DFS in retreat; Pinnacle fights smoking ban

What Attorney General Eric Schneiderman couldn’t do, gun-shy payment processors have accomplished: Put DraftKings and FanDuel out of business in New York State. SchneidermanThe two have said they will refrain from taking wagers from the Empire State through the end of the baseball season, although the agreement with Schneiderman only extends into September, opening the door to renewed betting in time for the playoffs and World Series (to say nothing of, more importantly, the NFL season). Also, Schneiderman will continue to prosecute the two sites for alleged false advertising. He said that, pending a change in New York law, “As I’ve said from the start, my job is to enforce the law, and starting today, DraftKings and FanDuel will abide by it.” The latter, meanwhile, will continue on a parallel track, lobbying legislators to make DFS explicitly legal in the state.

If they are successful and new, DFS-friendly law is written, Schneiderman will have to uphold it through gritted teeth. As he told ESPN last winter, “Daily fantasy sports is neither victimless nor harmless, and it is clear that DraftKings and FanDuel are the leaders of a massive, multi-billion-dollar scheme intended to evade the law and fleece sports fans across the country.” At the time, DraftKings responded that Schneiderman’s actions were precipitate and disappointing, adding that he “did not take any time to understand our business or why daily fantasy sports are clearly a game of skill.” The tiny pool of players who collect the bulk of winnings handed out by FanDuel and DraftKings certainly adds credibility to their argument.  As of today, the two sides are no closer than ever but the big DFS providers are going to have to get by on a significantly smaller customer base.

* Following New Orleans‘ lead, Baton Rouge is pondering a smoking ban in public places. This came as very bad news to Pinnacle Entertainment, owner of L’Auberge Baton Rouge, which dispatched its top lobbyist, Troy Stremming, to try and nip the idea in the bud. He warned city fathers that they were risking $2 million in tax revenue if Auberge BR casino floorthe ban passed. Gaming & Leisure Properties (which, ironically, is in the process of buying Pinnacle’s real estate) hung back from taking a position, saying, “We haven’t even seen what’s being introduced yet. We’ll take a look at it when it comes out and go from there.” Tropicana Entertainment, which owns Baton Rouge’s third-place casino, kept mum entirely. History is at least partially on Stremming’s side: A smoking ban — coupled with a recession — did a number on Illinois‘ casinos from which they have never recovered. However, in Louisiana, the evidence is neither clear nor consistent that a smoking ban will have a comparable effect. Results at Harrah’s New Orleans and Churchill DownsFair Grounds racino have not provided a conclusive case. Luckily for Baton Rouge, only $10 million of its $830 million civic budget is casino-derived, so lawmakers may decide that the risk is sufficiently minimal and go ahead with a ban. It already has five sponsors on Baton Rouge’s 12-member city council.

Americans for Nonsmokers Rights Associate Director Bronson Frick said Stremming was swimming against the tide, as more and more casinos are having to go smoke-free. As for Harrah’s (down 10% over the last 10 months, but with wide revenue swings over that time period), Frick said it frittered away time it could have spent building outdoor facilities for smokers, battling the inevitable instead. While it’s said that you can’t fight City Hall, Stremming has a good track record of persuading it. We’ll find out next month if his arguments held sway.

* Poker rooms have been on the retreat in Las Vegas but they have gained a new foothold in Philadelphia, where SugarHouse Casino is opening its “Poker Night in America Poker Room” tonight. (Wouldn’t it be surprising if it were the “Poker Night in America Baccarat Room”?) Levity aside, the inaugural event will be televised on the CBS Sports Network. Players will be able to take advantage of such amenities as charging stations”or people who have the attention span of a gnat,” says Lee Davy. And if the players have trouble staying focused, what of the TV viewer? Televised poker makes golf look fast-paced and brutal.

* Supreme Court nominee Merrick Garland is in the news again. He’ll be one of the justices on the United States Court of Appeals for the District of Columbia Garlandhearing arguments for and against a Cowlitz Indian Tribe casino megaresort in Washington State. The Cowlitz appear to be playing a weak hand, since to dodge Carcieri v. Salazar they would have had to have been “under federal jurisdiction” since 1934 — before the Cowlitz started negotiating treaties with the U.S. government. As if to bluff their opponents with a fait accompli, the Cowlitz are proceeding full steam ahead with site preparation for their 2,500-slot, 80-table game casino. This has prompted Clark County to issue a cease-and-desist order, ignored so far. The plaintiffs in the case write, “The Tribe [sic] decision to build as much of the casino as possible before this Court rules is calculated risk — one that also appears intended to undercut the Court’s review and limit available remedies.” A ruling is expected sometime this summer. The Cowlitz may want to defer actual construction until then, lest they find themselves with a 368,000-square-foot white elephant.

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