Response from Senator Harry Reid to My RAWA Inquiry

I wrote Sen. Harry Reid, Sen. Dean Heller, and Rep. Joe Heck about my opposition to the Restoration of America’s Wire Act (RAWA).  Sen. Reid’s response is discouraging, especially considering that Nevada has already regulated online poker and jobs like mine depend on the industry.  I have yet to receive a reply from Sen. Heller or Rep. Heck.

Response from Senator Harry Reid:

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Dear Mr. Mehaffey:

Thank you for contacting me regarding online gaming. I appreciate hearing from you.

As a former gaming regulator, I believe that maintaining the integrity and fairness of the gaming industry – both in brick and mortar casinos and on the Internet – requires strong and effective regulation. Unfortunately, the current state of affairs is the worst possible situation for consumers, regulators, and law enforcement officials. For more than a decade, illegal online websites offering Internet poker and other types of gambling have grown into a multi-billion dollar market. Yet, none of these sites are regulated by responsible U.S. regulators, and none of them have an incentive to comply with basic consumer protections and gambling regulations.

Whether one supports or opposes regulated online gambling, the current U.S. laws on this topic are outdated. The 2011 Department of Justice’s (DOJ) reinterpretation of the Wire Act has opened the door to permitting states to conduct all types of non-sporting, online gambling. Without strong regulations in place to govern this gambling, consumers inevitably will end up being hurt.

On March 26, 2014, Senator Lindsay Graham (R-SC) introduced the Restoration of America’s Wire Act (S. 2159). This legislation would prohibit online gaming. S. 2159 was referred to the Senate Committee on the Judiciary. Should this or related legislation reach the full Senate for consideration, I will remain mindful of your concerns regarding the impact of online gaming on our nation’s vulnerable populations.

Again, thank you for taking the time to share your thoughts with me. I look forward to hearing from you in the near future.

My best wishes to you.

Sincerely,
HARRY REID
United States Senator

 

Where I Have Been Writing Lately

I have written several blog posts in the past few weeks after writing just one in the first eight months of the year.  That is because the bulk of my news and casino reviews writing now appears on a variety of sites.

My most recent big project is writing information about resorts on the Las Vegas Strip and downtown for WorldCasinoIndex.com.  That section is completed and I am now working on resorts just off the Strip.  The information includes casino game information, hotel rates, restaurants and nightclubs.

My main news site continues to be USPoker.com and its sister sites.  I mostly write about the U.S. online poker movement with a few Las Vegas stories now and then.  I write some Las Vegas and NFL sports betting information at 4Flush.com.  I also write some content about the offshore online poker industry for SafestPokerSites.com.

I own a bunch of domains.  I am seriously considering developing a Las Vegas poker site.  That niche seems to be seriously lacking right now.  It might be hard to make some money off of that segment but it would be more like a hobby and service.

There is a lot of demand for this type of information.  While I hardly get to play anymore, I have all of the information I need to develop that type of site and make it the highest of quality.  What I am lacking is the time to work on it right now.

I already own Deadwoodpoker.com and it has never made a cent. That site needs updating badly.  I guess that gives me an excuse to take a trip to South Dakota in the coming months.

I plan on writing more on this blog.  I hated seeing it become so dated.  Expect more information about Las Vegas observations, poker, and maybe an occasional rant.

In the meantime, the only gambling I have been doing lately is on some full pay video poker machines on Fremont Street.  The theoretical rate is equal to working a minimum wage job.  The difference is that McDonald’s employees do not receive free drinks just for showing up to work.

If you have any ideas for a blog topic then feel free to leave a comment.  I am always looking for new topics to write about and learn.

 

How Nevada Should Raise $800 Million a Year Without the Margins Tax

There is no denying that education funding in Nevada is woefully inadequate. It is time to fix that.  Some groups have proposed a 2% tax on margins to raise $800 million per year.  It is not the solution.

The margins tax initiative would force companies to pay 2% of one of the following:

  • 70% of gross revenue
  • Gross revenue minus cost of goods sold
  • Gross revenue minus cost of employee compensation

This means that there is a minor deduction.  Most businesses do not run higher than 30% on either product or labor costs, so for simplicity sake, I will just use the 70% of gross revenue number.

This makes the true tax rate 1.4% of total receipts, regardless of actual profit.  A company could have made a large investment that made it unprofitable, but it will still pay 1.4% of its gross revenue to Nevada.  There could have been a catastrophic event in that year for a company, but it will still pay the margins tax in full.  The enormous increase in insurance costs affecting all businesses right now is not deductible, nor is rent, interest, depreciation, expansion, or anything else not directly tied to the cost of the product or the labor to produce it.

This Creates a Sales Tax on Groceries

Walmart’s profit margin is about 3%.  Its competitors profit at about half that rate.  Grocery stores run margins of about 1%. The margins tax will wipe out the entire profits of these businesses.  It is naive to think that these companies will operate in the red for the good of Nevada education.  They are going to raise prices to offset the new taxes.

The margins tax will be passed on as a cleverly disguised sales tax.  This will affect the poor disproportionately.  There are far better solutions to raising this money.

How Nevada Should Raise $800 Million a Year Without Margins Tax

There are so many segments of the Nevada economy that are not paying their fair share in taxes.  It is time to fix that.  Some will require residents to pick up some of the burden, but most of it will be at the expense of tourism and mining industries.

Raise the Gaming Tax Rate 

Nevada casinos make less of their income on a percentage basis from gaming than ever before due to the diversification of the Nevada tourism industry.  The numbers are returning to prerecession levels, meaning that casinos are actually generating more revenue now more than ever when taking amenities into consideration.

Nevada unrestricted gaming licenses won $11.1 billion in 2013.  That generated about $750 million in taxes at the 6.75% rate, which is the lowest in the country.  Only two other states (SD and NJ) are even below 10%.  Most are 20% and higher.

The casinos will fight any increase in gaming tax rates.  They will come up with a million excuses as to why it will hurt their business, but there is one fact that refutes their entire argument. Virtually every one of them is paying more in other jurisdictions and doing just fine.  Unlike those other states, they are not paying income taxes on nongaming income in Nevada, making their effective tax rate even lower.

The new Massachusetts gaming market has a 25% rate.  Three Nevada operators fought to enter that state.

Macau has an average tax rate of 39%.  That is still lower than some states. Pennsylvania is the number two gaming market in the country.  It taxes slot revenue at 55%.

The casinos can afford a 1% increase in gaming tax rates in Nevada.  That would raise $100 million.

Here is a list of all state gaming tax rates.

Tax Resort Amenities

More people are visiting to Las Vegas without gambling at all.  The state needs to get a bigger chunk of the money spent by these tourists that goes virtually untaxed.  A $2.50 increase per room in the hotel/motel tax would generate $81 million from the 125,000 Las Vegas area rooms, assuming a 90% occupancy rate.  This is about identical to what the margins tax would be, it is just more transparent.  Throw the rest of the state in there and that number easily exceeds $100 million.

Tax Restricted Gaming Licenses Similar to Resorts

Restricted gaming licenses are taverns and grocery stores that do not offer full services but have video poker and slots.  The maximum number of machines in a restricted gaming establishment is 15.  There is a tax and licensing fee of about $730 per machine each year.  A tavern with 15 devices pays about $11,000 per year in taxes. Some taverns make that in a day.

Let’s not pretend that these taverns are anything more than small video gambling establishments.  Tax them at the standard rate paid by unrestricted licenses, based on monthly win:

  • 3.5% of the first $50,000 during the month, plus
  • 4.5% of the next $84,000 plus
  • 6.75% of revenue exceeding $134,000

Tax Mining More

Nevada is the largest gold producer in the country.  There is only a 5% mining tax in the state.  That raised $236 million in the last fiscal year.  A 7% tax rate would put it in line with other major mining states.  We just found another $100 million.

A ballot initiative to remove the 5% cap on mining taxes will be voted on by Nevadans in November.  It would authorize the legislature to raise the mining tax.

Brothels

It is not often that a legal business comes along and begs to pay taxes, but that is what is happening in Nevada.  It seems that most politicians want to ignore that legalized prostitution even exists.  It is not going anywhere.  A majority of Nevadans either support it, feel it is a local issue, or simply do not care.

The live entertainment tax does not currently apply to brothels.  Setting the 5% LET tier on the industry would generate $365 million, based on numbers provided by the brothel owners in 2011.  Taxing it just 2% would bring in $146 million.

Cliffs

  • Raise gaming taxes 1%
  • Add $2.50 per night state tax on hotel rooms
  • Raise mining taxes 2%
  • Stop ignoring brothels, which are begging to pay taxes

Health Insurance Canceled Due to ACA, Again – October 14, 2014

I have been reluctant to publicly join the health care debate.  I have gotten to the point that I feel I must speak about what the Affordable Care Act (Obamacare) has done to my family.

I am a freelance writer.  I have purchased private health insurance since 2007.  I was opposed to Obamacare but tried to give it some benefit of the doubt.

“If you like your plan, you can keep your plan”

There are at least 37 documented times that Barrack Obama and his cabinet said “If you like your plan, you can keep your plan” or similar.  That was fine with me.  My family carried a great policy with a high deductible.  We got doctor visits and cheap prescriptions.  Our deductible was capped if we had a major bill.

In 2013, my family received a cancellation notice from our insurance company.  The notice stated that the policy did not conform to ACA standards so it must be discontinued under federal law.  This ran contrary to the previous promises made.

Our insurance company gave us one out. We could extend one year knowing that our rates would go up about 15% and we would have to pay the Obamacare fine for not carrying proper coverage.  We decided we would not renew the policy.

Nevada created a health insurance exchange but it never worked properly.  The state blew $72 million on it before abandoning it.  We could have given health insurance free for a year to about 10,000 families for that amount.  It is now the target of numerous lawsuits.

I tried to get insurance through the exchange but it never worked properly.  The questionnaire asked only one question per page that would have to be confirmed two additional times.  Once the site timed out all of this information would be lost and I would have to start over.

After wasting hours trying to get the site to work I was finally able to get quotes.  Premiums were more than double what we paid for deductibles that were not much different than the ones we already carried.  We were forced to carry coverage for ridiculous items we do not need and would never use that contributed to this increase.  Being forced to leave the insured group’s loyalty discount also contributed to the difference.  My wife and I decided that our family would go without health insurance.

Obama admitted that he lied about the insured being able to keep their policies in November 2013. He offered a chance for existing insured to keep their coverage for another year and not pay the fines.  We reconsidered our carrier’s offer and renewed it for one year.

It is hard to think that anyone would have voted for this law had known the insured would become uninsured.  Those that were misled should have a second chance to vote.

Nevada Health Exchange Sold Us Policy We Never Created

Fast forward to March 2014.  We started receiving insurance information from Nevada’s child health care program known as Nevada Checkup.  The notices stated that if our children were already insured then we could not use the cards. Since our kids were insured these cards were of no use to us.

The next month we received more information from Nevada Checkup. I decided to contact them to see why this was happening.  Their voicemail system is nearly always full when I call so there is no way to leave a message most times.

I did get through one time to the voicemail and left a message.  I got a call back.  The woman asked me to return her call in a message.  She did not leave her number and she called from a private number so it was blocked from called ID.

I decided not to waste any more time with this until the end of May when I started receiving bills for this insurance we never signed up for and never used.  I again tried to contact Nevada Checkup, but to no avail due to the voicemail being full.

I received a packet of information from two insurance companies that appeared to be vying for my business related to this state program.  I called both.  Neither could find me in their system with the account number, names, date of births and Social Security Numbers of my family.

I also called Medicaid, which had a number listed in this mountain of documentation.  The woman I encountered at Medicaid was extremely helpful but she also could not locate my family in the system.  I again unsuccessfully tried to contact Nevada Checkup.

I am not paying the premiums since I never signed up for this policy.  I am concerned that my credit could be damaged or someone collection company try to sue me for nonpayment.  I have also spent a good 20 hours on this entire nightmare, taking time away from my business and family.

Policy Canceled in 2014

I received a notice today, October 14, that our policy would be canceled and there would be no reconsideration this time.  We will now have to go without health insurance due to the law that was allegedly written to get people insured.  Now that we are getting older we will not have insurance because we can no longer afford all of the crap that is forced into policies. This obviously would not happen if we were able to keep the existing policy, as promised.

The feds have now extended non-ACA policies through 2017.  This is up to state insurance commissioners.  To the best of my knowledge, Nevada is not allowing any of these policies to remain active so this change of policy appears to be of no help to us.

The federal government clearly sees the damage caused to families like mine since it kicked the can down the road several years.  It is baffling that policy cannot be enacted into law to put this issue to rest once and for all.

I understand that the health insurance situation in the U.S. was not ideal and that was the entire reason behind the new law.  The thought behind Obamacare was in the right place.  Ramming through legislation nobody bothered to read was not the answer.

It is even more insulting that while I can no longer afford health insurance for my family after December 2014, I will be forced to pay fines that will subsidize other people.  There are ways around that, but the fact the law creates this scenario is unethical.

What About Subsidies?

One of the big selling points of Obamacare is that those making under a certain amount would receive federal subsidies for insurance. That is not really the case when you are self employed. When I tried to buy insurance from the Nevada exchange I was forced to submit a W-2.  I am self employed and file a Schedule C. Since I could not supply this information, I could not get subsidies.

I was instructed that my subsidies would appear on my tax return in the form of a tax credit. Since I am self employed, I have no idea what I will make in 2014.  I am basically being told that I am forced to buy a product that has no predefined price.  In that case, one must assume the highest price advertised is the actual price.

Senator Reid Refuses to Act

It is time for Congress to go back and revisit this.  Senate Majority Leader Harry Reid has refused to discuss Obamacare on the Senate floor even though he has received more than 50 bills related to it that already passed the House.  Forget little people like me.  The Las Vegas casino unions were threatening to strike over Obamacare and he did nothing.  It is hard to imagine that he acts in Nevada’s best interests.

Insurance Was Always the Problem

It is hard to argue that giving power to insurance companies was the solution.  They are part of the problem.  Many insurance policies do not pay anything, they simply create a discount off what the patient pays.  The solution was to fix this problem so that the working class could pay a reasonable amount in cash for health care visits.  All this does is encourage people to needlessly visit doctors.  It also discourages the next generation from entering the medical field.

I’m Not a Conservative

Some people that read this will probably automatically dismiss this as another angry republican.  I am a moderate by all accounts, probably even libertarian on some issues. I am certainly not a conservative.  I would probably be considered “Nevada Republican” since the party here voted to dump moral issues from its agenda but I do not identify with most republicans as they lose me when they start to force their moral policies into law.

On the other hand, I am baffled that the same party that feels big government should stay out of bedrooms, marriage and abortion feels that forcing Obamacare onto people is somehow different. The school lunch program nutrition debacle is another situation where no logic was applied. There are several other education policies that baffle me, as if federal lawmakers have any idea what policy is best for local public schools.

My point is simply that this health care law that was forced down our throats has millions of people like me in a bad situation. Most of the affected people are self employed or small business owners.  There are going to be a lot more contractors in the workplace as employers opt to cut hours and positions to avoid paying their share of Obamacare.

It was certainly not ever anyone’s intention to force families that were already insured into the situation I am in.  Unfortunately, it appears that the people responsible for ramming this poorly worded law through Congress refuse to admit their mistakes and fix them.  Those people will be looked at as one of the reasons for our epic health care collapse down the road if we cannot convince them to change their ways or vote them out of office, replacing them with those willing to pass a legitimate health care law.

Thank you for reading my rant.

Thoughts on the New Downtown Summerlin Development

I live about two blocks away from Downtown Summerlin.  That is the new shopping district located just south of Red Rock Resort in the far west end of the Las Vegas Valley.  I went to go check it out on the first day it was open, which was Thursday, October 9.  I returned on Monday.

The opening of the mall symbolizes the end of the Las Vegas recession.  A steel structure of the project sat idle for about four years before construction started on it again.  It was a victim of the economic downturn that bankrupted the original developer.  It is great to see this massive project completed.

Great Marketing Plan by Downtown Summerlin

The people in charge of the grand opening marketing deserve recognition.  The event drew in every news organization in Las Vegas.  The social media campaign was impressive and interaction with guests was excellent.  There were activities throughout the weekend to help draw residents to the new development.  We also enjoyed watching the opening night fireworks show without even having to leave our house.

Major Restaurant Competition

The development has 125 shops.  About 30 of those will be restaurants or food related businesses.

That is a lot of new restaurants opening at almost the same time.  It is also not in an area that is conducive to lunch sales and many of the restaurants in the development are what I would consider lunch options.  There is very little in the way of office space in the area.  That will change as the Downtown Summerlin expands, but it is true for the near future.

The competition is going to be tough for these original tenants dedicated to food.  I visited one on opening day when Downtown Summerlin was nearly at capacity in terms of cars and people and the restaurant was nearly empty.  I visited the same place today and I was the only customer in there.  Hopefully this is not a sign of the future.

The existing food outlets in the surrounding area may also struggle.  Red Rock Resort seems to recognize this as it has nearly turned its restaurant selection completely over in the past year.

Retail Fills Void in Market

The shopping offers a wide selection.  Retail was a segment missing from Summerlin.  It is an affluent area that was underserved.  The highway access should draw people from the northwest part of town.  I would imagine that this area will boom with spending during Christmas season.

Traffic

The traffic generated from Downtown Summerlin has been overwhelming so far.  One issue has been the traffic signals at Sahara Avenue and NV215 and Town Center and 215.  These signals are setup poorly on timers.  The turn arrow off Sahara to go southbound on 215 goes twice per cycle but it runs very short.  These need to be fixed immediately as it causes backups that are unnecessary.

It is also quite shocking that nobody had the foresight to put a light at Pavilion Center and Griffith Peak at the side entrance of Red Rock.  There are 100 useless traffic signals in town and this intersection sits as a four way stop that was not efficient when Pavilion Center was a dead end, much less with 106 acres of new retail sitting on it.

The traffic pattern within Downtown Summerlin is a bit annoying as well.  For example, when you turn right into the complex from Sahara Ave the road dead ends into a service drive going one way the other direction within 500 feet. Obviously these are needed, but the location and lack of ability to drive through that way is poor planning.  The only way to get through it is to drive through a parking area.

Sidewalk and Crosswalk Connectivity Need Improvement

The layout of the sidewalks is terrible in the area I walked around along the Sahara Avenue entrance.  There is no crosswalk where the exit to Sahara is.  The sidewalks just assume that you want to leave.  This may not be that big of a problem except that the sidewalk on the other side of the road ends towards the west side of the entrance into nothing, leading to a bunch of rocks. I doubt this is an area of future development.  It isn’t demonstrated that way on the maps and it would obscure the existing tenant.

There is basically no way to walk from Trader Joe’s to the building where Moe’s and Five Guys are without walking through cactus and rocks even though they are within sight of each other.

Where Are the Bike Racks?

Downtown Summerlin offers no bike lanes, paths or racks that I saw.  They certainly are not in the restaurant or frontage shopping areas. People that arrived by bike either locked them to random objects or left them unlocked.  This situation was also noticed by this blogger.

There are apparently some bike racks in a hidden area of the parking deck and by the movie theater.  This does little for people riding bikes to the quick serve outlets that are forced to lock them up to handicap parking signs and outdoor tables.

It seems that being bike friendly was the type of image the property was portraying.  It is just across the highway from a popular bike path.  I would ride my bike up there for lunch often but it does not even provide a place to store bikes.  This was a major oversight that I hope is corrected.

All of this is meant to be constructive criticism.  I am sure some of the issues I presented are in the works.  The development was new and it is easy to understand that a few items did not make the initial launch.  I want everyone to succeed that invested in this property and wish them the best of luck.

 

Son Learns Driving Safety Lesson on 15th Birthday

Monday was my son’s 15th birthday.  While Nevada does not allow learner’s permits until 15 and a half, I decided it was time to start talking to him about driving.  He got more of a lesson than I expected.

I was driving westbound on West Charleston just after 5pm with him and my eight year old daughter in the car.  We stopped at a red light at Merialdo Ln in front of Boca Park.  A few seconds later the unthinkable happened. A white Toyota 4Runner entered the intersection heading north on Merialdo Ln and flips nearly completely over.  The momentum of the roll took it almost all the way or maybe completely to its roof before resting on its passenger side.

It was hard for my brain to process.  From my angle, I could not see any other car.  My view was obstructed by the SUV.  After a couple of seconds my brain computed that someone must have run the red light and the impact did this.

I was right.  A woman in a mid 2000′s Honda Civic heading eastbound on Charleston ran the red light.  The front of the Civic was lodged into the undercarriage of the SUV.

Can you imagine how fast she was going to roll a Toyota 4Runner with a Honda Civic?  The speed limit is 45.  I doubt that speed could have done that.

Bonefish Grill employees to the rescue

A Bonefish Grill is opening at this intersection next week.  About a dozen employees came running from the restaurant just seconds after the car rested.  Several ran into the road to give aid to the two women in the rolled 4Runner. It was as if they were trained in this, working together to help free the women from the smoking vehicle that gave the appearance that is was on fire or about to be.

Las Vegas drivers on the other hand…

This light runs on a split cycle where northbound Merialdo Ln, the direction the 4Runner was going, turns green first, then the southbound side goes.  The cars going southbound were so rude that when their light turned green they were trying to go around this rescue with this SUV smoking and rolled over with a Civic embedded in its undercarriage.  The same thing occurred when the light turned green for Charleston.  Eastbound cars tried to force their way through.

The accident was not obstructing westbound lanes, but I could not leave my car where I was in the clear travel lanes.  I also had a panicked eight year old in the backseat distressed about what she just witnessed.

I left my cellphone at home but my son had his.  We called 911 and I made a u-turn at the next median break and returned to the scene, parking at Bonefish Grill.

By that time, the Bonefish employees had pulled the women to safety.  The Civic driver got out of her car under her own power.  I left my kids on a sidewalk away from the chaos and walked across the street to see if I could help and let the victims know that I saw everything and would be waiting for the police and fire.

The women that ran the red light was having a panic attack.  A few people were trying to comfort her.  This left to the two from the rollover alone.

I talked to the women in the SUV to comfort them as we waited on paramedics.  They were sitting on a wall at the intersection.  They seemed to be in great shape considering what had happened.

They were clearly in shock.  They told me they were fine, but I encouraged them to allow the paramedics to check them out.

As the shock wore off it became apparent to them that they were more hurt than they thought.  One woman mentioned she may have bit through her tongue.  They both complained about feeling beat up from the seat belts. Both were in a daze.

Fire and rescue appeared a couple of minutes later.  I gave them space and went back with my kids to wait for the police to arrive. All occupants were put on stretchers and taken away from the scene by ambulance.

Metro took much longer to arrive, but when they did, I gave them a statement and we went on our way.

Lessons Learned by Son

My son got to learn a few life and driving lessons out of all this.  He learned about how to report an accident to 911.  He then learned that distracted driving and speeding can lead to serious accidents like this one.  He also learned how seat belts saved lives in this accident.

Bonefish Grill Obviously Has a Great Team of Employees

I believe Bonefish Grill is currently training employees.  The advertised open date is September 29.  This probably made it so that they could drop everything to rush to the accident scene.  They deserve a lot of credit for working as a team in what could have been a dangerous situation on a six-lane state highway.

If these employees work together in this type of crisis, just imagine how well they will keep their cool when faced with the opening week’s dinner rush.  I predict good things for the future of this restaurant based on what I saw Monday.

Some Thoughts on the New Jersey Poker Affiliate Crackdown

Several regulated online gambling industry members have expressed to me that the affiliate arrangement in New Jersey was not working. The main complaint is that some affiliates that are promoting New Jersey sites are also advertising offshore sites on the same pages and websites. Some in the regulated New Jersey online gaming market believe that this is unfair competition from illegal sites and want to put an end to it.

Gambling911 first reported what had been rumored for weeks. The New Jersey Attorney General’s office would start to enforce the promotion of offshore sites and affiliates could become targets of state law enforcement, according to this report. Online Poker Report obtained the letter sent to one large online poker affiliate.

New Jersey’s online gaming revenue numbers have fallen below estimates. One reason often cited for this is the existence of offshore sites still operating in the market.

Last week, the Winning Poker Network left New Jersey, as well as Delaware and Nevada. These three states are the only ones with regulated online gaming.

In emails to players, Winning Poker cited the existence of regulated online poker as the reason for leaving the market. A few players in these states quickly reported that they were advised by the network to change their state in the system. This would allow them to continue playing. There are still several unlicensed U.S.-facing sites that are happy to accept action from players in regulated states.

What Should Affiliates Do?

Promoting offshore sites in regulated states is becoming more and more risky. It is probably time to stop promoting offshore sites entirely. Affiliates with a New Jersey vendor’s license should seriously consider this action. The license application tells New Jersey law enforcement exactly who you are and where to find you. While you are at it, do the same for Delaware and Nevada.

Another idea is to create a New Jersey mini-site. Many successful affiliates have done this. These may not be giant moneymakers today but the investment will pay for itself in the long run.

What Should Affiliates Not Do?

Affiliates should not be optimizing sites for terms like “New Jersey Poker Sites” and then advertising offshore ones on it. Offshore sites should not be described as “100% fully legal” and pages optimized for legal poker site terms should only include sites that are licensed and regulated. To state otherwise is false advertising. It could also make you the target of comments from executives of regulated sites made at industry events, which actually happened in recent months. This could put an unnecessary and unwanted spotlight on your business.

There is another reputation issue to consider. If a site fails to pay players down the road and you advertised them as “100% safe and legal” then it reflects poorly on your business.

It is time to realize that regulated states and those operators feel that they have the right to those players without unlicensed competitors and are serious about defending this opinion. It appears that offshore sites are starting to recognize this and the shift in attitude will only continue.  Affiliates in this for the long term need to give serious consideration to how their strategy going forward may affect their future in the regulated online gaming industry.

Opinion on New Jersey Affiliate Action

I applaud the DGE for acknowledging this problem and taking action to correct it. I agree with the state’s stance that offshore sites should not be promoted alongside regulated ones. It is not in the best interest of the industry as it hopes to grow online gaming to other states. It is easy to see how a player could get confused about what poker rooms are licensed and legal when they are presented with offshore sites in similar context.

The affiliate licensing process left a lot of questions as to what was allowed and what was not. This clears up some of those questions. I feel that it would be a great idea for the DGE to create a fact sheet about what exactly is expected from affiliates and operators in the marketing of New Jersey sites to clear up any confusion that may remain.

There is one concern that I have. Some major affiliates may decide to dump New Jersey sites entirely as the offshore business is far more lucrative. This would be counterproductive as it would get fewer eyes on advertising by New Jersey sites. While not a perfect solution, geotargeting by state may be the best compromise here.

Disclaimer

None of the above is meant to be legal advice. It is simply the actions I would be taking if I were in the position of some of the affiliates that appear to be in violation of the order from the DGE. If you are unsure about how online poker regulations affect your business you should consult an attorney that specializes in gaming.

— John Mehaffey

Rediscovered Online Poker Fun with Ultimate Poker PLO8 SNGs

I was among the thousands of players that were affected by Black Friday.  I used to play Fixed Limit Omaha High/Low and Seven Card Stud High/Low sit and gos and multi table tournaments at PokerStars before Black Friday.  I played online poker professionally off and on for years before Black Friday, which affected both my ability to play and my profession writing content and handling support for Poker Affiliate Solutions.

While I disagree with what happened on Black Friday, it had to occur to bring regulation to the industry.

I live in Nevada where I have two regulated online poker choices; Ultimate Poker and WSOP.  I have tried both equally in terms of rake paid.  I started at Ultimate Poker, but left it for WSOP when it launched because I am not a Texas Hold’em player.  I enjoyed the Omaha High/Low and Seven Card Stud High/Low cash games offered by WSOP, but eventually went back to Ultimate Poker.

The main reason I went back to Ultimate Poker is because of its support.  It is located in Las Vegas and response times rival what I grew accustomed to when I played at PokerStars.  The quality also equals PokerStars.

While I never played Pot Limit Omaha High/Low on a regular basis, I have grown to enjoy the sit and gos offered by Ultimate Poker.  I am a far better tournament player than cash game player. The amount of rake paid is much lower at tournaments as well.

The Ultimate Poker PLO8 sit and gos that run on a regular basis have seven seats with a $2.50 and $7.77 buyin.

The $7.77 sit and gos have a promotion where a player that wins three between November 21st and December 31st will gain entry to a $7,777 freeroll that will be held on January 5th.  I am certain that I am dead money since it is No Limit Texas Hold’em, a game I do not enjoy and have never perfected. I am not playing at Ultimate Poker because of this promotion, but who knows, maybe I can luckbox a cash in it.

The Ultimate Poker PLO8 sit and gos are the most fun that I have had since I lost access to PokerStars and there is ample action, even late at night.  The only thing that would be more fun to me would be having Fixed Limit Omaha High/Low and Seven Card Stud High/Low sit and gos and tournaments.  I feel certain that will never happen with Nevada’s limited liquidity.

I do not give much action at the Ultimate Poker PLO8 cash games because I feel the buyin range is not ideal.  I am not a big fan of 20-50 big blind buyin cash games.  I am sure that Ultimate Poker has its reasons for this, which likely includes keeping players from busting in deep games, but it keeps me from being a regular cash game player there.  If I put myself in Ultimate Poker’s shoes, I feel they are making the correct business decision.

As I watch the success in New Jersey, I wish that I had access to those games.  Hopefully a liquidity agreement will be signed between the states in the near future.  In the meantime, I will probably spend my spare time grinding a few dollars a week out of the low limit PLO8 sit and gos spread by Ultimate Poker until Nevadans have access to serious action.

New Jersey Regulated Online Poker Launching in November

I have not posted much in the way of content on my blog recently.  That is because I have been busy writing news for a number of other sites.  The online poker industry is getting off the ground and it has been creating a lot of work.

It all started in Nevada with Ultimate Poker, which launched on April 30th of this year.  WSOP launched in September.  Both are only available to players located in Nevada when logging onto the site.  That is all about to change.

New Jersey will open online poker and casino games for real money to players located in the state next month.  The official launch date for New Jersey online poker is November 26, 2013.  There will be a 5-day soft launch that will be available only to invited players.  The goal here is to identify any bugs before the sites are live to the general public.

New Jersey is taking a different route in Nevada in two ways.  The first is that it will launch multiple real money gaming sites on the same day.  The exact number is not known, but industry analysts believe the number will be around three.  The other is that casino games banked by the house will be available.  This will include slots, video poker and table games that are available in Atlantic City casinos.

Borgata, Golden Nugget, Trump Taj Mahal, Trump Plaza, Tropicana and Optimal Payments have all been approved for licenses.  As many as 30 other companies are still waiting for approval.  Noticeably absent from the process are Atlantic Club and Revel.  These are the only two Atlantic City casinos that will not opt into regulated online gaming.  Atlantic Club entered into a failed acquisition agreement with PokerStars.  Revel entered bankruptcy just one year after its grand opening.  Its gaming revenue numbers are not showing much improvement.

New Jersey will not be the first state to launch online casino games.  Delaware, through its state lottery and three racinos, will launch online casino games on October 31st.  Online poker will also be available, although Delaware’s small population is not expected to be able to support much action.  Delaware hopes to network with other states to improve its online poker liquidity.

The next question is what states will discuss online gaming during the 2014 legislative sessions.  California, Pennsylvania and Illinois have all been mentioned as possible states that may may join one of the newest industries in the United States.  Most states will start their next legislative session in January.

New and Improved Nevada Anti-SLAPP Law Now in Effect

First Amendment attorney Marc Randazza and Governor Sandoval celebrate the signing of Nevada’s new anti-SLAPP law. Credit: Randazza Legal Group

First Amendment attorney Marc Randazza championed a groundbreaking law in Nevada that went into effect on October 1, 2013.  Journalists, bloggers, and anyone that believes in the US Constitution should rejoice.  Any Nevadan that publishes a truthful article based on any topic of public interest is now immune from frivolous and vexatious lawsuits due to Nevada’s new anti-SLAPP law.  If a lawsuit is ruled by a judge to be a Strategic Lawsuit Against Public Participation (SLAPP) it is immediately tossed without ever going to trial, according to numerous articles published on the topic, including one from the Randazza Legal Group.

Marc Randazza published an article about his legal group’s road to victory in the Nevada Legislature. Others followed his lead to celebrate the news (examples are here and here).

The previous version of Nevada’s anti-SLAPP law may have only applied to political speech and the right to petition.  This meant that someone that successfully defended protected First Amendment speech might have to go through the hardship of a trial before being able to recover attorney’s fees and costs.  That has now changed since the scope of Nevada’s anti-SLAPP was expanded to include anything pertaining to “free speech in direct connection with an issue of public concern”, according to the points made in the above linked articles and other legal advice.

The new law now includes this language:

A person who engages in a good faith communication in furtherance of the right to petition or the right to free speech in direct connection with an issue of public concern is immune from any civil action for claims based upon communication.

Speech related to the gaming industry should fall under a topic of public interest due to NRS 463.0129, which begins:

NRS 463.0129  Public policy of state concerning gaming; license or approval revocable privilege.

1.  The Legislature hereby finds, and declares to be the public policy of this state, that:

(a) The gaming industry is vitally important to the economy of the State and the general welfare of the inhabitants.

(b) The continued growth and success of gaming is dependent upon public confidence and trust that licensed gaming and the manufacture, sale and distribution of gaming devices and associated equipment are conducted honestly and competitively, that establishments which hold restricted and nonrestricted licenses where gaming is conducted and where gambling devices are operated do not unduly impact the quality of life enjoyed by residents of the surrounding neighborhoods, that the rights of the creditors of licensees are protected and that gaming is free from criminal and corruptive elements.

(c) Public confidence and trust can only be maintained by strict regulation of all persons, locations, practices, associations and activities related to the operation of licensed gaming establishments, the manufacture, sale or distribution of gaming devices and associated equipment and the operation of inter-casino linked systems.

(d) All establishments where gaming is conducted and where gaming devices are operated, and manufacturers, sellers and distributors of certain gaming devices and equipment, and operators of inter-casino linked systems must therefore be licensed, controlled and assisted to protect the public health, safety, morals, good order and general welfare of the inhabitants of the State, to foster the stability and success of gaming and to preserve the competitive economy and policies of free competition of the State of Nevada.

 

The immunity described in the new anti-SLAPP law means that if a judge determines that a defamation lawsuit is unlikely to prevail due to it being protected free speech, it immediately gets tossed.  There is no trial.  The entire process is over and the aggressor will pay the accused all attorney’s fees and costs related to the case.

The anti-SLAPP statute does not stop at just immunity and attorney’s fees.  Defendants that prove that they were a victim of a SLAPP suit can be awarded up to $10,000 in damages immediately, in addition to reasonable attorney’s fees.

The court may award, in addition to reasonable costs and attorney’s fees awarded awarded to paragraph (a), an amount up to $10,000 to the person whom the action was brought.

Government attorneys can get involved too.

The Attorney General or the chief legal officer may or attorney of a political subdivision of this State may defend or otherwise support the person whom this action is brought.

They may not choose to do so, but if they do:

The court shall award reasonable costs and attorney’s fees to the person whom the action was brought, except that the court shall award reasonable costs and attorney’s fees to this State or to the appropriate political subdivision of this State if the  Attorney General, the chief legal officer or attorney of the political subdivision or special counsel provided the defense for the person pursuant to  NRS 41.660

Once a SLAPP is dismissed:

The person against whom the action is brought may bring a separate action to recover:

- Compensatory damages
- Punitive damages; and
- Attorney’s fees and costs of bringing the separate action

The law exists to discourage frivolous lawsuits and I cannot put into words how important this is.

It appears to apply to some federal cases.  Nevada’s anti-SLAPP law was applied in a New York Federal Court ruling earlier this week.  That case involved a Nevada party.

It is not that I want someone to be punished with these damages, I want these lawsuits to cease to exist.  Everyone deserves First Amendment protection without fear. I hope the potential damages and costs associated with lawsuits attempting to silence critics discourages this type of action forever.

Every person and company makes mistakes.  A simple apology goes a long way and countless companies have come out looking great by taking the proper route when their issues are made public.  In my opinion, this is what sets a great company apart from its competitors.  A company that chooses to threaten its critics will not go far.  I feel this is especially true in my industry where transparency is imperative.

The current US interactive gaming environment requires the licensing of all officers and companies.  This includes affiliates.  Groups that have operated unethically in the unregulated industry may have issues getting licensed.  Any company that manages to sneak in the back door could suffer a massive backlash.   We already saw this with iovation.

Nevada is a great state that believes in the First Amendment and all freedom associated with the US Constitution.  I am proud to be a resident.

Not a Lawyer Disclaimer

I am not a lawyer and this should not be taken as legal advice.  It is simply a celebration of free speech.  This article is based on other articles and discussions with an attorney about the law.  Always get legal advice from qualified legal experts.

(Edited 10/4)