Australia’s greyhound racing industry is in turmoil after an investigative television program uncovered shocking mistreatment of animals at a training facility. The entire board of Greyhound Racing New South Wales has been dismissed and politicians are calling for a temporary suspension of the industry.

The furore kicked off after Four Corners aired hidden camera footage of greyhound trainers using ‘live baiting’ to teach dogs to race. In place of the standard artificial lure, live animals – rabbits, possums, piglets, etc. – were tied to the mechanical lures. Once they caught up to the lure, the dogs would maul the animals, leading them to expect a similar ‘reward’ when they bolted out of the starting gate during an actual race.

The process of ‘blooding’ dogs has long been illegal in Australia but, as the footage demonstrates, it has a long way to go before it’s fully eradicated. Six trainers have been suspended in NSW, 10 more in Victoria and 13 in Queensland. A task force has been set up to investigate how widespread the practice of live baiting remains.

NSW Racing Minister Troy Grant ordered the dismissal of the racing board because “the community has lost confidence in the industry, and we now need the clear air in order to reform and reshape the industry.” Grant said the NSW greyhound industry was worth an annual $300m, employing or engaging over 15k individuals.

Grant’s actions weren’t enough to satisfy NSW Greens MP John Kaye, who said all greyhound racing should be suspended in NSW until the task force reveals its findings. Until then, Green believes “whatever race occurs in NSW will lack integrity,” as some dogs in competition will have been blooded while others have not. “There’s no way that can be seen as a fair gambling product.”

The government in Victoria has appointed a committee to investigate its own racing industry but has yet to take any disciplinary action against its board members.

SPORTSBET’S DOGGY STYLE

US federal prosecutors have asked a judge to reconsider a court ruling preventing them from using crucial evidence against accused sports betting operator Wei Seng ‘Paul’ Phua (pictured).

On Tuesday, prosecutors filed papers asking US District Judge Andrew Gordon to reconsider US Magistrate Judge Peggy Leen’s recommendation that prosecutors not be allowed to use evidence gained via questionable FBI tactics. Prosecutors have previously stated that the evidence in question is crucial to their case, which is supposed to go to trial on April 13.

Phua, his son Darren, poker player Richard Yong and five other individuals were arrested last July on charges of operating an illegal online sportsbook out of three luxury villas at Caesars Palace in Las Vegas. Suspecting chicanery was going on behind the villas’ walls, the FBI shut off the villas’ internet connection and then, when the occupants called to complain, sent in agents disguised as Caesars’ tech support wearing hidden body cameras.

The FBI agents neglected to mention their subterfuge when obtaining their warrants. For that omission and for having made other “false and misleading statements,” Judge Leen ruled that the search warrant affidavit was “fatally flawed.” Leen therefore recommended that the evidence obtained via the warrant – computers, mobile phones and other technology – be deemed inadmissible.

On Tuesday, assistant US Attorneys Kimberly Frayn and Phillip Smith Jr. argued that the FBI had presented sufficient legitimate evidence of probable cause when applying for the warrant. The prosecutors argued that the agents’ errors and omissions were neither intentional nor of a material nature sufficient to toss out the evidence obtained via the warrant.

Meanwhile, Phua’s attorneys David Chesnoff and Thomas Goldstein filed their own papers protesting Leen’s ruling that agents hadn’t violated the defendants’ fourth amendment rights by pulling the internet plug and playing dress-up. In a filing viewed by the Las Vegas Review-Journal, the lawyers argued that the government’s behavior – and Leen’s validation of said behavior – “would shock the conscience of ordinary Americans” and represented “an assault on our deepest constitutional values.”

Five of the defendants in this case have already reached plea deals with prosecutors, while charges against a sixth defendant were dropped, leaving only the Phuas still fighting the charges.

Nevada casinos and sportsbooks received some good news after the Nevada Gaming Control Board acquiesced to legalize betting on the Olympics.

A proposal from a group of Nevada casinos was discussed during a meeting held earlier this week and concluded with the board recommending to the Nevada Gaming Commission to overturn the long-standing ban on Olympic betting in the state.

Gaming board Executive Secretary Marie Bell told Bloomberg that the parameters the board agreed to would make “Olympic sporting or athletic events, sanctioned by the International Olympic Committee,” legal in Nevada, albeit with the caveat that betting would still be “subject to limitation by the chairman or the chairman’s designee in his sole and absolute discretion.”

The Nevada Gaming Commission can still alter these parameters if the recommendation contains language that needs to be changed such as allowing betting on events that don’t involve judges. On that end, popular Olympic sports like gymnastics, figure skating, and diving would remain illegal whereas other sports would be deemed legal to bet on.

The Commission is set to meet on Feb. 26 and this discussion is likely to be included in that meeting. Should it eventually green light Olympic betting in Nevada, it would be a significant step forward for the state, which has long banned betting on amateur sports not including college sports, thanks in large part to the effort of Senator John McCain.

The Olympics was part of that 2001 ban, even though betting on it has been widespread in other parts of the world, including the UK, which not only offers a plethora of Olympics-related bets, but also famously rolled out a platter of prop bets tied to the quadrennial event.

Lest we forget the prop on Queen Elizabeth II’s hat during the opening ceremonies of the 2012 London Games? Or that a UFO would appear during the same ceremony at 1,000/1 odds?

President Barack Obama-nominated, as the next attorney general, Loretta Lynch said that she likely wouldn’t alter the Justice Department’s opinion that the 1961 Wire Act only applies to sports betting.

During a confirmation hearing before the Senate Judiciary last month, she was asked by Sen. Lindsey Graham, who sponsored the Sheldon Adelson-backed Restore America’s Wire Act (RAWA), whether she was familiar to 2011 Department of Justice opinion to the 1961 Wire Act. Lynch said that she was familiar with the opinion but hadn’t studied in detail.

Rep. Jason Chaffetz, R-Utah, has reintroduced the “Restoration of America’s Wire Act,” or RAWA, which would restore the effective ban on Internet gambling by rolling back the legal landscape to what it was before the Department of Justice issued its opinion.

In a follow-up written response, Lynch further explains her views to the Senate Judiciary Committee saying that if confirmed, she would review the 2011 memo from the department’s Office of Legal Counsel that reinterpreted the Interstate Wire Act of 1961, the federal law that restricts the transmission of wager information.

“It is my understanding, however that OLC opinions are rarely reconsidered. Unless in the course of my review I conclude that OLC’s interpretation of the Wire Act is unreasonable, I do not intend to take any action to suspend or revoke the opinion. I would, of course, welcome the opportunity to work with you and other Members of Congress to address concerns about online gambling through legislation,” Lynch added.

She was also asked if she thinks it is appropriate for OLC “to effectively open the door for the states to offer Internet gaming without involvement of the Congress, the public, law enforcement, and state and local officials?”

Lynch answered, “OLC exercises the Attorney General’s authority to provide the President and executive agencies with advice on questions of law. Because OLC helps the President fulfill his constitutional obligation to take care that the law be faithfully executed, it is my understanding that the Office strives to provide an objective assessment of the law using traditional tools of statutory interpretation.”

Mexico is preparing to authorize the construction of casinos in popular tourist resorts, including Acapulco, Baja California and the Mayan Riviera. The country’s Interior Ministry said in a press conference last week that the idea was to keep new casinos from springing up in urban areas, where they’re more likely to rely on a local clientele.

The number of new casinos that will be permitted in resorts has yet to be determined. There are currently 297 gambling venues in Mexico and, using a formula based on the number of permits issued by previous federal governments, the new project could result in as many as 775 casinos being developed in resorts popular with affluent tourists.

Hotel chains including the Hard Rock Riviera Maya and Resort Mundo Imperial Acapulco have already confirmed their interest in adding live casino gambling to the list of amenities they can offer their guests. The head of the Mexican Association of Professional Real Estate Agents said certain unnamed “Las Vegas-based firms” had already expressed interest in setting up shop at resort properties in Cancun.

Mexico is currently in the process of passing its new Federal Betting and Raffles Law. The bill was approved by the House of Representatives in December and will be discussed in the Senate later this month. Maria Marcela González Salas, the Director General of Gaming and Raffles, said there is still time to amend the bill to include the resort casino project.

BRINGING ORDER FROM CHAOS

The new legislation is an attempt by Mexico’s new federal government to exert some control over the country’s chaotic casino industry. The legislation will require current casino licensees to reapply for licensing, which the head of the country’s gaming association has warned could spark a flurry of court challenges if many of these operators are denied new licenses.

Last May, federal authorities took action against several casinos operated by Entretenimiento De Mexico (EMEX), including the Playboy Club in Cancun. The authorities said EMEX had failed to legally establish the legitimacy of its operations. In 2013, Mexico reduced casino license terms from 40 to 25 years and revoked the ability of casino licensees to pass licenses on to other operators.

Authorities in the Netherlands have broken up what they described as a “professional, large scale” international illegal sports betting ring. On Tuesday, the Fiscal Information and Investigation Service (FIOD) anti-fraud agency announced that five suspects had been arrested on charges ranging from illegal betting to forgery and money laundering.

The five men – four Dutch nationals and a fifth man living in Cyprus who was temporarily in The Hague – were arrested following raids on homes in Netherlands, Cyprus, Austria, Germany, the UK and Curacao. The raids netted over €100k in seized cash, cars and luxury goods, including Rolex watches.

The six-country investigation began after the FIOD received a tip-off from Germany that one of the suspects was involved in match-fixing in 2008-09, including matches played in the Netherlands. The Netherlands public prosecutor says investigations have yet to uncover any proof of this alleged fixing activity.

The Netherlands takes a particularly dim view of illegal gambling activity, routinely vying with neighboring Belgium to see who can dole out the biggest six-figure penalties to operators not expressly authorized to accept wagers from its citizens. One of the five accused, a 58-year-old man from The Hague, is facing charges of operating an illegal lottery. Similar charges resulted in an €80k fine for an elderly couple from Austria who dared offer an online house lottery with a Dutch-language option.

The Netherlands is in the process of liberalizing its online gambling market but the Remote Gambling Bill is taking the long way around to passage. Latest progress reports had pegged a summer vote in the country’s upper house and an early 2016 timeline for the bill’s provisions to be actually implemented.

Malta-licensed online gambling operator Guts.com has announced it’s withdrawing from the German market after a recent court case involving a player fined €65k for playing on an unauthorized international online casino site.

Guts.com affiliates reported receiving emails this week telling them that German accounts will be locked “from 16th February 2015.” Withdrawals will be processed following that date but affiliates will no longer be able to send German players to Guts.com. The decision mimics the recent withdrawal from Germany of the Gibraltar-licensed Mansion Group.

Guts.com apologized for the inconvenience but said the move was necessary due to the recent Munich court verdict, which “goes against everything the [European Union} stands for.” Guts said it expects the verdict to be overturned, but until then, caution was the name of the game.

GERMAN BETTING ASSOCIATION TELLS GOV’T TO GET A MOVE ON

Germany currently permits only online sports betting and even that situation is legally murky. The 20 federal online sports betting licenses issued in September are currently mired in legal limbo as non-recipients challenged both the artificial cap on the number of licenses and the flawed licensing process.

This week, the recently formed sports betting industry group Deutsche Sportwettenverband (DSWV) said the legal uncertainty has been a boon to the “booming black market.” The DSWV, whose members include both domestic and international operators, said the situation is “only a logical consequence of the German licensing chaos.” The DSWV would love to “immediately initiate legal action against illegal vendors” on its own initiative but until its members’ had some legal clarity regarding their own status, “our hands are tied.”

The DSWV also believes the licensing process needs to be resolved as a matter of fairness to the private operators who pay the bulk of the country’s betting taxes. Citing figures from the Ministry of Finance, the DSWV said private sports betting operators paid 97% of the total €226m in federal betting tax in 2014, leaving just 3% contributed by state-owned operator Oddset.

Florida authorities have broken up an illegal online sports betting ring with alleged ties to New York’s Genovese organized crime family. Four individuals appeared at a Broward County bail hearing this week after being arrested with four other men last week following a 16-month investigation.

The accused are facing multiple counts of bookmaking, racketeering conspiracy, money laundering and using two-way communications to facilitate a felony. The credit betting ring reportedly used password-protected websites based outside the country to process wagers while moving money via a network of agents and couriers. Police seized $1.2m from bank accounts, safe deposit boxes and the defendants’ homes.

The multi-state operation, which involved 10 different law enforcement agencies including the FBI, has connections to the federal indictment in August of reputed Genovese family member Daniel Pagano. Broward County Sheriff Scott Israel said the Florida arm of the ring took in $1.2m since the investigation began in 2013.

MINNESOTA INTRO’S SPORTS BET BILL

As promised, Minnesota state Rep. Phyllis Kahn introduced the latest version of her sports betting bill this week. The HF 765 legislation (read it here) would allow Minnesotans 21 years of age or older to place wagers on sporting events except those involving collegiate events featuring Minnesota teams.

The bill envisions a prime role for the Minnesota Lottery, either offering wagers on its own or in conjunction with a private operator, or merely acting in an oversight capacity. Wagers would have to be made in person – no internet wagers allowed – at ’sports wagering lounges,’ which could include state racetracks. Net winnings will be taxed at 8%. Rules for maximum wagers, the use of credit, the types of wagering tickets and license fees have yet to be determined.

If approved, the bill would take effect July 1, 2015. Should the bill pass, Kahn has said she hopes the state will challenge the 1992 federal PASPA sports betting prohibition in a different federal court district than the one that keeps knocking back New Jersey’s efforts to introduce its own legal sports betting system.

California’s online poker stakeholders moved a little closer to consensus this week after three of the state’s tribes and casino operator Caesars Entertainment voiced softer stances on so-called ‘bad actors’.

Pechanga.net writer Dave Palermo obtained a letter written by the three tribes – the Rincon and Pala Bands of Luiseño Indians and the United Auburn Indian Community – to Assemblymen Reggie Jones-Sawyer and Mike Gatto, the authors, respectively, of the state’s two current online poker bills, AB 167 and AB 9.

The letter (read it here) paints its authors as online poker Rodney Kings, wondering why we can’t all get along. The tribes say they now support AB 167’s inclusion of state racetracks as eligible online poker operators along with federally recognized tribes and state cardrooms.

The letter also says ‘bad actors’ – which refers generally to operators who continued to take wagers from Californians after Dec. 31, 2006 but is primarily aimed at online poker titan PokerStars – should be redefined in terms of “personal participation in unauthorized gaming.”

The letter’s authors say they recognize that “control of an entity may change over time in a way that resolves regulatory concerns.” Such a view would seem to offer hope for Amaya Gaming, which purchased PokerStars last June from those nefarious Scheinberg fellows.

But Amaya isn’t quite off the hook. The letter’s authors say they “have not yet identified a possible consensus position” on so-called covered assets, i.e. the software, database, trademarks, etc. “developed through unauthorized internet gaming.” The tribes want to develop a position “based on considerations of fairness, regulatory integrity and legal requirements at issue.” So Amaya can operate online poker in California, but they might have to buy back the Ongame software they just sold to NYX.

The letter is a stark turnaround for the three tribes, who were among the 13 tribes who supported a 2014 bill that would have expressly kept PokerStars out of the market. In November, another member of those 13, the San Manuel Band of Mission Indians, defected to the other side, i.e. the Morongo Band of Mission Indians and three of the state’s largest card clubs, who have inked a technology deal with PokerStars.