Online Casino Spotlight

In order to ensure fairness, all reputable internet casino operators have their games audited by independent third-party organizations.  Not only is this a requirement enforced by the licensing authority in the operator’s jurisdiction, it also done to show players that they are running a fair and reliable business.  When it comes to the auditing of online casino games, eCOGRA is one of the most trusted names in the industry, a respected agency that makes its reports publicly available.  Anyone player who is new to the realm of online gaming should consider viewing these audit reports and understanding what they mean.

The Big Three

eCOGRA provides online casinos that have demonstrated fairness and responsible gaming with three different sets of certificates.  The first set proves that the agency asserts that the operator’s games are fair, and that the company runs a safe and responsible business.  The second set is related to the RNG (random number generator) found in most casino games.  These certificates are generally issued individually to prove the fairness of the RNGs of games such as blackjack, video poker and roulette.  They are provided based on analysis conducted by eCOGRA over a six month period, showing that every number is indeed randomly generated and that the outcomes of all tested games are unbiased.

The Bigger Picture

The Percent Payout Review just may be the most useful and important eCOGRA audit report of all.  By viewing this report, you can learn the average payout percentages for a variety of different casino game categories.  These categories include “all games,” “poker games,” “slots games,” and “table games.”  Conducted on a monthly basis, the figures in this particular report display the percentage of total player winnings vs. the amount wagered in a given month.  It should be noted that these numbers represent an average of the payouts and do not determine whether a player will win or lose money.  We will provide some real life examples to show you how these percentages work.

In September of 2009, slots games at Platinum Play Casino paid out at an average percentage of 95.60%.  This basically means that players were paid out $95.60 for every $100 wagered on those games, with the house keeping $4.40.  In the same month, the report indicated that poker games payout at an average of 99.51%.  Why such a big difference?  Well, because slot games are based more on pure luck while poker requires strategy and optimum decisions.  Skilled players who make sound decisions may notice that the payout percentage is either around or above this average.  Bad players are more likely to find that the average is significantly below the reported number.  The point here is that new players should not automatically assume that the return on online poker games is 99.5% as anything could happen.

Conclusion

Checking out the audit reports published by eCOGRA is something that both new and experienced players should consider doing on regular basis.  At the very least, they should review the Percentage Payout Review and base their play on those trends.  If you obtain nothing else from these reports, they will give you the assurance that the games you play at a given casino are safe and fair.

Ohio and West Virginia could not have been pleased by the news that Pennsylvania has legalized table games.  Ohio just recently approved slots parlors and West Virginia has held a competitive edge over Pennsylvania since they already offer table games.  However, that competitive advantage is about to vanish.  The revenue generated from Pennsylvania’s table games will be taxed at a rate of just 16 percent, with 1 percent going to the home county of each casino.  Compare that with the 35 percent tax on table game revenues in West Virginia and it is clear that casinos in West Virginia will soon be at a huge competitive disadvantage.  Likewise, many Pennsylvania residents will now be staying in their home state to play table games, rather than making the trek to West Virginia.  The first table games are tentatively scheduled to debut in July at most Pennsylvania casinos.

Bill 711 Bails out Budget

Pennsylvania Bill 711 is the catalyst that will allow poker, roulette, blackjack and dice games.  The bill does a lot more than just legalize table games because it is filled with special earmarks.  For example, there is an earmark that allows patrons in Philadelphia casinos to smoke despite the fact that there is a city law that bans smoking in public places.  Additionally, the bill also increases the amount of slot machines that a resort casino can have from 500 to 600.

Had this bill not passed it likely would have lead to the elimination of 1,000 state jobs and cuts to many state-funded programs.  Currently, there is a $250 million gap in the Pennsylvania budget and this bill is expected to fill that void.  The passage of Bill 711 came as good news to many and could mean particularly good news for the Rivers Casino in Pittsburgh.  Rivers Casino was predicted to be one of the State’s most lucrative, yet this past September it posted the third-lowest revenues of Pennsylvania’s nine casinos.  The hope is that table games will bring the Rivers Casino revenues closer to the highest in the state, rather than the lowest.

Much like every other state, Pennsylvania struggles to pass its budget each year.  The passage of table games has always been the, “break glass in case of emergency,” quick fix in the State’s back pocket.  Pennsylvania legislators must now hope that revenue projections will meet expectations because if they don’t there is no quick fix left to bail out the budget.

California has been hit hard by the recession.  Despite being strapped for cash, the state has always been a trendsetter when it comes to changing existing legislation.  As it stands now, the sate is prepared to hold a hearing on the tax benefits of regulating online poker.  This week, Roderick Wright, Democrat State Senator, reported that state legislature plans to hold a hearing regarding the matter next year in February.  While fellow State Senator Dean Florez agreed that it would make for a viable and potential source of income, he said the structure of the industry is the most important aspect.

The Commerce Casino and Morongo Band of Mission Indians are two parties in a network of gaming supportive groups that are all calling for the regulation of internet poker in California.  Both are hoping to operate their own respective poker rooms should the proposed legislation eventually become official law.  If it does, California would be the first state in the United States to legalize and regulate intrastate internet poker.

Patrick Dorinson, a spokesman for the Morongo tribe, stated that there are currently an estimated one million California resident playing poker at offshore sites, citing how popular the online game is among U.S. players.  While lawmakers will not come out and state approximately how much revenue intrastate internet poker could possibly bring to California, it has been speculated that if the industry is run like the local slot machines, it could generate well over $250 million a year.

Even with all the potential benefits, there are some groups that do not support the proposal for regulation.

Robert Smith, Chairman of the California Tribal Business Alliance, represents one of few voices that believes the regulation of online poker would negatively impact the state’s brick and mortar casinos.  Gambling opponents have also been outspoken on the issue, including Jim Butler, member of a local advocacy group.  Butler hinted that providing residents with the freedom to gamble away thousands online would only make the situation in California worse.

California still has its fair share of challenges to deal with even if legislature rules that regulation is worth pursuing.  For what seems like forever, the U.S. Department of Justice has been firm in its claims that all forms one online gambling are illegal, despite the fact that there is no applicable legislation that confirms this, something the UIEGA has been criticized for failing to do.  A large number of attorneys agree that the law the DOJ often refers to is the Wire Act, a law that only pertains to wagering on sports.

Although regulation seems to be closer than ever before, this is not the first time the state of California entertained the idea of regulating internet poker.  In fact, it was February 2008 when Assemblyman Lloyd Levine introduced his bill for regulating the industry. Unfortunately, the bill was never acted on before the legislative session for that year adjourned.

It may be a while before California sees online poker regulation, but the state is showing that it will not go out without a fight.

The long awaited regulations of the Unlawful Internet Gambling Enforcement Act have been postponed for six months from December 1, 2009.  Joe Brennan, Chairman of Interactive Media Entertainment and Gaming Association, informed the online gambling industry after the Federal Reserve and U.S. Treasury Department decided to delay the hearings.

The news came just a week before the hearing that was scheduled to be held by the House Financial Services Committee concerning two online gambling bills presented by Massachusetts Democrat Representative Barney Frank.  These bills could change the entire landscape of the online gambling industry, particularly the one that aims to undo the UIGEA entirely.  The UIGEA was enacted in 2006 after the industry was somehow connected to an unrelated port security measure spearheaded by Senate Majority Leader and Tennessee Republican Bill Frist.  Unfortunately for U.S. players, the SAFE Port Security Act was passed unanimously in the Senate.  With everything put on hold until next year, the fate of Franks bills is up in the air.

Regarding the hearing, which was to be held Thursday December 3 in Room 2128 of the Rayburn House Office Building, Michael Waxman, a spokesman for Safe and Secure Internet Gambling Initiative, reported to Poker News Daily that Barney Frank is demonstrating his commitment to changing the government’s perception on internet gambling.  He mentioned how the Chairman is looking to replace the failed attempts at prohibition with a viable regulatory framework that protects the consumer.  Waxman noted that Congressman Frank’s dedication is further indicated by strategically scheduling the hearing and approaching it on the heals of a push for the reformation of the U.S. financial industry, which is what the committee has been focusing on exclusively over the past six months.

As it stands now, the six-month delay will take online gambling regulation to June 1, 2010, just before election season rolls around next year.  Although pressing issues such as the slumped economy and healthcare have understandably hogged the spotlight since more than a year ago, online gambling just may have its day to shine in the sun.

When breaking the news, Brennan shared his thoughts by saying how encouraging it is to see that things are moving in the right direction, yet still unfortunate that it took this long. He also mentioned that hopefully one of Frank’s bill, which already has 63 co-sponsors, can at least be heard in the next months.

Neither Federal Reserve Chairman Ben Bernanke nor U.S. Treasury Secretary Timothy Geithner were available for an official comment on the delay at press time.  The PPA (Poker Players Alliance), National Thoroughbred Racing Association, the American Track Operations Association and members of the Kentucky Congressional delegation all filed petitions to the two government officials in letter asking that regulation of the UIGEA be instated in one year.  Alabama Republican Congressman Spencer Bachus and Arizona Republican Senator Jon Kyl asked Bernanke and Geithner to uphold the original December 1 compliance deadline but it was to no avail.

It looks as is if the online gambling industry in France will be changing very soon as the country is on the verge of enacting a new legislation largely based on the successful models of the UK and other European nations.  One of the most important components of this legislation is to prevent problem gambling by setting fixed limitations on wagers among other measures.  In addition, gambling operators will be required to post warnings about underage wagering and the potential dangers of compulsive gambling.

The opening of the online gambling market in France will consist of sports betting, horse racing, and community games of skill such as poker.  At this point, it is believed that online slots games, lotteries and common casino games such as black and roulette will be excluded from the market as the French government considers them to have a higher risk of addiction.

French Gaming Authority

ARJEL, a new independent public gaming authority, will be established specifically to regulate the online gambling market.  This authority will be responsible for the following:

Making suggestions on requirements for different types of gaming licenses to the government.

Ensuring compliance for policies associated with internet accessible games.

Preparing and attributing requests for online gaming operation licenses.

Monitoring internet gaming operations and taking action against illicit gambling sites and fraudulent activity.

According to a recent report, ARJEL with be given the power to prevent access to illegal websites through a direct relationship with internet service providers, which will allow them to block financial transactions.

Operator Responsibilities

The new online gambling legislation will impose strict requirements on the operators that service French players.  These requirements include:

Operators must provide information and confirmation on their identification, shareholding, and experience in the gambling industry.  They are also required to take the measures necessary to secure online transactions, protect minors, and prevent fraud and money laundering.

Online gambling websites must be accessible via a first level domain ending in the “fr” TLD (top level domain).

Licensees must be located within the member states of the ECC and EU.  If any headquarters of operators or shareholders are based in jurisdictions considered as non cooperative tax havens, they will be refused the licenses needed to legally offer their services in France.

Possible Time of Implementation

With the implementation of the legislation known as the Draft French Gaming Law in the works, ARJEL will likely need more time to establish an efficient architecture for regulation and license distribution.  According to senior officials within the French government, France will not begin granting online gambling licenses until sometime until 2010.  In all likelihood, the Draft French Gaming Law will not be officially enacted on January 1^st as originally expected, partly because of the detailed opinion of the EU Commission rendered back in June.  For this reason, French government officials are expecting the online gambling market to open up for the launch of the World Football Cup in June at the very latest.

Many players in the United States and other countries will probably be sad to know that it is indeed legal to gamble online in the United Kingdom.  This is mainly because the UK government views the online gambling arena as a legit and more interestingly, a profitable industry that can deliver significant tax revenues under the right legislation and regulation.  The U.S. on the other hand, sees it as a potentially dangerous industry that is difficult to control and has therefore, elected to prohibit it, or at least this is their attempt with the Unlawful Internet Gambling Enforcement Act.

Potential Revenues

The foreign countries where many online casinos operate openly embrace the internet gambling industry.  Operators pay these governments thousands of dollars to obtain gaming licenses in addition to taxes and other expenses.  Antigua, Grenada, Gibraltar, Curacao and the Dominican Republic are just a few of many small countries whose economies have received a significant boost from the online gambling business.  While the UK government does not regulate these offshore casinos, not all are corrupt or looking to cheat players.  Conducting business in general over the internet is risky whether the government is involved or not.  However, the online gambling space is becoming much safer and as a result, more trusted by UK citizens.

Proceeding with Caution

Due to the fact that offshore casino operators are not subject to scrutiny by the UK government, players need to be more cautious than ever.  Even though the country is more open to the internet gambling industry, if someone happens defrauds you, it will be very difficult to prove your case to any type of authorities.  Therefore, the best approach for UK players to take is to “wager with caution.”   Also keep in mind that all online casinos exist to make money by attracting as many new players as they possibly can.  The only way this can be achieved is by offering an honest service and establishing a good reputation.   If it starts to become known that the casino is not paying out winnings or involved in other questionable practices, word will travel fast and damage any credibility they have established.  The good thing is that most casinos, with the exception of the fly-by-not operators, have proved to be safe and reliable.

If you are someone who is concerned about transmitting sensitive personal information such as your name, address and credit card numbers over the internet to an online casino, you must understand the same risks exist when doing business with  other companies whether they are licensed in the UK, involved in the gaming business or not.  The internet can be a haven for criminal activity and not even legislation and regulation from the government can stop it from occurring.  Fortunately, reputable online casino operators take every to ensure that the information you share with them remains private and secure.  This is made possible by the use of secure servers and encryption technologies that protect data and prevents hackers from intercepting and thieving confidential information.

Germany’s online gambling ban is in question after one of the 16 states in the country recently stated their opposition to the current legislation.

A controversial treaty

The German Interstate Treaty on Gambling resulted in a ban of online gambling in the nation except for horse racing. The treaty was enacted on January 1, 2008. The legislation has been controversial on many fronts. It is viewed as a monopoly that is in violation of European law. A major European betting association, EGBA, has indicated that Germany’s policy is not in accord with Article 49 of the Treaty of Rome. According to this treaty, the rights of its members to allow access to online gambling are being denied. Two of these companies, Bwin and Unibet, have been vocal in their desire to see German’s current legislation be reversed.

All states must agree on law

The current legislation is set to expire on January 1, 2012. This type of legislation requires that all 16 states in Germany are in support of the law. One of the states has come forward to express their dissatisfaction with the German Interstate Treaty on Gambling after initially backing the bill last year.

The Schleswieg-Holstein state in northern Germany is now against the treaty. The Liberal Party and Christian Democratic Party in the state are looking to get the ban canceled. According to Jürgen Koppelin, the leader of the Liberal Party in Schleswieg-Holstein, an intrastate licensing system would be introduced, if the other 15 states can’t agree on reforms for the current legislation.

The supporters of the German Interstate Treaty on Gambling have argued that the legislation serves a very important purpose in the country. They argue that the monopoly is a form of protection for the citizens of Germany. In their view, the law is designed to protect consumers from problem gamblers to children.

German gaming lawyer Martin Arendts said that “the argument that only a monopoly can protect customers, prevent problem gambling and guard against fraud would not hold any more.”

Restrictions causing more harm than good

Germany is just the latest example of a country that has seen its gambling bans cause more harm than good. The United States, Australia, France and Russia have also enacted controversial gambling bans over the last few years. Most of these legislations have prevented free trade in the market.

The growth of online casino gambling isn’t expected to slow down anytime soon. Governments with a proactive approach could be taking advantage of the revenue that would be available from regulated online gambling. According to a report that was released earlier this week by U.S. congressman Jim McDermott, the United States could add over $40 billion in revenue over the next decade from taxes tied to a regulated online gambling industry in the country.

The Schleswieg-Holstein forces have come to realize the problems that occur when online gambling is restricted. Their reform ideas seem to be a more logical solution on how to properly oversee online gambling in the country.

After becoming the 39th state in the US to legalize casinos in a statewide vote last week, the state of Ohio is now in the process of formulating a plan to bring new casinos and thousands of jobs to the Buckeye State.

State meets with casino officials

Earlier this week, Ohio Governor Ted Strickland and state legislative leaders began initial discussions with some Ohio casino developers. The meetings involved Cleveland Cavaliers owner Dan Gilbert and some officials from Penn National Gaming. Gilbert is set to construct casinos in Cincinnati and Cleveland while the Penn National group is set to produce casinos in Toledo and Columbus as part of a plan to feature the four biggest cities in the state.

“We told the governor, ‘Look, we have gaming now in Ohio. What we have to do is do it the right way, where it positively affects the communities and creates the most jobs,’ ” said Gilbert. Penn National President Tim Wilmott stated that there were conversations pursuant to  the licensing and regulatory process. According to Wilmott, lawmakers should create the regulations before Penn and Gilbert will be comfortable paying the $200 million dollars outlined in licensing fees for the four casinos.

Issue swirling in controversy

While the vote did pass, there are still plenty of forces that are not in favor of the new legislation. Governor Strickland was not in favor of the Issue 3 measure that passed in his state. There are many in central Ohio that do not want a casino in their area. While Wilmott is hoping to have a casino opened in Columbus by the end of 2012, there is some strong opposition that could disrupt the plan. State Senate President Bill M. Harris, an Ashland Republican who opposed Issue 3, is looking into some proposals amending the constitution, which would give Columbus the right to reject the casino deal. The voters of Franklin County have already rejected the casino proposal. Strickland has also indicated his desire to give Columbus the option of being removed from the plan. The governor has vowed not to take any contributions from casino operators for his re-election bid in 2010.

Wilmott isn’t fazed by the opposition forces. “I know there’s been a lot of things said by the opposition, a lot of mistruths, a lot of blatant lies about what the casino will bring to the city of Columbus, to the state of Ohio,” he said. “I can assure you that we’re going to develop here, we’re going to create these jobs, and we’re going to get people back to work.”

After an aggressive campaign led by Penn National and Gilbert that topped 2008’s $40 million in presidential campaign spending, the pro-casino Ohio Jobs & Growth Committee reversed the historically anti-gambling stance in Ohio. The state had rejected expanded gambling four times over the past two decades. With an enticement of over 30,000 new jobs, the measure was able to strike a nerve for a state that has battled an unemployment rate of over 10 percent.

The mounting cards are starting to reveal that California could be the first state in the nation to take advantage of fully regulated and legalized internet gambling.  It has recently been reported that a new draft bill is floating around with intentions of allowing online poker within confinement of state borders.  Under the direction of Lloyd Levine, the state had previously explored whether it could legalize the act of wagering poker online due to the presence of the Unlawful Internet Gambling Enforcement Act.  With a draft bill officially known as the California Online Poker Enforcement Compliance and Consumer Protection Act in circulation, it looks as if the state is now moving forward to take the steps actually needed to legalize online poker.

The first part of the new draft bill dates back to January 15, 2009 and presents findings on the issue of online poker.  It explains how U.S. players spent billions of dollars in 2008, emphasizing that instead of furnishing the local economy, the money went to offshore operators in other countries.  The bill also states that it is in the best interest of California residents to license and regulate online poker sites, proposing a licensing and regulatory structure that would permit licensed and established operators to legally run these government-regulated operations.  California is currently licensing and regulating live poker games played within the state.  Unfortunately, it lacks the licensing system, regulatory structure and law enforcement mechanisms need to protect the millions of state residents who play for money online everyday.

Ultimately, California has the belief that online poker sites licensed in the state could benefit by offering the same types of games allowed in the land-based rooms.  They also believe that players would have better protection in licensed and regulated environments.  According to the draft bill, operators can only obtain intrastate online poker sites if they are a current gaming establishment licensed by the state and its tribes with gaming interest.  It has been reported that both the Bureau of Gambling Control and the Gambling Control Commission, both of which are divisions within the U.S. Department of Justice, will be responsible for devising a structure to ensure that licensing and regulation of intrastate poker wagering remains in line with the UIGEA.

The strength of this draft bill is great news for California gamblers, but there is still a lot of work that must be done.  There are numerous factors that need to be considering in order to ensure that both players and licensed establishments are truly located within California boundaries.  The mere involvement of the internet could make this a very steep hill to climb.  In addition, there must also be efficient guidelines in place to address issues such as compulsive and problem gambling, participation from minors and law enforcement to monitor the industry from within the state.  California seems determined to work out the kinks of internet gambling regulation so if they can make it work, this could mean positive change for the entire country.

The state of Nevada is the home of beautiful desert terrain, brothels and most notably, Las Vegas, now referred to by many as Sin City.  It is no secret that Nevada has become synonymous with gambling over the years.  With so many casinos and gambling establishments in the area, the prevalence of online gambling has sparked major competition on a state wide level.  And while you could say there is really no point in playing from your computer when you could easily venture to vibrant venues offering free alcohol and casino games galore, online gambling has managed to make its way into the homes of thousands of Nevada residents.  The more than one hundred sportsbooks and casinos may not like it but up to this point, they, like much of the rest of the world, have been powerless to stop it.  However, there are a few reasons why online gambling has still yet to explode as fast as eager players in Nevada would like.

Problems with Regulation

You might be surprised at the support internet gambling has garnered in recent times.  Several local governments are taking a closer look at existing laws while even some officials on the federal level are openly exploring ways to effectively regulate the industry.  In the state of Nevada, regulation and full legalization all rests on the shoulders of the Gaming Control Board and Gaming Commission, the two entities that would be responsible for adopting and enforcing the new provisions.  Unfortunately, there are currently three major roadblocks within the existing state legislation that might cause problems.

1.)  The first hurdle is the United States Department of Justice, an agency that would need to give Nevada regulators the green light and also one that is adamantly against online gambling.

2.) Second and very important, regulators would have to ensure virtual gambling technology that provides a reasonable level of protection to prevent minors from participating or stop online gambling in locations where the act is illegal.

3. Finally, regulators would have to make sure that internet gambling is consistent with the state’s public policy of maintaining the stability and success of Nevada gaming.  This is perhaps the biggest concern of all.

In 2001, a Nevada law was passed that authorized the state to at least explore the possibility of online gambling regulation. Now however, it looks as if legislators are holding back and observing the action of their neighbors.

America’s Online Gambling Capital?

California, the most popular state in the country and home to one of the world’s biggest regional economies, is currently lobbying strong for the regulation of online gambling.   The state is trying to leverage a sizable loophole in the UIGEA that will allow internet wagering to be legislated and fully regulated.  Due to its aggressiveness, many experts are predicting that California will eventually hold the title of America’s online gambling capital while Nevada sits back and watches.  There is a lot of tax revenue to be generated so if California succeeds, others will likely follow suit.