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DFS legality a huge issue at G2E

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LAS VEGAS -- Sports betting and daily fantasy sports dominated the conversation Tuesday at a gaming conference here, but nothing was resolved in the debate about whether DFS is gambling.

Still, it was great to see sports betting have such a big part at the Global Gaming Expo (G2E), which is held at the Sands Expo & Convention Center behind the Venetian/Palazzo complex (site of the famous Sands Hotel & Casino). G2E debuted in 2001 and I've attended more than half of those years, but many years I didn't bother as there was a lack of panels and exhibits on sports and/or horse wagering. I appreciate all forms of gambling, but I can only look at so many new slot machines, table games and surveillance systems.

In fact, on Tuesday's seminar schedule, sports had a panel or was discussed during every time frame.

9-10 a.m.: American Gaming Association president & CEO Geoff Freeman gave his "state of gaming address," in which he said the legality of DFS "is a gray area." He then introduced the keynote speaker, Jeffrey Ma (a member of the famous MIT blackjack team, the basis of the book "Bringing Down the House" that was made into the movie "21," and a fellow ESPN Chalk writer who gives NFL picks on SportsCenter), who peppered his speech with sports references.

10:30-11:30 a.m.: A panel called "Blurring the Lines: Lotto, Sports Betting, iGaming, Social and Fantasy Join Casinos."

11:45 a.m.-12:45 p.m.: A panel called "Regulation of Sports Betting and Daily Fantasy Sports in the United States: Questions Abound."

2-3 p.m.: A panel called "Business Threat or Opportunity: Sports Betting, Daily Fantasy and the Ongoing Debate," which was the only panel at that time and held in the big conference room that hosted the keynote addresses.

3-4 p.m.: A media-only panel called "Illegal Gambling Roundtable" in which Freeman was joined by representative from law-enforcement agencies across the country to discuss the AGA's ongoing initiative to crack down on illegal gambling operations.

The preponderance of sports betting discussion was also music to the ears of Vic Salerno, who is going to be a long overdue inductee into the Gaming Hall of Fame on Wednesday for his innovations of the first computerized betting system, self-service kiosks and smartphone betting apps during his long career running the Leroy's Race & Sports Books and now chairman of the board for William Hill's U.S. division.

"The fact of having sports wagering playing such a large part in this conference is the equivalent of the ugly duckling finally becoming the beautiful swan," Salerno said. "Sports betting is finally being recognized as an industry that is on its way to being accepted by the general public and possibly by the governmental agencies.

"I'm proud of sports bookmaking and the attention it's getting at G2E."

John Burge, CFO & COO of CG Technology (the sportsbook company formerly known as Cantor Gaming), also noted the increase given to sports betting, saying he was on a G2E panel two or three years ago ago and there were maybe 35 people in the room.

Burge was part of the "Business Threat or Opportunity: Sports Betting, Daily Fantasy and the Ongoing Debate" panel that was held in the biggest ballroom, with several hundred attendees. DraftKings CEO Jason Robins was also part of that panel, but anyone expecting a debate on the legality of Daily Fantasy Sports and whether it should be considered gambling and regulated as such were bound to be disappointed.

DFS's tremendous growth has drawn the attention of states legislators and possible congressional hearings, but Robins didn't address those. Robins stuck to the company line that DFS is a game of skill and not gambling (though the irony hung in the air that he was speaking at the biggest gaming conference in the world).

When asked how DFS differs from traditional sports betting, Robins said his game was more analytical and players can get more skilled the more they play it. He said that most people are surprised to hear that less than 15 percent of DraftKings' players say they bet on sports. He said they're more likely to be chess players or into stock market analysis.

Burge didn't defend sports betting as a game of skill. He agreed with Robins that there's not a lot of overlap in their customers. He said CG Technology had tried some fantasy-related offerings but they weren't as widely embraced as they expected. He mostly said, "There's enough sports to go around" but also added that there could be more synergy in the future as both sports betting and DFS continue to grow.

While there weren't fireworks during the biggest panel of the day, there was a more interesting debate during the smaller "Regulation of Sports Betting and Daily Fantasy Sports" panel held in a small hallway downstairs from the main areas of the conference.

Seth Young, COO of Star Fantasy Leagues (a smaller company than DFS giants DraftKings and FanDuel), also parroted the line that DFS is a game of skill (though to his credit he also termed sports betting a game of skill), but that drew an immediate retort from William Hill CEO Joe Asher.

"What does that matter?" he asked rhetorically. "Blackjack is a game of skill. Poker is definitely a skill. I can tell you for sure there is a skill in traditional sports betting. But they're all gambling.

"The Week 1 ads [from DFS sites] were over the top. They were pure gambling ads. You had the big checks, the guys sweating the action. We should call it what it is -- gambling."

The panel was about regulation, so when it turned to that topic, Young again called DFS a game of skill and didn't want his industry regulated when he said they're already doing a good job of doing that on their own.

"Why? Why is regulation such a bad thing?" Asher said. "The airlines are regulated. I'm glad they are because I don't want them crashing into each other in the sky. A fire code exists so you don't have too many people in a room. That's a good thing. So when you speak about regulation, you act as though it's the worst thing in the world? Regulation, in many respects, is actually OK, Seth. So, why are you guys so afraid of it?"

They at least agreed that with regulation comes taxation and Young said both would be OK as long as it wasn't onerous and allowed companies to make a profit.

Another member of that panel, Daniel Wallach, a shareholder in the law firm of Becker & Poliakoff and one of the most-quoted gaming lawyers on sports betting issues, nominated Young and Asher for MVP of the G2E.

On a more serious note, Wallach said: "The New Jersey case is the flashpoint for making sports betting legal in this country. What happens there will impact what happens across the country."

He said the Third Circuit Court asking the leagues for response briefs is a huge sign that its willing to rehear the case and said that could happen by January or February.

"New Jersey is 0-for-4 in court cases, but it can make the Hall of Fame if it wins the last one."

Wallach also said that the growth of daily fantasy could eventually pave the way for both DFS and sports betting to be legalized. He said it's important that some other state takes up the battle if New Jersey fails.

"That could be the difference of whether we get sports betting legalized in this country in 2016 or 2017 or if we're still talking about this in the 2020s," he said.

So while nothing was resolved at G2E 2015, Freeman probably summed it up best.

"The growth of Daily Fantasy Sports is drawing a lot of attention to this issue," said Freeman, who cited ESPN's Scott Van Pelt's discussion of the topic the other night as adding to how much sports betting and DFS are in the mainstream media. "If daily fantasy sports is in a gray area, it is our job to make it black and white. If it's legal, we need to be involved. But we don't view it as a threat. We view it as a potential partnership that could be beneficial for both sides.

"We're not going to grow our industry by squashing everyone else. We're going to grow it by tapping into new ideas."