype legal.endorphina.


Jurisdictional Update: Illinois

Background of the Illinois Video Gaming ActIn July 2009, Illinois enacted the VideoGaming Act (VGA) (230 ILCS 40/1 et seq.),which legalized the use of video gamingmachines within certain licensed establish-ments, including bars, veterans organiza-tions, fraternal organizations, and truckstops. The Illinois Gaming Board ischarged with licensing and regulating the

industry under the VGA. The video gam-ing machines the VGA authorizes aresimilar to those found in Las Vegas andIllinois casinos, and include video poker,video blackjack, and line-up games. Sincevideo gaming machines first went “live” onOctober 2012, the industry has growntremendously. As of January 2017, therewere over 25,000 video gaming machinesin almost 5,800 locations.

The VGA requires that the videogaming machines be owned and operatedby licensed terminal operators, who inturn place and maintain the machines atlicensed locations. 230 ILCS 40/25. Upto five video gaming machines may beplaced in each licensed establishment onlyif the establishment has entered into awritten “use agreement” with the licensedterminal operator for the placement of themachines. 230 ILCS 40/25(e). A “useagreement” is defined as a contract betweena licensed terminal operator and a licensedestablishment prescribing the terms andconditions for the placement and operationof video gaming machines at the estab-

By William Bogot

POWER PLAYIllinois Gaming Board GrantedExclusive Jurisdiction to DetermineValidity of Video Gaming Contracts

In J & J Ventures Gaming, LLC et al v. Wild, Inc. et al., 2016 IL 119870, the

Illinois Supreme Court held that the Illinois Gaming Board, not the circuit court,

has exclusive jurisdiction to determine the validity and enforceability of agree-

ments for the placement and operation of video gaming machines in gaming route

locations. However, the J & J Ventures Gaming decision may have raised more

questions than it answered. There is disagreement as to the breadth and scope

of the Court’s mandate, and questions as to the constitutionality of the Board’s

emergency rules to implement that mandate.

The Illinois Supreme Court (top) held that theIllinois Gaming Board, not the circuit court,has exclusive jurisdiction to determine the validity and enforceability of agreements forthe placement and operation of video gamingmachines in gaming route locations.


lishment. According to the IGB’s regulations, a use agreementmay be assigned only from one licensed terminal operator toanother. 11 Ill. Admin. Code 1800.320(d) (2010).

Hundreds of Overlapping Use AgreementsAfter the enactment of the VGA, many locations signed puta-tive use agreements with multiple terminal operator appli-cants. Some bars and other establishments signed exclusiveagreements with three or four different aspiring terminal opera-tors, and when these operators all became licensed by the gam-ing board, litigation ensued in courts across the state over whichoperator had the exclusive right to place their video gaming ma-chines in the locations.

In J & J Ventures Gaming, LLC v. Wild, Inc., 2015 IL App(5th) 140092, affirmed by J & J Ventures Gaming, LLC v. Wild,Inc., 2016 IL 119870, ¶ 45, an unlicensed operator entered intoagreements with various business locations granting it the exclu-sive right to place video gaming terminals in those locations, andthen assigned its rights in those agreements to Action GamingLLC, an unlicensed terminal operator applicant. The IGB issueda preliminary notice of denial for Action Gaming’s terminaloperator application, and Action Gaming then sold its rights tothe agreements to J & J Ventures Gaming, LLC (J & J Ventures),

a licensed terminal operator. Around the time of this assignmentto J&J Ventures, the business locations signed separate locationagreements with Accel Entertainment Gaming, LLC (Accel),a licensed terminal operator. Thereafter, J & J Ventures sued inthe circuit court seeking a declaratory judgment that it had theexclusive right to operate video gaming machines in the subjectlocations. Accel intervened and alleged that the location agree-ments assigned to J & J Ventures were invalid because they didnot comply with the Act and the Board’s regulations. The appellatecourt was tasked with determining the validity and enforceabil-ity of the exclusive location agreements and the assignments.According to the appellate court:

The central issue in this case concerns whether theexclusive location agreement, entered into between unli-censed entities, can control the placement of video gam-ing terminals once the agreement is assigned to a licensedterminal operator. Resolution of this controversy necessar-ily involves a determination of whether the original con-tract along with the series of subsequent assignmentsconstitute a valid “use agreement” under the Act andunder the regulations enacted by the Gaming Board.


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J & J Ventures Gaming, 2015 IL App(5th) 140092 at ¶ 30. The appellate courtdecided, sua sponte, that only the IGBcould make such a determination, and thatthe gaming board has exclusive jurisdic-tion over the matter. Id. ¶¶ 30–32, 64.

The case was appealed to the IllinoisSupreme Court, and at that time the Illi-nois Gaming Board intervened in the case.The board argued that “[i]t is impossibleto declare the agreement between J & JVentures and Wild valid without firstdetermining whether it meets the stan-dards of a use agreement under the VideoGaming Act and the Board’s regulations,”and that the Board has exclusive jurisdic-tion to make that determination. TheIllinois Supreme Court agreed and affirmedthe appellate court decision. According tothe Illinois Supreme Court, the legisla-ture’s intent to vest original jurisdictionin an administrative agency may be“discerned” by considering the statute asa whole and whether the legislature enactsa comprehensive statutory scheme thatcreates rights and duties that have nocounterpart in common law or equity. J& J Ventures Gaming, 2016 IL 119870 at¶ 23-24. In this case, the Illinois SupremeCourt held:

By legalizing the use of videogaming terminals for commercialgambling purposes, the legislatureenacted a comprehensive statutoryscheme, creating rights and dutiesthat have no counterpart in commonlaw and equity. Considered in itsentirety, this statutory schemedemonstrates the legislature’s ex-plicit intent that the Gaming Boardhave exclusive jurisdiction over thevideo gaming industry and the useagreements that are a necessary pre-requisite of engaging in that indus-try. The Act, therefore, confersauthority on the Gaming Board todetermine the validity and enforce-ability of contracts that purport tocontrol the location and operationof video gaming terminals withinthe licensed establishments.

Id. at ¶ 32.

Where Do We Go From Here? Following the Illinois Supreme Court’smandate, in February 2017, the IllinoisGaming Board issued emergency regula-tions1 for the agency to accept and ruleupon disputes as to the enforceability andvalidity of video gaming use agreements.41 Ill. Reg. 2704, effective February 24,2017. According to those emergency reg-ulations, the board shall decide a petitionbrought by a terminal operator or videogaming location alleging that a use agree-ment, or portion thereof, is invalid orunenforceable, including whether a useagreement complies with the require-ments of the VGA and the correspondingregulations. Id. This much appears to bein accord with Supreme Court’s mandatein J & J Ventures Gaming. However, theemergency rules also provide that thegaming board shall decide which useagreement will control if there are two ormore use agreements between a videogaming location and one or more terminaloperators with overlapping periods,whether a terminal operator has usedcoercion, deception or improper induce-ment to persuade a video gaming locationto enter into a use agreement, andwhether any automatic renewal provisionin a use agreement constitutes an undueburden on the video gaming location. Id.at 2704-2705. There is disagreement as towhether the Illinois Supreme Court’s de-cision granted the gaming board jurisdic-tion to determine these additional mattersthat are traditional common law contractissues. The emergency rules also providethat the petitioner bears the burden of

proof by clear and convincing evidence.Id. at 2705. This burden of proof, beinghigher than it would otherwise be for suchcontract claims and defenses in the cir-cuit court, may be constitutionallyproblematic.

In addition, there is a disagreementas to how these procedures will or shouldbe applied. For example, say a video gam-ing location refuses to allow a terminaloperator to place video gaming machinesat the location contrary to the parties’ useagreement. Does a terminal operatorhave to essentially exhaust its adminis-trative remedies and get a gaming boardfinding that its use agreement is valid as aprecondition to court action even when noparty is alleging that the use agreementfails to comply with the VGA and the reg-ulations? Or, can a terminal operator filea direct action for specific performance ordamages in court, and then only if thedefendant files an answer alleging that theuse agreement is invalid or otherwiseunenforceable does the action get stayedwhile the parties are required to petitionthe gaming board for a determination asto the validity or enforceability of the useagreement?

One thing is certain: with all the liti-gation over use agreements in Illinoissince the enactment of the VGA, thesedisagreements will likely find their wayback into court. �


William Bogot is a partnerwith Fox Rothschild LLP in the Chicago, Illinois office. Bill represents clientsin highly regulated indus-tries. He has worked for allthree branches of the Illinoisgovernment: the executive,legislative and

judiciary. However, Bill represents clients nationwide, both in regulatory matters and civillitigation. As a former legal adviser to the IllinoisGaming Board (IGB), Bill authored much of Illinois’ gaming regulations and advised the IGBand the governor’s office on all aspects of gaminglaw and regulation. Bill draws upon this and hisother government experience to counsel clients ingaming and other industries that have regulatoryoversight. He can be contacted at [email protected] or 312.517.9205

1 Emergency regulations are good until permanent regulations are adopted, but no more than 150 days.

There is disagreementas to whether the IllinoisSupreme Court’s decisiongranted the gaming boardjurisdiction to determine

these additional matters that are traditional common law

contract issues. The emergencyrules also provide that the petitioner bears the burden

of proof by clear and convincing evidence.

“

”


oday small or large casinos are looking for inno-vations with technology to increase the potentialof protecting revenue streams and to helpmigrate from analog systems to digital solutionswith integration capability now available in the IP(Internet protocol) world. This means that the

technology selected must offer a solution that is scalable and thatcan grow with the operation. Globally, gaming operations areinvesting in technology to increase the revenue potential of thebusiness enterprises that today include the use of IP NetworkedVideo Surveillance Solutions. This trend requires training andre-thinking of regulatory standards that keep pace with the levelof innovation HD (high definition) cameras and software pro-vide, as well as business continuity during technology refresh andthe impact this will have for mitigation of claims, disputes, risk-management and scams for gaming lawyers.

Of concern is today’s restrictive budget for surveillance andsecurity operations. Through planning being able to achieve atechnology refresh in a phase to phase transition with supportfrom property I.T. (information technology) departments, themanufacturer’s system engineers can guide the surveillance teamto make the best decisions.

Marisel Melendez, the surveillance director for Casino DelSol in Puerto Rico, started with the installation of a temporarysystem in the surveillance room to test its capabilities and userfriendliness. Marisel said, “We wanted to see how easy it wouldbe for the solution installation and which challenges our infra-structure of existing cable and camera infrastructure offeredthem. The test shots of HD cameras and encoder technology onour analog cameras was a success, providing our casino greaterclarity and the casino executives the best video evidence to makeinformed decisions for claims, disputes and any scam we mighthave to deal with in the future.

Puerto Rico is a highly regulated jurisdiction and not only dowe have the PR Tourism Company’s Gaming Division, but wehave to be in compliance with all federal (US) laws related to antimoney laundering policies and protection of financial informationamong others. Having a strong camera system enhanced ourcapability to audit transactions and identify and record incidents.

We also had to replace our existing system without inter-ruptions on the recording and without losing operating hours.Some of the challenges that we resolved were:

1.Replacing obsolete equipment recording less than 20 fps(frames per second). As required by regulations we had

to get a system able to provide storage capabilities to be incompliance, and of course within budget.

2.We needed a system capable to record our existing analog cameras in an IP environment and the addition

of HD (high definition) cameras capable of from 1 to 29megapixels depending on our needs property-wide for riskmanagement, guest safety, game protection and the publictrust.

3.The system has to be scalable for the gradual replace-ment of our aged analog cameras and as a planned

expenditure.

4.User friendliness for surveillance, security and casinostaff, many who are not efficient with computer use.

5.A program that facilitated production of recorded videoevidence that meets legal and regulatory compliance

and that offered different formats exporting the best evidence for recording quality, video management and digital storage space.

6.Installation without interruptions to the monitoring ofa 24/7 casino operation.

T

By Douglas Florence Sr., CPP, Marisel Melendez, MS and Ronald Flores, CSP

HD Video Surveillance & TrainingHow the Trend is Impacting Legal and Regulatory Decisions for Dispute and Claims Resolution



7.System needed to be in compliance with the PRTCGaming Division requirements in terms of image

quality and storage capability.

All challenges overcome, we started the migration. Thesurveillance agents are really satisfied with the network videosurveillance solution and the time spent for investigations andclaims resolution was decreased significantly. The below picturesshow the before with analog and after with improved clarityusing the 2 mega-pixel camera, both in real-time record rates.”

Innovation is driving the trends for the adoption of newtechnologies which must include training programs and how tobest use the technology for the benefit of the property. RonaldFlores, CSP a Gaming Commissioner for Pechanga GamingCommission and a Surveillance Executive, says that “training isalso a significant contributor for surveillance that must establishintegrity for the property, Integrity becomes difficult to main-tain due in part to some people that do not carry or support themessage. Oftentimes surveillance is treated as if we are not ofvalue; we must make ourselves invaluable. So today, we have tohave the intestinal fortitude to stand up and speak the truth. Asit has been said, truth is defensible.

Many times we bring in new agents they are trained on tablegames because these games are believed to be most vulnerable,but at what cost do we train on those same tables? Our trainingneeds to be broadened by leaps and bounds; our surveillancegurus like Darrin Hoke and Douglas Florence have shown ourneed for understanding the IT side of the industry. Often therookie or the tenured agent gets a call from purchasing, retail,or warehouse and they have no clue as to what to look for or whatprogram to use, who to call to get the paper trail of data fromthe purchasing director or restaurant deliveries. That is a vulne-rablilty equally as dangerous as the table games.

IT has steadily become a department without which wecannot live. As we all know those who hold the keys are thosewho have the greatest risk of fraud and theft. Who watches IT?How do we regulate the information from IT to our slot system,our rewards club, our marketing people? What is being givenaway for free? Unless we move forward with our surveillancedepartment’s understanding of Dataveillance and how it works todirect us to potential fraud or losses, we will be left behind. Wehave started with our surveillance agents having a better unders-tanding with training in ethical hacking and security level certifi-

cations. This will help us to move into the future by understan-ding programs, how and why they are made and understandinghow those programs can be cheated along with RFID cards.

Ronald recently attended a conference where he saw twotable games directors have a very big difference of opinion; thefirst one says “Training! We need training” while the second says“Technology! Training is not necessary because of the level oftechnology.” Ronald believes it will have to be a marriage of bothand most of us in the technology sector would have to agree. Wecan never forget the oldest scams are always the best. Does RFIDtechnology or the smart-shufflers keep the daub, nicks, sands andall other markings off of the cards? To achieve a false shuffle do youkick out the plug or step on the cord and rip it out of the machine?Our business is based on decisions made by the hour for revenue sodo we have to be able to shuffle and get hands out when technologyfails? All it takes is the fear of not generating revenue.

With education and training providing a significant contri-bution to the gaming industry as innovations continue, atten-dance at IMGL conferences and other events where experts intheir fields from the IMGL discuss matters impacting GamingLaw today is critical. Douglas Florence Sr., CPP VP for AffiliateMembers for the IMGL is also the ASIS International CouncilChair for the Gaming and Wagering Protection Council provi-des sessions for security, surveillance and investigations.

In conclusion, the use of HD video is truely driven by theglobal consumer market that has been using HD in their homesand businesses for almost a decade. What mobile telephonedoesn’t have a camera with megapíxel power? Shouldn’t ourcasino operations meet this level of video clarity combined withgood “dataveillance” and proper training? There are some gamingattorneys, regulators and casino executives who are making moreinformed decisions today because of the innovations of techno-lolgy while improving the public trust. �

ANALOG image Casino Cage. 2MP HD Image Casino Cage.



Douglas L. Florence Sr., CPP has over 40 years of securitymanagement experience that includes retail, corporate securitymanagement consulting, risk management and investigations.He is a recognized gaming and hospitality security/surveil-lance subject matter expert contributing to numerous docu-mentaries and interviews. Authoring over 60 articles oninvestigations, case resolution using technological aids and

behavioral observation techniques. Douglas, served as the founding Council Chairfor the ASIS Int’l Gaming & Wagering Protection Council founded in 1996 andhas served as the Vice President of Affiliate Membership for the IMGL Interna-tional Masters of Gaming Law 2008-2017. [email protected]


trip to the casino can mean fun, excitement,and hopefully financial rewards. Yet withthousands of people visiting casinos eachday across the country, even when everysafety precaution is taken, accidents can

happen in casino restaurants, hotels, nightclubs, and in thegambling areas.

According to a study conducted by the American GamingAssociation, U.S. casinos had a $240 billion economic impactin 2013. Unfortunately, with all of that money at stake, casinosare seen as a mecca to the plaintiff ’s bar. In fact, a number ofattorneys have specifically targeted casinos in their advertis-ing. Lawyers in New Jersey, Las Vegas and Florida’s GulfCoast have focused blogs and websites on advising clientsregarding claims against casinos. “People just figure, well thecasinos have a ton of money so they can afford to pay theseclaims,” indicated one prominent Las Vegas attorney.

The types of casino incidents these plaintiff attorneystend to seize on include food poisoning, shuttle bus accidents,broken slot machine chairs, burns, and assaults — but by far,the most commonplace (and most costly to the property own-ers) are slip and fall accidents. With tens of millions of peoplevisiting casinos each year, a disproportionate share of the costsassociated with slip and fall claims rests with casino operatorsand their insurers.

The most common causes of slip and falls are obvious, andit would seem because of this, easy fixes, but those don’talways happen. We will take a closer look at the some of themost common causes for slip and fall accidents and steps thatcan be taken toward preventing them in the future.

Common causes of slip and fall accidents(and how to help avoid them in the first place)First, it’s important to examine some of the most commoncauses (direct and indirect) of slip and fall accidents. Directcauses are such things as spilled liquids, food, cracked or brokentiles, mats, cracked or broken sidewalks, uneven steps, ice andsnow, potholes, and physical obstacles. Indirect causes includeinadequate or dim lighting, and missing handrails orguardrails, among other things. Some of the most commoncauses include:

Wet Floors. Food or beverages, rain, snow, and ice can bedeposited on the floor or tracked into buildings. In reviewinghousekeeping, maintenance, and cleaning policies, floors shouldbe cleaned during non-peak hours and the premises inspectedon a consistent and routine basis. Audits should be conducted,and performance tracked and maintained. Caution/warningsigns need to be placed in close proximity to the actual spill orwet area. These signs should be sufficient in number and placedin a timely manner so as to provide proper warning.

Ice and Snow. A business is responsible for the sidewalks,parking lots and landscaping on their property. Walkways mayinclude areas outside the sidewalks. In most cases, the law doesnot require a business owner to remove snow and ice off theproperty. However, if the weather causes an unusually heavyaccumulation of snow on the roof, and that snow then melts

Casino Slip and Fall Accidents How Notto Gamble

With SafetyBy David B. Willis

A




and drips off onto the sidewalk and freezes onthe ground, the business owner could be heldresponsible for an injury resulting from the icecreated by the melting and refreezing.

Misplaced Physical Objects. Misplaced mats,furniture, door stops, moldings, fallen merchan-dise, power cords or wiring can all be the sourceof a slip and fall injury.

Congested Means of Ingress and Egress.Business owners must ensure adequate means forpatrons to enter and exit the building or premiseswithout severe congestion. Heavy amounts ofcongestion through obstructed areas could cause a business ownerto become liable for injuries stemming from the congestion.

Inadequate Lighting. Dim or inadequate lighting can result inliability by hiding hazards such as steps, curbs, potholes or un-even pavement (and it can also invite criminals to assault or stealfrom patrons).

And a Note about Sidewalks. In some jurisdictions, the busi-ness owner is responsible for maintaining the sidewalk adjacentto its property. In other jurisdictions, the business owner andgovernmental entity share the responsibility for maintaining thesidewalk.

Preventative steps can help avoid slip and fall accidentsIn addition to safety training, take time to survey a property –note potential hazards and take immediate action to eliminatethese hazards. These steps include:

� Maintain floors, sidewalks, aisles, and walkways at regularintervals.

� Provide regular training for employees regarding safetymeasures and protocols with immediate reporting.

� Create safety protocols and instruct employees in slip andfall safety – create incident reports. Instruct employees onprocedures for assisting customers who have fallen – emergency assistance police and rescue.

� Conduct regular maintenance of outdoor areas includingsidewalks, play areas, and parking lots and, monitor and repair landscaping, potholes, and lane markings, and removeobstacles.

� Maintain records of maintenance including actions to remove and repair conditions. Make sure governmental inspections are all passed and maintain proof of passingscores.

� Conduct daily safety surveillance of mats, carpeting floors,lighting, litter, fallen merchandise, and uneven or buckled flooring.

� Maintain proper liability insurance with periodic policy reviews.

� Improve safety through constant monitor-ing, setting benchmarks, and examiningpolicies and procedures.

Beyond these day-to-day safety proceduresand protocols, staff training, and monitoring/inspections to ensure the safety of the casinogrounds, there are also some “big picture” plan-

ning principles that can be im-plemented. For example, it’simportant to measure (and

record) the slip resistance ofall floor surfaces (both wetand dry) on the property.

A number of largegaming companies havestarted to address slipand fall concerns by con-ducting floor slip resist-ance testing, which

establishes baseline bench-marks using a tribometer set

to ASTM requirements in order toestablish both dry and wet coefficients of friction for insideand outside walking surfaces. They then monitor the findings andconduct routine audits to ensure compliance with standards (andpromptly take any corrective action as required). It is criticallyimportant to establish this baseline, in case of future claims.

Also, when considering the installation of new flooring,management should take the opportunity at the initial design andmaterial selection stage to ensure that appropriate design andmaterials are used, with safety top-of-mind. With respect to exist-ing floors, if the internal floor slip resistance testing demonstratesa below standard coefficient of friction, steps will need to betaken to replace or apply various treatments to bring the floor-ing up to standard. Implementing a science-based, measurable,benchmarked, and audited program can go a long way in limit-ing liability and capturing value for your organization.

One prominent east coast casino redesigned its main entry-way and parking lot entrances and exits using many of theseprinciples, which resulted in a significant reduction in slip and fallincidents and thus, the corresponding costs associated withthese incidents. By creating a culture of safety, the impact of im-plementing these measures has resulted in a reduction in totallosses of nearly 15% and a reduction in the revenue required topay these losses of almost 18%.

What to do if a slip and fall accident occursUnfortunately, even when all of the necessary safety precau-tions are in place, slip and fall accidents can still happen.Casino owners and operators should train staff (and periodi-cally conduct drills on these slip and fall protocols) to make sureeveryone is prepared and trained for what to do, as the likely

Continued from previous pageBy creating a cultureof safety, the impactof implementingthese measures has resulted in a reduction in total

losses of nearly 15%and a reduction in therevenue required topay these losses of almost 18%.

”

“Casino Slip & Fall


first responders to slip and fall incidents:

� Offer assistance – immediately call for medical attention, police, and other first-responders, as appropriate.

� Gather documentation – prepare a comprehensive incident report, including witness statements and contactinformation, and a statement from the injured party.

� Secure video surveillance footage and/or take photo-graphs of the scene and the claimant (if they allow you).

� Report the incident to risk management, legal and the insurance carrier.

� Follow-up with claimants within 24 hours. Let themknow of your concern, and find out if they sought medical attention. Also have a corporate representative contact them within a few days, and maintain records ofall contact (and outcomes). If the area of the fall is defective, make sure building operations and risk management are aware of the hazard so that it can be repaired as soon as possible.

� Preserve evidence, i.e. a mat, floor tile, etc. DO NOT conceal evidence. It can result in additional damages froma separate cause of action for spoliation of evidence.

� Monitor for and keep record of social media postings bythe claimant/plaintiff.

Slip and falls may still happen, so what’s next? Even with the best of intentions, and with industry leadingpolicies and procedures, proper vigilance and pro-active main-tenance and repair, slip and fall accidents will still occur. Forproperty owners in the casino or hospitality industries, it iscrucial to develop world class legal protocols designed to limitliability and manage slip and falls when they do happen.

All strategies begin with an initial assessment oraudit. Establishing benchmarks through measurementand then implementing constant monitoring followed up byauditing those results will create a culture of safety that willproduce measureable cost savings. This culture of safetymay involve creating custom models designed to addressspecific concerns or more broad applications to addresssystemic problems.

In the final analysis, creating a culture of safety will pro-duce a significant reduction in litigation costs. Even thoughslip and falls may be a cost of doing business in a highly prof-itable and visible industry such as gaming, the safety ofguests, staff and other visitors does not have to take a backseat to profit. �

EU Law in each individual case. In the Rosengren case, however, the CJEU did not confer to

the Swedish Supreme Court, which requested a preliminary rul-ing, any independent latitude for action. The preliminary rulingleft practically no discretion to the Swedish Court and effectivelysettled the case.

As was clear, the proportionality principle’s significancehas varied when it concerned the Swedish alcohol and pharma-ceutical monopolies. The foundation upon which the monopolieswere built has not been subjected to any proportionality test. Thereason for this, as became apparent, was that no proportionalitytest had been done up to this point under the framework ofarticle 31 EG. Only when measures fall outside the areas ofapplication of this article, such as in the Gourmet (see above) andRosengren cases, has the proportionality principle had any decisivesignificance.

The Swedish gaming regulation allows offering, participa-tion and marketing of cross-border gaming services, and theGovernment owns and controls two of the major gamingproviders and marketing investors on the Swedish market. Fromthe point of view of the consumer, the market is flooded witheasily accessible gaming products and marketing messages. Theactual design and concrete functioning of the Swedish regula-tory regime makes it impossible to claim that Swedish pub-lic policy aims to limit gambling in society. Moreover, very fewrestrictions exist for foreign private operators to offer and mar-ket gaming services to Swedish customers.2

Hence, the EU legal question in a nutshell is whether theremains of the Swedish gambling monopoly—the prohibition topromote participation in cross-border gaming services, seen as arestriction of the right to freely offer services cross-border in theEU—could be justified on grounds of public health or public order.

It seems fairly rational to conclude that if the Swedish rel-atively coherent and systematic alcohol monopoly does not sur-vive a proportionality-test performed by both the CJEU and anational court of last instance, the incoherent and unsystematicSwedish gambling monopoly is not likely to survive. Comparedto the alcohol monopoly, the gambling monopoly could be char-acterized as the horror cabinet of Madame Tussauds’.

The EU law challenges against the marketing prohibitionhave been numerous. The prohibition has continuously been jus-tified with reference to public health concerns. This may seempuzzling since the social science is pretty clear regarding the lackof a causal link between the marketing prohibition and any pos-itive health effects. The justification seems even more misguidedwith regards to the virtual flood of legal marketing channelsavailable to Swedish customers. In this environment, it’s scien-tifically impossible to discern any cause and effect relations. Need-less to say, these factual circumstances are of fundamentalimportance for the EU law conformity of the Swedish gamblingpolicy. If the Government can’t prove that the policy in realitylimits gambling and that the marketing prohibition has positiveeffects on public health, the policy constitutes an illegal restrictionon the freedom to provide services granted by the EU Treaty.3 �

SWEDISH GAMBLING MONOPOLYContinued from page 29

David Willis, a trial attorney with more than 25 yearsof litigation experience, focuses his national practice inthe defense of corporations in the areas of complex tort,commercial, and employment law. He represents bothpublic and private corporations in the areas of hospitality,specifically the food and beverage industry, franchise,health care, transportation, and environmental law.

David has extensive multi-jurisdictional trial experience and has tried to verdict over 50 cases in state and federal courts.


During the 1950s, Cuba offered the gambler several of theleading casino facilities in the world. There was littledoubt, however, that the gaming was connected to

organized crime personalities in the United States as well as tothe military dictator Fulgencio Batista. Both entities skimmedconsiderable sums of money from the casino operations. Cubaalso had both public and private lotteries, a first-class racingfacility, and jai alai fontons. All the gambling activity came to ahalt after Fidel Castro engineered a successful rebellion andtook over the reins of power in January 1959. Repeated attemptsby casino owners and the new government to negotiate a con-tinuation of casino gaming were unsuccessful. It has been sug-gested that—as a result—U.S. crime interests were involved inattempts to overthrow the Castro regime, both in the abortiveBay of Pigs invasion in 1961 and in several assassinationattempts on the new dictator’s life. An entire tourism infra-structure subsequently slipped into decay during the fivedecades of Fidel Castro’s rule. Today that rule has been passedto Fidel’s younger brother Raul Castro, and now there arevoices suggesting that Cuba may soon seek to restore itstourism industry and may even contemplate reopening casinos.

The island of Cuba was colonized and controlled by theSpanish government for four centuries, until a revolutiondeveloped in the 1890s. When the United States declared waron Spain in 1898, the revolution became successful, and inde-pendence was gained for the Cuban people. Authorities in theUnited States, however, sought to keep many controls over theCuban people. American war troops were not removed until1902, and even after the Cubans elected a new governmentunder President Jose Miguel Gomez that year, the UnitedStates “negotiated” to have a major naval base at GuantanamoBay. Other commercial interests in the United States also con-tinued their economic domination over much of Cuba. Theseinterests had been in Cuba for many years before the revolu-tion. Many Americans looked at the seaside location calledMarianao, ten miles outside of the city of Havana, and foundit to be a desirable place to live, engage in real estate transac-tions, and start tourism resorts.

A local group known as the 3 C’s (named for Carlos Miguelde Cespedes, Jose Manuel Cortina, and Carlos Manuel de laCruz) formed a tourism company that sought to build a casinoin Marianao. In 1910, they proposed legislation in the National

CUBA Casinos Past, Casinos Future (?)By William N. Thompson

Congress that would have permitted the casino and also wouldhave granted them an exclusive thirty-year concession tooperate it. At a time when the Americans in Cuba saw thecasino as “opportunity,” Americans in the United States werein a wave of anti-sin social reform. This was the same yearthat the casinos of Nevada closed their doors and the Prohi-bition movement was being organized. U.S. PresidentWilliam Howard Taft was lobbied hard by church intereststo reject casino gambling so close to our shores. During theSpanish American War, President William McKinley haddecreed that there be no more bullfighting in Cuba, callingthe activity a disgraceful outrage. Taft, as expected, “bullied” theCuban Congress to follow U.S. wishes as well. The casino legisla-tion failed to pass. A second attempt was made to have casinos withtaxes designed to support $1.5 million in construction of facilitiesfor tourism in Marianao. One New Yorker, who had a contract tobuild a jai alai fonton and a grandstand for racing, sought to changeTaft’s mind on the issue, but again, casinos were defeated as a resultof the moralist campaign in the United States.

However, gambling was in the cards for Cuba. In 1915,Havana’s Oriental Park opened for horse racing. In 1919, casinopromoters promised that they would build the streets and plazasfor Marianao if they could have casinos. President Mario Menocal,who had been elected in 1917, supported a bill for casinos. Thenational legislature authorized a gambling hall for the resort on 5August 1919. The 3 C’s group won the right to run the facility. Inaddition to land improvements for tourism, they agreed to anational tax that was designated for the health and welfare of poormothers and their children. At the same time, President Menocal’sfamily won a concession to have jai alai games in Marianao. Thetourism push was on, and patrons from the United States were theprimary market, especially after Prohibition of alcoholic consump-tion came into effect for the whole country in 1919. The RoaringTwenties roared just outside of Havana. Several new luxurioushotels opened, each having a gaming room. Each successive presi-dency endorsed tourism and welcomed all investors. Even AlCapone opened a pool hall in Marianao in 1928. Then the Depres-sion came, and so too did a movement for general social reform.

Leaders openly condemned the degradation of casino gamingand other sin activities that had been widely offered to tourists. In1933, the casinos were closed, and the Prohibition ended in theUnited States. The economy floundered. The next year, army

sergeant Fulgencio Batista was able to oust Pres. Ramon Grau SanMartin and install his own government. He ruled as chief of staffof the army while another held the presidency. At first Batista triedto bolster the notion of cultural tourism, but he could not resistallowing casinos to reopen—under the control of the military.Batista was very concerned about the honesty of the games. Forsure, he would be skimming. If players were being cheated, how-ever, he knew there soon would be no players. The house oddscould give the casinos only enough profits to pay off the generalsand the politicians. Games had to be honest. Batista turned to aperson who understood this and other dynamics of the casinoindustry very well—Meyer Lansky. Lansky took over casinooperations, and he imported dealers who would work for him andnot behind his back. The Mob cleaned things up in all the casinos.Because of World War II and postwar disincentives for foreigntravel by Americans, however, the casino activity was rather dor-mant through the 1940s. Nonetheless, Havana attracted more per-sons of bad reputation. In 1946, Salvatore “Lucky” Luciano movedin to conduct heroin trade and to be involved with the JockeyClub and the Casino Nacional. Lansky was influential in persuad-ing the government to expel this competitor.

Fulgencio Batista won the presidency on his own in 1940. In1944 and 1948, he permitted Grau San Martin and Carlos PrioSocarras to win open elections; however, he remained very mucha controlling element. In 1952, while a candidate for the presidency,he sensed he had no chance of victory. Batista executed a coup andtook the reins of power by force. Subsequent elections were rigged,



Hotel Riviera (left) in Havana, Cuba. Riviera was the playground of American gangsters before the Cuban revolution.

The White Palace is one of many well preserved mansions in the resort community that were casinos during the Batista era.


and Batista remained in power until the beginning of 1959. Duringthis latter period of rule, casino development greatly accelerated.

Prior to 1950, only five casinos were in operation, and a briefreform spirit in 1950 led the government to close them. Commer-cial pressures, however, led to a reopening before Batista conductedhis coup. The casinos now offered large numbers of slot machinesfor play. By the mid-decade, new Cuban hotels were attractinglarge investments from the United States, as the gambling opera-tions were quite lucrative. Foreign operators, however, still hadties to organized crime members. A major incentive for a renewedinterest in Cuban gaming came from the U.S. Senate Kefauverinvestigations that were exposing illegal gambling operations inthe United States. Organized crime members were being run outof places such as Newport, Kentucky; Hot Springs, Arkansas; andNew Orleans, Louisiana. At first, they gravitated toward LasVegas; then Nevada instituted tough licensing requirementsthat precluded their participation in operations there. Cuba, theBahamas, and Haiti became desired locations. Four of the fivelargest Havana casinos were in the hands of U.S. mobsters. As

newer properties such as the Havana Hilton, the Riviera, HotelCapri, and the Intercontinental Hotel came on line, Mob handswere involved in the action. Meyer Lansky was always theleader of the group. He kept the games honest, and he kept thepolitical skim money flowing in the correct directions. Whensomeone got out of line, he gave the word, and Batista could makea great show about throwing a mobster out of the country.In addition to enhancing casino gambling, Batista also improvedrevenues of the national lottery by inaugurating daily games.

In 1958, things seemed to be on a roll just when Fidel Castrogathered strength for his military takeover. Revelations in the NewYork Times about Mob involvement in Cuban casinos dampenedtourist enthusiasm, as did the fear of impending violence. Thenames of Jake Lansky (Meyer’s younger brother), Salvatore Traffi-cante, and Joseph Silesi were added to the lists of unsavory par-ticipants in the industry.

Fidel Castro was born in 1926, the son of an affluent sugar-cane planter. He attended a Catholic school in Santiago de Cubabefore entering the University of Havana as a law student in 1945.There he began his career as a political activist and revolutionary.

He participated in an attempt to over-throw the government of DominicanRepublic strongman Rafael Trujilloand disrupted an international meetingof the Organization of AmericanStates in Bogota in 1948. He sought apeaceful way to power in 1952 as heran for Congress; however, the contestwas voided when Batista seized powerand cancelled the election. In 1953,Castro took part in an unsuccessfulraid on the government; he was cap-tured and imprisoned for a year. Hewas released by Batista as part of ageneral amnesty program, but he keptup his revolutionary efforts, leading an-other unsuccessful raid in 1956. Histhird try was his charm, as he success-fully moved through rural Cubaduring 1958, attacking Havana at theend of the year and driving Batistafrom office.

When Castro’s forces descendedon Havana on New Year’s Eve 1958,there were thirteen casinos in Havana.The hotel casinos represented a col-lective investment of tens of millions

of dollars. Lansky’s Riviera alone cost $14 million. Several own-ers and operators did not want to join Batista in his hasty exile

Museum of the Revolution in Havana, Cuba. The palace was theheadquarters of the Cuban government for 40 years.

Four of the five largest Havana casinos were in the hands of U.S. mobsters. As newerproperties such as the Havana Hilton, the Riviera, Hotel Capri, and the Intercontinental Hotelcame on line, Mob hands were involved in the action. Meyer Lansky was always the leaderof the group. He kept the games honest, and he kept the political skim money flowing in thecorrect directions. When someone got out of line, he gave the word, and Batista could make a great show about throwing a mobster out of the country.

Continued from previous page”

“

out of the country, even after revolutionary rioters had smashed upmany of their gaming rooms. They wanted to hold on to what hadbeen a very good thing. That would be difficult, however. Castrohad waged a revolutionary media campaign that condemned thesin industries of Cuba and their connections to the Batista gov-ernment. Castro pledged that he would close down the casinos.

Castro was good to his word on this score, at least at thebeginning. He also stopped the national lottery from operating.Meyer Lansky, on the other hand, pledged that he would work withthe new government, and casinos were temporarily reopened,ostensibly to protect the jobs of their 4,000 workers. However, thereopenings were short-lived. The casinos closed for good (underthe Castro regime) in late 1960. Castro’s frontal attack on the Moband its casino interests in Havana had political consequences in theUnited States, where the Central Intelligence Agency planned the1961 Bay of Pigs invasion to overthrow Castro and also may havecontracted with organized crime operatives to attempt toassassinate the new leader.

The fall of the Batista regime and the end of Cuban casinoshad repercussions throughout the gaming industry. Nevadalost its strongest competitive market, and Cuban operatives andowners had to move. The ones that could be licensed went to LasVegas, as did many of the dealers and other casino workers. Oth-ers had to find unregulated or under-regulated jurisdictions. Haitiand the Dominican Republic were close at hand, as was TheBahamas. Most of the gaming entrepreneurs in these jurisdic-tions had Cuban experiences, as did many who went to London toopen casinos after 1960 legislation gave unregulated charity gam-ing halls a green light. Lansky, George Raft, and Dino Cellini wereprincipals in London’s Colony Club until they were expelled fromthe country. Former Nevada lieutenant governor Cliff Jones ofLas Vegas had been active in Cuba. He had made a choice betweenNevada gaming and foreign gaming when the “foreign gaming”rule was adopted in Nevada (the rule prohibited Nevada casinolicensees from having casinos outside of the state). He chose to beinvolved in foreign gaming and therefore could not return to Las

Vegas. Instead, Jones began campaigns in one small country afteranother to legalize casinos and then began operations that hewould later sell to (or share with) local parties for high profits.Clearly, the activity of Castro in closing down Havana gamingcaused a major spread of gaming elsewhere.

The Cuban national lottery, while closed in 1959, was permit-ted to resume operations by Castro. At first Castro allowed the cre-ation of a savings bond lottery, under which all bettors kept theirinitial wager, but they were paid lottery win prizes instead of inter-est on their investment. Interest in casinos for Cuba persists as manycasino companies eagerly awaited the passing of Fidel Castro. How-ever, even under his regime, in 2013, a casino cruise ship fromCanada was allowed to make port in Havana.

Current interest in having new Cuban casinos has a definiteFlorida touch. In that nearby American state casino gaming hasbegun with both Native American reservation casinos as well as ma-chine gaming on race courses. Many Florida operators are staunchlyopposed to new Cuban casinos fearing direct competition. On theother hand, Florida interests are also expressing great desires to geton board and participate in new openings. The arena for new legal-ization fights is being set up at this moment. �

Further Reading: Lacey, Robert. 1991. Little Man: Meyer Lansky and the Gangster Life. Boston:Little, Brown.

Schwartz, Rosalie. 1997. Pleasure Island: Tourism and Temptation in Cuba. Lincoln: University of Nevada Press, chaps. 6, 12.

Sifakis, Carl. 1990. Encyclopedia of Gambling. New York: Facts on File,85.

William Thompson is an emeritus professorof public administration at the Universityof Nevada, Las Vegas. He is author ofover a dozen books on gambling subjects,and he is a frequent contributor toAmerican Gaming Lawyer.


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