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Top-10 gambling industry stories of 2011

23 December 2011

There are times when the Casino City editorial team really has to scrape the bottom of the barrel to come up with enough items to fill a top-10 list. Putting together the top-10 gambling industry stories of the year, however, is usually not one of those cases.

And this year, more than ever, our top-10 gambling industry stories of the year is chock full of big news. In fact, there are quite a few stories that ended up on the cutting room floor this year that would have been in the top-five any other year.

ESPN moves to live coverage of the World Series of Poker Main Event — not on our list. Pennsylvania casinos generate more revenue than Atlantic City in November this year for the first time— not on our list. Poker superstar Phil Ivey skips the WSOP — not on our list.

The reason the 10 items below made our list over the ones listed above is they are, or promise to be, real game-changers for the industry. So let's look back and see just what transpired in the gambling industry in 2011.

10. Epic Poker League launches
The Epic Poker League, launched by former WSOP commissioner Jeffrey Pollack, offers the top 250 (or so) poker players in the world a chance to test themselves against an elite field in four $20,000 buy-in main events. You can only get into the tournament by meeting strict criteria or by making a final table of a single $1,500 "Pro-Am," and the top 27 players in the four events will earn a spot in a $1 million freeroll at the end of the season.

Modeled after the PGA Tour, the Epic Poker League's goal is to showcase the best tournament poker players, many of whom may not be household names — at least not yet. The first three tournaments drew an average of 111 players (about 42 percent of the eligible player base), and considering many of the qualifiers live outside the U.S., it's not a bad turnout.

It remains to be seen whether the Epic Poker League will last or will go the way of the Professional Poker Tour, the Professional Poker League and other similar attempts to "legitimize" poker. But regardless of whether the league booms or busts, it's already been much more successful than any previous professional league, so it earned a spot on our top-10 list this year.

9. Sahara shuts down
Let's be honest, the real reason people were sad about the closing of the Sahara has to do with its ancient history (at least as measured by the gambling industry), not its recent past. The Las Vegas casino is a shell of its former self, outshined by the high-class casinos further south on the Strip. But the casino was one of the last links to "old Vegas" and its presence is missed. There have been rumblings that it will undergo renovation and reopen, and I for one can't wait to see it.

8. Brick and mortar/online poker partnerships
Early in the spring, it seemed that every gaming company in the U.S. was in a race to partner with an online poker room. Steve Wynn signed an agreement with PokerStars; the Fertitta brothers (co-founders of Station Casinos) inked a deal with Full Tilt Poker. And while those deals soon fell apart in the aftermath of Black Friday (more on that later), other American gaming companies are now working with online poker rooms that have not allowed U.S. players to make real-money bets since the passage of the Unlawful Internet Gambling Enforcement Act in 2006. MGM is working with bwin.Party and Caesars Entertainment has reached a deal with 888. While these companies can't offer real-money games to U.S. players yet, they want to be ready if and when they can.

7. Massachusetts passes casino gambling legislation
I've been a resident of the Bay State since late 2004, and I've been told by local media that casino legislation was likely to pass in nearly every legislative session since I got here. Well this year they were finally right. The legislation signed by Gov. Deval Patrick allows a gambling commission to grant licenses for up to three "resort casinos," each located in a different region of the state, and one "slot parlor" to be located anywhere in the state. Mohegan Sun, whose flagship casino is located just south in Connecticut is eyeing a site in the western part of the state. Caesars Entertainment has entered a partnership with Suffolk Downs while gaming mogul Steve Wynn is already considering leasing a site owned by New England Patriots owner Bob Kraft across the street from Gillette Stadium. Wynn's long-time rival Sheldon Adelson has recently indicated that he may be interested in pursuing a license as well. With this many heavy-hitters involved, things could get very interesting.

6. European companies gain foothold in Nevada
British bookmaker William Hill spend most of the spring buying up Nevada sportsbooks. These purchases included American Wagering, which operates Leroy's Sportsbooks in 72 locations in Nevada, the Cal Neva Sportsbook Division and Brandywine Bookmaking. Total cost: $55 million.

"We did a lot of homework on Nevada and we set our sights on these three companies," William Hill Chief Executive Ralph Topping said. "We wanted to have the size and scale and this is a great opportunity to establish ourselves in Nevada."

5. Resorts World opens in New York City
There have been tribal casinos in the state of New York for years, but Resorts World Casino New York City is the first casino in the Big Apple. Owned by the Genting Group and located at the Aqueduct Racetrack, Resorts World offers slot machines and electronic table games. The facility took in $14 million in revenue in its first 10 days, and that was before it opened its more spacious second floor. A game-changer indeed.

4. Black Friday
I'm sure there are some online poker players who will quibble with me placing Black Friday fourth on this list. And some people (most notably American online poker players), will remember what happened on April 15, 2011 for the rest of their lives. But to be honest, I think we all knew the day was coming. Sure, we may have fooled ourselves into believing that the legal limbo would continue forever, but when you made a deposit to an online poker room and it appeared on your bank statement as something completely unrelated to poker, or when you made a withdrawal and got a check in the mail from a random bank that never stated what the check was for, you had to know that the Department of Justice would stop it all eventually. Black Friday was a big story and a game-changer to be sure. It will continue to have ripple effects for years. But it's nothing compared to our top three stories of 2011.

3. New Jersey amends state Constitution to allow for sports betting
New Jersey lawmakers and casino executives have wanted sports betting for years. But after the Professional Amateur Sports Protection Act passed in 1992, New Jersey missed its window to regulate the industry and it's been against federal law to offer full-scale sports betting in every state but Nevada ever since. New Jersey is trying to change that.

The state's residents approved a measure to change the state constitution to allow casinos in the state to offer sports betting, and now the matter will most likely be settled in the courts. Sen. Ray Lesniak had to remove a provision that would have allowed bets from smartphones and the Internet in order to get Gov. Chris Christie's signature, but was willing to do so in order to see the legislation pass. Should the state win in court, every state in the nation would be free to decide whether it wanted to allow sports betting within its borders.

2. Full Tilt meltdown
A year ago, I wouldn't have been surprised if you told me that Black Friday was going to happen in 2011. But if you told me that Full Tilt Poker would be completely shut down, have its license revoked, and be bought by French investors, well then I would have said you were full of it.

With a large list of recognizable pros, high-stakes games and innovative ideas like Rush Poker, Full Tilt looked unstoppable. But when the site got cut off from American customers, cracks started to appear on the surface. PokerStars reimbursed Americans to the tune of more than $100 million in a month. Full Tilt gave statement after statement which essentially said "We'll release another statement soon," while Americans were left to wonder if they'd ever be paid.

Players outside the U.S. started to complain that their withdrawals were taking longer than ever, and in late June, the site's license was suspended, and eventually revoked.

It turns out that even prior to April 15, the company was often unable to access funds from U.S. banks but went ahead and credited American players with funds when they attempted to make a deposit anyway. And to keep their pros from knowing anything was wrong, they kept paying them, even though their cash reserve balances were running dangerously low. The site was even called a “Ponzi Scheme” by the U.S. Department of Justice, and poker superstars Howard Lederer and Chris Ferguson were named in an amended civil complaint.

The company has been purchased by Groupe Bernard Tapie, which will pay players outside of the U.S., while Americans will have to go to the Department of Justice to get their balances back.

1. Department of Justice says intrastate online gambling is A-O-K
Several states have looked into licensing intrastate online gambling. All have been told by the Justice Department that doing so would be against the law, despite the fact that the UIGEA includes a carve-out for intrastate online gambling, so long as states can determine that gamblers are located within the state's borders and are 21 or older.

Christie even referenced conversations he had with Justice Department officials when he opted to veto a bill that received broad bi-partisan support that would have licensed and regulated online casinos and poker rooms in New Jersey.

But with several states pressing the issue, including Nevada, which adopted rules for Internet poker licenses, the DOJ's Office of Legal Counsel conceded to Senate Majority Leader Harry Reid (D-Nev.) that intrastate transactions are "authorized under state law … even if communications are routed across state lines." Armed with this information, state lotteries will be free to sell tickets to people within their borders online, as well as license and regulate online casino and poker operations. The only gambling activity that is expressly forbidden is sports betting, which is covered by the Wire Act.

Now that's a game changer.
Top-10 gambling industry stories of 2011 is republished from
Aaron Todd

Home-game hotshot Aaron Todd was an editor/writer at Casino City for nearly eight years, and is currently the Assistant Director of Athletics for Communications and Marketing at St. Lawrence University, his alma mater. While he is happy to play Texas Hold'em, he'd rather mix it up and play Omaha Hi/Lo, Razz, Deuce-to-Seven Triple Draw, and Badugi.

Aaron Todd

Home-game hotshot Aaron Todd was an editor/writer at Casino City for nearly eight years, and is currently the Assistant Director of Athletics for Communications and Marketing at St. Lawrence University, his alma mater. While he is happy to play Texas Hold'em, he'd rather mix it up and play Omaha Hi/Lo, Razz, Deuce-to-Seven Triple Draw, and Badugi.