Online Gaming & Sports Betting
At the intersection of interactive gaming and government regulation, one law firm stands out.
Ifrah Law has represented Online Gaming clients since the inception of the industry, and now represents many of the largest iGaming companies and industry associations around the world. We have been at the center of most of the important prosecutions and lawsuits in the Online Gaming industry, plus we were instrumental in the creation of the legislative and regulatory frameworks in four states which currently permit online gaming: Delaware, New Jersey, Nevada, and Pennsylvania.
Nationally ranked by Chambers USA in Gaming & Licensing Law, Jeff Ifrah and his firm bring decades of experience in betting and wagering law to advise startups in the eSports space, including both real money and skill-based p2p competition sites, on compliance with both state and federal law. Our clients in the sports betting arena include FanDuel, FoxBet, Bet365, Playtech, Unikrn, WorldPay/FIS Global, and SportRadar. Jeff and his team have also gained a strong reputation in other innovative internet-based industries such as payment processing and money transmission.
The firm is a founding member of iDEA (iDevelopment and Economic Association), an association which seeks to grow jobs and expand online interactive entertainment business in the United States through advocacy and education. Its members include, Golden Nugget, 888, PaddyPowerBetfair, GVC, and Scientific Games, among others. On behalf of iDEA, Ifrah Law submitted an amicus brief to the Supreme Court in the seminal sports betting case Murphy v. NCAA, which was decided in favor of iDEA’s argument urging the rights of states to direct their own economies.
Two characteristics uniquely qualify Ifrah Law to represent iGaming companies:
- Our substantial experience in both criminal defense and civil litigation. This is invaluable because even civil cases can expose iGaming companies to criminal prosecution. We are litigators who know the risks and how to avoid them.
- Our knowledge of the Online Gaming industry and the people who work in it. We are a firm of lawyers who share a passion for understanding our clients and their businesses. Through our representation of iGaming businesses since the industry’s beginnings, we have acquired an in-depth understanding which is key to our ability to craft solutions that meet our clients’ goals.
Jeff Ifrah and his team advise online casino operators, poker and fantasy sports sites, and payment processors on class action lawsuits, mergers and acquisitions, vendor and supplier issues, government investigations and criminal matters. We also serve as Special Internet Counsel for the Delaware State Lottery. The firm is known for representing clients in cases involving progressive areas of the gaming industry, such as sports betting, social gaming, skins betting, iGaming, online sweepstakes and lotteries, peer-to-peer betting and mobile gaming.
Ifrah Law publishes the blog, Ifrah on iGaming and maintains a timely white paper entitled, “The Definitive Guide to Online Gaming and Betting in the U.S.” (available for download here), a comprehensive overview of iGaming legislation and business opportunities. The firm has been honored by industry associations such as eGaming Review for its innovation, excellence, and dedication to best practices, and Jeff Ifrah frequently presents on issues pertaining to iGaming law for organizations like the American Bar Association (ABA), the International Masters of Gaming Law (IMGL) and the International Association of Gaming Advisors (IAGA).
Manging the Entire RFP Process for Tribal Gaming Company
Seneca Gaming Corporation is the largest casino in New York State in terms of revenue; it is
owned by the Seneca tribe. The company runs three casinos in Western New York.
In 2013, New York passed a law allowing retail sports betting within casinos, but the passage
of specific state regulations governing the activity was delayed; regulations are now expected
to be issued sometime in 2019. The Seneca tribe retained Ifrah Law to help find them a partner
to run this expanded operation of retail and mobile sports betting operations. We are currently
running the entire RFP process for the casino, offering the opportunity to bid for potential
partners to service this $1 billion market. Ifrah Law is advising on what the corporation should
seek in a partnership and what potential partners might ideally offer; we have reviewed over 20
applications, and will help the client cull the list down to a select group of finalists to service a
$1 billion market for sports betting in New York State.
Advising eSports Company on ICO, Cryptocurrencies, Compliance, and Regulation
Unikrn, an international leader in eSports products and content, asked us to provide legal
advice on various new products, including its initial coin offering: we provided strategic advice
on the products and games on which the cryptocurrencies could be used, while remaining
compliant with U.S. gaming and financial services regulation on the federal and state level. We
also worked closely with Unikrn during all phases of development of their product, including
revisions to the product and games, updates to the ICO whitepaper, and various regulatory and
compliance strategies. We continue to advise Unikrn on various new gaming offerings and are
advising on licensing matters in newly opened sports betting markets.
Sports Betting Data Company Licensing and Preserving Commercial Contracts
A sports betting data company contacted Ifrah Law to assist with its licensing process in New Jersey and
Mississippi in relation to its sports betting business. The company provides sports betting data
to sports books all over the world and is seeking licensure in New Jersey and Mississippi.
Ifrah Law assisted with the licensing process, including reviewing applications and disclosures,
advising on proper disclosures for corporate officers and the various business entities, and
working directly with regulators on the licensing process. We were successful in securing
approval for operations in New Jersey while the investigation was underway.
The firm also assisted with petitioning the Mississippi Gaming Commission for approval to begin
offering certain sports betting products prior to finalization of the license application, thus
preserving the company’s commercial contracts.
Ifrah Law Represents Seller in Multi-Million Dollar Acquisition of Affiliate Marketing Company by Publicly Traded International iGaming Corporation
In the second acquisition this year negotiated by Ifrah Law in the iGaming space, an international gaming company has purchased the firm’s affiliate marketing client in a deal valued at approximately $6.5 million. The buyer praised the deal as confirming its position as the number one player in iGaming lead generation in the U.S.
Requiring an in depth knowledge of the iGaming industry in addition to applicable gaming laws, the deal demonstrates Ifrah Law’s preeminence in this rapidly growing space. The firm’s reputation continues to rise as the go-to advisor for building profitable businesses in the affiliate marketing and iGaming industries, which are becoming increasingly attractive to larger buyers.
Clients turn to Ifrah Law for its ability to create meaningful agreements, often in an accelerated time frame, which provide value to buyers while at the same time encouraging sellers to continue to innovate in this burgeoning industry.
As the legislative climate for iGaming improves across the U.S., Ifrah Law anticipates an increase in companies seeking to take advantage of the opportunities available in this profitable nexus between affiliate marketing and online gaming.
Partner and M & A Lead Michelle Cohen and Counsel Drew Barnholtz represented the Seller in this transaction.
Obtaining Dismissal of Fraud Claims Against Online Gambling
In the first class action suit brought by former U.S. poker players, Ifrah Law went all in and won a big pot on behalf of an online poker company and individual poker pros that were defendants.
The suit involved complex fraud issues arising out of claims of Racketeer Influenced and Corrupt Organizations Act (RICO) violations. These issues resulted from the plaintiff’s demand for return of U.S. player funds held in online gambler accounts after Black Friday. On that day in 2011, the U.S. government shut down the three most popular online poker sites. More than two million citizens were playing our national card game online, and they were confronted by the seals of the FBI and Department of Justice and a notice of domain name seizure as well as blocked access to each player’s account balance.
The lawsuit demanded return of plaintiff’s money under a conversion claim, and also accused the defendants of racketeering, which would have entitled the plaintiffs to three times the damages owed.
In a closely watched argument in the U.S. District Court for the Southern District of New York, Ifrah Law held all the right cards and won a dismissal of all claims against the poker pro defendants, as well as all RICO claims against the corporate defendants. The judge’s order was a big win for the individual defendants in this case, but also a victory for individual defendants in other class action cases pending in New York.
(Segal et al v Bitar et al. 1:11-cv-04521-LBS (S.D.N.Y.))
Delivering a One-Two Punch to Simultaneous Gambling-Loss Recovery Cases
A plaintiff’s law firm brought two gambling-loss recovery cases against our client, Amaya, in the United States District Court for the Southern District of Illinois. The first case addressed alleged gambling losses sustained as a result of playing on the PokerStars website. Additionally, our client was implicated in a second case that named Rational FT, which the client acquired when the client purchased Full Tilt Poker (FTP).
Both cases were instituted by a third-party – the mothers of players who allegedly suffered these losses. And in both instances, the courts ruled in favor of our clients after Ifrah won numerous motions that caused the defendants to amend their ultimately unsuccessful complaints.
After nearly three years, the judge brought finality to these proceedings by granting Ifrah’s last-filed motions to dismiss (which had been pending since mid-2014) and ordering the dismissal of both cases with prejudice. The judge’s orders in both cases were nearly identical. The cases were affirmed on appeal.
(Sonnenberg v. Oldford Group, Ltd., Rational Entertainment Enterprises, Ltd., Case No. 3:13-cv-00344-DRH (U.S. District Court Southern District of Illinois))
(Fahrner v. Bitar et al, Case No. 3:13-cv-00227 (U.S. District Court Southern District of Illinois))
Ifrah Law Wins Dismissal In PokerStars Class Action
When faced with an attempted class action in the plaintiff-friendly Southern District of Illinois, PokerStars turned to Ifrah Law to defend them. Not only did this case pose the risk of a multi-million dollar hit to PokerStars, but a money judgment would have opened the door for related class actions against online poker operators offering services without a license.
The plaintiffs filed the suit under the Illinois Loss Recovery Act, which allows individuals to collect losses on behalf of third parties, providing third parties fail to make their own claim within six months of losing the wager. Ifrah successfully argued that PokerStars was not liable. The court agreed with Ifrah, stating that PokerStars served as a third part service provider – only providing the forum for others to play and does not have stake decided in how the game plays out.
The Judge’s decision in this case was monumental for the online gaming industry and likely closed the door on future class actions against PokerStars. Further, this case provides precedent for other class actions that may arise against online gaming operators.
(Kelly Sonnenberg v. Oldford Group, Ltd., and Rational Entertainment Enterprises, Ltd. (No. 13-0344-Drh) (S.D. Il.))
Preparing License Application to Become Registered Casino Service Industry Enterprise
Ifrah Law prepared the license application for Ezugi to become a registered Casino Service
Industry Enterprise in New Jersey. We have worked extensively on representing the client
in negotiations with the New Jersey Division of Gaming Enforcement to address Division
of Gaming Enforcement (DGE) concerns, obtain approval of the application, and to receive
transactional waivers for continued operations. The firm also represents Ezugi on its corporate
transactions and revenue share agreements with multiple casinos. Ezugi was the first operator
after regulation to offer a “virtual” live dealer where remote players watch and play poker
online while they view a real casino table and dealer. This innovative and cutting-edge work
has resulted in our client partnering with the Golden Nugget Casino and its counsel, Brownstein
Hyatt Farber Schreck, LLP.
Leading a First-of-its-Kind Battle to Block the Seizure of Domain Names
When the state of Kentucky went to court to try to seize the domain names of 141 Internet gambling sites, it was a shot across the bow of Internet companies around the world. If the state’s lawsuit – the first of its kind anywhere – was successful in bringing about the forfeiture of the domain names, the consequences would be severe for both Internet commerce and civil liberties.
At an initial court hearing attended only by the state’s lawyers, without notice to the owners of the domain names, the judge concluded that the websites were violating Kentucky’s gambling laws. The judge ordered the domains to be seized and their ownership transferred to the state.
When it got word of what happened, the Interactive Gaming Council – the organization that represented the owners of 61 of the domain names at issue in the case – turned to Jeff Ifrah for help. As a host of other organizations – including trade associations and civil liberties groups – mobilized to join in fighting the judge’s order, Jeff became lead counsel, coordinating the legal challenge to the seizures.
Not surprisingly, the judge turned down their request that he reverse his own order. Convinced the order was unlawful, Jeff led the defense team in taking the case to the Kentucky Court of Appeals. There, Jeff persuaded the Court of Appeals to rule that the judge exceeded his jurisdiction. The Court of Appeals ordered that the seizures be blocked.
The state appealed that ruling to the Kentucky Supreme Court, where Jeff continued to fight the forfeiture. The appeal raised significant legal issues never before decided by the court, including whether a domain name can be considered property that is subject to seizure under Kentucky law and whether a domain name can be considered a gambling device under the law.
In the end, the Supreme Court sidestepped these important questions. Instead, it ruled that the case was not properly before it because of a legal technicality. But the end of the appeal was not the end of the case. Litigation continues with Kentucky state officials. While the final outcome of the case remains to be seen, its significance will be felt throughout the Internet gaming industry.
(Commonwealth of Kentucky ex rel. J. Michael Brown, Secretary, Justice and Public Safety Cabinet v. 141 Internet Domain Names – Civil Action No.: 08-CI-1409 (Commonwealth of Kentucky, Franklin Circuit Court, Division II))
Obtaining an Historic Settlement with the Department of Justice
When the U.S. government seizes assets and funds, they are normally not very sympathetic or predisposed to giving any of it back. But in a case against a payment processing company, federal authorities in Maryland seized over $2 million of alleged
illegal proceeds in connection with investigation of illegal sports betting – and Ifrah Law helped get half of it back.
In claiming it was a front for the gambling industry, the Department of Justice was very aggressive in seizing the payment processor’s assets in California. But Ifrah law conducted a very precise forensic investigation and demonstrated to the government
that over 50 percent of the company’s proceeds were from legal, legitimate sources. We successfully argued that the scope of the seizure was overly broad.
In a result that is still turning heads in the legal industry, Ifrah Law obtained the first settlement on record where the Department of Justice agreed to refund over $1 million of proceeds that were initially represented to Court as illegal proceeds.
(United States v. Contents of Various Accounts, etc., Case No. CCB-10-774 (U.S. District Court, District of Maryland))
Successfully Negotiating a $60 Million Sale of iGaming Websites
Ifrah Law helped our client profitably exit its strong position in the lead generation market within iGaming through a sale of websites and other affiliate related assets from the US-based founders in a transaction worth up to $60 million.
The acquisition included generated revenues from licensed operators in the regulated casino and poker markets in the states of New Jersey and Nevada, plus a range of other assets which are expected to generate significant revenues as other US states re-regulate iGaming. It positions the buyer to become the largest regulated casino affiliate in the US, and to take advantage of further re-regulation in what has the potential to become the world’s largest iGaming market.
Currently the US market represents approximately 20 percent of the total online Casino market. Some states have reregulated to permit online games, such as Nevada (poker), Delaware (all game types) and New Jersey (all game types), and initiatives are underway to re-regulate in other states.
Representing an Online Poker Operator in Nevada Federal Court
When a leading online poker company was sued in Nevada by a prominent poker professional and former company endorser, the company put all their chips on the experience of Ifrah Law.
The plaintiff was one of the first women to place highly in a poker tournament. She claimed that during the online company’s early years she was offered a one percent ownership in the firm in exchange for her promotional efforts as a “celebrity player.”
She also claimed that the ownership stake was worth $100,000 a month for every month that the company was making distributions. She sued for breach of contract, breach of fiduciary duty, breach of the covenant of good faith and fair dealing, unjust enrichment, and fraud. Her attorneys estimated damages to be $40 million, with the additional possibility of punitive damages.
Ifrah Law won a dismissal in the trial – and won three more move to dismiss orders in subsequent actions. The initial motion to dismiss contained allegations that the player’s “typhoon of litigation” was fueled by a “thirst for publicity.”
(Cycalona Gowen v. Tiltware LLC, et al. – Case No.: 2:08-CV-01581-RCJ-RJJ (United States District Court for the District of Nevada))