Regulation

The Pennsylvania Gaming Control Board (PGCB) has proposed easing the process for self-excluded persons to regain access to the 17 brick-and-mortar casinos in the commonwealth.

In October, the PGCB proposed a rule change to the state’s casino self-exclusion program. The responsible gaming initiative allows individuals to ban themselves from the state’s casinos for a year, five years, or lifetime.

The October rulemaking proposal would lift the request for removal component and automatically re-enroll banned casino patrons as permissible people.

Controversial Motion

Critics say allowing banned casino patrons automatic re-entry following the expiration of their self-imposed bans could threaten the very purpose of the program. State gaming regulators say the motion is to standardize the PGCB’s self-exclusion programs, which, along with casino self-exclusion, include programs to deny one’s access to iGaming, video gaming terminals (VGTs), and/or fantasy sports.

The casino self-exclusion program remains the only self-exclusion program managed by the PGCB that requires a gambler to apply for reinstatement following the termination of their self-exclusion.

The PGCB says many self-excluded casino enrollees wrongly think their access to the state’s casinos is automatically restored upon the end of their self-imposed time. That leaves individuals susceptible to trespassing charges should they try and enter a casino before being re-enrolled as a permissible patron.

Many individuals erroneously believe that once the time period selected for casino self-exclusion has passed, they are once again allowed to engage in gaming activities in this Commonwealth’s retail casinos. This comes from either not reading the self-exclusion paperwork that they sign clearly enough or simply forgetting after several years that they must request removal. However, with these individuals remaining on the self-exclusion list, they are subject to trespass charges if caught in a licensed facility, and the confiscation of funds if they win while gaming,” the PGCB explained.

“This often results in individuals who incorrectly believed they were no longer on the self-exclusion list petitioning the board for the return of confiscated funds and winnings. Movement to a unified automatic removal process will eliminate confusion, reduce potential trespass actions, and eliminate many administrative proceedings within the board relating to requests for the return of confiscated funds,” the PGCB’s proposed rule adjustment continued.

Self-Exclusion Data

Pennsylvania, the third-richest commercial gaming state in terms of revenue after Nevada and New Jersey, has a robust self-exclusion program. The PGCB reports that its four self-exclusion options have a total of 33,953 enrollments, with casinos accounting for 23,242 of the enrollments.

People aged 55 and older are most likely to enroll, as the age group accounts for 8,657 enrollees. Whites are the most enrolled ethnicity with 16,017 members.

The PGCB says 5,136 people have self-excluded themselves for life. There is no way for a self-excluded person who chose the lifetime option to regain access to the brick-and-mortar gaming floors.

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An environmental impact study regarding Las Vegas Sands’ proposal to build a casino hotel at Nassau Veterans Memorial Coliseum in Uniondale, NY could soon be released.

On Wednesday, the Nassau County Legislative Rules Committee unanimously voted to release the environmental impact study, setting the stage for the public to review it. That move also paves the way for the full legislature to vote on the matter.

Should the legislature sign off on the environmental review, the next step would be a public hearing on the matter.

Sands is hoping to build a $6 billion casino hotel at the site of Nassau Coliseum in Uniondale. Despite some controversy surrounding that effort, the LVS bid is widely viewed as one of the most credible in the downstate casino competition. Nearly a dozen gaming companies and their partners are vying for the three New York City-area casino licenses the state has yet to award. That’s expected to happen late next year.

Long Island Casino Environmental Review is Important Step

While a single committee voting to advance the environmental impact study appears to be nothing more than a perfunctory legislative step, it’s meaningful because environmental concerns were among the reasons the casino proposal encountered legal difficulty.

The court ruled that Nassau County must give residents adequate opportunity to express concerns regarding how a large-scale project such as an integrated resort could affect the local environment.

The environmental review, which is currently ongoing, is vital to Sands’ Long Island casino ambitions on multiple fronts, not the least of which is that under New York law, the lease transfer on Nassau Coliseum between the county and the gaming company cannot be finalized until the review is complete.

Environmental Concerns

The Nassau County Legislative Rules Committee didn’t publicly detail the findings in the impact study, but those details could soon see the light of day. Whether or not that alters perceptions of the casino project remains to be seen.

In September, an opposition group said the Sands casino could strain Long Island’s already limited drinking water supply, adding that the project could have other negative long-term environmental consequences.

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EDITOR’S NOTE: “Vegas Myths Busted” publishes new entries every Monday, with a bonus Flashback Friday edition. Today’s entry in our ongoing series originally ran on July 29, 2022.

One of the most enduring myths of Vegas is that casinos pump oxygen onto casino floors to keep players alert and increase their playing time. Could this be true or based partly in truth? And, if not, how did it start?

“The rumor regarding the pumping of oxygen into casinos is not true,” Tony Cabot, distinguished fellow in gaming law at the University of Nevada, Las Vegas, told Casino.org.

 And there are several reasons why.

More importantly, adding more oxygen would create a fire hazard, because air with greater than the normal 21% oxygen is more of an accelerant, making any open flame burn hotter, faster, and at lower temperatures. The oxygen itself isn’t flammable.

This would violate all casino fire insurance policies, and if a fire were to occur, the investigation would lead to a public relations nightmare.

“Casinos do a number of things to encourage people to continue to play,” Cabot said. “But pumping in oxygen is not one of them. It’s just one of those myths about Las Vegas that people like to spread.”

Author You Can’t Refuse

This myth springs from the fertile imagination of Mario Puzo, the late author of “The Godfather.”

In Puzo’s 1978 novel, “Fools Die,” casino owner Alfred Gronevelt places a regular 2 a.m. call to his building engineer “to pump pure oxygen through the casino air-conditioning system to keep the gam­blers from getting sleepy.”

In the 45 years since the book’s publication, conspiracy theorists have circulated this fiction as fact. Even some legitimate media sources have joined in. One 2006 BBC article builds the myth up as true to make the point that “such psychological trickery would be banned in Britain.”

Casinos do fill the air with things to entice players to keep playing. These include loud music, pleasant scents, and freezing air-conditioning.

Look for “Vegas Myths Busted” every Monday on Casino.org. Visit VegasMythsBusted.com to read previously busted Vegas myths. Got a suggestion for a Vegas myth that needs busting? Email corey@casino.org.

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A proposal to raise Louisiana’s sports betting tax to 51% has quickly been scrapped due to pressure from the gaming industry.

On Monday, Rep. Roger Wilder III (R-Livingston Parrish) proposed House Bill 22 (HB 22), which sought to more than triple the state’s tax on sports wagering to 51% from 15%. If that legislation had passed and become law, it would have put Louisiana on par with New York and Vermont as the states with the highest levies on sports betting. On Wednesday, Wilder asked that the bill be deferred, acknowledging he needs to discuss the matter with the industry.

I have some learning to do,” Wilder said to local media. “I look forward to hearing the testimony from the industry, to gain a deeper insight of what the industry has with respect to their needs and their concerns on this issue.”

Wilder’s legislation, which had bipartisan support, was part of Gov. Jeff Landry’s (R) broader tax proposal aimed at boosting revenue while jumpstarting the state’s economy. The state representative said he will continue working on the proposal, but it’s all but dead for the current session, which expires on November 25.

Sports Betting Tax Hikes Not Going Over Well

Year to date, only Illinois has increased its sports betting taxes, moving to a progressive scheme under which the largest operators by market share pay more than their smaller counterparts.

That state’s decision sparked ample speculation regarding which cash-starved states could follow suit, and while there was plenty of discussion, Louisiana wasn’t projected to be one of the jurisdictions that would move to increase sports betting levies.

Louisiana has an estimated handle of $3 billion, putting in the upper half of states with legalized sports wagering. The state generates nearly $55 million in annual receipts from regulated online sports betting.

Louisiana Sports Betting Tax Had Support, Faced Opposition

It may have caught the industry by surprise that Louisiana — a red state — was home to a sports betting tax hike proposal, but as noted above, Wilder’s bill had bipartisan support. It was also backed by both left- and right-leaning community groups concerned about adverse effects stemming from wagering proliferation.

“You think about our Caesars Superdome sponsorship at a 51% tax rate, we wouldn’t have made that investment,” said Caesars New Orleans Samir Moad in the interview.

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Sports betting industry observers likely didn’t have Louisiana considering a major tax increase on their 2024 bingo cards, but it’s possible following newly filed legislation.

On Monday, Rep. Roger Wilder III (R-Livingston Parrish) proposed House Bill 22 (HB 22), which if enacted, would more than triple Louisiana’s sports betting tax to 51% from 15%.

There is hereby levied a fifty-one percent tax upon the net gaming 2 proceeds from sports wagering offered to consumers within this state pursuant to this 3 Title electronically through a website or mobile application,” according to text of the bill.

Mobile sports betting debuted in Louisiana in early 2022 and since then, that form of wagering has flourished in a state that was already the casino capital of the Southeast. Currently, the state ranks 15^th in handle since its legalization of sports wagering, though that position is likely to fall as more populous states such as Florida and North Carolina deliver more data.

Louisiana May Be Inspired by NY Sports Betting Tax

It’s not clear if Wilder drew inspiration from New York or Vermont in proposing HB 22, but those are the only other states with sports betting taxes of 51%.

Wilder’s proposed legislation could ruffle the feathers of sportsbook operators in another way. If passed into law, it would repeal a previous statute that allows for promotional play, a primary customer acquisition tool in the industry.

“Repeals the provision authorizing promotional play and amends the definition of ‘net gaming proceeds,’” according to the bill.

The legislation isn’t applicable to Louisiana’s parimutuel industry, including bets made on horseracing and winning wagers.

Louisiana Tax Proposal Could Surprise Industry

Earlier this year, Illinois altered its sports wagering tax scheme, moving to a graduated levy system under which the largest operators, such as DraftKings and FanDuel, pay higher taxes than their smaller market share rivals.

That move resulted in those two gaming companies seeing their tax rates effectively double in that state and stoked speculation in the industry that other states could move to increase sports wagering taxes to boost revenue.

At this time, it’s not clear if there’s momentum for Wilder’s bill, but it might have one thing on its side. Louisiana has a favorable sports betting geography in that none of the three states with which it shares borders currently permit mobile betting.

The post Louisiana Pol Proposes Massive Sports Betting Tax Hike appeared first on Casino.org.

The Grand Sierra Resort in Reno has agreed to pay the Nevada Gaming Commission (NGC) a quarter of a million dollars to settle a regulatory complaint stemming from an incident last year.

The Nevada Gaming Control Board (NGCB) brought a complaint against MEI-GSR Holdings, LLC, doing business as the Grand Sierra Resort after one of its agents reported being denied prompt access to the property’s Grand Theatre during a routine inspection.

Casino security told the agent, who had his NGCB badge and credentials displayed, that he had to relinquish his firearm before entering the theater. After about six minutes, higher-ups with the resort informed the security personnel that the gaming agent could enter the theater with his weapon.

Rare Occurrence

All establishments licensed by the NGC are subject to routine inspections. State gaming agents are to have immediate and full access to “all portions of the premises,” with the definition of premises being “curb to curb,” said Somps.

The senior deputy attorney general explained that gaming agents review areas off of the casino floor to ensure that no illegal gambling or other unlawful activity is occurring inside the licensed gaming facility.

While a brief delay for access is sometimes common, a delay of six minutes, which the agent disputed and said was longer, is an outlier according to Somps. Paired with a similar incident in 2021, where a third-party security guard hired by the Grand Sierra, blocked a gaming agent’s immediate access until he was wanded, Somps said a $250K penalty against the resort was warranted.

Licensees have a long history of complying and granting Board agents immediate access to all portions of the premises. The Board views the Grand Sierra Resort’s violation seriously and maintains that licensees and their employees understand that any Board agent be given immediate access to any portion of the premises of the gaming establishment after they display their credentials,” Somps said.

The Meruelo Group, the parent owner of the Grand Sierra Resort controlled by billionaire Alex Meruelo, didn’t contest the fine in agreeing to settle the complaint.

The $250K fine comes just days after Meruelo’s Grand Sierra donated $15K to both the Robert Mitchell Elementary School and Vaughn Middle School, both of which are part of the Washoe County School District.

Where the Money Goes 

The NGC and NGCB are responsible for the strict regulation of all persons, locations, practices, and activities associated with the state’s gaming industry. Nevada’s gaming law allows the NGC to impose fines on licensees found to be noncompliant with its regulations.

Fines received by the state gaming agency are directed to the Nevada General Fund. The $250K fine against Grand Sierra slightly offsets another decision made on Monday that determined that Nevada Restaurant Services Inc., the parent of Dotty’s gaming taverns, was owed a $3 million tax refund.

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The Nevada Gaming Commission (NGC) unanimously voted in favor of refunding $3.12 million in overpaid taxes to Nevada Restaurant Services Inc., the operator of the ubiquitous Dotty’s gaming taverns.

As part of the settlement, privately held Nevada Restaurant Services agreed to forgo claims to $222,744 in interest, which had been building up to the tune of $446 per day. Some members of the NGC had reservations about refunding that cash to the gaming operator because it was late in filing a claim.

In addition to Dotty’s, Nevada Restaurant Services runs gaming taverns in Nevada under the Bourbon Street, La Villita, Points! Casino, and Red Dragon brands.

Nevada Owes Dotty’s Parent More Money

The aforementioned $3.12 million isn’t the only refund coming to Nevada Restaurant Services by way of the NGC.

It was also discovered that the gaming bar operator is owed $1.8 million for two years of overpayments. The Dotty’s owner will accept that amount, but will forego rights to interest payments.

The overpayments occurred because NRSI failed to properly deduct wagered cashable electronic promotion amounts from its $46.9 million gross revenue. Under state regulations, companies can deduct specific promotional costs from taxable revenue, which NRSI overlooked,” reports The Las Vegas Review Journal.

There are 120 Dotty’s locations in Nevada, 80 of which are restricted gaming locations, meaning there are 15 gaming machines per venue. Twenty-seven Dotty’s taverns have as many as 40 gaming devices. None of the properties, nor any of the company’s other establishments, have table games.

How Nevada Gaming Promotion Deduction Works

Nevada’s guidelines pertaining to the deduction of select promotional expenditures are relatively straightforward, but there is some onus on operators to be diligent on this front. That includes maintaining solid documentation and performing regular testing of systems that could be applicable in the deduction claiming process.

“At least annually, all computerized player tracking, promotional accounts, promotion and external bonusing slot systems (in-house developed and vendor systems) are reviewed by personnel independent of the individuals that set up or make changes to the system parameters. The review is performed to determine that the configuration parameters are accurate and that the configuration parameters have not been altered without appropriate management authorization (e.g., player tracking system – verify the accuracy of the awarding of points based on the dollar amount wagered),” according to the Nevada Gaming Control Board (NGCB).

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The Commodities and Futures Trading Commission (CFTC) is pledging to diligently monitor platforms offering financial contracts tied to political outcomes as Election Day nears.

The commission, which is engaged in a lengthy legal spat with financial exchange and prediction platform Kalshi, views itself as the sheriff in a wagering arena it considers to be the Wild West. Speaking from the Bloomberg Global Regulatory Forum in New York on Tuesday, Chairman Rostin Behnam told Bloomberg Television he sees the CFTC as an “elections cop.”

We’ll pursue any action, as we do in any part of our markets,” he told the news outlet.

Behnam’s comments arrived a week after a federal appeals court in Washington DC fast-tracked a complaint by the commission seeking to block Kalshi from offering bets on US elections.

CFTC Already Polices Kalshi

Benham didn’t get into specifics regarding how the CFTC will step up its law enforcement-esque efforts pertaining to election markets, but the commission is already the regulator to which Kalshi and rival PredicIt answer.

Regulated US sportsbooks are prohibited from booking bets on elections. However, Kalshi and PredicIt aren’t flouting US laws. The use of derivatives helps, as does the fact these platforms and others like them aren’t election-only betting venues.

For example, Kalshi clients can currently use the site to “bet” on economic data, stock index moves, and even pop culture events such as award shows. The site even offers a slew of bets related to Taylor Swift.

CFTC Policing Efforts Could Be Difficult

The extent to which the CFTC can monitor election-related betting could hinge on a court ruling that may or may not be happening prior to Election Day on November 5. Additionally, activity on Kalshi and PredicIt is likely to increase as Election Day draws closer and could continue swelling if various results aren’t known on election night. Such a volume uptick would be a natural response by participants in those markets, not an implication of something nefarious.

Some critics speculate that foreign money piling into election betting markets could color US voters’ opinions of the presidential race. As of this writing, Kalshi shows former President Donald Trump (R) with a 60% chance of winning, or a 20-point lead over Vice President Kamala Harris (D).

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After an audit revealed that Uncle Sam may have let more than $1 billion in income tax on recent casino jackpots go uncollected, the IRS is cracking down on the oversight. And one of Las Vegas’ most recognizable casino gamblers finds himself in the crackdown’s crosshairs.

The news was delivered by this Sept. 30 report from the independent IRS watchdog group Treasury Inspector General for Tax Administration (TIGTA). It found that 148,908 Americans with gambling winnings exceeding $15,000 failed to file tax returns between 2018 and 2020.

Their winnings exceeded $13.2 billion dollars, making the unpaid taxes just north of $1.4 billion.

TIGTA analyzed the W-2G forms generated by casinos when gamblers hit slot jackpots of $1,200 or more or Keno wins of $1,500 or more. Its report noted that 103,000 of these delinquent winners were never issued notices or faced with efforts to bring them into compliance.

In a response to the report, the IRS wrote, “We agree with the recommendation,” vowing to begin enforcement actions.

The Internal Revenue Code states that gains from gambling are fully taxable and must be reported as income by individual taxpayers. Gambling losses may be deducted for filers itemizing up to the amount of their winnings. 

Other Findings

Among the TIGTA report’s other concerns were hundreds of W-2Gs that were filed by casinos without the required taxpayer identification numbers. This makes it extremely difficult for the IRS to trace the winnings to its recipients.

Also, the watchdog group noted, the IRS has too few processes in place to identify noncompliance with excise taxes by gambling operators, particularly in the rapidly growing online sports-betting market.

The IRS also agreed with the latter recommendation. However, it disputed the significance of the W-2Gs without taxpayer IDs, since the number was small.

“While this population may not be large in absolute terms, we believe that the amount of backup withholding that should have been withheld is significant,” TIGTA responded.

Code Adjustments

Form W-2G’s Summary of Withholding Requirements doesn’t currently single out earnings from sports gambling or iGaming. Sports betting is among the fastest-growing sectors of the U.S. gaming industry, with retail and/or online sportsbooks regulated in 38 states and Washington, D.C.

The IRS has obliged to specifically inform taxpayers of their filing requirements for sports betting and online casino gambling winnings.

“Form W-2G has not evolved with the growth of the gambling industry,” TIGTA’s report read. “For example, the wager codes on Form W-2G include only nine specific types of gambling activities, which do not include a wager code for sports betting. If there was a wager code specifically for sports betting, the IRS could use this information to identify potential non-filers and under-reporters.”

The Treasury estimates that U.S. taxpayers underpaid their federal taxes by $688 billion in 2021, with non-filers responsible for 11% of the unreceived funds. The IRS’ Failure to File penalty is 5% of the unpaid taxes for each month or part of a month that a tax return is late. The maximum penalty is 25% of the unpaid tax.

The IRS typically reserves criminal prosecution for exceptional cases where massive fraud and tax evasion evidence is rampant.

Vital Error

Last month, Scott Roeben, founder of Casino.org’s own Vital Vegas, received an IRS audit letter regarding taxes on $100,000 in unreported W-2G income in 2022.

The letter gave him 30 days to respond with specific four-year-old documentation or “further steps” would ensue.

The only problem, Roeben says, is that he filed his 2022 tax return on time, with all gambling income reported.

“I filed everything properly,” he said. “I just had a large number of jackpots, so that triggered the audit, presumably.”

Roeben called the IRS’s campaign “selective persecution of casino patrons because of the stigma attached to gambling,” adding that it demonstrates “how out of touch the IRS is with the reality of gambling.”

“This is making people jump through hoops, spend money on tax professionals to help with their audits and reconsider a pursuit they enjoy,” he says, adding that, even in the case of tax cheats, “jackpots are far from the entire picture when it comes to gambling.

“It’s like saying passengers of the Titanic had an absolute blast for 2,070 miles.”

The post IRS Cracks Down on $13B in Unreported Gambling Winnings appeared first on Casino.org.

Wynn Resorts (NASDAQ: WYNN) confirmed it has been granted the first commercial casino license in the history of the United Arab Emirates (UAE) and the Middle East at large, paving the way for Wynn Al Marjan Island to include a gaming venue.

The Las Vegas-based gaming company made the announcement late Friday, noting the General Commercial Gaming Regulatory Authority (GCGRA), the UAE’s first gaming regulatory agency, approved a commercial gaming facility operator permit. The GCGRA, which was formed last year, hasn’t issued a statement regarding the Wynn approval, but the casino operator said it won the license after a “diligent and extensive review” by the regulatory body.

Wynn Resorts thanks the GCGRA for the confidence and trust the license grant signifies and is proud to be the recipient of the first commercial gaming facility license in the UAE,”

Located in Ras Al Khaimah, the $3.9 billion Wynn Al Marjan Island has been under construction for several months and is expected to open in early 2027. Development of the property is a partnership between the gaming company and RAK Hospitality Holding.

Wynn UAE Casino Could Reshape Gaming Industry

For decades, regulated gaming has been off limits in the Middle East, but recent developments indicated the UAE could break that thaw. Those include the formation of the GCGRA in 2023 and the July approval of a lottery license for an Abu Dhabi-based company.

Over the long-term, it could prove to be a prescient move by Wynn because some analysts believe, at maturity, the UAE casino market could generate as much as $5 billion in annual gross gaming revenue (GGR). The emirates are attractive to gaming companies due to vast amount of oil wealth, the soaring number of high-net-worth residents, and the UAE’s status as one of the region’s prime tourist spots.

Additionally, viable global growth outlets are hard to come by in the gaming industry. For example, Macau appears unlikely to add more licensees and the Singapore duopoly is locked up close to another 30 years.

Wynn Will Soon Provide UAE Casino Update

Investors could soon gain more insight about Wynn’s UAE casino project because the company is holding an event for analysts and institutional investors on Tuesday, Oct. 8 at its namesake integrated resort on the Las Vegas Strip.

“Craig Billings, Chief Executive Officer, along with other members of the Wynn Resorts global leadership team will deliver presentations, including on the resort’s expected financial performance. The Analyst & Investor Update Meeting will commence at 11:30 a.m. Pacific Time and conclude at approximately 2:30 p.m. Pacific Time,” according to a statement from the gaming company.

When that invitation-only event was announced, analysts speculated it was a sign Wynn would be approved for a casino license in the UAE.

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