Hypotheticals Part 2

1. Megatote, a long time client of your firm, has called and asked for advice regarding offering its new Supersports products and services in jurisdictions it currently serves. Megatote is currently an industry leader for pari-mutuel wagering and race track simulcasting for horse racing. Currently their services are provided to ten horse racing tracks, off track race books in seven states and off track race books in twelve tribal casinos. Megatotes’ hub servers are located in Kentucky and they serve as a central dissemination, accounting and odds calculation point for the entire business. Megatote also leases terminals and equipment to its customer books to communicate with the Megatote servers and to print wagering tickets.

Supersport is a new service that uses the basic Megatote pari-mutuel wagering system to offer interstate pari-mutuel wagering on Nascar, Indy Car Racing (IRL) and Formula One races. The client has an initial question:

1.A Please Answer. [15 points] Whether offering the Supersports product and service to its current clients (the horse racing tracks, the off track books and the off track tribal books), or operation of the Supersports product by its clients, is likely to violate any federal gaming laws, if so, which laws and why.

Also on the call is Mel Practiss, former attorney and representative of the manager of a casino being constructed by the Menominee Indian Tribe of Wisconsin. The casino is nearly completed and the managers are very excited about the Supersports product. They have a tentative agreement with Megatote to operate a stand alone version of the Supersports system on site at the casino (no interstate pooling of wagers, no off-site wagers, and no off-site communications by the system) provided it can be done so without violating any federal laws. In conjunction with the construction of their casino, the tribe is finalizing its amendment of tribal laws and gaming regulations. Mr. Practiss asks you to draft tribal laws and regulations that will specifically authorize the operation of a stand alone Supersports book at the new casino. After a long pause, he asks if you have any reservations about such a task, or in other words is there a problem with the tribe doing this?

1.B Please Answer. [10 points] What is your response to Mr. Practiss (for clarification, you do not have to draft such laws and regulations to answer this question)?

2. Nanotel, the nations 72^nd largest national cell phone service company, has retained your firm to assist in vetting its new promotion that is designed to expand Nanotel’s market share following its acquisition of a patent on the method of playing networked card games over a cellular phone network. As part of the promotion Nanotel will begin offering the Meizu miniOne (an iPhone Clone) preloaded with a promotional networked poker application (see illustration). The promotion is called the Play-For-Fun Nantotel Worldcup of Poker and the client’s initial thoughts on the promotion are as follows:

· Open to all Nanotel Subscribers that acquire a miniOne phone

· No charge to enter the contest

· No charge for the software

· Every participant will receive 100 Nanotel Chips to use in play for each round of the tournament

· The tournament rounds will run in 15 minute increments. The player with the most chips at the virtual table at the end of the round will progress in the tournament. Players must make bets, calls or folds within 35 seconds to avoid folding by default.

· The results of the contest for each day will be posted on the Nanotel website and the overall contest winner each day can submit their picture to be featured next to their name on the web site.

· The promotion is set to run for 3 months.

· The promotion will include a national television and radio ad blitz.

Because Nanotel leases air time from T-Mobile (similar to Virgin Mobile and Sprint), T-Mobile has required Nanotel to get a clearance opinion regarding the proposed contest. Prior to asking for such opinion, Robin Banks, general counsel for Nanotel, asks you if there is any risk of violating federal gaming laws with the contest as outlined?

2.A Please answer. [15 points] Whether there are any risks of violating federal gaming laws or federal advertising laws with the contest as outlined and, if so, what risks are presented [be specific]?

After your answer to her first question, Robin mentions that the Caribbean Gem Casino, a land-based casino on St. Eustatius island, and PokerEmpire.com an online real-money poker site operated from St. Eustatius (that accepts wagers from any jurisdiction), have offered to subsidize prizes for the contest if the virtual table poker felt carries the Caribbean Gem name and logo and the cards feature the PokerEmpire.com name and logo. The prizes will be trips to the Caribbean Gem Casino for a live poker tournament and a $50,000.00 cash prize to the ultimate live tournament winner. Additionally, PokerEmpire.com will pay for the development and distribution costs of the phone software to make it happen. Robin asks if this changes your initial analysis and if so how and why (ignoring any potential commercial speech issues associated with the ad campaign)?

2.B Please answer. [15 points] Does the modification of the contest as proposed by Carribean Gem and PokerEmpire.com change your analysis (from question 2.A) with regard to federal gaming law risks?

3. [5 points] The Menominee Indian Tribe of Wisconsin is trying to acquire land for a casino on a currently failing dog track in Kenosha, Wisconsin that is about 200 miles from the long recognized reservation of the tribe. The Secretary of the Interior, after consultation with the Menominee tribe and appropriate state and local officials, including officials of other nearby Indian tribes, has determined that a gaming establishment on such newly acquired lands would be in the best interest of Menominee tribe and its members, and would not be detrimental to the surrounding community. The matter now rests with the Governor of Wisconsin. Pursuant to the Indian Gaming Regulatory Act (“IGRA”), what level of discretion does the Governor of Wisconsin have in either concurring with or rejecting the Secretary’s determination?