Jeff Ifrah Presents on the Future of Online Gaming at J.P. Morgan Global High Yield & Leveraged Finance Conference
Yesterday, at the annual J. P. Morgan Global High Yield & Leveraged Finance Conference in Miami Beach, Florida, Ifrah Law Founding Member Jeff Ifrah shared his predictions for the growing online gaming industry in the U.S. and in Europe. Susan Berliner, an analyst with J.P. Morgan who covers gaming and lodging, moderated the panel, which also included Marc Falcone, CFO of Fertitta Entertainment/Station Casinos, and Eamonn Toland, President of Paddy Power. The panelists addressed the potential for online gaming’s additional expansion in the states as well as payment and logistical issues.
J.P. Morgan’s conference attracted a crowd of over 1,000 CEOs, CFOs and other C-Suite executives from high-growth companies across an array of industries, including gaming, entertainment, energy, and transportation and institutional investors. Questions from attendees at Tuesday’s panel indicated that investors were most interested in the rollout of online gaming in the three states that presently permit it: Delaware, Nevada, and New Jersey.
Ifrah noted that one study predicts online gaming revenues in the U.S. to reach approximately $670 million. According to Ifrah, how online gaming grows depends on what the states do to permit gaming and their licensing processes and what other states come online in the near future. Ifrah shared that just a couple hours before, Delaware and Nevada announced an historic agreement to pool their liquidity to increase their prize pool, allowing poker players in those states (and any other states which may subsequently sign on to the agreement) to play online poker offered by operators in either state, and to play against players in the other state. Governor Sandoval of Nevada and Governor Markell of Delaware met in Wilmington yesterday to announce this exciting development. The State of Delaware, an Ifrah Law client, launched online gaming in November.
Marc Falone of Station Casinos observed that run rate revenues for online gaming are estimated at $150 million in 2014. While online gaming is still in the early stages, it has the potential to be a much larger business with significant long-term growth potential. Falcone pointed out five challenges to online gaming growth, about which the panel generally agreed:
* General awareness – many consumers still do not understand that online gaming is legal in Delaware, Nevada, and New Jersey, which hinders participation and growth.
* Payments – despite online poker’s legality in the three states, Mastercard, Visa and other payment processors nevertheless decline to make deposits on online gaming sites.
* Geolocation – the states utilize geolocation technology to confirm that only residents in those states play. Many individuals have found the geolocation confirmation process unwieldy and difficult with which to interact, causing them to choose another activity. Falcone, Ifrah and the other panelists agreed geolocation technology and ease would improve over time.
* Security – in the age of high profile data breaches at Target, Neiman Marcus and elsewhere, and a reported breach on the Sands website, consumers’ interest in online gaming may be chilled. New Jersey requires a player enter a social security number. Consumers are understandably reluctant to provide that type of sensitive personal information in a website form. Industry needs to continue to work on secure procedures that will boost consumer confidence.
* Offshore gaming – licensed operators in the three states still compete with offshore gaming sites.
Eamonn Toland of Paddy Power stressed that online gaming revenues are currently as anticipated; growth takes time as consumers become more aware and some of the “wrinkles” identified above are ironed out. He sees a significant revenue growth of 28% month-to-month. As to whether online gaming “cannibalizes” land-based casinos, Toland and the other panelists concurred that the online gaming player is an entirely different demographic and they did not see the cannibalism effect. Toland believes online gaming will grow significantly as states contract with each other like Delaware and Nevada just announced.
As to other states that may authorize online gaming, Ifrah and the other panelists mentioned California, Illinois, New York, and Pennsylvania as potential markets. The panel participants cautioned that while these are exciting developments at the state level, the federal government would be monitoring online gaming operations to see if there are any significant issues, such as consumer protection issues. However, at least one panelist believes that online gaming has extensive protections – such as age verification, protections for problem gamblers – that result in fewer losses for consumers than in land-based casinos.
A November 2013 ruling from the United States District Court in a bankruptcy case may create an obstacle for a tactic increasingly popular among federal prosecutors – the seizure of a defendant company’s domain name.
The statutes permitting civil and criminal forfeiture in U.S. District Courts – Title 18, United States Code Sections 981 and 983, respectively – both authorize seizure of “property.” In a number of prominent (and not so prominent) cases, federal prosecutors have seized a defendant company’s domain name, which may shut down the company’s operations during the pendency of the case. But it does not appear that any Court has squarely considered, in a forfeiture context, whether a domain name constitutes “property” that may be seized and forfeited.
Alexandria Surveys, LLC v. Alexandria Consulting Group, LLC, Civil Action 1:13—CV-00891, Bankr. Case No. 10-11559-BFK, was not a forfeiture case, but it may have set the table for a forfeiture defendant to argue successfully that a domain name may not be seized. In Alexandria Surveys, the District Court reviewed a ruling in the Bankrupcty Court relating to the sale of certain assets previously belonging to the debtor. In the case, the debtor argued, among other things, that the sale of the debtor’s web address and telephone numbers was improper because neither were the “property” of the bankruptcy estate, and therefore neither could be sold by the trustee.
In considering the issue, the Court noted a split in the Circuits as to whether a telephone number constitutes property of an estate. Compare Rothman v. Pacific Tel. & Telegraph Co., 453 F.2d 848, 849-50 (9th Cir. 1971) (trustee lacks right to distribute telephone number as property of the estate); Slenderalla Sys.of Berkeley, Inc. v. Pacific Tel. & Telegraph Co., 286 F.2d 488, 490 (2d Cir. 1961) (same) withDarman v. Metropolitan Alarm Corp., 528 F.2d 908, 910 n.1 (1st Cir. 1976) (permitting trustee to distribute telephone number as property of estate); In re Fontainebleau Hotel Corp., 508 F.2d 1056, 1059 (5th Cir. 1975) (same).
The Court observed that, while the Fourth Circuit Court of Appeals has not yet addressed the issue, state law determines the contours of property interests assumed by the trustee. In that regard, the Court noted the Virginia Supreme Court’s relatively recent decision in Network Solutions, Inc. v. Umbro International, Inc., 529 S.E.2d 80 (Va. 2000), in which that court specifically held, in the context of a garnishment action, that a web address and telephone number could not be garnished by a judgment creditor because the debtor lacked a property interest in them. 529 S.E.2d at 86-87.The court held that a domain name registrant acquires the contractual right to use a unique domain name for a specified period of time, and that the domain name is not property, but rather, “the product of a contract for services.” Id. Without diminishing the importance and significance of web addresses and domain names, the Alexandria Surveys court followed the holding in Network Solutions that they did not constitute “property.”
While Alexandria Surveys did not deal specifically with the law of forfeiture, the holding that domain names do not constitute property has significant implications for civil and criminal forfeiture cases. The case is not binding on other courts, but given the paucity of precedent characterizing domain names, this analysis may be viewed as instructive by courts considering claimants’ and defendants’ challenges to domain name seizures. And a shift in the law that did not permit those seizures would deprive the government of a significant piece of leverage that it now wields in many cases.
Last month, the Missouri Court of Appeals published its opinion holding that criminal defendant David Polk is not entitled to a new trial. Although the prosecutor may have acted improperly by posting trial updates via Twitter, there was no evidence that her updates swayed the jury to convict Polk. The court’s decision resolves a once-cold case that began in St. Louis more than twenty years ago.
In January 1992, Polk approached an eleven-year old girl on the street, then forced her to the basement of a vacant lot and repeatedly assaulted her. Soon after, the victim and her mother reported the crime to local authorities, who collected DNA and other evidence. After that, the case went cold. But three years ago, authorities were notified of a DNA match linking Polk to the crime. The investigation was reopened and culminated in Polk’s prosecution for forcible rape and forcible sodomy. A jury convicted on both counts, and Polk was sentenced to fifteen years on each count.
After trial, Polk asked the judge to dismiss the case or strike the jury panel. In support of his request, Polk submitted evidence that, during the time frame of the trial, Circuit Attorney Jennifer Joyce had posted inappropriate comments about the case on Twitter:
- Prior to jury selection, Joyce tweeted, “David Polk trial next week. DNA hit linked him to 1992 rape of 11 yr old girl. 20 yrs later, victim now same age as prosecutor.”
- During trial, Joyce posted two comments. In the first, she tweeted, “Watching closing arguments in David Polk ‘cold case’ trial. He’s charged with raping 11 yr old girl 20 years ago.” In the second, she tweeted “I have respect for attys who defend child rapists. Our system of justice demands it, but I couldn’t do it. No way, no how.”
- During deliberations, Joyce tweeted, “Jury now has David Polk case. I hope the victim gets justice, even though 20 years late.”
- Post-verdict, she tweeted, “Finally, justice. David Polk guilty of the 1992 rape of 11 yr old girl. DNA cold case. Brave victim now the same age as prosecutor,” and “Aside from DNA, David Polk’s victim could identify him 20 years later. Couldn’t forget the face of the man who terrorized her.”
According to the defense, Joyce’s comments not only violated the professional rules of conduct but tainted the jury verdict as well. But the trial court refused to dismiss the indictment or strike the jury, and Polk appealed.
In a decision published last month, the appeals court affirmed Polk’s conviction, but acknowledged that the Circuit Attorney’s posts were problematic. The court admitted that her comments may have violated the rules of professional conduct for prosecutors. The rule in question prohibits prosecutors from making out-of-court statements that stoke public sentiment against the accused unless they serve a legitimate law-enforcement purpose. Joyce’s tweets may have crossed the line. They did not appear necessary to inform the public, but highlighted evidence against the defendant, dramatized the victim’s plight, and referred to Polk as a “child rapist,” a term that was likely to arouse heightened public condemnation.
The Court of Appeals also noted that such posts have the potential to taint a jury verdict. But the law required Polk to show more than potential prejudice—he had to show that the extrajudicial comments “substantially swayed” the jury. Because he proffered no evidence that jurors were aware of, much less influenced by, the posts, Polk was not entitled to a new trial.
Jennifer Joyce is not the first prosecutor to catch flak for abusing social media. Cleveland prosecutor Aaron Brockler was fired after he contacted defense witnesses on Facebook and dissuaded them from providing alibi testimony. But the issue in that case was the prosecutor’s confirmed use of deception to influence trial witnesses. The issue in Polk’s case was whether the prosecutor’s tweets influenced the jury, as alleged. There was no evidence to that effect, so the conviction was affirmed.
The Cheyenne and Arapaho Tribes have filed suit against Secretary of the Interior Sally Jewell after the Department Interior blocked their effort to offer real-money online gaming to international customers.
The Tribes were prepared to launch Pokertribes.com after coming to a revenue-sharing agreement with the state of Oklahoma. Pursuant to the terms of the agreement, the Cheyenne and Arapaho Tribes were permitted to offer their online gaming to clients overseas, but were prohibited from offering gaming to clients in Oklahoma or elsewhere in the United States. Under the compact, the tribe would pay the state 4 percent of the first $10 million in annual net revenue from electronic gaming, 5 percent of the next $10 million and 6 percent of any subsequent amount, plus a monthly 10 percent from non-house banked card games.
However, the Department of Interior Assistant Secretary of Indian Affairs disapproved two versions of the plan, in August and November 2013 respectively, finding that the state of Oklahoma could not offer exclusive access to an international market and that therefore the state’s “concession is illusory” and it is not entitled to revenue sharing. Notably, however, the Department of Interior explicitly declined to “reach the issue of whether internet gaming as contemplated in the Agreement was lawful,” restricting the basis of its opinion to the fact that “the State has not offered a meaningful concession” sufficient to justify sharing revenue from the online games. Since the Department did not approve the agreement, Pokertribes.net is currently inactive.
The Cheyenne and Arapaho Tribe filed the complaint against the Department of Interior on December 26, 2013 alleging that its decision was arbitrary and capricious, an abuse of discretion, and otherwise contrary to law. The tribe seeks declaratory and injunctive relief to prevent further obstruction of the website’s operation. The case is currently pending before Judge Timothy D. DeGiusti in the Western District of Oklahoma.
Instead of trying to resolve this issue through litigation, we think the better path forward for the Tribes would be to use their political leverage to pass state legislation allowing the Tribes to offer intrastate online gaming to Oklahoma residents, as well as to players internationally. If the Tribes were successful in getting this legislation passed, their authority to offer online gaming would be derived from state law rather than tribal compact and would therefore preclude federal involvement. Offering gaming to Oklahoma residents as well as international customers would also resolve any concerns about the state’s allegedly illusory concessions.
As long-time observers of and participants in the internet gaming industry, we at Ifrah Law looked forward to 2013 as a year full of promise for internet gaming, particularly in the United States. In the end, industry progress in 2013 was mixed:
The year saw the enactment of online gaming in New Jersey and online poker in Nevada and Delaware, but also saw a district court judge and then a three-judge panel of the United States Court of Appeals for the Third Circuit block New Jersey from proceeding with sports betting. During 2013, a number of the individual defendants charged in the Black Friday case in the Southern District of New York settled their cases, and the former customers of Full Tilt Poker saw the beginnings of the remission process that is promised to return to them some or all of the money they had on deposit with Full Tilt at the time of the April 2011 seizures.
After a year filled with so many changes, we naturally are looking forward to see what will happen in theinternet gaming industry in 2014. Here are a few of our predictions:
This past year we witnessed the definitive shift away from an expectation that poker would be legalized through federal legislation, and toward state-by-state enactment of regulatory schemes for online poker. The limitation of the state-by-state approach, of course, is that the legalization of poker in a state only permits individuals in that state to play against other individuals in that same state. In a state like Nevada or Delaware with small populations (and small player pools), there will be significant pressure to increase player liquidity by executing agreements with other states that will permit individuals from all of those states to play against one another. It is very likely that Delaware, New Jersey and Nevada will enter into a multistate poker agreements with each other in 2014, and that any other states that enter the market will be close behind. To the extent that states other than New Jersey authorize online gaming other than poker, those agreements may also encompass other games such as slot machines. The result will be more people at the tables, bigger prize pools, and more competitive games. This, in turn, is likely to increase the popularity of the games, meaning more money coming in for the states to share. And more money will likely to encourage states on the sidelines to enter the market to get a cut of the earnings. These latecomers may actually rely on the established regulatory bodies – such as those in New Jersey and Nevada – rather than creating licensing and regulatory infrastructure in their own states.
It seems obvious to us that other states will want to tap into online poker or gaming as a source of revenue. But it is less clear which states will make the move – particularly the states with massive markets like California. With a population of some 38 million people, California has nearly five times the population of New Jersey and more than a dozen times the population of Nevada, making it potentially the most lucrative online market in the United States. So will California join the fray in the coming year? Odds are even; numerous bills have been discussed in the past, but the state will have to start accelerating its legislative agenda in order to get anything off the ground in 2014. The prominence of tribal gaming in California poses special challenges, as the Native American tribes – who view gaming as their special prerogative –will undoubtedly demand a significant share of revenues. The only certainty is that, if California does enact online gaming, the size of its population will permit it to dictate to other states the terms of interstate agreements for its players.
Hail Mary Pass
No list of predictions for the year would be complete without calling one longshot. In 2012, New Jersey attempted to enact sports betting in its casinos, but progress was barred after a suit by the National Collegiate Athletic Association and professional sports leagues under the Professional and Amateur Sports Protection Act (PASPA). The past year saw the district court issue its injunction in NCAA v. Christie, and a federal appellate court uphold that prohibition. This year we will see whether the United States Supreme Court will take the case and, if so, how it will rule. The case poses just the kind of issues that the Supreme Court often addresses, including the balance of power between the power of the federal government and the rights reserved to the state by the United States Constitution. If the Supreme Court were to hear the case and rule in favor of New Jersey, intrastate sports betting would undoubtedly soon begin, and be followed soon thereafter by online sports betting. But the numbers do not lie: The Supreme Court historically acceptsfewerthan one percent of thecases it is asked to hear. In the end, we have to concede that a favorable ruling from the Supreme Court is a bit of a HailMary pass. But like its football namesake, to watch it happen can be awfully exciting because of what is at stake.
Here at Ifrah Law we will be keeping a close watch on developments in 2014 so that our clients may benefit from all of the new opportunities that are sure to appear in the online gaming industry.
The Obama administration has issued a road map to combat intellectual property theft over the next three years.
The “2013 Intellectual Property Enforcement Coordinator Joint Strategic Plan” follows up on the more narrowly tailored “Administration Strategy on Mitigating the Theft of Trade Secrets” that we wrote about earlier this year, and reviews progress made on intellectual property issues in general since the administration’s first general IP strategic plan was issued in 2010.
While this year’s plan rightfully highlights the administration’s achievements in trade secret protection, it sheds little light on the concrete steps necessary to achieve its future goals in that area.
The strategic plan reveals progress made on the trade secret legislation, investigation, prosecution, and sentencing fronts. The enactment of Public Law 112-236, the “Theft of Trade Secrets Clarification Act of 2012,” closed a loophole by clarifying that the Economic Espionage Act protects trade secrets related to “a product or service used in or intended for use in” interstate or foreign commerce. The FBI unveiled a public education campaign to raise awareness of trade secret theft, and FBI trade secret theft cases are up 39 percent.
The Department of Justice has provided federal prosecutors with special training in computer crimes in order to support law enforcement agencies in the investigation of trade secret theft perpetrated by persons who pose a national security threat. Over the past three years the administration has also bolstered criminal penalties for economic espionage and directed the U.S. Sentencing Commission to consider increasing offense levels for trade secret crimes.
Despite these accomplishments, there is much more to achieve. The plan aims to press for protection of trade secrets overseas and enforcement actions to address their theft or misappropriation, and expresses concern about “forced technology transfer,” that is, efforts by foreign governments to condition market access or the ability to do business on the transfer of trade secrets or proprietary information.
While this document is high on aspirational talk regarding international coordination, it is notably low on concrete proposals for domestic trade secrets legislation. The lack of momentum on this front may be understandable considering that the administration received only 13 comments in response to the “Administration Strategy on Mitigating the Theft of Trade Secrets” that it released in February. However, there is a general consensus in the IP community that the law needs to provide a federal civil cause of action for trade secret theft that provides for broad civil remedies, similar to the Copyright Act or the Patent Act. Until such an act is implemented, trade secrets will not have a level of protection commensurate with their importance.
Earlier this week, attorneys for convicted computer hacker Andrew “Weev” Auernheimer filed their opening brief in their appeal to the U.S. Court of Appeals for the Third Circuit to have his conviction overturned.
In 2010, Auernheimer’s co-defendant Daniel Spitler, who agreed to plead guilty in 2011, discovered a flaw in AT&T’s iPad user database, that he used to collect 114,000 email addresses. Auernheimer then disclosed those email addresses to Gawker, who published a redacted form of some of the account information. The disclosure of the email addresses attracted significant media attention and ultimately forced AT&T to change their security protocols.
Last November, Auernheimer was found guilty by a jury after a five day trial of violating the Computer Fraud and Abuse Act (CFAA) and conspiracy to gain unauthorized access to a computer without authorization. He was sentenced in March to 41 months imprisonment to be followed by three years of supervised release.
The CFAA prohibits accessing a computer without proper authorization, which is the same statute that Internet activist Aaron Swartz was convicted of violating. The law has faced steep criticism for being overly broad and allowing prosecutors wide discretion by allowing them to charge individuals who have violated a website’s terms of service. Last month “Aaron’s Law” was introduced in Congress, which would amend the CFAA to prevent prosecutors from charging an individual with violation a company’s terms of service and from bringing multiple charges against an individual for the same act.
The government’s brief is due on July 22 and Auernheimer will then have the opportunity to file a reply brief by August 5.
We will know in a matter of months how the Third Circuit will rule on Auernheimer’s appeal and whether his conviction and sentence will be upheld. This case raises some very interesting issues on the scope of computer crime laws and prosecutorial discretion. Is the conduct of Auernheimer the type that we need to devote government resources to send a person with no criminal record to prison for a significant period of time?
Today, New Jersey became the third state in the country to legalize online gaming within its borders, as New Jersey Governor Chris Christie (R) signed into law a bill legalizing online gaming in the state.
Here is a video in which Jeff Ifrah, founding partner of Ifrah Law, discusses this exciting development.
Both houses of the state legislature had previously passed the bill by large margins and Gov. Christie had sent the bill back to the legislature requesting minor changes to the bill. The legislature made the changes requested by Gov. Christie, and on Tuesday the state General Assembly voted 68-5-1 to pass the bill with the Governor’s requested changes. The State Senate then voted to pass the bill by a margin of 35-1. Governor Christie signed the bill into law shortly thereafter.
The changes requested by the Governor included an enhanced level of funding for compulsive gambling treatment programs, a requirement that state employees and legislators disclose any representation past or present of entities seeking Internet gaming licenses, and an extension of a prohibition on any casino-related employment for state employees and legislators to include companies involved in Internet gaming.
New Jersey’s online gaming law would allow the state to participate in interstate gaming compacts with other states that have legalized online gaming within their borders, as long as this is consistent with federal law. Online gaming compacts would allow for the possibility of generating much larger player pools for the games as well as significant extra revenue for the state.
Under the law, casinos or their affiliates would be allowed to offer the same games that are currently offered on Atlantic City casino gaming floors. All players must be physically located in New Jersey, but do not need to be residents of New Jersey. There is no definitive word yet on when games will become operational, but it is quite possible that it could happen this year.
The law will help to stimulate the New Jersey economy and created needed jobs and revenue for the state.
“Internet gaming will provide a lifeline to New Jersey casinos by producing more jobs and additional revenue,” said bill sponsor New Jersey State Senator Raymond Lesniak (D). “At the same time, it will contribute to the state’s economic recovery and generate more revenue for state programs for seniors and the disabled.”
Under the law, all equipment used in Internet gaming is required to be located in Atlantic City. This will create a significant number of jobs in the region.
We are very happy to see New Jersey enact an online gaming law. This will be an enormous boost for the state as well as great news for gamers, who will soon be able to play online again.
We have previously reported in this space about the use of domain name seizures by American law enforcement – for example, here and here. Recent media reports show that domain name seizure has become the go-to tactic for law enforcement for other countries as well.
Canadian police made a series of arrests during an invitation-only Super Bowl party attended by 2300 people as part of Project Amethyst. A Royal Canadian Mounted Police spokesperson says this was connected with the arrest of 21 individuals related to a separate online credit betting operation in November. The more recent arrests were connected with an online sports betting operation that used the website located at www.platinumsb.com. In addition to arresting six individuals, officers also seized $2.5 million in cash as a result of the execution of nine search warrants in and around Toronto.
Police also seized the domain name associated with a Costa Rica-based website, which is registered with Washington State-based Enom, Inc. Police obtained a Canadian court order for that purpose, and then submitted a request under the Mutual Legal Assistance Treaty (MLAT) between Canada and the United States. The domain name was then transferred to the control of Canadian law enforcement authorities who, in turn, redirected it to a new landing page. Visitors to the platinumsb.com website are now greeted by a notice stating that the web site has been “restrained by court order granted to the Attorney General of Ontario.”
Media reports indicate that the website was back online as www.platinumsb.tk within hours of the shutdown. The .tk top level domain belongs to Tokelau, a non-self-governing territory off the coast of New Zealand. The .tk version of the domain name was reportedly registered in 2004, suggesting that the group operating the sports book had set up contingency plans for a seizure of its .com website.
Whatever the merits of the Canadian prosecution against individuals affiliated with PlatinumSB, the seizure of the platinumsb.com domain name certainly shows that domain name seizure is by no means a tactic used only by U.S. law enforcement. As more and more businesses move largely or exclusively to the Internet, the global use of this law enforcement tactic is sure to grow.
Facebook is quickly expanding its real money gaming platform. Net Entertainments has signed a license agreement with Bonza Gaming, which is a joint venture between gaming publisher Plumbee and online gaming operator Sportingbet. Under the agreement Net Entertainment will offer a range of casino games to Bonza Gaming, which will create an app, Bonza Slots, that will be available on Facebook to users that want to participate in real money gaming.
Facebook is now the world’s largest social media outlet, with over a billion active users. Last summer, Facebook announced that it would expand its social gaming to real money gaming, beginning initially with users in the United Kingdom. Bonza Slots becomes the third real money gaming app on Facebook, joining Gamesys and 888 Holdings; all three companies have recently reached deals with Facebook to launch their real money gaming apps. With Facebook’s massive user base, it can accomplish what other online gaming sites could likely only achieve on a much smaller scale — the ability to reach a large and constantly growing base of players.
Facebook is no stranger to online gaming. For some time now, it has offered its users the option of playing online games for Facebook credits as an alternative to real money. In 2011, Facebook changed its advertising policies, allowing online gambling companies to advertise in jurisdictions where such services are permitted. In the past, Facebook has been extremely strict when it comes to advertising online gambling business on its website. Now, Facebook’s Advertising Guidelines web page has a specific online gambling clause under the Gambling and Lotteries subsection of the Ad Content section, which reads: “Ads that promote or facilitate online gambling, games of skill or lotteries, including online casino, sports books, bingo, or poker, are only allowed in specific countries with prior authorization from Facebook.”
It is not clear how much Facebook will charge real money gaming companies to operate on its platform. In general, Facebook charges other apps 30 percent of their revenue, and there is no indication that gaming will work any differently. After reviewing Facebook’s public filings, we still have some questions about this and we will report back as we find answers.
In any case, Facebook’s new online real gaming platform will immediately give it a strong position in the real money market in the United Kingdom and a great opportunity to monetize its very large user base. With legislative efforts for real money online gaming gaining momentum across the United States, Facebook could be well positioned to be a power in the U.S. market in the future if it chooses to do so.