Official magazine of the International Masters of Gaming Law
MALTA MARKET FOCUS
INTERNATIONAL MASTERS of GAMING LAW MAGAZINE
VOLUME 3 | NO. 1 | JANUARY 2023
BRAVE NEW WORLDS LATEST DEVELOPMENTS IN MIDDLE EAST, IRELAND, ALASKA AND CALIFORNIA
PLUS: ANTI-MONEY LAUNDERING IN EUROPE CYBER SECURITY OPERATOR-LED RESPONSIBLE GAMBLING EUROPE’S DIGITAL SERVICES ACT AUSTRALIA’S CROWN IN THE SPOTLIGHT MALTA AND THE FALLOUT FROM FATF GREY LISTING LOOKING AHEAD TO NAPA & MUCH MORE!
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IMGL MAGAZINE | JANUARY 2023
MALTA’S FATF GREY-LISTING IMGL OFFICERS 2023
Officers of IMGL for 2023
SUSAN BREEN Secretary MISHCON DE REYA LONDON +44 20 3321 7434 SUSAN.BREEN@MISHCON.COM
QUIRINO MANCINI President TONUCCI & PARTNERS ROME, ITALY +39 06 322 1485 QMANCINI@TONUCCI.COM MARC DUNBAR Executive Vice President DEAN MEAD & DUNBAR TALLAHASSEE, FLORIDA +1 850 933 8500 MDUNBAR@DEANMEAD.COM
ERNEST C. MATTHEWS IV Vice President, Affiliate Members INTERNET SPORTS INTERNATIONAL LAS VEGAS, NEVADA +1-702-866-9128 ERNEST@ISISPORTS.COM BIRGITTE SAND Vice President, Affiliate-Regulator Members BIRGITTE SAND AND ASSOCIATES COPENHAGEN, DENMARK +45 24 44 05 03 BS@BIRGITTESAND.COM
PETER KULICK 2 nd Vice President, Treasurer DICKINSON WRIGHT PLLC LANSING, MICHIGAN +1 517 487 4729 PKULICK@DICKINSONWRIGHT.COM COSMINA SIMION 1 st Vice President SIMION & BACIU BUCHAREST, ROMANIA +40 31 419 0488 COSMINA.SIMION@SIMIONBACIU.RO
KATHRYN R. L. RAND Vice President, Educator Members UNIVERSITY OF NORTH DAKOTA LAW SCHOOL GRAND FORKS, NORTH DAKOTA
+1 701 777 2104 RAND@LAW.UND.EDU
KATE LOWENHAR-FISHER Assistant Treasurer EXECUTIVE VICE PRESIDENT, CHIEF LEGAL OFFICER EVERI HOLDINGS INC
IMGL MAGAZINE | JANUARY 2023 IMGL MAGAZINE | JANUARY 2023
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PRESIDENT’S WELCOME
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Presidential priorities & an exciting year ahead
QUIRINO MANCINI President INTERNATIONAL MASTERS OF GAMING LAW
Welcome to the first edition of the IMGL Magazine of 2023, my first as president and the first to feature the new IMGL branding. In my New Year’s message, I highlighted some priorities which I am excited to pursue. First, I would like to establish and expand our presence in emerging gaming jurisdictions worldwide, particularly, but not exclusively, in Asia and Africa. The IMGL Magazine has a part to play in this aim and I encourage members from beyond North America and Western Europe to consider whether you could contribute an article for a forthcoming edition. My second priority is to expand the IMGL’s reach with regulators, policymakers, in-house counsel and industry advisors. We cannot truly claim to be shaping the future of gaming law without numbering more of these important individuals among our membership. I am grateful to Ince, our partners and sponsors of the IMGL ICE reception for engaging with regulators to invite them as guests. I encourage all members to consider doing the same with their clients and contacts. My third priority is to further enhance the IMGL’s educational mission to ensure that gaming and gambling law is recognized as a specialist practice area. You will be able to see this in action at our Spring Conference in Napa in April where the finalists of our first student writing competition will be presenting their work. Reviewing their entries, Kathryn Rand and the members of her education committee found their papers to be topical, knowledgeable and of extremely high quality. I am sure their contributions will enhance our time in Napa as well as being a valuable springboard to their careers. If you have not already done so, I encourage you to book your place for Napa and at our Autumn Conference to
be held in Zurich Switzerland in September.
Finally, I am sure I share with you a desire to work with the media and other stakeholders to redress the often negative image and reputation of our industry. In these pages and in those of future issues you will find data and arguments to counter some of the common false and misleading narratives and to support our industry in making a case for its positive contribution to entertainment and to society in general. These are ambitious priorities, but I am certain that with the solid support of our Executive Committee, and of course, you our members, that we will make great progress across the piece. I look forward to working with you all to strengthen and grow the IMGL in my time as president. I mentioned our rebrand at the outset. it is important to say that this has flowed from the work being done on the new IMGL website which is launching soon. I must thank Ali Bartlett of Bose McKinney & Evans, our executive director Brien Van Dyke, head of publications Phil Savage and the members of the website committee for their excellent work in making this a reality. I Hope you will find the new site more user friendly and a great source of authoritative gaming law content. The IMGL is a unique organization; open, inclusive and collegiate and an ideal forum for making friendships and business contacts. We have an exciting year planned for 2023 and I very much look forward to meeting you in person in Napa, in Zurich and at the numerous masterclasses, receptions and educational events that we have planned.
Quirino Mancini
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IMGL MAGAZINE | JANUARY 2023
EDITORIAL
Wise speakers rise above the noise
IMGL president Quirino Mancini mentions an important point in his remarks on the previous page highlighting that the gaming industry is often placed in a negative light in the media. The recent articles in the New York Times are just the latest in a long line of sensational and hostile reports all too often not overly interested in facts and figures. No matter that the gaming industry is highly regulated in numerous jurisdictions and contributing billions in taxes, employment and economic effects. Is the gaming industry doomed to be fair game? There are many reasons why it is tempting for newspaper and other media to go after the gaming industry. There is the historic association (often through movies) with the mob in the old days of Las Vegas. There is also the moralistic argument informed by religious views. And there is the human response from those who do not gamble who feel that others should not either. It is, they feel, a waste of money, an irrational activity where the odds are against the player. Finally, stories about games
of chance are rarely boring to their readers. Anecdotal reports necessarily also catch the attention of political stakeholders. And ubiquitous wall-to-wall and TV advertising is unlikely to help public perception of the industry. Indeed, some politicians who recognize a bandwagon when they see one will be quick to demand that something must be done. Clearly, there is no doubt that there will always be people who loudly proclaim their opposition to games of chance, that is, to a form of entertainment whose existence they do not approve of. The question for us is: how should we react as gaming lawyers? Should we use equally loud and sensational voices? This issue puts forward data and arguments that show other perspectives on the industry. We hear from authors who do not deny the issues that the industry is facing but who identify them and analyze the regulatory and legal challenges ahead. Personally, I have always been more
SIMON PLANZER PHD, Editor in Chief IMGL MAGAZINE
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IMGL MAGAZINE | JANUARY 2023 IMGL MAGAZINE | JANUARY 2023
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EDITORIAL
VOLUME 2 • NO.1 JANUARY 2022 IMGL magazine
IMGL magazine
interested in those calm voices that use sharp and precise analysis rather than highly charged crusading rhetoric. The former are interested in spreading facts, the latter in spreading their vision. I am reminded of Former German chancellor Helmut Schmidt who was renowned for his dry, prosaic style. When confronted by the ‘visions’ of his opponents at election time he remarked that: ‘people who have visions should go see a doctor’. Does it get more unemotional, down to earth and fact-based? My wish for 2023 is that IMGL’s finest members will be heard by parliaments, courts and regulators not as rabble rousers but as what they are: subject matter experts. In the midst of a great deal of noise by loud speakers, the unemotional, precise analysis of wise speakers may be far more credible. I look forward to an entertaining 2023 and to seeing you all in Napa and Zurich this year.
SPOTLIGHT ON REGULATORY ISSUES: WORLD REGULATORY BRIEFING REPORT
PLUS: UKRAINE AND BRAZIL MARKET REPORTS, DIGITAL ID IN EUROPE, CHANNELIZATION AROUND THE WORLD, APPLE’S CASINO APPS ...AND MUCH MORE TAX TALK: SPECIAL FEATURE
PLUS: ADVERTISING BANS, NFTs & VIRTUAL DIGITAL ASSETS IN GAMING, FORMER DK REGULATOR’S PERSPECTIVE,
UKRAINE, SINGAPORE, IRELAND, PHILIPPINES, UK GAMBLING WHITE PAPER, ...& MUCH MORE
IMGL Magazine • January 2022 • 1
IMGL Magazine • April 2022 • 1
Yours sincerely, Simon planzer@planzer-law.com
Click the covers to catch up on IMGL Magazines from 2022.
IMGL Magazine is owned, published and distributed by: The International Masters of Gaming Law PO Box 27106, Las Vegas, NV 89126 USA The IMGL is a domestic non-profit corporation registered in Nevada, U.S. with registration number NV20121147120 Editor in Chief: Simon Planzer PhD, planzer@planzer-law.com Publication & Marketing Committee: Co-chairs , Stephanie Bell and Simon Planzer Members : Henrik Hoffmann, Kok-Keng Lau, Christine Masse, Peter Kulick, Anna Soilleux-Mills, Veronique dos Reis Head of Publications: Phil Savage phil@IMGL.org Design and production: SportBusiness Communications. Copyright: All rights reserved to IMGL. No part of this publication may be reproduced or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without prior permission from the publisher. The articles expressed in this publication do not necessarily reflect the views of IMGL but those of the authors. The publisher and editor do not accept any liability for the contents of the authors’ contributions.
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IMGL MAGAZINE | JANUARY 2023
MALTA MARKET FOCUS
CALIFORNIA SPORTS BETTING
What chance for the Golden State to emerge as a gambling powerhouse?
SPECIAL INTEREST GROUPS AND BIG OPERATORS ATTEMPTED TO HIJACK THE SPORTS BETTING INDUSTRY IN CALIFORNIA. JOHN K. MALONEY ASKS WHAT ARE THE LESSONS LEARNED & THE PATH FORWARD IN THE US’S MOST POPULOUS STATE?
IMGL MAGAZINE | JANUARY 2023 PAGE 6
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CALIFORNIA SPORTS BETTING
When the voters of California went to the polls in November 2022, they had two opportunities to legalize sports betting and, at a stroke, create the world’s largest market in the gambling vertical. Following an expensive and accrimonious campaign by sponsors of both propositions, the two competing sports betting bills placed were both soundly defeated. Proposition 26, drafted by tribal gaming interests, was rejected by approximately 62% of the voters. Proposition 27, which was drafted by mobile and online gaming interests, was rejected by approximately 82% of the voters. These are both dramatic defeats. What is the voters’ message? Are they opposed to sports betting? Did they believe that the two sports betting proposals smacked of self-interest? Did they see Proposition 26 as an attempt by the tribal casinos to further control the gambling industry in California and, in effect, create a monopoly? Did the voters understand that the mobile and online sports betting option dramatically increases the handle and thus creates more tax dollars for California? Are the voters demanding a comprehensive sports betting structure that is inclusive rather than exclusive? In attempting to answer these questions, it is necessary to understand and take into account certain basic facts that are not seriously in dispute. California has approximately 40 million residents, as well as tens of millions of visitors each year. It is a sports happy state. It has a US$ 3.6 trillion economy, which constitutes the 5th largest economy in the world. In gaming parlance, California has liquidity standing alone without any partnerships. California has a very large gaming footprint composed of tribal brick and mortar casinos, cardrooms, horse racetracks and a state-run lottery system. This is a deeply entrenched multi- billion-dollar industry. Sports betting comes in a variety of forms. Many bettors enjoy the atmosphere of brick and mortar-based sports books with big screen televisions and food and beverage amenities available at casinos, cardrooms and horse racetracks. March madness in Las Vegas is an excellent example. Many bettors enjoy the privacy and convenience of mobile and online sports betting, as demonstrated by the success of mobile and online sports betting in the states that currently permit such betting. What is missing from California’s gaming industry is legal sports betting. Notwithstanding the absence of legal sports betting, California residents are active sports bettors. As it stands, billions of dollars are wagered with offshore sports
betting sites leaving sports bettors vulnerable to unregulated sports betting. Is the better option to have a well-regulated sports betting industry if there is already unregulated widespread sports betting activity taking place in California? Currently there is no benefit to California’s taxpayers or state and local government entities based on the unregulated sports betting industry. The unregulated industry is not going anywhere, and with the popularity of sports betting in the United States, it will continue to grow. Neither Proposition addressed these basic facts in a comprehensive fashion that clearly benefited California’s residents, taxpayers, state and local government entities and services or all elements of the California gaming industry in a comprehensive manner. One can argue that the propositions reek of self-interest. Proposition 26, supported by many of California’s Native American Tribes (the “Tribes”), limited sports betting to in- person on-site betting at tribal casinos and horse racetracks, excluded California’s cardrooms and contained no provision for mobile and online gaming. It also contained provisions allowing the Tribes to attack the operation of California’s cardrooms (viewed by the Tribes as illegal serious competitors to tribal casinos), which are heavily regulated by the California Department of Justice. There are 66 cardrooms located throughout the state which provide substantial important financial support in the communities in which they operate. Proposition 27, supported by the mobile and online sports book industry, completely excluded in-person on-site sports betting. In addition, it excluded cardrooms and horse racetracks from mobile and online sports betting. It also included a huge one- time fee of US$100 million for a sports bettor operator license, effectively excluding medium and small mobile and online sports betting companies from the California market. The more options that sport bettors have, the more competitive the industry will be. Competition in the marketplace benefits the consumer. Limiting sports betting to in-person and making it user unfriendly is a disservice to the consumer. On the flip side, so is limiting sports betting to only mobile and online.
The winners and losers
Neither Proposition presented California’s voters with a comprehensive legal sports betting structure that encompassed both all existing California private ownership gaming interests
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IMGL MAGAZINE | JANUARY 2023
CALIFORNIA SPORTS BETTING
and the well-regulated and operated mobile and online gaming industry. The multiple million-dollar advertising campaigns of Propositions 26 and 27 sent a not-so-subtle message to California voters – the proponents of both Propositions were focused on self-interest, not consumer interest. The attack ads, the negativity and the complete failure to educate voters properly on the way sports betting works doomed both Propositions. It was clear that both Propositions opposed an inclusive broad based sports betting industry structure that benefitted all traditional regulated gaming interests, consumer demands and taxpayer and state and local
licensed, well-regulated mobile and online gaming companies of various sizes that are able to demonstrate competence in the mobile and online gaming industry and effectively promote healthy competition. Healthy competition is in the best interest of California’s consumers. California has a unique opportunity to have a highly regulated sports betting industry with the best sports betting operators in the world. The main obstacle standing in the way is the need to bring together all relevant gaming industry interests in a manner that facilitates the development of a sports betting bill
that gives California’s consumers the sports betting options and venues that they want. That means a bill that provides for both in person brick and mortar and mobile and online sports betting venues. Why? Because some consumers want the ambiance of brick-and-mortar sports betting, some consumers prefer the convenience of mobile and online sports betting and some consumers live in areas where the only practical legal sports betting is mobile and online sports betting. In order for sports betting to become legal in California, the competing gaming interests (the tribal casinos, cardrooms, horse racetracks and mobile and online gaming operators) need to agree collectively upon a sports betting structure that encompasses the tribal casinos,
government interests. There was no comprehensive plan in which all these interests received a substantial benefit. It is submitted that the voters understood this and accordingly turned thumbs down on both Propositions. The “winners” in this whole process to date are the consumers, taxpayers, voters, cardrooms, and small and medium sports book operators that would have been artificially excluded under Proposition 27 by a US$100 million entry fee included in Proposition 27, as well as state and local government. The “losers” are the proponents of self-interest. The losers should understand that the sympathetic voter that passed the Tribal Government Gaming and Economic Self Sufficiency Act
CALIFORNIA The Golden State at a Glance: 39m $3.6tr
POPULATION MAKING CALIFORNIA THE US’S MOST POPULOUS STATE SIZE OF THE LOCAL ECONOMY REPRESENTING 17% OF TOTAL US GDP
$84k $3bn
MEDIAN ANNUAL HOUSEHOLD INCOME
SIZE OF POTENTIAL SPORTS BETTING MARKET
(Proposition 5) in 1998 may not view the issues presented by the Tribes then in the same way today. The Tribes have exclusivity over casino style gaming in California and have constructed billion-dollar casinos in California. The income generated by the exclusivity of these casinos has enabled the Tribes to become a powerful political force in California. However, the Tribes do not have an exclusive right to sports betting. Sports betting is an open opportunity for all elements of the legal gaming industry. The opportunities presented by a competitive sports betting marketplace are tremendous for California’s consumers, taxpayers and state and local governments if properly established and implemented by an inclusive, broad based sports betting structure, This is a structure that encourages inclusion of a number of experienced
cardrooms, horse racetracks and mobile and online gaming operators. That structure must contain a sound regulatory and licensing format that encourages competition and appropriate access to all elements of the regulated gaming industry consistent with gaming consumer demands and interests, including responsible gaming protections. In addition, such a structure must acknowledge, preserve and continue to encourage support of local government costs and services to the extent permitted by applicable law. Charting a path to a brighter future The drafters of future sports betting bills should look to jurisdictions that have successfully implemented the various
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IMGL MAGAZINE | JANUARY 2023
CALIFORNIA SPORTS BETTING
components of broad based sports betting structures. New Jersey has implemented both brick and mortar-based sports betting and mobile and online sports betting. Michigan has successfully implemented sports betting at both its three Detroit casinos and its many tribal casinos, including mobile and online sports betting through the auspices of these casinos, which in turn have partnered with seasoned well-regulated mobile and online sports betting companies. In the states where sports betting is succeeding, the regulatory structures eliminate artificial barriers to competition and include rational fee and regulatory structures that encourage operators to do business in the state while also protecting consumers with strong age and location verification protection systems and implementation of responsible gaming protections. Moreover, they recognize the variety of ownership structures prevalent in the industry today, including licensing structures that take into account the licensing of gaming businesses, suppliers and individuals on a multi- jurisdictional basis. This includes the use of transactional waivers for sports betting operators and suppliers where appropriate to enhance the competitive environment. Any California sports betting proposals put forth in the future should incorporate these elements in California’s sport betting structure. In addition, the sports betting industry needs to educate the consumer public that mobile and online sports betting is a successful, highly regulated gaming format in many gaming jurisdictions. Mobile and online sports betting systems are certified by the best gaming technology certification companies in the world, including GLI and BMM. This includes geo location and age verification technology, which is standard in the mobile and online gaming infrastructure. Responsible gaming goes hand in hand with gambling and is a key area of support for the consumer who may have a gambling problem. The sports betting operators in the United States are all well-regulated companies that are very sensitive to the needs of the consumer and the need for investment into responsible gaming programs.
In this regard, the operators are required to have very effective compliance programs to detect and deter criminal activity such as money laundering. The gaming regulators in turn oversee and enforce strict compliance with gaming regulations by the operators. These are factual messages that need to be communicated effectively to the consumer. Sports betting will eventually become legal in California. The timing of it will depend upon the ability of California’s current gaming interests to set aside their total focus on self-interest and agree upon a sports betting bill that addresses consumer, taxpayer and state and local government interests in an inclusive, common-sense manner that clearly benefits California’s consumers. The Tribes will be a huge part of the equation given their political power. But the Tribes do not hold a royal flush hand. If they refuse reasonable compromises, the voters can turn against them. While some Tribes fear that the mobile element of sports betting will cannibalize their casino business, the fact remains that the tribal casinos do not conveniently service all California consumers. It is better for the Tribes to be at the table when drafting sports betting legislation then to be on the sidelines. The inclusion of all interested parties is what will push sports betting over the finish line the fastest. In summary, the voters in California in November 2022 sent a message to the Tribes and the large sports book operators. The message is loud and clear, please put forth a sports betting bill that creates options for the consumer, benefits the taxpayers, ensures a sports betting market that is well regulated and free from corruption and includes a strong responsible gaming element. In many ways, California is viewed as the holy grail for the sports betting industry. It is not a cheap knock off. California’s current gaming industries and the mobile and online sports betting operators, as well as California legislators, have a great opportunity to create a sports betting bill that establishes a well-regulated and consumer friendly sports betting structure that can make California the strongest, most successful sports betting system in the country, if not the world.
JOHN K. MALONEY Principal Attorney at the Law Offices of John K. Maloney. For more information contact: +1 (702) 387-9397 jmaloney@johnkmaloneylaw. com
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IMGL MAGAZINE | JANUARY 2023
EUROPEAN UNION
Will the EU Digital Services Act shape the future of on-line gaming? PASSED WITH LITTLE FANFARE IN APRIL 2022, THE EU’S DIGITAL SERVICES ACT PROMISES TO BRING ABOUT THE KIND OF SHAKEUP THAT WILL MAKE GDPR SEEM INSIGNIFICANT. ITS FULL RAMIFICATIONS ARE YET TO BE FELT BUT JAKA REPANSEK OUTLINES THE MAIN PROVISIONS.
The Digital Services Act (DSA) creates new standards for digital services in the EU. It regulates illegal content online, the protection of users’ rights, and the liability of a wide variety of online intermediaries, including online marketplaces, cloud providers and app stores. DSA will have a deep impact on the on-line gaming industry and business models in the EU. As with GDPR, there will be a long-term world-wide impact as well. The DSA, together with its sister regulation, the Digital Markets Act (DMA), forms a new set of rules intended to create a safer and more open digital space and to foster innovation and competitiveness. DSA reforms and supplements the e-Commerce Directive 1 as it relates to online intermediaries, maintaining core pillars such as safe harbour provisions while introducing new obligations relating to disinformation, illegal
goods and content, cyber violence, dark patterns and targeted advertisements. Businesses operating online, including on- line gaming and betting sites, will benefit from access to tools for flagging illegal content and activities that could otherwise damage their trade and services. Application of DSA to all parties is from the beginning of 2024. However, for very large online platforms (VLOPs) and the European Commission, the application date may be earlier - between spring and the summer of 2023 once the exact definition of “very large” is published. All online platforms that are not micro or small enterprises will have to start reporting their average monthly user count from February 2023 the months after the entering into force of DSA on 16th November 2022. The DSA will apply alongside its sister regulation, the DMA,
1 https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=celex%3A32000L0031
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which imposes a long list of obligations and prohibitions on digital platforms that are designated as “gatekeepers”, seeking to ensure fair and contestable digital markets in the EU. 2 Each is a core component of the EU’s wide-reaching reform of digital sector regulation (“The European Digital Decade”) and, in combination, the two pieces of legislation create a strong regulatory regime for the digital environment in Europe. DSA focuses on online content regulation and user protection, while the DMA seeks to prevent large and influential digital companies from implementing practices that are considered to limit competition or to be otherwise unfair. The DSA introduces wide-ranging obligations on intermediaries and new rights for users, including: • updating the regime for intermediary liability for third- party content, • rules to trace sellers on online marketplaces, • mechanisms to address illegal content, goods and services, • increased rights for users, including the right to challenge moderation decisions, • increased transparency requirements for online platforms, • obligations for the protection of minors, • new limits on targeted advertising and much more.
The DSA will apply to a range of providers of digital “intermediary services”, where such services are offered to natural or legal person recipients that are established or located in the EU. In practice, this will catch a broad range of businesses, including internet service providers, cloud providers and web hosting platforms, social media networks, online search engines, web-based messaging services and email services, domain name registrars, voice over IP services, and online platforms including app stores and online marketplaces which store or transmit the content of third parties. The concept of “offering” services is broad under the DSA, with providers of worldwide intermediary services included if they enable use of their service by EU users and have a “substantial connection” to the EU, such as targeting activities towards a Member State. Further, the DSA imposes specific obligations related to the content, format and accessibility of documents and information, such as terms and conditions. Online platforms will have to disclose information on their number of average monthly active recipients and these obligations will require efficient internal mechanisms. Businesses need to prepare in advance for new obligations requiring the adaptation of the design, presentation and/or functioning of their online interfaces.
2 https://ec.europa.eu/commission/presscorner/detail/en/QANDA_20_2349
European Union President Ursula von der Leyen is seen as a champion of Europe§’s Digital Decade
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Impact on online gambling Recital 32 of the DSA addresses online gambling and betting services: the applicable Union or national law on the basis of which those orders are issued may impose additional obligations and should be the basis for the enforcement of the respective orders. In the event of non-compliance with such orders, the issuing Member State should be able to enforce them in accordance with its national law. The applicable national law should be in compliance with Union law, including the EU Charter of Fundamental Rights 3 and the Treaty on the Functioning of the EU (TFEU) provisions 4 on the freedom of establishment and the freedom to provide services within the Union, in particular with regard to online gambling and betting services. Similarly, the application of such national laws for the enforcement of the respective orders is without prejudice to applicable Union legal acts or international agreements concluded by the Union or by Member States relating to the cross-border recognition, execution and enforcement of those orders, in particular in civil and criminal matters. The enforcement of the obligation to inform the relevant authorities about the effect given to those orders, as opposed to the enforcement of the orders themselves, should be subject to the rules set out in this regulation (DSA). DSA further defines a number of provisions that could potentially be beneficial in the fight against illegal online gambling. These include an improved notice-and-action mechanism which will enable all users to flag up illegal content online, an introduction of the concept of “trusted flaggers” whose notifications of illegal content would need to be addressed with priority, and enhanced consumer protection and know- your-business-customer requirements. Trusted flaggers are defined as “independent entities which will identify and notify illegal content to online platforms”. Online platforms will have to react to their notifications with priority and without delay. This concept could become a
powerful tool for on-line gaming and betting providers when tackling illegal content online. Several EU lotteries are already preparing to apply for the status of »trusted flaggers«, awarded by the Digital Services Coordinator. The DSA imposes an obligation on hosting service providers to put in place “notice and action” mechanisms enabling individuals or undertakings to notify them of illegal activity or content. The DSA could therefore improve the efficiency of the fight against illegal online gambling offers and advertising, by allowing anyone to contribute through the “notice and action” mechanisms to make the Internet safer for players. The current absence of an obligation on service providers to verify the identity of their business customers, and their resulting anonymity, make it nearly impossible to bring civil or criminal actions to stop online harms. Know your business customer (KYBC) obligations could become be a powerful tool in tackling illegal content effectively online. Further, the DSA strictly prohibits advertising targeted towards minors, complementing the existing absolute bans on gambling by minors and on gambling advertisments targeted at them in all EU member states. In conclusion: the proposed DSA is intended to be “a horizontal framework for all categories of content, products, services and activities on intermediary services” 5 . This horizontal framework legislation does not address every concern online but rather builds the foundation and should be complemented by vertical and sector-specific initiatives where needed. Preparing for the new DSA requirements will take considerable effort and investment, as well as technical and human resources that gaming and betting businesses should anticipate today, rather than tomorrow. Failure to comply with the DSA may result in fines of up to six percent of annual global turnover. Smaller breaches, such as the provision of incorrect or misleading information to regulators, may result in fines of up to one percent of annual turnover.
JAKA REPANSEK Founder RePublis Media & Gaming For information contact jaka.repansek@republis.si
3 https://commission.europa.eu/aid-development-cooperation-fundamental-rights/your-rights-eu/eu-charter-fun- damental-rights_en 4 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A12012E%2FTXT 5 https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52020PC0825&rid=2
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MALTA MARKET FOCUS
MALTA’S FATF GREY-LISTING
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The Impact of Historic Land Acquisition on Tribal Gaming In Alaska A 2022 OPINION FROM THE DEPARTMENT OF THE INTERIOR COULD HAVE A PROFOUND EFFECT ON THE ABILITY OF ALASKAN TRIBES TO OPEN TRIBAL CASINOS. MARSHA COTTON AND HEIDI MCNEIL STAUDENMAIER REPORT.
Introduction The history of gaming in the United States is complex, particularly in the State of Alaska. Until recently, certain Alaskan Native Tribes have struggled to participate in the profitable Class II and III tribal gaming industry. In large part, unclear legislation concerning the United States government’s ability to hold “Indian Lands” in trust on behalf of Alaskan Native Tribes – a precondition for many tribes seeking to offer gaming on their lands under the Federal Indian Gaming Regulatory Act (“IGRA”) 1 – has proved to be a roadblock. This article outlines the turbulent history of the land into trust acquisition process in Alaska, and how recent developments may finally provide Alaskan Native Tribes the opportunity to expand gaming on their lands.
Land into trust background First, it is helpful to understand the Native American land into trust process as distinct from traditional property ownership principles. Most commonly, individuals and entities hold title to land as “fee land.” Fee land is under complete control of the owner/titleholder, who can be an individual or an entity, and allows the owner to use the land for any legal purpose. In contrast, “trust” land is a territorial arrangement, whereby one party agrees to hold title to the property for the benefit of another party. Specific to Native American lands, the land into trust process involves the United States Department of the Interior (“DOI”) acquiring the title to a land parcel and then holding that parcel “in trust” for the benefit of the tribe or an individual tribal member.
1 25 U.S.C. § 2701 et seq.
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The land into trust process was generally created in response to the devastating effects of the Dawes Act, also known as the General Allotment Act (“GAA”). 2 Passed in 1887, the GAA divided tribal lands, allotted parcels to individual tribal members, and provided for the public sale of any surplus tribal lands remaining after allotment. This led to many negative and harmful consequences, including the dramatic reduction of land ownership by Native American tribes in both the lower 48 states and Alaska. 3 In 1934, Congress enacted the Indian Reorganization Act (“IRA”), which for practical purposes, terminated the allotment system. 4 Years later, in 1980, the DOI established regulations governing the land to trust process in an effort to help tribes regain lost lands and promote tribal self-determination. 5 Through the DOI trust process, tribes have the ability to establish a land base for tribal communities, reacquire lands within or near their reservations, and clarify jurisdiction over their lands. 6 Acquiring land into trust also helps to maximize a tribe’s eligibility for federal services and programs, including opportunities for gaming. Most tribal lands in the United States are currently held as trust lands. Alaska legislative and administrative history On November 16, 2022, the DOI Solicitor issued Opinion M-37076 (“2022 Opinion”), clarifying that the DOI Secretary does in fact have authority to acquire land into trust within the State of Alaska. 7 The next day, the DOI Assistant Secretary for Indian Affairs announced the approval of a land into trust acquisition for the Central Council of Tlingit and Haida Indian Tribes of Alaska. 8 The acquisition on behalf of the Tlingit and
Haida Tribes is only the second land into trust acquisition in Alaska since the passage of the 1971 Alaska Native Claims Settlement Act (“ANCSA”), and the first acquisition in five years. The acquisition is significant because the DOI had historically maintained that it lacked authority to acquire trust lands in Alaska, based on the ANCSA and a hodgepodge of federal statutes including the IRA and Alaska Indian Reorganization Act (“Alaska IRA”). 9 It was not until recently that the DOI changed its course. To understand how this change will likely impact tribal gaming in Alaska, the convoluted history of the IRA and Alaska IRA are briefly discussed below. Congress enacted the IRA in 1934, in part, to establish an opportunity for tribes to assume a greater degree of self- government, both politically and economically, by allowing conservation and development of Indian Lands through the land into trust process. Section 5 of the IRA generally authorizes the DOI Secretary to acquire land into trust across the United States. 10 However, confusion over the Secretary’s ability to acquire land into trust specifically within Alaska has plagued interpretation of the IRA from the beginning. Originally, Section 5 of the IRA authorized the Secretary to acquire land into trust for “Indians” and provided that, for the purposes of the IRA, Eskimos and other aboriginal people of Alaska are considered “Indians.” At the same time, however, the IRA was explicitly inapplicable to any U.S. Territory, which at the time included Alaska. Two years later, in 1936, Congress enacted the Alaska IRA to correct these perceived inconsistencies within the IRA. 11 The Alaska IRA extended the trust authority codified in IRA Section 5 to the Territory of Alaska. However, once Alaska
2 See South Dakota v. Yankton Sioux Tribe , 522 U.S. 329, 333 (1998). 3 U.S. Department of the Interior, Office of Indian Economic Development, Benefits of Trust Land Acquisition, https://www.bia.gov/service/ trust-land-acquisition/benefits-trust-land-acquisition. 4 Carcieri v. Salazar, 555 U.S. 379, 382 (2009). 5 Land Acquisitions, 45 Fed. Reg. 62034 (Sept. 18, 1980). 6 U.S. Department of the Interior, Indian Affairs, Benefits of Trust Land Acquisition, https://www.bia.gov/service/trust-land-acquisition/bene- fits-trust-land-acquisition. 7 Robert T. Anderson, Solicitor Opinion M-37076, “The Secretary’s Land into Trust Authority for Alaska Natives and Alaska Tribes Under the Indi- an Reorganization Act and the Alaska Indian Reorganization Act” (Nov. 16, 2022). 8 U.S. Department of the Interior, Indian Affairs, Indian Affairs to accept land into trust for Tlingit and Haida Indian Tribes of Alaska, https://
www.bia.gov/news/indian-affairs-accept-land-trust-tlingit-and-haida-indian-tribes-alaska (Nov. 17, 2022). 9 Kyle E. Scherer, Alaska’s Tribal Trust Lands: A Forgotten History, 38 Alaska L. Rev. 37, 38 (June 2021). 10 Anderson, Solicitor Opinion M-37076 at 6. 11 See 25 U.S.C. § 5119.
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became an official state in 1959, uncertainty arose again over the applicability of both the IRA and Alaska IRA to the State of Alaska (as opposed to the Territory of Alaska), and the DOI took the position that it lacked authority to acquire trust lands in Alaska. 12 Because of this, almost none of the 229 federally recognized tribes in Alaska have ever held “trust-status” land. 13 After decades of uncertainty, in January 2017, then-Solicitor for the DOI Hilary C. Tompkins published an Opinion (“2017 Opinion”) which concluded that Section 5 of IRA, as applied to Alaska through the Alaska IRA, authorized the Secretary to accept land into trust for Alaskan Native Tribes and individuals. 14 This clarification was short-lived because, in June 2018, her successor as DOI Solicitor Daniel H. Jorjani temporarily withdrew the 2017 Opinion while he investigated the Secretary’s authority for future trust acquisitions in Alaska. 15 On January 19, 2021, one day before President Joe Biden’s inauguration, then-Solicitor Jorjani permanently withdrew the 2017 Opinion and published a new Opinion (“2021 Opinion”), addressing the Secretary’s authority to acquire land into trust
in Alaska. The 2021 Opinion asserted the 2017 Opinion’s legal conclusion that the Secretary is authorized to take land into trust in Alaska was flawed because it did not address the possible effect of the Statehood Act and the ANCSA upon the Secretary’s authority. For almost two years it appeared that the DOI would maintain this position precluding land into trust acquisitions in Alaska. 16 The recent 2022 Opinion serves as a withdrawal of the 2021 Opinion. The 2022 Opinion concluded that Alaska’s statehood did not alter the applicability of the IRA to Alaska Natives and tribes. The 2022 Opinion further concluded that none of the concerns raised in the 2021 Opinion, mainly the issue of ANCSA applicability, affects the scope of the Secretary’s authority to acquire land into trust under the IRA and Alaska IRA. Impact On tribal gaming Due to the complicated history of Alaska and the land into trust process, gaming in Alaska has been very limited since the passage of the IGRA, in contrast to the lower 48 states. 17
12 Alaska’s Tribal Trust Lands: A Forgotten History, 38 Alaska L. Rev. at 38. 13 See Meghan O’Connor, The Secretary of the Interior Has the Authority to Take Land into Trust for Federally Recognized Alaska Tribes, 45 Am. Indian L. Rev. 89, 96 (2021). 14 Hilary C. Tompkins, Solicitor Opinion M-37043, “Authority to Acquire Land into Trust in Alaska” (January 13, 2017). 15 Daniel H. Jorjani, Solicitor Opinion M-37053, “Withdrawal of Solicitor Opinion M-37043, ‘Authority to Acquire Land into Trust in Alaska’ Pending Review” (June 29, 2018). 16 Daniel H. Jorjani, Solicitor Opinion M-37064, “Authority to Acquire Land in Trust in Alaska” (January 19, 2021). 17 See, e.g., Letter from Montie R. Deer, Chairman, Nat’l Indian Gaming Comm’n, to Christopher A. Karns, Attorney, Dorsey & Whitney LLP (ap-
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The IGRA serves as the comprehensive regulatory scheme for tribal gaming throughout the United States, and it provides that a tribe may only conduct gaming on “Indian Lands.” The IGRA defines “Indian Lands” to include, among other things, any lands outside a reservation which are held in “trust” for the tribe—which (until recently) Alaska tribes have virtually none. 18 The 2022 Opinion appears to have encouraged a significant shift for Alaskan tribes to move forward with developing gaming operations. For example, on December 8, 2022, the Chairman of the National Indian Gaming Commission (“NIGC”) approved the Klawock Cooperative Association’s Class III Gaming Ordinance amendment as required by the NIGC’s Revised Model Gaming Ordinance. 19 As a result, Klawock Cooperative Association can now expand its existing Class II gaming operations. Though the 2022 Opinion is being touted as a sign of great progress for Alaskan tribes in the gaming industry, it is important to note that the Opinion is vulnerable to withdrawal just as the 2017 and 2021 Opinions. Recognizing this, the DOI wants to make the trust process clarification provided by the 2022 Opinion less likely to be reversed. On December 5, 2022, the DOI Office of the Assistant Secretary for Indian Affairs published proposed amendments to the regulations governing the land into trust process (25 CFR part 151). 20
recognized tribes have been precluded from reaping the benefits of lands held “in trust”. Another major proposed regulation change is the removal of language that carved out Alaskan Natives from the definition of “Individual Indian.” The purpose of this change is to clarify that the regulations do not limit trust acquisition by Alaska Natives and tribes in any way. The DOI has invited representatives of federally recognized Indian Tribes and Alaska Native Corporations to consult on these proposed changes to the land into trust process. Written comments on the proposed rule changes will be accepted until March 1, 2023, and the proposed regulations will be finalized thereafter. If and when the proposed amendments are approved, Alaskan Native Tribes should have an easier path to establishing gaming facilities on their lands. Conclusion Since the passage of the IGRA, tribal casinos have thrived on Indian Lands throughout the United States. However, Alaskan Native Tribes have, for the most part, historically been excluded from capitalizing on the gaming industry’s success. Now, with the DOI’s 2022 Opinion in hand, Alaskan Native Tribes may move forward to seek the development and expansion of gaming activities on their lands. Although the final administrative rules for trust acquisitions remain undetermined, at least for the foreseeable future, Alaskan Native Americans are celebrating the opportunity to use the land into trust acquisition process to greatly enhance their economic development opportunities through gaming ventures. 21
HEIDI MCNEIL STAUDENMAIER
Partner Coordinator of Native American Law & Gaming Law Services
One major change included in these proposed regulations is to create a new category within the trust acquisition process for “initial Indian acquisitions.” This is designed to fast track the process for tribes applying for trust lands for the first time. Such a change is particularly relevant for lands in Alaska, where many of the federally proving Class II gaming for Kake Tribe) (Apr. 18, 2000) https://www.nigc.gov/images/uploads/indianlands/Orga- nized%20Village%20Kake2.pdf. 18 25 U.S.C. § 2703(4)(B). 19 Notice of Approved Class III Tribal Gaming Ordinance, 88 Fed. Reg. 1091 (Jan. 6, 2023); National Indian Gaming Commission, Bulletin 2018-01, (Jan. 10, 2018) https://www.nigc.gov/images/uploads/bulletins/Bulletin_2018-1_ Revised_Model_Ordinance.pdf. 20 Land Acquisitions, 87 Fed. Reg. 74334 (Dec. 5, 2022). 21 To be sure, on January 17, 2023, the State of Alaska sued the DOI related to the land into trust acquisition for the Central Council of Tlingit and Haida Indian Tribes, arguing that the acquisition limits its sovereign jurisdiction and undermines key terms of the ANCSA. See Complaint, Alaska v. Newland et al. , No. 3:23-cv-00007-SLG (D. Alaska Jan. 17, 2023), ECF No. 1.
MARSHA COTTON Attorney, Commercial Litigation Group Snell & Wilmer, L.L.P For information contact +1 602.382.6598 mcotton@swlaw.com
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