Justia Gaming Law Opinion Summaries

In 2020, a federal grand jury indicted David DeQuattro, an architect, and Cedric Cromwell, Chairman of the Mashpee Wampanoag Tribal Council and President of the Mashpee Wampanoag Gaming Authority. They were charged with various federal offenses, including bribery and extortion, related to Cromwell allegedly soliciting and DeQuattro allegedly providing checks and other items of value to protect a contract between DeQuattro's firm and the Gaming Authority for building a casino on tribal land.The United States District Court for the District of Massachusetts held a jury trial where DeQuattro was convicted of one count of federal-program bribery, and Cromwell was convicted of two counts of federal-program bribery and multiple counts of Hobbs Act extortion. However, the District Court later entered a judgment of acquittal on the Hobbs Act-related counts, determining that the Hobbs Act did not clearly abrogate tribal immunity. Both defendants appealed their § 666 convictions, and the government cross-appealed the judgment of acquittal on the Hobbs Act counts.The United States Court of Appeals for the First Circuit reviewed the case. The court reversed both the § 666 convictions and the judgment of acquittal. The court found that the evidence did not suffice to show that the RGB contract was "business" of the Tribe, as required under § 666, because the Gaming Authority, which entered the contract, was a separate legal entity from the Tribe and received almost all its funding from a third party. The court also reversed the District Court's judgment of acquittal on the Hobbs Act convictions, holding that tribal officials do not enjoy immunity from federal criminal prosecution and that the evidence was sufficient to show Cromwell's intent to engage in a quid pro quo arrangement. The case was remanded for further proceedings consistent with this opinion. View "United States v. Dequattro" on Justia Law

In 2014, Salvatore Groppo pleaded guilty to aiding and abetting the transmission of wagering information as a "sub-bookie" in an unlawful international sports gambling enterprise. He was sentenced to five years' probation, 200 hours of community service, a $3,000 fine, and a $100 special assessment. In 2022, Groppo moved to expunge his conviction, seeking relief from a potential tax liability of over $100,000 on his sports wagering activity. He argued that the tax liability was disproportionate to his relatively minor role in the criminal enterprise.The district court denied Groppo's motion to expunge his conviction. The court reasoned that expungement of a conviction is only available if the conviction itself was unlawful or otherwise invalid. The court also stated that the IRS's imposition of an excise tax does not provide grounds for relief as 'government misconduct' that would warrant expungement.On appeal, the United States Court of Appeals for the Ninth Circuit affirmed the district court's decision. The appellate court held that because Groppo alleged neither an unlawful arrest or conviction nor a clerical error, the district court correctly determined that it did not have ancillary jurisdiction to grant the motion to expunge. The court explained that a district court is powerless to expunge a valid arrest and conviction solely for equitable considerations, including alleged misconduct by the IRS. View "USA V. GROPPO" on Justia Law

In this case, the Supreme Court of Iowa upheld the conviction of the defendant, Sydney Leiann Slaughter, for gambling and making a false claim of winnings. The defendant falsely claimed that she won a slot machine jackpot of $4,000 when her boyfriend was the actual winner. The court found that there was sufficient evidence to show that the defendant had the requisite intent to defraud and had not made a wager contingent on winning a gambling game. The court also held that expert testimony regarding the definition of a "wager" was admissible, and found that the lower court’s error of admitting reference to case law in the expert’s testimony was harmless. The Supreme Court of Iowa affirmed the decision of the Court of Appeals in part and vacated it in part, ultimately affirming the judgment of the District Court. View "State of Iowa v. Slaughter" on Justia Law

The First Circuit held that the Wire Act's prohibitions are limited to interstate wire communications related to bets or wagers on sporting events or contests, thus affirming the district court's grant of Plaintiffs' motions for summary judgment.In 2011, the Office of Legal Counsel (OLC) of the U.S. Department of Justice (DOJ) issued a legal opinion concluding that the Wire Act's prohibitions were uniformly limited to sports gambling. In 2018, the OLC issued an opinion, which was later adopted by the DOJ, that all prohibitions in the Wire Act, with one exception, applied to all forms of bets or waters. In 2019, the New Hampshire Lottery Commission and one of its vendors commenced this action seeking relief under the Administrative Procedure Act and the Declaratory Judgment Act. The district court granted relief, ruling that the Wire Act was limited to sports gambling. The First Circuit affirmed, holding (1) this controversy is justiciable; and (2) the Wire Act applies only to interstate wire communications related to sporting events or contests. View "New Hampshire Lottery Commission v. Rosen" on Justia Law

Dew-Becker sued Wu, alleging that the two had engaged in a daily fantasy sports (DFS) contest on the FanDuel website; that Dew-Becker had lost $100 to Wu; and that the contest constituted illegal gambling so that Dew-Becker was entitled to recover the lost money under 720 ILCS 5/28-8(a). The circuit court rendered judgment in favor of Wu, finding that section 28-8(a) does not allow recovery when the gambling is not conducted between one person and another person. The appellate court affirmed.The Illinois Supreme Court agreed that recovery is unavailable. The DFS contest was not gambling under section 28-8(a). A person commits gambling if he “knowingly plays a game of chance or skill for money or other thing of value, unless excepted in subsection (b).” Subsection (b)(2) provides an exception to gambling for a participant in any contest that offers “prizes, award[s] or compensation to the actual contestants in any bona fide contest for the determination of skill, speed, strength or endurance or to the owners of animals or vehicles entered in such contest.” That “DFS contests are predominately skill-based is not only widely recognized” but has created a potential revenue problem for the DFS websites. New and unskilled players are often hesitant to participate. View "Dew-Becker v. Wu" on Justia Law

The State of Arizona and Williams Gaming, Inc. (WMS), a manufacturer of electronic gaming machines, initiated a civil asset forfeiture against money Randy Binning had won, in part, in Tunica, Mississippi, casinos. Binning was indicted in Mississippi for violations of the Mississippi Gaming Control Act. A circuit court in Mississippi, however, dismissed all criminal charges against Binning with prejudice. Despite the dismissal of charges in Mississippi, Arizona continued its prosecution of the civil-forfeiture action. Binning sought a writ of prohibition from the Mississippi Supreme Court, clarifying to the state of Arizona that any further collateral attacks upon the dismissed criminal charges under Mississippi law should have been barred as res judicata. Because Binning failed to provide sufficient authority that a court in Mississippi may issue a writ of prohibition to a court outside of the state, the Mississippi Supreme Court affirmed denial of the writ. View "Binning v. State of Mississippi" on Justia Law

In 2008, Johnston, a horse racetrack executive, promised a $100,000 campaign contribution to then-Governor Blagojevich in exchange for his signature on a bill to tax the largest casinos in Illinois for the direct benefit of the Illinois horse racing​ industry. After Blagojevich’s corruption came to light, the casinos sued the racetracks, alleging a conspiracy to violate the federal Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961, and state‐law claims for civil conspiracy and unjust enrichment. A jury awarded the casinos $25,940,000 in damages, which was trebled under RICO to $77,820,000. The Seventh Circuit affirmed in part, holding that the jury did not have legally sufficient evidence to support a verdict finding a conspiracy to engage in a “pattern” of racketeering activity, as required for liability on a RICO conspiracy theory. The casinos are still entitled to the $25,940,000 in damages on the state‐law claims, but not to have those damages trebled under RICO. View "Empress Casino Joliet Corp. v. Balmoral Racing Club, Inc." on Justia Law

Kaplan operated an illegal sports-booking business in New York that moved to Costa Rica in the 1990s. In 2004, the company went public on the London Stock Exchange. Before going public, Kaplan placed $98 million in trusts off the coast of France. Kaplan neglected to pay federal income or capital gains tax for the trusts for 2004 and 2005. In 2006, Kaplan was indicted for operating an illegal online gambling business within the U.S. Kaplan accepted a plea agreement, which stated: [N]othing contained in this document is meant to limit the rights and authority of the United States … to take any civil, civil tax or administrative action against the defendant. The court asked: Do you understand … that there is a difference between a criminal tax proceeding and a civil tax proceeding … that [this] doesn't preclude the initiation of any civil tax proceeding or administrative action against you? Kaplan replied, "I understand." The court sentenced Kaplan to 51 months of imprisonment, and ordered forfeiture of $43,650,000. Later, the IRS issued Kaplan a notice of deficiency with penalties, totaling more than $36,000,000. The Eighth Circuit affirmed: since Kaplan failed to file a return, the period to assess taxes never began to run; the plea agreement was unambiguous; and the government's failure to object to the Presentence Report did not prevent the government from bringing a civil tax proceeding. View "Kaplan v. Comm'r of Internal Revenue" on Justia Law

At issue in this case were devices that resemble traditional casino-style slot machines in certain respects and offer users the chance to win sweepstakes prizes. The five Defendants in this ran businesses using devices that employed modern technology to run sweepstakes computer games. The Kern County District Attorney’s Office filed separate civil actions against each of the Defendants, alleging that Defendants had violated antigambling provisions of the Penal Code in operating their businesses and seeking injunctive and other relief. The superior court granted preliminary injunctions prohibiting each defendant from operating any business that includes any type of “sweepstakes,” “slot machines,” or “lottery” feature. The Court of Appeal affirmed, concluding that the sweepstakes operations were illegal slot machines. The Supreme Court affirmed, holding that Defendants’ devices were unlawful slot machines under Cal. Penal Code 330b. View "People ex rel. Green v. Grewal" on Justia Law

Based on investigations by law enforcement officials, a grand jury returned an indictment against several individuals and companies alleging that they had used an Internet gambling system to conceal illegal gambling by presenting it as an Internet sweepstakes. The prosecuting attorney then mailed letters to Plaintiff and other proprietors of Internet sweepstakes cafes threatening criminal prosecution if they did not immediately cease to run the sweepstakes. Plaintiff filed this action seeking to prohibit the prosecuting attorney from enforcing gambling laws against it with respect to Internet sweepstakes. Plaintiff sought to compel discovery of information related to the ongoing criminal investigation. The trial court ordered the prosecuting attorney to produce the information. The prosecuting attorney filed an interlocutory appeal. The court of appeals balanced the competing interests of Plaintiff and the prosecuting attorney and affirmed in part and reversed in part, holding that certain information being sought was not protected by the law enforcement investigatory privilege. The Supreme Court affirmed, holding (1) the law enforcement investigatory privilege is not absolute; and (2) the balancing test the Court adopted in Henneman v. Toledo for weighing the interests of law enforcement in keeping the information confidential against the needs of a civil litigant who requests the information in discovery remains valid. View "J & C Marketing, LLC v. McGinty" on Justia Law