Gaming Law International

Pharmaceutical companies sued over drug allegedly tied to compulsive gambling

More than 100 people who claim they developed a gambling habit after taking drugs used to treat Parkinson’s disease have filed a class action lawsuit in Australia against Pfizer and Aspen Pharmacare. The claimants allege they lost hundreds of thousands of dollars and suffered family breakdowns because of compulsive gambling behaviour caused by the drugs. The drugs implicated are Cabaser, sold by Pfizer, and Permax, sold by Aspen. The class action suit claims Pfizer and Aspen failed to warn of increased risk of compulsive disorders. In 2008, a jury in Minnesota awarded US$8.2 million to a man who became a compulsive gambler after using Mirapex, a drug sold by Boehringer Ingelheim, to treat Parkinson’s disease.

European Court upholds Internet gambling ban in member states

The Court of Justice of the European Union has ruled that an EU member can ban a foreign Internet gambling company based in another member state from operating within its border to protect its citizens against fraud and other crime associated with Internet gambling. The ruling follows a court adviser's March opinion which stated that recognition of gambling licenses across member states is not viable under the EU's current system. 

In the decision, the Court held that "because of the lack of direct contact between consumer and operator, games of chance accessible via the Internet involve different and more substantial risks of fraud by operators against consumers compared with the traditional markets for such games".

The decision confirms that the Netherlands has jurisdiction to prohibit Internet gambling sites based in the UK from offering Internet gambling services to its citizens. The Court stated that: "A member state is entitled to take the view that the mere fact than an operator ...lawfully offers services via the Internet in another member state is not a sufficient assurance that national consumers will be protected."

The ruling is not unexpected. Foreign Internet gambling companies that offer Internet gambling in countries where they are not legally authorized to operate are essentially unregulated and unsupervised in those jurisdictions. 

Possibly the world's worst gambling addiction

Terrance Watanabe, the Omaha businessman who ran the Oriental Trading Company for many years, is in court defending criminal charges over a US$14.75 million gambling debt Harrah's alleges he owes them. In one year, Watanabe spent US$204 million gambling at the Rio and Caesars Palace - both Harrah's properties in Las Vegas. Watanabe paid back at least US$112 million. By all accounts, he likely holds the world's record for the largest sum of money ever gambled and lost in a commercial casino in a year. 

Canadian payment processor pleads guilty in U.S.

Douglas Rennick, the Alberta man who was accused of laundering US$350 million in illegal Internet gambling proceeds in the United States last year, pleaded guilty in a federal court in Manhattan to a lesser charge of one count of transmitting wagering information in the U.S. From 2007 to 2009, Rennick opened a number of bank accounts in the U.S. under various corporate entities to receive funds from foreign Internet gambling companies and disburse the funds to U.S. residents. Rennick received about US$350 million from bank accounts in Cyprus used by the offshore Internet gambling companies that he did business with. 

U.S. casino revenues fell 5.5% in 2009

Commercial casino industry revenues in the U.S. dropped for the second year in a row according to statistics released today by the American Gaming Association in its annual State of the States Report. Gambling revenue in 2009 was US$30.74 billion - a 5.5% decline from 2008. Some of the highlights from the AGA report - in 2009:

 

• consumer spending in Nevada declined 10.4% to US$10.393 billion
• consumer spending in New Jersey declined 13.3%
• Las Vegas remains the top gambling market in the U.S. with revenue of US$5.5 billion
• casino employment dropped 8.1% across the U.S.

The report also tracked gambling preferences and indicates that the popularity of poker continues to decline. Only 7% of gamblers in the U.S. ranked poker as their favourite game. Slot machines was the favourite game, preferred by 59% of U.S. gamblers. 

 

Portland man accused of gambling mother's life savings away

Richard Stone, a 52-year-old Portland, Oregon man, was charged this week with stealing his elderly mother's life savings to gamble. Stone's mother suffers from dementia and is in an adult foster home. Stone is alleged to have sold her house and used the proceeds to gamble, take trips and pay his bills. He is charged with criminal mistreatment and theft. You can read the story here. 

When gambling regulation works - how Macau casino operations are affecting American gaming regulators

The Las Vegas Sun has an excellent story that captures the connection between gambling operations in different jurisdiction by the same casino operator and the role of gambling regulators here. Reporter Liz Benston reports that the sometimes shady way in which casino VIP rooms are operated with the use of junkets in Macau will impact Atlantic City casino operators who also operate, or hope to operate, in Macau. That's because in order to maintain a U.S. state gaming registration, casino operators have to operate their casinos in a way that will not negatively affect the integrity of the gaming industry in that state. The smallest link to criminality with a casino operator will affect its integrity, and therefore the integrity of the state's control over the industry. The FATF has repeatedly expressed its concern over casino junkets as a potential vehicle for money laundering in Asia. 

Australian indicted for laundering US$500 million in Internet gambling proceeds

The US Attorney's Office announced today that an Australian foreign national, Daniel Tzvetkoff, was arrested in Las Vegas today on charges that he assisted illegal Internet gambling companies process about US$500 million in transactions for American gamblers. Tzvetkoff operated a payment processing company called Intabill Inc. Tzvetkoff was charged with gambling conspiracy, bank fraud conspiracy, money laundering conspiracy and one count of money laundering. The indictment was unsealed in Manhattan federal court today. It alleges that Tzvetkoff convinced banks to provide services through the Automated Clearing House System to offshore online gambling companies and that he disguised the recipients so banks would not know they were online gambling companies. 

In an e-mail, one of Tzvetkoff's alleged co-conspirators told him he had hired programmers to develop "unique" websites for the shell companies so that if someone was "checking the companies out there is absolutely no way to tie the companies together." Tzvetkoff replied that it was "perfect." If convicted, Tzvetkoff faces a term of imprisonment of up to 75 years.

Casino formerly owned by Frank Sinatra may be closing for good

The Cal Neva Casino, formerly owned by Frank Sinatra, may be closing permanently because of plunging numbers of gamblers. The Cal Neva was owned by Sinatra in the 1960s and flourished as a popular casino resort destination for Hollywood stars like Marilyn Monroe, Dean Martin and Sammy Davis Jr. It was where Marilyn Monroe spent her last weekend before her death from a drug overdose in Los Angeles in 1962. Sinatra lost the casino license in 1963 when FBI agents spotted mobster Sam Giancana on the premises. The Cal Neva Casino is owned by a real estate firm that is currently in discussions with several gambling operators to consider re-opening later this year. Gaming revenues for the past year were apparently about half what they were in the mid-1990s. The Cal Neva opened in 1928 and straddles the Nevada-California border on the north shore of Lake Tahoe.

Survey says Canadians unaware Internet gambling from foreign sites is illegal

According to a survey conducted by Ipsos Reid, only 23% of Canadians and 37% of Americans, respectively, know that Internet gambling from foreign sites is illegal. Ipsos Reid said the survey shows that authorities are doing a poor job of informing citizens that Internet gambling provided by foreign operators is illegal. The difference among Canadian and American responses can be explained by the fact that the U.S., unlike Canada, has actively prosecuted foreign Internet gambling operators for several years. By way of clarification, it should be noted that in Canada, it is the provision of Internet gambling by non-government entities that renders the activity illegal in Canada.

French to permit (and regulate) Internet gambling

The French government has ended a long-standing ban prohibiting Internet gambling in France and has approved regulations that will grant licenses to foreign companies seeking to offer Internet gambling services to French citizens. Under the new regulations, companies will have to establish separate sites for French customers and provide permanent records on players to the government. There does not appear to be any discussion occurring about which companies can provide online gambling services to French citizens under the new regulations or whether proposed service providers will be subject to investigations to ensure the integrity of the gaming industry as is customary for land based casino operators in Canada and the US.

German national in Florida pleads guilty to operating an unlicensed money transmitting business

Michael Schuett, the German national living in Florida who was arrested by the US Secret Service on February 18, 2010 for money laundering and operating an unlicensed money transmittal business that serviced online gamblers, has pleaded guilty to the lesser charge of operating an unlicensed money transmitting business. Schuett incorporated numerous companies which received and transmitted about $70 million for online gambling. None of his companies were registered with the Office of Financial Regulation or FinCEN. The US government seized over $2.7 million in assets from Schuett's numerous bank accounts in Florida as well as a Porsche and Audi. The US Attorney is seeking a sentence of up to five years in federal prison. Our earlier post describing the original criminal complaint is here. 

Class action problem gambling lawsuit not certified

Ontario Superior Court Justice Maurice Cullity ruled against certification of a $3.5 billion class action lawsuit against the Ontario Lottery & Gaming Corporation this week that had been filed on behalf of a class of Ontario problem gamblers. The litigation alleged that the OLGC failed in its duty to prevent persons who had signed self-exclusion forms from continuing to gamble in Ontario. The Court heard that the OLGC has paid out an average of $167,000 per case to settle nine lawsuits with problem gamblers. Counsel for the class intends to appeal the ruling.

Popular online gambling domains in jeopardy

Kentucky is one step closer to blocking online gambling activities in that state. The Kentucky Supreme Court ruled today that two groups purporting to represent several offshore Internet gambling sites whose domains were the subject of a state seizure in September 2008, did not have standing in the litigation. The domains that Kentucky is seeking to seize include absolutepoker.com, bodoglife.com, goldencasino.com, sportsbook.com, playersonly.com, sportsinteraction.com, mysportsbook.com, linesmaker.com and vicsbingo.com.

Macau to regulate casino market

Macau's chief executive, Fernando Chui, announced today that Macau will start regulating the growth of its casino market. "Apart from those we have agreed in principle in the past, in construction and those already approved, we will regulate (approval of the building of new casinos) in the future," Chui told a news conference. Chui said the government plans to set up a regulatory body to monitor the growth of the gambling industry. 

Gambling Addiction Awareness Week in US

It's National Problem Gambling Awareness Week in the US. The NPGAA is a campaign by the US National Council on Problem Gambling to educate the public about problem gambling. We don't have a similar awareness campaign on a national level in Canada although we have similar gambling addiction problems but on a much smaller scale. Of all the stories I've read about NPGAA over the past few days, Michael Burke's post here called "Allen Iverson Should Accept This Crisis as a Gift" is the best. 

Several men indicted in Kansas City for online gambling scheme

Four Kansas City area men are accused of operating a multi-million dollar Internet gambling scheme in a federal indictment recently unsealed. Gerlarmo Cammisano, 56, James J. Moretina, 60, Michael J. Lombardo, 54, and James L. Dicapo, 57, appeared in a US court accused of operating an Internet sports bookmaking business that attracted almost $3.6 million in bets between March 2006 and April 2009. Two companies also were charged - Phoenix International Teleport Satellite Services of Chandler, Ariz., and Elite Sports, a company in San Jose, Costa Rica.

California man killed over gambling loss

A California man was convicted of first degree murder today over a gambling loss. Franco Edgar Neftali, 44, shot a man to death shortly after losing hundreds of dollars in an illegal Cambodian dice game in 2007. Neftali faces up to 50 years in jail when sentenced in May.

US lawyer with gambling addiction suspended after stealing to feed addiction

Ohio lawyer Michelle Smithern lost her license to practice law indefinitely today after a hearing by the Akron Bar Association. Smithern started gambling on the internet in 2004 and as she continued to gamble, she also began using alcohol in excess. Over a two-year period, she took about $108,000 from her firm to gamble online. In 2009, she was convicted of felony theft for stealing.

Sands China profit up 22%

Sands China Ltd., the Macau casino operator controlled by billionaire Sheldon Adelson, reported a 22% increase in 2009 profits. Net income increased $213.8 million from $175.7 million a year earlier, the company reported. Sands China has the second-biggest market share among Macau casinos. Last year, revenue from baccarat, blackjack, slot machines and other gambling grew 9.7% to a record $15 billion in Macau.