Pennsylvania online gambling John Payne RAWA

It’s back to the drawing board for State Rep. John Payne after language he authored for Pennsylvania online gambling was stripped from a comprehensive bill package related to gambling in the state. (Image:

Pennsylvania online gambling is off the table in Harrisburg, but down in Washington, DC, so is the Restoration of America’s Wire Act (RAWA).

The news is a mixed bag for Internet gambling proponents as many were hoping for the Keystone State, the sixth most populated state in the country, to join Nevada, New Jersey, and Delaware in authorizing online casinos. Of course, no state would be allowed to license Internet gambling if RAWA would be passed and signed into law, as the federal legislation would restore the Wire Act to its pre-2011 interpretation.

Poker Players Alliance Executive Director John Pappas summed up the May 24 events by tweeting, “Victory in DC w/RAWA amendment being withdrawn. Redo in PA with iGaming still open for consideration at a later date.”

The Bad News

As has been reporting, State Rep. John Payne (R-District 106) has been leading the push for online poker and gambling in Pennsylvania for more than a year. His legislation, House Bill 649, calls for the legalization of online casino games and the potential liberalization of daily fantasy sports (DFS).

This month state lawmakers added Payne’s iGaming language as an amendment to House Bill 1925, legislation that dictates how gaming revenue from land-based casinos in Pennsylvania is utilized.

But on May 24, House politicians in Pennsylvania voted 122-66 against the Payne add-on and thus removed such language from HB 1925. Payne’s bill to regulate online betting in Pennsylvania isn’t dead, but the statute will need to find a new way to become law.

The Good News

Backed by Las Vegas Sands Chairman Sheldon Adelson, the billionaire whose real estate portfolio includes The Venetian and Palazzo in Las Vegas, RAWA seeks to eradicate a 2011 opinion issued by the Department of Justice (DOJ).

On September 20, 2011, the DOJ’s Office of Legal Counsel published a memo that concluded, “Interstate transmissions of wire communications that do not relate to a ‘sporting event or contest’ fall outside of the reach of the Wire Act.”

The DOJ issued its position on the Wire Act after Illinois and New York asked the department to opine if they could “use the Internet and out-of-state transaction processors to sell lottery tickets to in-state adults.”

Adelson has made it his personal mission to ban online gaming ever since, and has used his political clout to pressure lawmakers into backing RAWA. Sen. Lindsey Graham (R-South Carolina) and Rep. Jason Chaffetz (R-Utah) have championed the legislation in their respective chambers.

RAWA has been the subject of two House committee hearings, but the legislation has found little support. It was largely thought to have been shelved until earlier this month when RAWA-like language sneaked into a Senate Appropriations bill.

It then maneuvered its way into a 2017 fiscal year spending bill authored by the House Appropriations Committee. However, on May 24 Rep. Charlie Dent (R-Pennsylvania) said he would withdrawal the amendment in order to expedite the bill’s passage.

“I think the DOJ overstepped its bounds by disregarding congressional intent and acting unilaterally by issuing that opinion,” Dent said. “I want to draw attention to this issue and request that the committee continue to work with me to reassert congressional oversight. . . At this time, I ask unanimous consent to withdrawal my amendment.”

eSports daily fantasy online video gaming

eSports will soon be a $1 billion annual market, and that doesn’t even include potential forthcoming gaming revenues stemming from wagers on the video game tournaments. (Image: Helena Kristiansson/

If you’re unfamiliar with eSports, you won’t be for much longer. Essentially a term that represents competitive video gaming, eSports is swiftly becoming one of the hottest buzzwords in the gaming and gambling industries.

The market has grown so dramatically over the last year that Nevada Governor Brian Sandoval (R) held a Gaming Policy Committee meeting recently to discuss the emerging format and consider if there’s a way for traditional land-based casinos in the state to enter the realm.

“I’ve always felt that Nevada is a state that always embraced innovation, particularly in gaming,” Sandoval said at the event on May 13. “Because of the speed of technology and innovation, I think it’s important that our regulators keep up with the type of innovation that is happening.”

The innovation Sandoval is referencing deals with how video game tournaments are now attracting thousands of fans to arenas and stadiums around the country, with millions more watching on television and online.

Gaming officials believe Nevada could soon provide lines to gamers on certain eSports championships that would be similar in structure to traditional sports betting. But first, Nevada regulators must deem eSports to be an actual sport instead of a hobby or recreational activity.

Putting Sports in eSports

Nevada is the one grandfathered state that is taking advantage of its exclusion from the Professional and Amateur Sports Protection Act of 1992 (PASPA) that banned sports betting. Bookmakers in Las Vegas and Reno are free to offer lines on just about any sporting event, but when it comes to eSports, things are little murky.

Gaming law in the Silver State says that “any event other than a horse race, greyhound race, or an athletic sports event” is prohibited from sportsbooks. It’s unclear if using one’s fingers to control video game characters constitutes athletics. 

However, the law also states that Nevada Gaming Control Board Chairman AG Burnett possesses the power to approve a new event should he have adequate support from the state’s gaming board and commission.

Burnett said he’d be open to taking such action, but isn’t sure eSports isn’t already legal under Nevada law.

“Events that are not athletic events by professional players have to go through the process whereby an application is filed,” Burnett opined. “It is an interesting fact that the eSports players have been given special visa status as professional athletes to travel to and from the United States through the State Department.”

Full Steam Online

Regardless of Nevada’s decision whether to generate odds on eSports, online the market is taxying for takeoff.

Vulcun was one of the first daily fantasy eSports operators, the provider currently offering contests on “Counter-Strike: Global Offensive,” “League of Legends,” and “Dota 2.” But instead of winning cash, players compete to win in-game items.

Vulcun is no longer the only game in town.

Daily fantasy sports (DFS) heavyweight DraftKings entered the fray last October with one-day eSports contests. Similar to DFS contests on professional sports, DraftKings customers select a roster of eSports players competing in the same tournament and play against other selected rosters for a chance at winning real money.

According to Newzoo, a data and analytical company covering video games and eSports, the global eSports market will surpass $1 billion in annual revenues by 2019. “2016 will be pivotal for eSports,” Newzoo CEO Peter Warman said in January.

RAWA Lindsey Graham online gambling

Senator Lindsey Graham, seen here on the right with Rep. Jason Chaffetz, coyly managed to include anti-online gambling wordage similar to RAWA in the Senate Appropriations Committee’s latest spending bill. (Image: Scott Applewhite/Associated Press)

RAWA is back, albeit in a much more innocent and vastly condensed form.

The Restoration of America’s Wire Act, originally introduced in 2014 to the US Senate and House by Senator Lindsey Graham (R-South Carolina) and Representative Jason Chaffetz (R-Utah), seeks to overturn a 2011 opinion made by the Department of Justice that effectively gave states the right to legalize online gambling.

RAWA would restore the Wire Act to include all forms of Internet betting, not just sports betting.

But Graham and Chaffetz’s crusade against online casinos is currently being backed by only 35 congresspersons, or about seven percent of Congress’ 535 total voting members. It’s an unpopular bill that is seen by opponents as an attempt by federal lawmakers to obtain powers reserved to states under the Tenth Amendment of the US Constitution.

This week it came to the gaming community’s attention that RAWA-like language had quietly made its way into a massive $65 billion spending bill issued in April by the Senate Committee on Appropriations.

One of they key members on that committee? You guessed it, Lindsey Graham.


Online gambling advocates have been more than pleased to watch RAWA fail to reach even a floor discussion in either chamber of Congress. The language in Senate Bill 2837 indeed reflects the overall goal of RAWA, but it is reduced to a simple four-sentence paragraph.

Page 59 of the budget legislation states, “Since 1961, the Wire Act has prohibited nearly all forms of gambling over interstate wires, including the Internet. However, beginning in 2011, certain States began to permit Internet gambling. The Committee notes that the Wire Act did not change in 2011. The Committee also notes that the Supreme Court of the United States has stated that ‘criminal laws are for courts, not for the Government, to construe.'”

The wording seems more of a footnote than legal decree, and even if the bill passes as presently written, the language would seemingly have no impact on current law.

Pennsylvania Wants iGambling

The little chance RAWA has in Congress is good news for state lawmakers around the country looking to capitalize off the growing Internet wagering market.

In Pennsylvania, no politician is more pro-gambling than State Rep. John Payne (R-District 106). During a House Gaming Oversight Committee meeting this week, Payne, who also chairs the committee, told attendees and the media that in order to stay ahead of the curve, Pennsylvania must look to online casinos.

“People think, ‘We ate Atlantic City’s lunch, it’s all over,'” Payne told Reading Eagle reporter Liam Migdail-Smith. “Atlantic City’s not going to just take this.”

Payne’s remarks were in response to how the state might assure Pennsylvania gambling operators that they’ll have every advantage possible over neighboring rivals. Commercial gambling is legal in Maryland, Ohio, Delaware, and of course New Jersey.

Payne believes to keep pace with New Jersey, the state must legalize Internet gambling and allow current land-based operators to get in on the game.

In February, Payne’s Gaming Oversight Committee voted 23-1 in favor of urging Congress to overturn the longstanding federal ban on sports betting and allow states that regulate casino gaming to legalize gambling on sports.

 daily fantasy sports hearing DraftKings FanDuel

DraftKings and FanDuel are going to Washington, DC, next week for a daily fantasy sports congressional hearing in a House subcommittee. (Image: Lucas Jackson/Reuters)

Daily fantasy sports (DFS) will be the topic of an upcoming hearing hosted by the US House Subcommittee on Commerce, Manufacturing, and Trade.

Next Wednesday, May 11, the subcommittee will gather to listen to testimony in an effort to “understand the current direction of the industry and consider whether there is a federal role to play.”

“The issue of daily fantasy sports leagues has been at the forefront of the news over the last few years,” Subcommittee Chair Rep. Michael Burgess (R-Texas) said in a press release. “The committee is providing a forum for all stakeholders to discuss the many aspects of this complicated issue.”

The witness list has yet to be published, but it would seem likely that representatives from DraftKings and FanDuel, the two leading DFS platforms, would have a voice in the discussion. Various parties could serve as counter witnesses to daily fantasy sports including advocacy organizations and numerous state attorneys general who have already opined against DFS legalization.

Country at Stake

DraftKings and FanDuel are shelling out an untold amount of money on legal fees battling for their right to operate in states across the country. While there is no concrete specific number, it could be in the millions of dollars.

Though the two predominant DFS operators aren’t explicitly calling for a federal ruling on the lawfulness of their contests, as they believe the law is already on their side, one countrywide legal verdict would greatly reduce their legal fees.

Of course, a federal decision going against them would effectively outlaw their operations.

That’s why next week’s hearing is much more to the industry than a simple meet-and-greet. DraftKings CEO Jason Robins and FanDuel’s Nigel Eccles haven’t been confirmed as invitees, but if they are welcomed to testify, they will need to do everything in their power to tilt the conversation in their favor.

General Opinions

The discussion is expected to center on the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA) that made it illegal for banks and payment processors to facilitate withdrawals or deposits for American citizens on gambling websites.

The DFS community argues its contests aren’t forms of gambling but skill-based activities.

State attorneys general have mainly supported the gambling definition, with New York Attorney General Eric Schneiderman stating last November, “A person engages in gambling when he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence.”

FanDuel and DraftKings ceased operations in New York in part of a settlement with Schneiderman but remain optimistic the state legislature will pass DFS legislation.

“Fantasy sports is considered a game of skill and received a special exemption from the 2006 Unlawful Internet Gambling Enforcement Act,” FanDuel states on its network. “The vast majority of states consider fantasy sports a game of skill.”

The DFS versus attorneys general versus state politicians appears to be a never-ending conflict, which is why it might be the appropriate time for federal intervention.

“A patchwork of differing and contradictory policies by the states could have negative consequences for consumers, as well as further growth and innovation,” the subcommittee concluded in its reasoning for the hearing.

online poker California Sheldon Adelson

Sheldon Adelson will be none too happy to learn an online poker bill has advanced out of committee in California. (Image: AP/

Online Poker is legal only within the borders of Nevada, New Jersey, and Delaware, but that short list could soon include the mammoth State of California. The most populated of the 50 states, the California Assembly Governmental Organization (GO) Committee voted unanimously on Wednesday to move Assemblyman Adam Gray’s (D-District 21) legislation forward and one step closer to ending prohibition of the card game online.

Gray’s Assembly Bill 2863 would legalize Internet poker and create a regulatory environment to license intrastate interactive operators. After years of state legislation failing to adequately satisfy the various invested sides including tribal leaders and the horse racing industry, AB 2863 seems to have found the sweet spot by way of $60 million.

That’s the figure the racing community stands to receive on an annual basis for supporting the proposition. While it won’t actively participate in online poker, the first $60 million generated from online poker by Native Tribes would be forfeited to support the dissolving horse racing segment.

“After countless revisions and meetings with stakeholders and consumer advocates, there remained two key issues raised by opponents: horse racing and suitability,” Gray said in a statement. “Today we put forward language that settles the horse racing component, and negotiations over suitability continue.”

Sustained Affairs

While most attending the GO hearing on Wednesday supported AB 2863, a divide remains on determining the satisfactory criteria of licensee applicants.

Montreal-based Amaya paid nearly $5 billion in June of 2014 to buy PokerStars, the most active and most known Internet poker network in the world. However, PokerStars is also widely known for its criminal actions in the United States between 2006 and 2011.   

Certain tribes believe California would be best served to block any iPoker platform with rogue histories regardless of whether its parent company has since undergone a takeover.

The other argument is that PokerStars would likely boost revenues stemming from online poker legalization, as it has quickly done in the isolated New Jersey market.

“We have taken the time necessary to thoroughly understand and respond to the concerns put forth by stakeholders,” Gray explained. “Through this process, we have created a coalition that is willing to acknowledge the problem and support a comprehensive solution. . . We still have more work to do.”

Las Vegas Gag

The most vocal critic of AB 2863 at the GO hearing was Rev. James Butler, the executive director of the California Coalition Against Gambling Expansion. Butler has ties to Sheldon Adelson, the Las Vegas Sands billionaire who is the most outspoken antagonist of online poker and Internet gambling.

This week longtime Las Vegas Review-Journal columnist John L. Smith resigned from the media outlet for an alleged ban on writing about Adelson. Through a subsidiary company, Adelson purchased the Review-Journal for $140 million late last year, pocket change to a man worth over $30 billion.

“If I can’t hold the heavyweights in the community to account, then I’m just treading water,” Smith told NPR in an interview. “It wasn’t an easy decision to make, but there was no other decision to make.”

Iowa Tribe of Oklahoma online gambling

The Ioway Casino, one of three gambling facilities operated by the Iowa Tribe of Oklahoma, will soon be complemented by an online casino that will cater to international customers. (Image:

The Iowa Tribe of Oklahoma will join Nevada, New Jersey, and Delaware in the legal online gaming market beginning August 1, 2016.

Though the sovereign Native American group won’t be allowed to cater to US or even Oklahoma residents, US District Judge David Russell’s decision to allow the tribe to run an interactive betting website is a giant step forward for iGaming proponents and has the potential to singlehandedly revolutionize the Internet casino industry in the United States.

After acquiring the domain in late 2015, the Iowa Tribe of Oklahoma moved to enter the online poker realm but was quickly thwarted by the state government.

An arbitrator agreed upon by the tribe and Oklahoma Governor Mary Fallin (R) ruled that its encompassing of the Internet “is merely using technology to . . . increase Tribal revenues” and therefore not in violation of its gaming compact.

In late February, the Iowa Tribe of Oklahoma field a motion seeking clarification from the US District Court for the Western District of Oklahoma, and it received the verdict it was looking for this week.

Ruling’s Impact

Though Oklahoma doesn’t have any commercial casinos, it’s home to over 50 gambling venues all owned by Native American tribes.

Russell’s agreeing with the arbitrator’s findings in that Internet gambling conducted by the tribe is permissible “as long as the games are controlled and operated by a computer server located on tribal lands” would seemingly extend to the nearly 40 other federally recognized tribes in Oklahoma.

Iowa Tribe of Oklahoma Chairman Bobby Walkup said after the arbitrary findings, “Every tribe has the same opportunity . . . to engage in Internet gaming. We look forward to moving forward and launching the site as soon as possible in 2016.”

The consequences could be significant, especially if tribes in other states take similar steps. The judgment is also momentous in that it to some degree goes against current federal law.

The Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) made it illegal for banking companies to facilitate Internet transactions related to gambling for US citizens. Of course, American Indians are citizens of not only their reservations but also the United States of America.

Finally, Russell’s position also seems to be under the assumption that the tribe will be able to properly block US and Oklahoma residents from accessing the online poker and gambling network. Geo-location technological abilities have long been a leading issue of concern for legislators against the expansion of online casinos.

Play Money, Then Stakes Raised

According to the website, free play gaming will launch on May 17, with real money play to follow on August 1. The site has also revealed its plans to take the platform to the skies by bringing an international “in-flight real money play online casino” to airplanes.

The third component of the Iowa Tribe’s entry into iGaming isn’t expected to commence until January 9, 2017. It’s unclear whether the in-flight Internet casino will be available on domestic flights soaring above states where online gambling is banned, or whether it will only be offered during international trips.

New Jersey online gambling revenues

New Jersey online gambling revenues benefited from the arrival of PokerStars, as total iGaming earnings soared nearly 18 percent in March. (Image:

The New Jersey online gambling market is budding with promise as the warmer spring air descends on the region.

Though gambling revenue was down 1.7 percent at land-based casinos in Atlantic City, online the figures went the other way significantly.

Per data provided by the New Jersey Division of Gaming Enforcement (DGE), total Internet Gaming Win was up 17.8 percent in March 2016 compared to the same period in 2015. Digital operators collected $15.5 million in iGaming revenues, a $2.3 million jump year-over-year and the most ever for a single month since New Jersey legalized Internet gambling.

The Borgata maintained its market stronghold, as the resort’s interactive platform led the way with $4.2 million in revenue. Caesars Interactive and Tropicana each garnered $3.16 million, the Golden Nugget collected $3 million, and Resorts rounded out the five operators with $1.87 million.

No Fault in Our Stars

PokerStars’ parent company Amaya is currently engulfed in scandal surrounding its CEO David Baazov who has since taken a paid leave. Baazov is being accused by financial securities regulators in Quebec of aiding insider trading deals by providing confidential information to outside parties and investors.

The charges against the Amaya founder have raised speculation as to what impact it might have on the company’s license in New Jersey and whether PokerStars might be removed. However, on April 1, the DGE renewed Amaya’s operating licensing, though only for a second six-month term.

Unless the criminal investigation extends to Amaya itself, it would seem unlikely that the DGE would void the Canadian gaming company’s license as it’s become quite clear PokerStars is having a positive influence on New Jersey’s online poker returns.

In March, gross income for iPoker soared 10.5 percent to $2,461,064, the highest number since April 2014 when the market generated $2.59 million.

PokerStars’ return to the United States online poker market was projected to renew interest in New Jersey, but by most accounts it has exceeded analysts’ expectations.

Officially launched on March 21, PokerStars was only fully operational for 11 days and yet the market grew by $466,999. That’s definitely positive news for regulators and state officials, as well as players who have voiced frustrations over inadequate player pools in recent months.

Others Suffer Slightly

As regulators and players hoped, PokerStars New Jersey seems to be attracting a new crop of players and not simply poaching from the other two rooms currently in operation. While their revenue didn’t increase with the March bump, it also didn’t fall drastically.

Borgata reported peer-to-peer iPoker revenue of $1,033,380 in March, while Caesars, responsible for the WSOP/888 room, reported $830,007.

Those figures are roughly where the two rooms have been hovering over the last several months, though they are slightly sliding. Borgata recorded $1,198,539 and $1,061,706 in January and February, and Caesars came in at $952,693 and $932,359.

The financial disclosures prove that PokerStars is indeed welcoming a new base of customers, as the $165,159 January to March cumulative drop by Borgata and Caesars is still a net positive for the overall iPoker market.

daily fantasy sports Alabama Tennessee

Alabama Attorney General Luther Strange declared this week that daily fantasy sports has no lawful grounding in the state, and his legal colleague to the north in Tennessee agrees. (Image: Albert Cesare/The Montgomery Advertiser)

Daily fantasy sports (DFS) has already been declared illegal by numerous state attorneys general, and this week two additional chief legal advisors joined the opposition to the online contests.

Alabama Attorney General Luther Strange and Tennessee Attorney General Herbert Slatery issued opinions Tuesday on the emerging and popular sports wagering Internet platforms, and both made their positions clear that DFS constitutes illegal gambling under their respective current laws.

Online and land-based commercial gambling is prohibited in Alabama and Tennessee.

“Paid daily fantasy sports contests are in fact illegal gambling under Alabama law,” Strange declared. Slatery echoed that position by saying in his own statement, “‘Gambling’ in Tennessee means ‘risking anything of value for a profit whose return is to any degree contingent on chance’ . . . Fantasy sports contests fall within the broad definition of ‘gambling.'”

Though the two attorneys general agree in principal, only Strange issued cease and desist letters against the two market leaders, DraftKings and FanDuel. The two companies have until May 1 to terminate operations.

11 states have now ruled against DFS or banned residents from participating in the contests.

Mad Skills

The legality conversation pertaining to DFS essentially comes down to determining if skill or chance players a more vital role in winning the contests. Operators argue players must use data and talent to regularly win the pot.

Strange doesn’t much care about whether there’s skill involved, as he feels there’s certainly some element of chance and that immediately classifies the offerings as forms of gambling.

“There is, of course, a measure of skill involved in creating a fantasy roster,” Strange said. “But in the end, contestants have no control over the performance of the players on their rosters.”

Slatery agrees. “While participants may use skill to select players for their teams, winning a fantasy sports contest is contingent to some degree of chance,” the Volunteer State attorney general declared.fantasy sports

Another component to the two opinions is the fact that DraftKings, FanDuel, and other DFS operators collect fees for orchestrating the contests. That’s an important difference to traditional season-long fantasy leagues typically competed among friends through free online sites.

FanDuel is urging Tennessee residents to back a DFS bill that has been approved by the state senate. “The state should be a home for this growing industry, but the legislature has to act.”

DFS: Where We Stand

It seems every morning another daily fantasy sports headline pops up, so to help you determine where your state stands in regards to the emerging industry, we’ve compiled a list of the legislative action.

Legal: Arizona, Indiana, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Montana, Rhode Island, Virginia, Washington

Legislation Pending: California, Connecticut, Florida, Kentucky, Michigan, Minnesota, Missouri, Nebraska, New Jersey, New Mexico, Oklahoma, Pennsylvania, South Carolina, West Virginia, Wisconsin

Contested/Illegal: Alabama, Tennessee, Georgia, Hawaii, Illinois, Mississippi, Nevada, New York, South Dakota, Texas, Vermont

Don’t see your state listed? That’s because you’re living in one of the 13 states that hasn’t yet released an opinion or introduced legislation to legalize or prohibit DFS.

As always, isn’t a legal resource and you should proceed at your own discretion.

casino money laundering FinCEN SAR

FinCEN Director Jennifer Calvery is a strong proponent of financial institutions filing suspicious activity reports, but the practice might be giving rise to casino money laundering. (Image: Allison Joyce/Reuters)

Casino money laundering has been on the front pages of newspapers around the world over the last several weeks after $46 million was successfully swindled from the Federal Reserve Bank of New York and laundered through two casinos in the Philippines.

In total, the online hackers were able to transfer some $81 million from the Bangladesh account in Manhattan before their criminal operations were discovered due to a spelling error on one of their withdrawal requests. They had planned to steal nearly $1 billion.

Funneling money both domestically and internationally has long been a concern for American authorities responsible for protecting the security of the country, but a rise in activity is now being accredited to the US government’s own anti-terrorism policies.

Banks that suspect fraudulent activity are rapidly closing suspicious accounts, forcing lawbreakers to take the money into their own hands and find new avenues to move the funds. With locations spread around the globe, the land-based and online casino has become a preferred vendor for criminal enterprises.

“The whole flow of money goes underground, and that becomes counterproductive to the original purpose of being able to track it,” World Bank economist Dilip Ratha told the Wall Street Journal.

SAR Czars

A suspicious activity report, or SAR, is when a financial institution alerts the Financial Crimes Enforcement Network (FinCEN) to possible money laundering or other potential criminal misconduct on the part of a banking customer. The self-reporting program is required under the United States Bank Secrecy Act (BSA) passed in 1970, but was first introduced in 1996.

Over the last 20 years, SAR filings have grown exponentially.

According to a compilation of data by the Wall Street Journal, 62,388 reports were filed by US banks in 1996. Two decades later, more than 906,000 SARs were registered in 2015.

The BSA initially only applied to financial institutions, but the rise in criminal use of banking services offered inside casinos led to the Act being amended and cages being included in the law.

Casinos have 30 days to file a SAR from the initial date of detection for any cash transaction exceeding $10,000. Representatives detail the “who, what, where, when, and why” of the incident and file the account with FinCEN.

FinCEN Backs FinCEN Strategy

SAR informs the US government to potential illegal money laundering, and backers of the system say it’s critical to ongoing operations to combat fraud and terrorism.

“It’s one of the most important sources of data being used,” FinCEN Director Jennifer Calvery said.

But critics also claim the delayed timeframe gives criminals plenty of time to create a complicated web while also erasing any sort of money trail.

It’s likely why SARs continue to increase in the casino sector. SARs filed by casinos and card clubs grew 69 percent between 2013 and 2014 from 27,520 to roughly 47,000.

Calvery remains committed to the program. Her office reached an $8 million settlement with Caesars in September for lax anti-money laundering protocols used with high rollers at its properties both domestic and abroad.

During her remarks at the 2015 Bank Secrecy Act Conference in Las Vegas last summer, Calvery told casino attendees, “Criminals will always look for new and innovative ways . . . Each of you has the challenge and opportunity to help ensure that your casino or card club is doing its part to stay one step ahead of them.”

Amaya David Baazov trading charges

Amaya CEO David Baazov’s grand vision certainly didn’t feature the criminal trading allegations he’s being accused of by financial regulators in Quebec. (Image:

Amaya CEO David Baazov has enjoyed a storied run over the last two years. Though he founded the Canadian gaming company in 2004, he became an international power player in online gambling in 2014 when his then-small Quebec enterprise managed to buy the Rational Group, parent company to PokerStars and Full Tilt Poker, for an eye-opening $4.9 billion.

The 35-year-old has been called the “King of Online Gambling” by Forbes, but financial and securities regulators in Quebec are alleging he might be more appropriately labeled as the king of insider trading.

The Autorité des marchés financiers (AMF) named Baazov this week on five counts of trading charges. The governmental regulatory body said in a statement that Baazov aided outside investors with privileged information in an attempt to “influence the market price of the securities of Amaya.”

Building up to Amaya’s June 2014 buyout of Rational, Amaya’s stock price on the Toronto exchange became a bull in a china shop as speculation of the takeover mounted. However, AMF investigators suspect it wasn’t all just sound investing on the part of shareholders, but also Baazov enticing capitalists by distributing confidential information.

In addition to Baazov, two others and three corporations are named in the AMF filing for a total of 23 charges.

“Pursuant to which these proceedings are filed, offenders are liable to stiff fines as well as prison sentences,” AMF President Louis Morisset said.

Baazov Denies Allegations

On Wednesday, Baazov took to his public relations firm to defend his name.

“I have always been proud of my reputation for personal integrity and ethical business conduct,” Baazov declared. “While I am deeply disappointed with the AMF’s decision, I am highly confident I will be found innocent of all charges.”

Baazov is currently trying to take his company back private along with a group of unidentified investors. Though the AMF investigation into possible trading criminality at Amaya began back in December of 2014, Baazov’s expected forthcoming bid to regain full control is thought to have raised supplementary examination.

Amaya quickly came to the defense of its CEO, the company saying in a statement that Baazov has the full support of its independent board members and explained Amaya’s own internal investigation into executive activities leading up to the $4.9 billion purchase found no breaches of law.

Family Affair

If the AMF allegations are proven true, David won’t be the first Baazov to be convicted of a crime.

His brother Josh scammed seniors through a telemarketing scheme promising valuable prizes in the late 90s. The Federal Trade Commission ordered Josh to pay $777,000 in restitution.

The AMF says it has reason to believe that Josh played some role in David and Amaya’s valuation buildup that allowed the company to be in a position to attract hedge funds and banks to assist in its Rational pursuit.

Regulators say in addition to those charged, search warrants and court orders have been obtained for 13 individuals who allegedly used privileged information possibly dispensed by Baazov to gain more than $1 million.

PokerStars officially launched in New Jersey this week. The state’s Division of Gaming Enforcement didn’t mention Josh’s name or his crimes in its exhaustive and nearly two-year-long investigation into Amaya and its associates.