American Indian & Federal Gaming Law

UNLV Boyd School of Law - Spring 2016

2014

2016 Client Hypothetical

See the body for the hypothetical. Read More...

Midterm Hypo 2

This was a question from the 2009 exam. Yet another opportunity to test your knowledge.

INSTRUCTIONS
1. Read the following e-mail string.
2. ANSWER the question posed in the most recent e-mail from Sr. Partner (…
Our client C. Boss at Oceanic Casino has asked us for a brief summary of the legality of online poker sites and what the risks are for Oceanic if they are engaged in joint promotions with MaxBet Poker…).

- - - - - - - - - - - - - - - - - - -

From: Sr. Partner
Sent: May 1, 2009, 09:00 A.M.
To: Student
Subject: FW: MaxBet

Student,

Our client C. Boss at Oceanic Casino has asked us for a brief summary of the legality of online poker sites and what the risks are for Oceanic if they are engaged in joint promotions with MaxBet Poker.

As you know, Oceanic is a long time client of the firm with casinos in Las Vegas, Mississippi, Macau and Reno.

I have included the e-mail string from C. Boss, but it appears that their Macau property wants to do joint promotions with MaxBet.

I called C. Boss to let him know that you were in the best position to send them a reply given your billing rate and your familiarity with online gaming.

Please work on this right away.

Thanks

Sr. Partner
-----Original Message-----
From: Boss, Casino [mailto:CBOSS@OceanicCasino.com]
Sent: April 28, 2009 8:24 PM
To: Sr. Partner
Subject: Fw: MaxBet

Dear Partner,

Can you please provide me with a short summary of whether online poker is legal in the U.S.? Also, can you please let me know the risks of running promotions with MAXBET?

As you know, we are currently under tight budget constraints, so please keep this short and keep the billable hours down on this one for now.

Thanks

C. Boss

C. Boss
General Counsel
Oceanic Casino, LLC
300 S. 4th Street
Las Vegas, NV 89101

----- Original Message -----
From: Dente, Al
To: Boss, Casino; Katz, Bob
Cc: Warren Tea
Sent: April 28, 20:08:01 2009
Subject: RE: MaxBet

Thanks Casino Boss. From my time working in Australia I have had some experience with the US regulators and federal agencies concerning internet gaming, but I am told that they are not as strict on Poker.

Al Dente
President
OCEANIC CASINO MACAU
Email AlDente@OceanicCasinomacau.com
________________________________

From: Boss, Casino [mailto:CBOSS@OceanicCasino.com]
Sent: April 27, 2009 11:17 AM
To: Katz, Bob; Al Dente
Cc: Warren Tea
Subject: Re: MaxBet

Al,

The test is as Bob stated below. I will do some research in the morning and get back to you.

Casino Boss

________________________________

From: Katz, Bob
To: Dente, Al
Cc: Warren Tea ; Boss, Casino
Sent: April 27,18:34:52 2009
Subject: RE: MaxBet

yes
________________________________

From: Al Dente [mailto:AlDente@OceanicCasinomacau.com]
Sent: April 27, 2009 4:55 PM
To: Katz, Bob
Cc: Warren Tea
Subject: RE: MaxBet

Bob,

Is Casino Boss the best person for us to work with me verifying the compliance issues on this then??

Al Dente
President
Oceanic Casino Paradise Limited
Email AlDente@OceanicCasinomacau.com
________________________________

From: Katz, Bob [mailto:Bob_Katz@OceanicCasino.com]
Sent: April 27, 2009 1:34 PM
To: Al Dente
Cc: Warren Tea
Subject: Re: MaxBet

We can if we are satisfied that they operate in compliance with law - especially in the U.S.

----- Original Message -----
From: Dente, Al
To: Katz, Bob
Cc: Warren Tea
Sent: April 25, 20:27:20 2009
Subject: FW: MaxBet

Bob,

We have been having a number of conversations with Poker room operators most of whom are currently internet poker operators. As a matter of principal, can we be associated and therefore do business with, anyone that operates in the internet gaming environment?

Al Dente
President
OCEANIC CASINO MACAU
Email AlDente@OceanicCasinomacau.com

________________________________

From: Tanya Hyde
Sent: April 25, 2009 9:41 AM
To: Al Dente
Cc: Reid Enright
Subject: MaxBet

Al,
Just to give you a quick idea of who they are; this information is available on the net. Over the next few days we will move to qualify this; void of the hype.

MAXBET POKER - Company information

MaxBet Poker is an online poker card room launched in May 2001 with the involvement of a team of poker professionals known collectively as the MaxBet Force, among them are:

Mary Christmas ,
Matt Tress ,
Chuck Wagon ,
Dan Druff ,
Dinah Soares and
Chris P. Bacon .

The service can be reached via two web domains, MaxBetpoker.com, and MaxBetpoker.net, where players can choose to gamble with real or play money from either site.

U.S. internet poker rooms have come and gone these past few years, but MaxBet Poker remains one of the biggest online success stories. Currently, MaxBet is one of the five largest online poker rooms in the world! This site is hailed for its rigorous efforts to cater to U.S. players by offering high stakes real money poker games to U.S. players, and is one of the few rooms that has continued to serve us here in the states, despite frustrating changes in U.S. legislation. Because of this, the site has picked up a lot of U.S. players that were abandoned by other sites.

Today, MaxBet Poker is increasing its focus on foreign markets and expanding its business base in Asia, Europe and the UK. This means a wider array of fish for you to exploit, at any hour of the day, as well as the assurance that your account will remain functional regardless of the erratic political climate here at home. You know MaxBet Poker because their marketing team has sought to recruit some of the best known players in the world, who have come together to form the MaxBet Force. These renowned players provide significant branding for the company, and give credibility and exposure to MaxBet when playing offline tournaments all over the world.

Tanya Hyde
Director of Casino Operations

OCEANIC CASINO MACAU
thyde@OceanicCasinomacau.com


(SEE THE INSTRUCTIONS ABOVE FOR THIS QUESTION BEFORE ANSWERING

Midterm Hypo 1

he following is a question from the 2007 exam (with some of the names changed). Take some time to read the questions and draft an answer based upon the statutes and gaming law concepts that have been presented in class to date.

Since this was an exam question, this is a good opportunity to test yourself and develop questions for class.



Grid Iron trading cards, the largest maker of professional football player trading cards, has called to asked you to analyze certain federal gambling law risks associated with a current issue they are facing and a proposed enhancement to their online fantasy football player card game.

The Current Season Long Fantasy Games:

Currently Grid Iron runs online fantasy sports leagues that mix its trading card business with fantasy sports. Players pay a $50 entry fee to Grid Iron for each fantasy football team they wish to build and manage. Once a player purchases the right to build and manage a fantasy football team they are randomly assigned to a league consisting of up to 9 other Players. Players build their teams by purchasing digital versions of football player trading cards prior to the start of the real NFL football season. Each card costs $5.00 and each Player's team can have up to 16 digital cards at any one time. Each week during the NFL season the online site sets up fantasy sports match ups between players from within the same league. While each player's team may have up to 16 digital players cards in their deck, they are only allowed to play 8 players each week in their intra-league matches (1 Quarterback, 2 Running Backs, 3 Receivers, 1 Kicker and 1 NFL Team Defense). Scoring follows standard fantasy football scoring. Each week the players may use the graphically rich Grid Iron online system to revise their line ups, trade cards with other players, drop cards from their deck into a free agency pool or add cards from the free agency pool; however, each transaction costs the players involved a $2 transaction fee. At the end of the season winning players from each league are announced on the web site, and every player receives physical custom trading cards in the mail of their digital playing cards with the season long fantasy statistics of the player imprinted on the back and the players' chosen team name on the front. No prizes are awarded.

Last year, prior to offering or announcing the contest, Grid Iron received opinion letters from two law firms that the current contest was not gambling in any state because no prizes are awarded. Therefore, the contest is offered in all 50 states, including Utah and Hawaii (2 states with no legal forms of gambling).
Shortly after the contest was announced last year, the client was approached by BETDUCK.COM, an online sports wagering site to promote the BETDUCK.NET and BETDUCK.COM sites. BETDUCK.NET is a site that is functionally identical to the BETDUCK.COM site; however, the BETDUCK.NET site does not allow any money wagering. The BETDUCK.NET site is labeled as a training site that teaches online users how to wager though simulations of wagers, but does not offer any real wagering. Accounts created at BETDUCK.NET site are accessible on the BETDUCK.COM site when players decide that they want to wager for real money. The BETDUCK.COM site is licensed and run from the island nation of Vanuatu. Pursuant to Vanuatu licensing, the BETDUCK.COM site displays a disclaimer that players from jurisdictions where online gaming is illegal should not place wagers on the site. The BETDUCK.COM site gets about 70% of its wagers from U.S. players despite the disclaimer. The promotion with Grid Iron was to offer BETDUCK.NET and BETDUCK.COM banner adds with current play for free wagering lines in the banner advertisements. Grid Iron agreed to run these banner ads to offset the costs of developing and running the site. In return, BETDUCK.COM compensated Grid Iron by subsidizing the entire cost of developing and operating the Grid Iron fantasy sports league site.
Last month, Grid Iron received a letter from the U.S. Department of Justice regarding the BETDUCK.NET and BETDUCK.COM advertisements. The letter looked much like the letter to the National Association of Broadcasters and mentioned that running such advertisements violates U.S. law in the view of the Department of Justice. Grid Iron is concerned that without the BETDUCK advertisements, the fantasy sports league will be unprofitable.
The marketing department believes that they can increase the popularity and profitability of the Grid Iron digital players card fantasy sports site by offering prize contests. They have approached the management and general counsel of Grid Iron with two possible prize contest implementations as follows:
New Ideas:

1. The Premium League

In the Premium League, players pay an entrance fee of $1500 for each team they build and manage. The contest is identical to the current contest, however, at the end of the season, the winners of each premium league are entered into a random drawing to receive travel, lodging and two tickets to the NFL Super Bowl, and the physical players cards the winner receives at the end of the season will be signed by the actual NFL players. The approximate value of this prize is $15,000.

2. The Quick Pick Weekly Fantasy Game

The Quick Pick Game is an optional game to the standard season long fantasy contest. The Quick Pick Fantasy Game allows players to purchase an entry into a 1 week quick format fantasy sports contest for $5 per entry. Each entry has a list of 16 of pre listed NFL players. For example, the entry may have the following players (quarterbacks) pre-listed, Tom Brady, Peyton Manning, Aaron Rogers, Mark Sanchez, Christian Ponder, Drew Brees, Joe Flacco, Jay Cutler, Matt Ryan, Matt Stafford, Eli Manning, Tim Tebowb, Carson Palmer, Philip Rivers, Tony Romo, and Mike Vick. On each entry, players select their predicted placement order of the NFL player's fantasy scores for the next week. Player's entries are scored by weighting the order of their correct picks. For example, if a player selects the correct order of the NFL player with the highest score, the third highest score and the lowest score, they would have an entry score of 31 points (16 for the highest scorer, 14 for the third highest, and 1 for the lowest). Each week the player with the highest score wins 80% of the value of the total entries for the week (if more than one player has the highest score, then the pot is split evenly among the winners). In order to participate in the Quick Pick Weekly Fantasy Game a player must be part of a season long fantasy league with Grid Iron.

Client Questions (this is what you should answer)

1. The client is concerned with the letter from the Department of Justice. The client is asking for advice to assist them in determining whether or not they should continue running the BETDUCK.NET and BETDUCK.COM advertisements. Specifically, they want to know whether or not continuing to run the BETDUCK.NET and BETDUCK.COM advertisements will violate any federal gambling laws or whether running such advertisements is protected commercial speech. They also want to know if only running the BETDUCK.NET advertisements changes your analysis.

2. With the Premium League, the General Counsel wants to know if there are any federal gaming law risks to adding the premium league to their current offerings.

3. The marketing department believes the Quick Pick Weekly Fantasy Game could significantly enhance the revenue of the site by collecting weekly Quick Pick Weekly Fantasy Game entrance fees. Marketing studies show that there is a large demand for this product. The legal department is less enthusiastic and asks to let them know if there are any criminal gambling law risks with the Quick Pick Weekly Fantasy Game that are not present in the basic fantasy sports contest they have been running for the past year.