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Category Archives: Gaming
Gaming Alert – New Jersey Governor Chris Christie Conditionally Supports Online Gambling – Boyd Gaming and Caesars Stocks Rally as a Result
On February 7, 2012, New Jersey Governor Chris Christie issued a conditional veto of a bill that would legalize online gambling in New Jersey, but indicated that he would approve the bill if a few changes were implemented, including an increase in the tax rate from 10% to 15% and the inclusion of a provision that would allow the legislature to reevaluate the bill after 10 years. The legislature is expected to promptly incorporate these revisions and resubmit the bill to Governor Christie in mid-March. This signifies a significant step forward for online gaming in New Jersey and throughout the U.S. Continue reading
Posted in Gaming
Gaming Alert – Eastern District of New York Rules Poker Is Not Gambling Under IGBA
In a decision that could have a significant impact on distressed gaming companies, Judge Jack B. Weinstein of the U.S. District Court for the Eastern District of New York ruled on Tuesday that poker does not constitute gambling under the Illegal Gambling Business Act (“IGBA”), a federal statute that makes the operation of any “illegal gambling business” a criminal offense. See U.S. v. Dicristina, No. 1:11-cr-00414-JBW (E.D.N.Y. Aug 21, 2012). While poker operations remain illegal under the laws of the vast majority ofU.S. states, includingNew York, the decision may lend support to the argument that online poker operations should be considered outside the scope of certain other federal laws regulating online gaming. Continue reading
Posted in Gaming
Time to Roll the Dice on Online Gaming?
On December 23, 2011, the U.S. Department of Justice Office of Legal Counsel (“OLC”) issued a memorandum opinion dated September 20, 2011, eliminating one of the federal barriers to legalizing internet gambling and opening the door for the possibility of a regulatory regime shift.[1] In the OLC Opinion, the Department of Justice addressed an apparent conflict between the Wire Act and UIGEA and concluded that “interstate transmissions of wire communications that do not relate to a sporting event or contest” fall outside the reach of the Wire Act. Finding that the Federal Wire Act does not prohibit the use of out-of-state transaction processors to sell in-state lottery tickets over the internet or the transmission of lottery data across state lines, the OLC Opinion reverses the long-held position that the Wire Act applied to all interstate gambling, whether sports-related or not. Although it may take some time to determine the ultimate effect of the OLC Opinion, now that the Justice Department has clarified its view that the Wire Act does not broadly prohibit online wagering (unless it relates to sporting events or contests), the advance of internet gaming appears inevitable. Continue reading
Delaware Bankruptcy Court Considers Scope of Section 505(a) of the Bankruptcy Code
Securing a determination of a debtor’s tax liability is an issue that frequently vexes debtors in possession and trustees during the reorganization process. While section 505(a) of the Bankruptcy Code authorizes, with apparent clarity, bankruptcy courts to, inter alia, “determine the amount or legality of any tax,” taxing authorities often oppose motions for relief under section 505(a) and challenge bankruptcy courts’ jurisdiction to hear such motions.[i] Such was the case in a recent decision rendered by the Bankruptcy Court for the District of Delaware. Continue reading
Posted in Analysis, Gaming, Tax Issues
Tagged 505(a), Delaware
When Tribal Gaming Goes Sour – Rights & Remedies in an Unclear Legal Environment
Although the steep downturn in the U.S. gaming industry that began in 2008 appears to be easing for the time being, many mid-market gaming companies are still encountering difficulties servicing their debt as consumer spending slowly creeps back. In 2009, the Restructuring Review ran a two-part series on the strategies available to gaming companies seeking to restructure their debts, and the challenges facing creditors who must choose between writing down their investments or attempting to foreclose on their collateral. This article examines additional and unique challenges facing creditors attempting to restructure debt issued by tribal gaming entities. Continue reading
Posted in Analysis, Gaming
Tagged casinos, Chapter 11, Chapter 7, IGRA, NIGC, section 303, tribal