Winners and Losers in the Gambling world in 2015
Many of he gambling houses, land-based and online were faced with litigation of the past year. From attempts to open sportsbooks, the events of the Daily Fantasy Sports, ther was hopes for regulation, California attempts to legalize online poker. With all that wend down in 2015 some companies fared better than others. Lets look at the good and the bad.
PayPalThe good news is PayPal is now back in the USA again. There has been a 12 year absence of this well known payment processor. PayPal came to the decision in this past year that it was willing to be a participant despite the Federal gaming laws. Four years after they began operation in USA PayPal flipped when the regulators were looking closely as to whether the company was violating the Federal anti-gambling laws. During 2003, PayPal merged with eBay, an thus effectively shutting off all their lines of communication with the online gaming world. Recently that merger ended which meant that Paypal could pursue other avenue of business. When Dalaware, Nevada and New Jersey legalized online gaming PayPal saw an opportunity resulting in the payment processor allowing free flow from bank accounts to the gaming sites which includes the well known Caesar’s WSOP.com. PayPal is not taking chances this time round and they are ensuring that they stick by the Federal Rules. Currently customers can only fund their online gaming accounts in these three states where online poker is legal. There are several states that are looking to legalize online gaming, and it’s estimated that the payment processor could probably be handling billions in payments over the next five years.
DraftKings/FanDuelIronically, these two Daily Fantasy Sports companies could easily fit in both categories. The two companies have not been around very long (FanDuel founded in 2009 and DraftKings in 2012), and currently each company is worth billions. Up until a couple of months ago, the two companies looked like they were ready to lock down the Fantasy Sports world. Neither companies expected what happened recently, this is similar to what happened to PayPal years ago. Recently some powerful people began asking questions about the legality of the DFS, and it started when the national media in September when it was found that a DraftKing employee had reportedly used inside information to win $350,000 on FanDuel. Many believe that this PR nightmare might be the start of the end of DFS, or possibly, strict regulation. Both have attempted to deal with the problem and promised their customers that it was an isolated case. They set new rules which banned employees from playing on any Fantasy Sports. Rather ironically, both sites have reported that in the first week of October they had their best week since opening doors, in terms of revenue that was generated from buy-ins for their games. So it seems despite all the negative press received, it might have helped drive even more players to the DFS sites. Ongoing investigation by the FBI and New York State will keep DFS in the news which will most likely drive up profits. Key industry organization, the Fantasy Sports Trade Association, has now formed their own regulatory watchdog arm using the Fantasy Sports Control Agency (FSCA). This is a win for players as better regulation in 2016 is something that competitor, StarsDraft, (owned by PokerStars) is aiming for.
California Online Poker PlayersThe California poker community made every attempt to become the fourth state to legalize online poker during 2015, however, for the 8th year in a row, it failed to make it happen. This year’s effort was the best chance of al the 8 years, but despite all efforts this measure had to pass in the state. California State is badly in need of new means of revenue streams. But all the parties involved, the poker rooms, the tribal casinos, the racetracks and even the online poker companies, were once again divided and unable to come to an agreement of how the pie should be split. For the first time the bill was put to a vote, but, the finite details of this agreement could not be worked out during the final California state legislative session during September, 2015 fizzled out without and positive decision. If poker became legal in the state of California, it’s estimated tht it could be almost $400 million annually, which will bring more revenue from the state taxes than the current three states that are now legal combined.
Sports Bettors in New JerseyCurrently the sports betting hope in New Jersey are on the losers’ list, but that could change. Governor Chris Christie’s efforts to again pump in much needed tax dollars into the Californian state’s struggling economy one again were shot down by a 2-1 vote in the appeals court during August, which delighted the major NCAA and the professional sports leagues who oppose expansion of gambling on their athletes and leagues. In mid-October, a Federal appeals court did agree to re-open the case, to re-hear oral arguments, and to review new briefs that were submitted by proponents. This has revived hope for sports betting in New Jersey. Should the gambling opponents have things their way, as they have over the last three years, and the latest decision is overturned, New Jersey could still be facing another year or two of litigation before they have ironed out the details for implementing sports betting in the Garden State.
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