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Gaming Report: Frank Pallone Drops Federal Sports Betting Bill, Kenyan President Seeks Reduction of Gambling Taxes & More

Frank Pallone and Uhuru Kenyatta
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  • PG News September 19, 2018
  • 6 Mins Read

In the global gaming industry that has been rapidly striding towards expansion there are conflicts and issues galore, drawing attention.

U.S. Congressman Frank Pallone has thrown a surprise by withdrawing his bill seeking federal control over sports betting. Pallone’s work of labour, the Gaming Accountability and Modernization Enhancement (GAME) Act would have brought in federal standards for minimum consumer protection but the New Jersey democrat has now gone back on his long-standing views on gaming legislation.

Meanwhile, in the wake of increasing pressure from gaming operators, Kenyan President Uhuru Kenyatta has sought re-evaluation of the new Finance Bill 2018 that legitimizes a 35% gambling tax rate. Kenyatta has refused to sign the bill and recommended that the tax rate be reduced to 15%.

Genting Malaysia has been facing legal roadblocks in its integrated casino project in Massachusetts that it was proposing to build in conjunction with the Mashpeee Wampanoag tribe and is now considering options to recover its invested money.

Frank Pallone Drops Federal Sports Betting Bill

U.S. Congressman Frank Pallone has withdrawn his bill that sought creation of federal standards for sports betting. In a speech on September 12, the Democrat from New Jersey has announced that he no longer supported the Gaming Accountability and Modernization Enhancement (GAME) Act.

Frank Pallone
Frank Pallone

“Right now, my own position is, and I’m only speaking for myself, that we shouldn’t move with any federal legislation for sports betting,” Pallone said, while speaking to the National Congress of American Indians (NCAI).

The GAME Act was authored by Pallone who, unlike other Congressmen like senators Orrin Hatch and Charles Schumer had supported and advocated state jurisdiction on most aspects of online gambling and sports betting. It would have established federal standards for minimum consumer protection and if approved, would have powered the states to create interstate gaming networks and regulate sports betting.

In light of Pallone’s prominence in Congress, his withdrawal of the GAME Act is a big surprise. Pallone, while tabling the GAME Act had stated, “It’s time to recognize that the federal laws are outdated, and the GAME Act will modernize them by increasing transparency, integrity, and consumer protections.”

According to Pallone, the “tremendous success” of sports betting initiatives in New Jersey and other states in terms of revenue changed his mind. He also mentioned several revenue figures from reports of different states.

The Congressman also noted that major sports leagues have been lobbying Congress for federal regulation that would give them integrity fees and control over the data. The leagues were, he suggested, acting as opportunists rather than in good faith.

Kenyan President Pushes For Reducing Gambling Taxes From 35% to 15%

Making a serious bid to reduce the country’s new uniform gambling tax rate that is as high as 35% currently, Kenyan President Uhuru Kenyatta has refused to sign the new Finance Bill 2018 and asked the parliament to reintroduce a measure for reducing the tax rate to 15%.

Uhuru Kenyatta
Uhuru Kenyatta

Notably, Kenyatta himself had signed the 2017 legislation that led to increase of gambling taxes from the then 5% for lotteries and 7.5% for betting operators to a new and uniform 35% for all gambling products. The new rate officially came into effect on January 1.

The move led to fierce lobbying by gaming companies that claimed that the high tax rates made their Kenyan operations “unworkable.” Local sports bodies and betting operators like SportPesa had to scrap its existing sports sponsorships, to renew some of the deals at reduced rates.

In June 2018, India-based social and mobile gaming operator Nazara Technologies had entered Kenya’s real-money sports betting market by establishing a Kenyan subsidiary, NZWorld Kenya Ltd. in partnership with a local Kenyan firm.

However, recent government efforts to amend the Finance Bill and reprieve the high tax rates, including the amendment tabled before the parliament last month have failed. Meanwhile, the parliament is yet to approve the release of funds to the tune of US$79.3 Million in new gambling taxes collected that are supposed to help fund sports bodies.

President Kenyatta will find it difficult to push a decrease in gambling tax though. In face of the ‘social impact’ of gambling, the parliament has shown little interest towards reopening the gambling tax issue and reduction of the tax rates.

Genting Malaysia Explores Options to Recover $428M Massachusetts Investment

Genting Malaysia is looking at the options for recovering its investment of MYR1.77 Billion (US$428 Million) for a planned integrated resort in Massachusetts.

The company had issued promissory notes worth $275 Million to the Mashpeee Wampanoag tribe for developing the ‘First Light Resort & Casino’ on a 300-acres area in Taunton, south of Boston.

First Light Resort & Casino
First Light Resort & Casino

However in September 2017, the U.S. federal government through Department of Interior (DoI) rejected grant of the disputed land to the tribe for the resort project, construction of which had been halted after strong local opposition.

“The Group is currently deliberating the appropriate course of action by working closely with the Tribe to review all options available for the Group’s investment in the promissory notes as well as its recoverability,”Genting Malaysia, in a recent filing stated.

Local residents had opposed the resort on grounds that the 2015 awarding of the land for the resort was a misinterpretation of the Indian Reorganization Act, that had been clarified by a 2009 Supreme Court ruling.

Meanwhile, the National Congress of American Indians (NCAI) has issued a statement on the issue saying that, “The Tribe presented evidence that its lands and people were included in various federal reports documenting Indian tribes at various points in history. However, the decision rejects this clear evidence of federal jurisdiction by inexplicably claiming that these federal reports do not constitute ‘exercises’ of federal jurisdiction.”

For Genting Malaysia, the only legal reprieve would come if the House Bill 5244 that was filed by Representative William Keating in the U.S. Congress last March is passed. The legislation would entail the DoI “to reaffirm the land in trust for the benefit of the tribe,” the company noted in its filing.

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