Good afternoon.

I am Matt Fruman, Ward 3 Councilmember and Chairperson of the Committee on Human Services.

Today is May 4th, 2026, and we are meeting in room 123 of the John A.

Wilson building and on the Zoom platform.

The time is now 11 p.m.

Today we are conducting a public hearing on B26-0656, the Internet Gaming and Consumer Protection Act of 2026.

Bill 26-0656 was introduced by Councilmember Felder on April 9th, 2026.

The stated purpose of the Internet Gaming and Consumer Protection Act of 2026 is to amend the district's existing law governing the lottery and associated games to add a new title authorizing and regulating Internet Gaming or eGaming.

Online casino style games like Blackjack, Poker, and Roulette played on mobile devices or computers are already accessible to district residents through unregulated and offshore platforms.

In 2024, it is estimated that DC residents wagered close to 700 million dollars on these unlicensed platforms.

I will say I am going to ask folks who may have generated those estimates how they generated those estimates.

This legislation establishes a comprehensive licensing framework, including a consumer protection plan, responsible gaming requirements, taxation, reporting, and an enforcement framework administered by the Office of Lottery and Gaming, or OLG.

Additionally, the bill defines and prohibits unlicensed sweepstakes gaming and similar dual currency gaming products.

This allows the district to take action against these unlawful online platforms.

The bill also makes conforming and administrative changes necessary to implement safe eye gaming within the district.

I look forward to hearing from our public witnesses about their opinions regarding legalizing and regulating eye gaming in the district.

Any potential monetary gain for the district through regulation and taxation of online gaming must be weighed against ensuring the health and safety of our residents.

Some logistics on testimony.

Before we uh hear from our public witnesses, and I expect we will be joined by Councilmember Felder shortly.

I I ask that all witnesses limit their testimony to the allotted time.

Advisory neighborhood commissioners and the first representatives of organizations to speak will have five minutes.

Other public witnesses will have three minutes to testify.

After hearing from our in-person witnesses, we will turn to our virtual witnesses.

And I'm going to call those witnesses to the table and then the first round of witnesses to the table and then turn to councilmember Felder should he wish to make an opening statement.

So let's start with uh Les Burnell, Director uh Les Burnell.

Oh.

Uh Mr.

Horn, were you going to go first or Les?

First?

Okay.

So uh Bernie Horn.

And then before we get you started on your testimony, let me turn to Councilmember Felder to see if he has an opening statement.

Thank you.

Thank you, Chairman Fiumann, and good afternoon to our public and government witnesses.

A few weeks ago, I introduced the Internet Gaming and Consumer Protection Act of 2026.

Bill 26 Days 0656 to regulate and legalize an activity that is already happening every single day across the District of Columbia, iGaming.

Studies show that district residents are already participating in online gaming and online casino style gambling through offshore and unregulated platforms.

Whether we choose to acknowledge it or not, this market already exists.

The question before us is not whether online gaming happens, it does.

The question is whether the district will continue allowing millions of dollars to flow outside of our oversight and outside of our economy, or whether we will regulate it responsibly, protect consumers, and generate revenue that benefits district residents.

Estimates show that D.C.

residents wagered approximately $700 million on unregulated gaming platforms in 2024 alone.

That is revenue currently leaving our city with little to no consumer protection, no meaningful oversight, and no public benefit for the people of the district.

As our economy continues to shift, as federal layoffs and pack working families, and as we face ongoing budget pressures and economic uncertainty, we must begin thinking creatively and responsibly about sustaining revenue sources that do not place additional burdens on residents already struggling with the rising cost of living.

This legislation creates a regulated framework for online gambling under the Office of Lottery and Gaming with strong consumer safeguards, age verification requirements, responsible gaming tools, and enforcement authority to crack down on illegal and predatory operators.

Importantly, this bill also is about accountability and public benefit.

The legislation establishes a 25% tax on online gaming revenue and licensing fees that can help the district address critical budget shortfalls while supporting investments and behavioral health services, financial literacy, consumer protection, and other essential public programs.

This is not about encouraging gambling.

It is about recognizing reality and responding responsibly.

If residents are already engaging in these activities, then we have an obligation to ensure there are safeguards in place to protect them, especially young people and vulnerable residents, while ensuring the district receives the economic benefit instead of unregulated offshore companies.

This bill also cracks down on unlicensed sweepstakes style gaming platform operating in legal gray areas and give the district stronger enforcement tools to protect consumers.

Colleagues, the district cannot afford to sit on the sideline while other jurisdictions modernize their gaming framework, create consumer protections, and capture new revenue streams that support public priorities.

This legislation is about modernization, it's about regulatory, it is about consumer protection, and it is about economic responsibility during a time when the district must be strategic about every dollar.

I look forward to continuing to work with Chairman Fioma, my colleagues, stakeholders, advocates, and residents as this legislation moves through the committee process.

And with that, Mr.

Chairman.

Thank you very much, Councilmember Felder, and thank you for your work on this bill.

Okay.

Mr.

Commissioner Horn, nice to see you when you're ready.

Thank you very much.

This is the first time I've ever gotten a benefit by being an ANC commissioner.

So thank you so much.

I'm currently a commissioner from ANC 3D05, but about 25 years ago, I was the policy director and the congressional lobbyist for what was then called the National Coalition Against Gambling Expansion, which is now change its name to stop predatory gambling, which is your next witness.

So I just want to endorse uh Les Brunell's testimony.

There's nobody that knows more than he does.

I'll make three quick points.

First, creating new gambling, new gambling sites that are supposed to be legal is not going to stop the illegal sites.

It's not going to move anyone from the illegal sites to the legal sites.

It's just going to create more gamblers with the city advertising and standing behind it.

And you know, to my mind, the way the city gains revenue is just as important as how it spends revenue.

The second point is that casino gambling is intended to be addictive.

It's created to be addictive.

They are it follows the process of a BF Skinner box, you know, a psychological test that keeps people coming back.

And you know, social media is that to some extent.

But we're not creating poor people with social media.

So you know, while the government might make money on this, the government's also gonna have to spend money to try to do something about people who have lost their money to gambling.

And the third point is um, whichever side you're on, obviously I'm against it no matter what.

I think that this is premature.

I think that we're gonna have a different mayor soon.

We're gonna have a substantially different council soon.

And I think that something that is so has such a long-term and substantial effect shouldn't be done in this council session.

I think it should be um done next year when we have the new decision makers.

And that's it.

Thank you so much.

Thank you very much for your testimony, Commissioner Horn.

I'm very No, no, no, don't go away.

I'm very sorry to hear that this is the first time that you've gotten any benefit out of being an ANC commissioner.

I hope that I hope there's been some sort of like personal satisfaction along the way.

Yes.

That's about it, though.

All right.

So uh you said that if you create legalized gaming, you won't replace the illegal sites.

And you made it sound like there is no trade-off, like there's no absorption into the legal gaming sites from the unregulated gaming sites.

Is there data somewhere out there that you point to on that?

I've seen data pointing in a different direction, but what on what do you base that claim?

I'll let Les Brunell address that.

But um, you know, look at our cities of um experience with uh I-71 marijuana sales.

Um it's been years and years and years, and we have not closed them down.

We have we have taken steps.

And those are physical things where you can go and send city employees and police.

Umline, there's nothing you can do.

I mean, people can go to whatever um internet uh site they want to go to, and they'll continue to go there.

Okay.

Uh hear you.

Councilmember Felter, did you have any questions?

Uh thank you very much.

And Councilmember Henderson, did you have any questions for the United States?

Okay, so thank you very much, uh, Commissioner Horn.

We have been joined by at-large council member Christina Henderson.

Uh Councilmember Henderson, would you like to make an opening statement?

Uh let's just be very brief.

Um this was uh I'm not gonna lie, I I didn't know about this bill two weeks ago.

Um people started asking me about it, and I was like, what are you talking about?

We're moving very quickly on this piece of legislation.

Um I will say I'm approaching this in the same type of skepticism that I had about sports betting.

I wasn't on the council during sports betting.

So I think there are probably gonna be a lot of people who are gonna come up here and tell us about the revenue projections.

And well, Gambit also had some revenue projections that we never achieved either.

So uh I'll have some questions for the director of the lottery.

I think is that the governor, is that the government witness?

Yes.

Um if if we get there.

But yeah, that's it.

Thank you.

I'm here to learn.

All right, thank you very much.

All right, now we will turn to uh our first panel, uh Les Burnell, Oliver Barry, Brianne Dora Schwall, and Keith White.

Okay, Mr.

Burnell, when you are ready.

Thank you.

Uh good afternoon.

Um Les Bruno, I'm the national director for Stop Predatory Gambling.

Uh and our mission is to reveal the truth behind commercialized gambling operators to prevent more victims.

And I want to emphasize that we do not accept funding from commercialized gambling interests.

So the first uh 15 years of my professional career, I used to run campaigns, help candidates win for public office.

And one of the commonalities through all those experiences was that most of those folks, they ran for office because they wanted to improve people's lives.

You know, it was about making a difference in society.

And I have to say, one of the things that drove has drone me to the driven me to this issue over the last 18 years is there is no government institution in this country that inflicts more harm on the social, financial, and mental well-being than the public policy of predatory gambling.

So unless I'm gonna put that in real terms.

So we're not coming through security, you guys had a big banner.

This the district has a big banner.

No taxation without representation.

Like that's one of our core principles that we talk about.

I come up from Massachusetts.

Like you learn you learn that principle in your DNA, as like an in an elementary school.

Today in our country, in state after state, including here in the district, we have a system of taxation by exploitation.

And it's time that we added the principle of no taxation by exploitation, right alongside the principle of no taxation without representation.

So let's talk about two of those specific uh ways that the institution of predatory gambling harms your constituents.

One, you know, the we heard talks about um people talk about affordability, right?

Affordability is at the top of the agenda for both political parties today.

Well, in preparation for this hearing, we went through the District of Columbia's lotteries um uh uh financial reports for the last several years, okay.

Over the next five years, if you combine the the personal wealth that your constituents are losing to the lottery and to forms of gambling, commercialized sports gambling, and you add them all together, over the next five years, your constituents are gonna lose 400 million dollars to their personal wealth to forms of gambling that the district sponsors.

Okay.

In the last fiscal year alone, that was 79 million dollars of lost personal wealth.

And to put it in a real terms that we all can relate to, that's 150 dollars per minute.

Okay, so in the in the five minutes I'm talking here today, your constituents are gonna lose 750 million dollars.

I'm you know, seven hundred and fifty dollars in the course of this of our conversation today.

And and uh the Washington Post reporter Danny Funts, his new book, Everybody Loses, had a great stat in there that only one out of every 100 online gamblers.

Okay, so one out of a hundred online gamblers profits in the long term.

So this is a government program we're talking about here.

This is only le this is only legal when you partner with the government.

And then the last kind of key point I want to emphasize here, we hear a lot about illegal gambling.

We've got to go after this because we're gonna wipe out these uh these illegal markets.

Well, since the district has legalized online sports gambling, the rate of illegal gambling in this district district, as well as across the country and state after state that has legalized sports gambling, it has increased.

And and Brian's gonna has a has great numbers, studies on all those the legal numbers.

So I'm gonna let her kind of get into that in the weeds.

But the numbers I love to cite are are the kind of the leading uh gambling lobbying entity in the country, which is the American Gambling Association.

So in 2022, the the head of the American Gambling Association wrote a letter to then uh Department of Justice A.

G.

uh.

Merrick Garland calling on the attorney general.

This is four years after legalization of online gambling uh in this country, sports gambling, calling on him to crack down on illegal gambling, right?

The New York Times broke down an incredible story in 2022, did a four-part cover story on how the narrative behind illegal gambling was a made-up public relations narrative by the gambling industry.

And the reason why they needed to do it is because your constituents, they're not demanding online gambling.

They weren't demanding commercialized sports gambling.

They sure as heck aren't demanding online casino gambling.

So they have to create this phony public relations narrative to create, you know, the brief life into a lobbying campaign.

Because there's no rational reason why you'd ever support this.

So that's the reality of this.

It's a con for your constituents who are losing 150 dollars every minute to this.

And then lastly, you know, when we say we're gonna regulate this.

Okay, the District of Columbia today, in every low-income neighborhood, you know, on every street corner is selling $50 lottery scratch-off tickets.

Okay.

That's what regulated gambling looks like in the district.

Okay.

Fifty dollar scratch off tickets to low-income citizens.

I don't think any of us are in public life, because that's what we think this is about.

Okay.

And the system of taxation by exploitation.

So thank you very much.

Thank you for your testimony.

Oliver Barry.

Thank you, Chair Freeman, members of the committee.

My name is Oliver Barry, appearing on behalf of the National Association Against Eye Gaming.

We're a coalition of brick and mortar casino operators, organized labor, and local governments aligned in opposition to the expansion of the most addictive form of gambling that government can authorize.

I want to briefly highlight three concerns with you today.

First, the revenue case for eye gaming is overstated.

We recognize the district faces budget pressures this year, but not every revenue source is worth the risk.

Supporters point to increased tax revenue.

Yeah, a recent analysis that we commissioned with the innovation group estimates that the district would generate roughly 18 million annually on average over the four first four years of legalization of eye gaming.

That must be weighed against the social costs that follow enactment.

Let's take New Jersey, for example.

A recent NIRA study found legalized eye gaming imposes approximately $350 million per year in added social costs.

And we're seeing those harms in real time.

In Pennsylvania, another eye gaming state, calls to the 1-800 gambler helpline have increased every year for the past six years, with over half of the callers now identifying online gambling as their most problematic form of gambling.

Notably, only seven states have implemented eye gaming, and in just the last two and a half years, more than twenty-five states have rejected similar proposals, including Virginia and Maryland earlier this year.

Second, legalizing eye gaming will not eliminate illegal gambling.

It will expand it.

If legalization displaced illegal operators, legal states would not still be chasing them.

Yet just last month, Michigan, another iGaming state, announced that it issued 45 cease and desist orders this year alone to illegal offshore operators targeting Michigan residents.

Illegal operators continue to thrive because they offer what legal platforms cannot.

Better odds, bigger bonuses, fewer restrictions, and no taxes.

That is why illegal operators still control roughly 74% of America's $90 billion online gambling market.

And in 2024 alone, illegal gambling revenue grew 64%, nearly double the legal market's growth rate.

The answer to illegal gambling is not stronger enforcement, not legalization, not excuse me.

The answer to legal gambling is stronger enforcement, not legalization that expands demand and normalizes risky behavior.

Lastly, I we believe this bill raises serious policy and legal concerns.

These platforms are designed to maximize engagement through push notifications, targeted promotions, frictionless deposits, and continuous play mechanics.

And beyond those policy concerns, I think the district faces a serious legal question.

We recently commissioned a legal analysis that concluded the eye gaming would likely violate the Federal Johnson Act because the systems used to deliver online casino games likely constitute prohibited gambling devices under federal law.

Our analysis suggests congressional action, not council action, would be required before eye gaming could proceed in the district.

For all these reasons, we respectfully urge the committee to reject this legislation.

Thank you, and I welcome any questions.

Thank you.

Thank you.

Mr.

Chair, distinguished members of the committee, I appreciate the opportunity to be here before you today.

For the record, my name is Briandora Schwal.

I'm an international problem gambling expert and advocate, and I proudly serve as the director for the national campaign for fairer gambling.

I have been in the field of problem gambling for more than 13 years now.

And I've had the privilege of being mentored by the leading national expert on such matters of 28 years, Mr.

Keith White.

Sitting next to me.

Mr.

Keith White taught me and said, and I quote, online gaming is Frankenstein's monster of advertising, access, and action.

He taught me the values of something called the total consumption model.

That when you further expand gambling, so too do you expand the number of problems.

Mr.

White impressed upon me the value of something in public health called the precautionary principle.

For those that may not know, the precautionary principle of public health rejects the notion that risks are acceptable until proven, excuse me, until harm has been proven.

But in this case, DC doesn't need to wait and see if harm has been proven.

It has.

Leading addiction experts say that eye gaming is ten times more addictive than its other gambling counterparts.

And it is illegal in 42 U.S.

states, and for good reason.

Two of the states that have legalized eye gaming, New Jersey and Pennsylvania, have found that the rates of addiction are three times greater than the presumed national average.

That's roughly 6% of their population that's actively struggling today.

Another few things of importance.

Research tells us that for every one individual that's struggling, six others are negatively impacted.

And of all the addictions, it carries with it the greatest rates of shame and stigma, thus often reporting and significant underreporting, and individuals struggling are 15 times more likely to die by suicide than the general population.

Additionally, it's important to note that in the few states that have chosen to legalize, we've learned some very troublesome trends.

This industry is dependent upon those that are struggling.

The state of Connecticut found that 71% of gambling revenues are coming from 7% of the population.

1.8% being those struggling with an addiction, the remaining being at risk.

Of the states that have legalized, UCLA and USC found that debt collection rates are risen, credit scores have fallen, and personal bankruptcies are increasing as much as 30%.

And as you've heard my fellow panelists talk about how legalization does not in any way capture the illegal market, Penn State recently found that their illegal market in Pennsylvania grew from 6% to 10% year over year.

Given the demographic of the residents of DC, I'd also like to take a moment to note that minorities and active duty military are at greater risk for struggling with gambling disorder.

In fact, our military members and veterans are three and a half times more likely, and we find that in the minority communities, those children engage in gambling much younger than their peers.

The industry will speak about their commitment to responsible gambling, but yet in states that have asked, less than 4% of users are actually even using those tools.

And one app reported accepting hundreds, 620 bets, as a matter of fact, from minors, allowing them to gamble more than 2.78 million dollars.

It should not be done in an attempt to remedy some budgetary shortfall.

The catastrophic harm that will be felt from some legalization will not only be gravely felt by that individual, this will trickle into your homes into your communities, and will be felt by the entire district.

It's been a privilege, and I'd be happy to answer any and all questions that you have.

Thank you very much.

Mr.

White.

Thank you.

Chair Bruman and Members from Johnson.

You got to turn your mic on.

Okay.

Thank you again for the opportunity to testify.

I have been working on gambling issues for more than 30 years, including 27 as the executive director of the National Council on Problem Gambling.

I founded my firm, Safe for Gambling Strategies last year to promote responsible gambling and prevent gambling addiction.

A list of my current clients is found in my written testimony, but my remarks and recommendations today are not on behalf of any client or organization but are based on my three decades of experience and as a residents of our of our region.

I do not support or oppose uh B 260656.

If the Act passes, the district has this has a second chance to get online gambling right.

And the expansion of legalized gambling, of course, must be accompanied by adequate funding for services for prevention, education, treatment, enforcement research, responsible gambling and recovery, uh, the PETER model, if you will.

But regardless of the outcome of this bill, it's critical that the council provide dedicated funds to prevent and treat gambling addiction.

Such funds were included in the 2018 Sports Betting Act, uh, but were uh stripped, sent stripped from the budget.

DC is one of the few jurisdictions in the United States that does not devote a share of its gambling tax revenue to problem gambling.

DC could be a leader in online gambling by coupling a best in class responsible gambling program, uh best in class, I'm sorry, responsible gambling regulation with a comprehensive problem gambling program.

As the council considers expanding online gambling, I urge you to address four important areas we've heard a little bit about today channelization, best in practice regulation, digital health and high risk populations.

So briefly, one, we need to move players out of the illegal markets.

One important aspect of this discussion is that illegal gambling operators, of course, pay no uh pay no taxes or provide no consumer protection.

They often target minors and self-excluded individuals.

Channeling existing players from the black market to the legal regulated space is in everyone's advantage.

We need to extend the existing online uh regulations here in DC.

OLG has already done a good job of um putting responsible gambling protections into place.

These protections should be extended to any online casino operator and expand it as research and practice evolve.

As Brianne mentioned, New Jersey um has an aggressive system that requires operators to monitor for indicators such as rapid betting, chasing losses or extended sessions, and to provide timely interventions to take proactive steps when risky patterns emerge.

Players should be encouraged and even incentivized to take control through deposit limits, time limits, budget calculators, and personalized activity dashboards.

Three, we need to use digital health technology to fill the gaps.

As discussed, DC does not have a dedicated fund to prevent and treat problem gambling.

Even if this bill is enacted, it will take a while for these services to be built.

This creates a tremendous opportunity to utilize digital health technologies to fill this gap.

Teletherapy, recovery apps, and gambling specific blocking software making world class world class problem gambling services available and more accessible than ever before.

Sub-exclusion systems now allow secure encrypted enrollment online across all licensed operators in our region and ideally across the country.

DC should join such a system as well as facilitate access to these apps.

Last, we need to address high-risk priority populations.

All three of these areas show why we need it's more important than ever that iGaming, excuse me.

Advertising growth, mobile betting expansion, and illegal operators remain all risk factors balanced somewhat by increased services funding, improve public awareness, and better treatment access in our region, but not yet in the district.

Thank you for the opportunity to testify today, and I look forward to your questions.

Thank you very much for your testimony.

I guess I will start with questions and then uh turn to my colleagues.

Uh Mr.

White, in this it actually anybody could answer, but I think I'm going to start with you.

One of the big issues around this is to the extent to which regulated eye gaming would displace unregulated eye gaming and various claims were made.

You and your testimony it you didn't make a claim one way or another on this, but you did I I almost heard your testimony as embracing the concept that a regulated market could make sense to the extent that it displaced an unregulated market, but talking about the most important things to be done.

But to the extent that there's data out there that can support whatever decision we make, can you help point me to that data because I have folks I like the fact that you appear agnostic, which gives me more confidence in the data that you point me to.

So how how do we grapple with this question?

It it it it is a it's an extremely uh difficult question to answer.

So studies are all over the place.

In some regulated markets, um users, a majority of the users are shifting to the legal regulated side, but there is always still going to be people that use both, and then there's always going to be a chunk that use just the that stay on the on the illegal sites.

So numbers uh are really rough, but it's anywhere from a third will will be exclusively on the regulated side, a third will stick in the middle and use both, and a third will um stay with the illegal side for all sorts of reasons.

And then what do you do in that setting to get folks off of the illegal site?

Well, I think as we mentioned, enforcement is one big pillar, but you have to encourage people to that if they are going to gamble to use the regulated market.

You know, there's a lot we can do to incentivize gamblers to remind them that some of these apps they see advertised on TV, or perhaps the sweepstakes app or even a prediction market app are not legal and regulated here in the district.

And there's a lot of consumer protection reasons why while you might not want to encourage people to gamble online, if they choose to do so, make sure they're doing it with something, somebody regulated by OLG.

So enforcement is part of it.

Public education awareness is a big part of it.

And then, you know, that there's you you that's you're never going to eliminate the illegal market, but you can do a much better job of channel channelizing.

Okay.

I mean, do Mr.

Brunell, you have your microphone on.

Did you want to speak to this of the source of the data that we could look at?

Yeah, I'd just say like you're not hearing from the FBI.

You're not hearing from the metropolitan.

Metropolitan police department with these data points.

The data that we keep hearing about is anyone that says that this is going to be get reduced is data that's provided by the gambling industry.

It's gambling lobbyists that are producing this research that somehow legal gambling goes down.

So that that's part of the con and this.

It's not coming from law enforcement agencies.

They're paying for this research.

And it's and it's important to note that when Mr.

White talks about his client list, he didn't mention the client list.

The client list includes gambling industry companies.

That's who we were up.

So it's just I mean, this I think that's important that for the record.

We say a client list, the client list includes gambling companies.

Okay.

I mean, I will say, and I'm an uh the National Association Against Eye Gaming, clientless and funders are important, and you I'm appreciative that you started by saying that you are funded by casinos, I think is the case.

And so there is a lot of information out there being put out by people who have very strong stakes in this.

But help me understand why the casino industry is taking the position that it is.

Sure.

Um I should clarify too, that not not all brick and mortar casino operators are members of the association.

We have counterparts on the other side of this issue, and so I want to be fair and transparent.

Um but our members uh have taken a stance across the country uh that eye gaming is harmful to brick and mortar casinos.

It's harmful to the communities in which those brick and mortar casinos are uh within, uh particularly as it relates to you know jobs, vendors, suppliers that support that small ecosystem of brick and mortar operators.

So in many states, uh unlike the district here, that's uh a uh a primary angle that we come from.

Um but there's still uh uh uh economic and social and community fallout that occurs with iGaming that we've seen in the seven states that have implemented this today.

And so that's why we also have uh labor unions as members and even local units of government that are members of the association.

Does that answer the question?

I mean it does, but I I think we had a hearing this morning on the budget for OLG generally, and the and Director Burnside talked about the competitive environment in this gambling world, and the lottery has atrophied in the face of all of these other different kinds of products.

And that's that's in some ways neither here nor there.

The question is, I think, to what extent are we greatly growing the number of people who are gambling as a as opposed to how they are distributed.

And that's why this question of uptake of l legal eye gaming amongst those who are engaged in illegal eye gaming or unregulated eye gaming, what does that look like?

Because if it if this significantly displaces unregulated eye gaming, it's one thing, and frankly, from my perspective would make sense.

If it is greatly growing the number of people who are gambling, it's a different situation.

And I see that you're you're itching to go for your microphone.

Um, I think we should maybe think about it in the context of sports betting, right?

We heard the same argument made around sports betting.

People are doing it illegally, so we should legalize it and we'll move them from the illegal market over into the legal market.

Except now one in ten Americans have placed a sports bet.

One in ten Americans were not illegally sports betting until we put it on everyone's phones, and we put it across every game in sports ever in this country, right?

It's it's in your face, and there are aggressive inducements and advertisements glamorizing the act of sports betting.

In fact, it's made out to appear that if you're not you're not sports betting, you are somehow missing out, right?

And so the same will exist in the context of eye gambling.

It's the sports betting operators, right, who are asking for this inclusion.

I'll now easily be able to buy my sports betting app if this were to legalize and then quickly migrate over to a slot machine or blackjack machine.

You're never going to be able to compete with the illegal market.

These are operators who have a flagrant disregard for our laws and for consumers for their own interest.

You'll never compete with them.

They just don't care.

If I may just add one quick note to that.

So I I think too, it just from a high level, it's it's inherent to conclude that if the illegal market continues to grow, as I mentioned before in 2024.

And the illegal market is continuing to grow, whether it be sports gambling or iGaming in those markets, in those seven markets that it's at, there that has to be additive if both are growing.

It can't be that we're losing gamblers on one side and adding them on the other.

If both channels are growing, either some have moved over and new ones have joined one side, or we have completely added to the pie.

Yeah.

I mean, maybe.

But it's it also could be that people frequenting brick and mortar casinos went down.

And it could also be that people who had used the lottery games and thought of that as their vehicle for their entertainment dollar have gone down.

So it isn't, I mean, it it isn't as night follows day.

And I do think, and I mean I think this is very important testimony.

So very grateful to you for your testimony.

Uh the illegal operators with no guardrails, with none of the kinds of things that are talked about in this legislation to manage the way in which things uh the gambling happens, they are more toxic than legal eye gaming and regulated eye gaming.

So I I hear the passion from the panel, and I and I get it.

I mean I will say in my family, there have been people who have, you know, long before the casino was in the in on their phone and in their pocket, got into trouble and needed to be bailed out because of gambling.

So I a hundred percent get that.

The question is, how do we deal with as council member Felder was talking about the fact that it is there and what do we do in that context?

Do we regulate it and try to put as many guardrails on as possible?

Or as you are warning, if we do that, did we just increase the pie?

It is not my goal to increase the pie.

My goal is to try to, if it happens, do it in a way that protects people as much as we can while giving them something that they clearly want.

So I'm speechified but wanted to respond.

And now I will turn to my colleagues for other questions, Councilmember Felder, if you have questions.

Thank you, Chairperson Fieldman.

And uh thank you to each and every one of you.

I truly appreciate uh your testimony.

Uh we've heard the argument that online gambling will continue regardless uh if the district does something or not.

Uh Brienne, you can start off with this question, and everyone else is more and welcome to time in uh if they would like.

Could you speak to what responsibility does the government have to protect consumers in an activity that is already wise for it?

Uh thank you for the the question.

I think that um one, right now it's illegal, right?

So the government's responsibility is to be addressing this, uh, using every means afforded to them to enforce and protect its constituencies from somehow getting the impression that this is okay or that they're protected or they're safe.

And by at large, as a country, we're we're not doing that.

We're definitely not doing that here.

I also believe that the government has an obligation that they they benefit.

They profit from gambling right now of several kinds, and they're not investing and educating, researching, preventing, or treating the harms that have come from those products and the harm from the products that are here illegally that you're aware of.

You know, to the chair's earlier points, these are questions that he offered about capturing the illegal market that I'd love to be able to speak eloquently to.

I believe the government has an obligation, if you're considering this policy to research it in an unbiased manner, if this would really address your concerns.

And if I may, I would say when we look at uh when we say enforcement in the gambling industry, that's a really broad bucket.

So there's a couple things specifically that that we should look at.

One is payments.

So choking off the money flow.

If you're a online payment provider that is also servicing the regulated legalized market or you know other other legalized markets, there can be uh enforcement mechanisms, because if you cut off the money, um obviously it will still find a way, but it makes it a lot harder.

It introduces friction, which is a term that you'll you'll hear a lot about uh in the responsible gambling world.

Second thing is uh blocking lists, whitelists, blacklist.

Uh there's a number of countries at a national level that will ask um ISPs to block illegal gambling websites.

Uh we don't do that a lot here.

We could, you know, LLG could certainly promulgate a list of sites.

It changes daily, but at least again, it creates friction.

And then last, um perhaps based on such a list, you can really look at it advertising.

So if if someone is advertising a knowingly illegal product to the citizens of the district, shouldn't we be able to try and take steps to prevent them from advertising or at least advertise in areas that are that are regulated?

So when so enforced there's a lot of other enforcement, you know, as less said, there's certainly the FBI, but I think when we think about enforcement in the gambling space, it's a lot less than the National Police Agency, or it's or it's a lot more, I would say, than than that here.

And I'm just kind of quickly answer your question.

So to your point, you know, you know, related to your point as well, uh, Mr.

Chairman.

Gambling existed and but existed on the fringe of society.

Okay.

What we're talking about here in the District of Columbia and across our country is this district and other state governments have made commercialized gambling the the marketing and advertising of it the public voice of American government.

It's what we advertise to the American people more than anything else.

We love them to use the term consumer protections.

Like state governments are a and the district, you're a partner with this industry.

The business practices that produce the most wealth for the district and and for states are the business practices that produce the most harm.

The Wall Street Journal investigate a report in 2024 to internal documents from one online gambling operator.

70 percent of online gambling profits come from one half of one percent of the users of the apps.

That's what regulated gambling looks like.

So it's the public voice of American government.

The last thing I'll say is is you put by but if there's an irreconcilable conflict of interest between the when when states promote this, is an irreconcilable conflict of interest because the business practices that produce the most wealth produce the most harm.

It's like putting Dracula in charge of the blood bank.

No, uh thank you for that.

Uh and and thank you for flagging opportunities to strengthen enforcement because these will all be very important and stop in the legal market and holding bad actors accountable.

Now you talked about um stronger consumer protections.

Could you speak to what strategies would you recommend to protect consumers?

Brianna?

I was gonna say I feel like that was pointing at me, sir.

Thank you.

Well, one, as I noted, some of the state evidence shows that um these responsible gaming tools that often the industry will speak to are not really heavily engaged upon.

Now there are some variances if we're talking about like uh self-exclusion, cool-offs, deposit limits, not to belabor the point, but it's hovering around 4%.

So if we actually wanted to protect consumers, incentivizing users to use the tools that are designed to hopefully help prevent or alleviate harms would be key.

We're not seeing that, right?

We aren't seeing KYC that are really keeping children off of these platforms.

So I think having a better handle on trying to get user engagement up with the tools that they tout as being part of that collective protective mechanism that exists within the regulated market.

But I want to also talk about advertising.

So there was this interesting report that came out, again, not mine.

Um it's from common sense media.

And it showed that 36% of 11 to 17-year-old boys had gambled.

But that's not even the worst stat.

The worst stat was that about 60% of boys had noted that they were getting gambling content on their social media feeds that they did not go seek.

So if you really want to talk about protecting or guardrailing, getting a control on who we're advertising to, allowing them to access these platforms.

We have to think about is it just about permitting the act of gambling, or are we actively promoting it to a demographic that we shouldn't be speaking about this to?

If I had given that stat about alcohol, people would feel a lot differently.

Thank you.

I'm sorry, within your testimony, you guys talked a lot about, you know, if the district legalizes our game and this would just expand.

Could you speak to how do you how do you justify allowing illegal operators to continue to profit with no accountability?

I don't justify it, sir.

With all due respect, I believe that it is incumbent upon DC to get better about enforcing it.

The data that I have seen from states such as Michigan, Pennsylvania, and New Jersey, not my own, are telling me that legalization has only grown the market.

I don't believe that it is okay for the DC residents to have access to these platforms unchecked.

I would agree with the industry wholeheartedly.

It is existential to individuals to have unfettered access to the illegal market.

But legalization all but guarantees the growth of that market.

And the only thing that I can weigh in on are policies that you're considering.

And as much as I'd love to give you a million guardrails from international precedence to safeguard a legalized market, I can't.

I'd love to.

I'd love to tell you that two-pound stakes are the answer here.

And slowing down the games is gonna all but ensure that you're in a kind of massive harm or that everybody's gonna move to the legal market and the illegal market goes away.

I too seek all those things.

One of my dreams by doing this work was that I'd be in a room over the next you know 15, 20 years or on public officials where they should and then there's a growing number of them, frankly, that are feeling this way, you know, and it's exciting to me.

But what I would love to see is public officials who are a passionate and disgust about the lack of enforcement by legal gambling.

The fact that on street corners in this city, people are selling $50 scratch-off tickets as a government program.

You know, the fact that your lottery and other lotteries in this country are exempt from truth and advertising regulations.

Like the idea this is a this is the district.

It was in this district where 20 years ago they had ran advertisement with Martin Luther King on lottery advertising, saying, live the dream, play the lottery.

Like, I mean, that's the that's what it looks like.

That's what we should be passionate about.

You your constituents are losing 150 dollars a minute to to a government program.

Okay.

And you'd reduce that, you're gonna reduce illegal gambling.

People can't pay their rent, can't pay their health care, and we're pushing people already losing 150 bucks a minute without even adding this stuff into the district.

If I may just say something more about that.

Um not everybody who gambles will suffer harm.

But we're talking about a policy based upon people who are breaking the law, about businesses that are here breaking your laws.

We spend trillions of dollars a year and buying drugs off the streets.

I don't hear anybody talking about whether or not we should legalize fentanyl, because that's going to be of the way to address the drug crisis.

I'm all about giving people the option to gamble if that's what they want to do, and not everybody will be harmed.

But as a proud American, I don't know if we should make our policies based upon bad actors.

Uh thank you.

Well, thank you for that.

And that concludes my questions for this panelist.

Thank you, Councilmember Henderson.

Thank you.

Um thank you all for your testimony.

I have a couple of follow-up questions.

So right now you could place a bet on pretty much anything uh right from your phone.

Uh I could place a bet on how many times Matt says, um in a hearing, I could place a bet on how many posts will be done.

I don't know, if we're gonna drop a bomb that day, any number of things.

So I guess my question to start is why is I gaming any more addictive than polymarket or calci or any of these other um things that are already out there.

And that's for anybody.

Yeah.

I mean, I'll start and be others here can probably with the public health experience can speak to even more depth to that.

But like what you're doing, you're taking a highly this is gambling fentanyl online gambling.

You literally are playing the money the moneymakers are like games like online slots where you can play them like every five seconds.

You have you you know you can just push money right in, it's all seamless, you know, with you know, from your bank account right into these apps, and you literally can play 24 hours a day, seven days a week, you know, right from your bedroom.

So you have a tough day at work, you're going through a divorce, you know, you just lost your spouse, you know, to death.

Like you need to escape from life, you get on the the apps, and you can lose every last dollar that you you have and go into tens of thousands, hundreds of hundreds of thousands of dollars of debt like in in a month.

No, I hear you.

I don't think that's the same.

That's what makes it so.

And they'll cut you off.

The states, because the states are making money from this.

No one steps in and cuts you off.

What cuts you off is your access to cash.

Once you run out of money, that's when they cut you off.

Okay.

But there are casinos that are open 24 hours.

So I think maybe to your question, um there's well, prediction markets or sweepstakes or other forms of illegal online gambling, maybe legally uh different.

They are psychologically, emotionally, behaviorally, and and if you will, addictively the same.

So peop people with gambling problems see no distinction or difference.

In the policy space, we see no distinction or difference.

There's arbitrary legal distinctions, which I'm not going to opine on, but from that, from your perspective to your question, they are the same.

There's no research that shows they're more the prediction markets, for example, are more addictive.

There's certainly no research that shows they're less addictive.

And as we talk to people in the recovery community, it seems pretty clear.

I'm asking this question because I think one of you testified that like eye gaming is the most addictive form of gambling, which I'm trying to understand.

How is it more addictive than everything else that is also accessible on the phone?

I watched a basketball game last night.

I got like six offerings of DraftKings.

Yeah.

Like with players.

So I'm not going to defend the prediction market or any other type of gambling.

But a few things of note with eye gambling.

In particular, um, the speed of the games can often be faster than what you would find or experience in a traditional casino.

Um there is some data out of the UK that study the risk correlation of problem gambling with something known as live dealer gambling, where the brain thinks that it's somehow a little bit safer or less risk because of this supposed person in front of you, but actually it's someone being streamed in from somewhere else.

There are neurological factors that go into this.

Now, put that in combination with the fact that certain states have allowed and countries you to do eye gambling with a credit card, for example, or gift cards, right?

So now you're increasing speed and the type of payment matters, and then put on that aggressive ads or inducements.

Come gamble, give you two hundred and fifty dollars.

You're chasing losses, you're betting more and more.

It is a it's a combination of not only the design, but the deployment of the products that are we're seeing lead to the increased rates of harm.

Okay, I hear you on that.

Um I you would maybe you wouldn't know this.

I chair the health committee, so I'm I'm familiar with this and also familiar with we had been having uh appropriation specifically for gambling addiction, and this proposed budget um cuts that funding.

Um so we're I I know we have a problem.

And now I also have proposals to increase uh access, but I'm not sort of dealing with um what is very real in terms of sort of the addiction space.

Um you all spoke in uh the testimony that there, I think what, eight states that have already done this.

I don't know where they are, and so they're varying degrees of implementation, but what have been some of the challenges or not that have arisen.

Yeah, so seven states have enacted it and implemented it.

Um New Jersey, Michigan, Pennsylvania, Connecticut, Rhode Island, Delaware, West Virginia.

Yeah.

Um Maine recently signed it into law, but it is not up and running yet.

Okay.

Um I I think the challenges that we're seeing in those states are are much what we talked about today.

We I think we referenced New Jersey, Pennsylvania stuff we're seeing in Michigan.

So uh there was something more specific that you want to see from one of those states or some of the challenges.

No, I mean I just in general, right?

Like this is one of those situations where DC isn't necessarily a pioneer.

So you like to learn from other states in terms of what they've kind of seen.

Um and maybe some of the other witnesses will get to it, but like, you know, from a drafting standpoint, this is a pretty meaty bill.

And um I know that you all are opposed in general.

Well, Keith is uh we'll sort of see.

But it would be helpful, I guess I'll say this for the other witnesses.

It would be helpful to get feedback in terms of the actual how they put this or how this is being proposed to be deployed here in the district, right?

Um and I'm saying that from the uh the safeguard standpoints of I I don't actually know what the safeguards look like in terms of the internet in the Wa Wawa, like uh I tend to agree that in this type of situation, unless there's a aggressive enforcement, the illegal websites will continue to exist.

Um with VPN and other things, right?

Like people they find a way to get to the website that they want to get to, regardless of whatever safeguards that we kind of put in place.

Um yeah.

Well, I just quickly uh safeguards.

We know we use that term a lot when it comes to states in in the district promoting gambling.

The New York Times reported that 70 to 80 percent of state lottery revenue comes from 10 percent of the lottery users.

For brick and mortar casinos, up to 60 percent of uh casino revenue comes from people who are addicted to to the casinos, addicted to casino gambling.

But as a lot as the as the Wall Street Journal reported earlier, 70 percent of online gambling profits coming from one half of one percent.

Like that's with so-called safeguards in place.

Like there are no safeguards because the business practices that produce the most wealth for the district are those business practices that inflict the most harm on your constituents.

I hear you on that.

And then there is this other piece called free will, right?

And so when I'm talking about safeguards in some cases, I'm talking about how do I ensure that young people don't get to it, right?

So I know that some states have said 21 and up.

Some other states have said 18 and up.

This is the type of stuff that I'm trying to figure out on on that front.

Um I think the jury is out on if is this something we could figure out in the next three weeks.

Probably not, but you know, I'm just a member of the committee.

Uh that's all.

Um so that's I'm trying to like g get into sort of um those pieces.

I hear you.

I I I am I'm not um suggesting that your testimony is incorrect in some ways.

I think um last week there was just uh announcement uh the quarterback for Texas Tech has to missing up on the season is having to go into um treatment for gambling.

You're the quarterback.

Right?

So like it's there, and I hear you, and I guess I'm just trying to understand.

Total elimination is not realistic.

So what else should we be doing?

I I think uh what what we found, at least in in watching the seven states that have implemented this and and watching the sports betting market, uh it's frustrating that it hasn't seemed like the safeguards have caught up to the technology.

And I think you're gonna find that as you dig deeper into the set.

There's there's no level of safeguards that are going to keep up with this technology to be the most restrictive or more responsible gambling uh effort that you can have in a bill like this.

Okay.

I don't want to give suggestions or guarantees about those guardrails because there's no guarantee they would help.

But things that you point out.

This is 21 plus, um, which other states have done.

So these are class three games, right?

If I have to be 21 to go in a casino, if you're gonna do this, you should probably be 21 to get it on your phone, right?

Um but states that have embarked upon this journey have found that their rates of problem gambling have increased.

They're pretty high.

Um New Jersey has recently rolled out some regulations, which Mr.

White spoke to, but whether or not they're effective and driving down the rates of harm and preventing further harm is yet to be seen.

Pennsylvania actually passed a bipartisan resolution to study the social and economic implications.

A very jarring stat that came out of that Penn State report I noted found that 20 upwards of 20 percent of mixed mode gamblers, so these are people who might go to a casino and play online, have a gambling problem.

This would be some of the highest rates in the world if this is true, and I have no reason to doubt Penn State gave us wrong data.

So addiction, percentage of revenue from those addicted is a very real concern for the district or any state that would consider such a policy.

And just real quickly, in my written testimony, I referenced the National Council on Problem Gambling's Internet responsible gambling standards.

That's the baseline that every jurisdiction should use.

OLG's got a good start, they don't meet all of those standards yet, but in each of the seven jurisdictions has a different mix.

But there's there's a template out there.

Okay.

Thank you.

Thank you.

All right, thank you very much.

Uh councilmember Felder, do you have more questions?

You're done.

Uh I want to thank you all very much.

I I do I'll make one observation.

Some of the part of what makes this hard is some of the things, the guardrails that you're talking about, cooling off periods, the way in which payment is done, the amount that you can bet in different all of those kinds of guardrails may make legalized e gaming less competitive with illegal eye gaming, which is what we want.

And yet that's attention that is out there.

There's also the data about where there's legal I gaming, there's evidence of higher levels of addiction, but that can also be addiction that is revealed because there is legal eye gaming where it existed but had not been exposed because it wasn't the there weren't the references to responsible gaming.

So it this is a tough one.

Very grateful for all of your testimony, and we will now turn to our next panel.

Thank you.

Robert O'Connor.

John Pappas.

And Michelle McGregor.

Okay, Mr.

Scalf, when you are ready.

Thank you.

Chairperson Fruman, Councilmember Henderson, Councilmember Felder, thanks for your time today.

My name is Matt Scalf, and I am a senior government affairs manager at DraftKings.

I am here on behalf of DraftKings in support of B 26656.

DraftKings Incorporated is a digital sports entertainment and gaming company with products that range across daily fantasy, regulated gaming, and digital media.

Headquartered in Boston and launched in 2012, the company operates iGaming pursuant to regulations in five states and at Ontario Kenda under its draftKings brand, and pursuant to regulations in four states under its golden nugget online gaming brand.

DraftKings is committed to being a responsible steward of this new era in real money gaming by developing and promoting educational information and tools to help all players enjoy our games responsibly.

Nearly two years ago, Council passed legislation to modernize the district's online sports wagering market.

Soon after, DraftKing Sports launched in the district and has contributed nearly 11 million dollars in tax revenue while providing a safe, responsible gaming environment for district residents.

The bill represents a natural next step, building on the district's success by joining eight states and authorizing iGaming as part of the district's existing, well-regulated gaming framework overseen by the Office of Lottery and Gaming.

Importantly, eye gaming is already occurring in the district through unregulated operators.

These entities generate $18.8 billion annually nationwide without paying taxes or adhering to basic player protections.

For the district, this represents an unrealized recurring revenue opportunity estimated at $500 million over the five-year financial plan.

In addition to the revenue opportunity, regulating iGaming positions of district to safeguard residents by codifying responsible gaming protections.

DraftKings supports such protections, and our responsible gaming team is a leader in this space, focused on promoting responsible play and advancing best practices through our work with the responsible online gaming association.

In the district today, we already offer responsible gaming tools for sports wagering, such as our budget builder, deposit limits, time limits, cooling off periods, and self-exclusion.

Under this legislation, these same tools will be adapted for iGaming and made available to players to help them game responsibly.

DraftKings has a strong record in the five iGaming states where we operate, delivering both meaningful tax revenue and robust player protections.

We look forward to the opportunity to bring that same model to the district and respectfully urge the committee to support the bill.

Thank you again for the opportunity to provide testimony today.

I would be happy to answer any questions the committee may have.

Thank you very much.

Uh Mr.

O'Connor.

So I can see the light.

Thank you, Mr.

Chairman.

Uh my name is Rob O'Connor.

I'm the Vice President of Government and Industry Affairs for BetMGM, a joint venture half-owned by MGM Resorts International, who, of course, operate nearby MGM National Harbor, and I've been a resident of the district for over 30 years.

Since the launch of mobile sports betting on June 10th, 2021, BedMGM has invested more than $65 million in the District of Columbia sports betting market, and our business has touched over 50,000 unique customers.

Over these five years, our employees in the district have participated annually along with our nationals or Washington Nationals partner in their Turkey Palooza, distributing over 900 turkeys and 900 winter hats and gloves just before Thanksgiving.

Additionally, BedMGM annually supports the Cherry Blossom Festival and the DC Pride Parade.

The last time me and my sports betting colleagues, my sports betting alliance colleagues testified before the Council almost exactly two years ago, we came forward with the proposal to open up the D.C.

online sports betting market to a competitive mobile licensing framework.

We speculated then that if DC opened the market, it would likely experience rapid tax revenue growth.

The D.C.

Council passed that bill, and the tax revenue increases have followed.

Similarly today, I appreciate the opportunity to submit testimony in support of Councilmember Felder's bill, the Internet Gaming Consumer Protection Act of 2026, and would like to thank Councilmember Felder and Chair Fruman for their leadership with this timely conversation about iGaming.

iGaming markets around the country have experienced impressive success in generating tax revenue for critical state programs by structuring a market where multiple iGaming operators can offer their products statewide without geofencing restrictions.

This type of framework recognizes two fundamental consumer dynamics.

One, people are increasingly seeking out entertainment through digital means, and two, they like to have options to compare game products, game types, betting odds, loyalty rewards, et cetera, and ultimately use what they believe to be the best platform for their gaming interests.

Speaking as a company with significant online and physical gaming verticals, I want to highlight the value of the omnichannel experience.

Based on extensive experience operating around the country, time and again, our company has observed that markets perform at their best by maximizing consumer engagement when iGaming is introduced to complement in-person betting experiences.

You do not need to look far to see the revenue success of competitive iGaming markets.

Neighboring states, Pennsylvania, West Virginia, Delaware, and further New Jersey have each had competitive iGaming markets for several years and have experienced significant year-over-year growth in tax revenue.

BetMGM strives to delight our customers who gamble responsibly.

We take responsible gambling issues very seriously and look forward to working in partnership with the district on standing up a safe and responsible iGaming market.

We continue to develop protocols that encourage responsible gaming on the front end and use a series of markers to identify when a player may be exhibiting signs of problem gambling.

We offer messaging and interaction with players, self-exclusion lists, and wager limits as examples of ways that players may limit their engagement.

And when we do identify a customer with a potential gambling problem, we refer them and pay for their intake interview with a trained professional gambling addiction counselor.

From an operational and compliance standpoint, BetMGM and others can quickly enable a mobile district-wide iGaming platform, bringing iGaming to D.C.

now will rapidly increase revenue to the city.

Thank you, Mr.

Chairman.

Thank you for your testimony.

John Pepis.

Thank you, Chairman Furman, members of the committee for the opportunity to testify and thank you, Councilmember Felder, for your leadership on this bill.

My name is John Pappas, and I represent the iDevelopment and Economic Association, a D.C.

based trade association representing uh the online gaming industry.

I myself am a D.C.

resident for almost 30 years, and I have two young children who are in the D.C.

public school system here in D.C.

I want to start with the point which has already been made extensively and I think really hit on the head by uh the chair when he said the fact, what do we do with the fact that it is here?

It is here.

Online gambling is here today.

Some data that was presented in my testimony shows that over a hundred thousand visits to illegal offshore sites happen from within the District of Columbia, not once a year, every single month.

100,000 visits to offshore websites from the District of Columbia.

Tens of thousands of ads are delivered not only to minors but to adults here in the District of Columbia every single month.

In fact, on my phone, as I was sitting there, I typed, can I play online slots in D.C.?

And immediately I was driven to several websites saying these are the most trusted websites in D.C.

to play online slot machines.

Not only that, on my way here, I was listening to one of my favorite podcasts hosted by a DC radio personality, where he advertises for one of the prominent offshore online casinos, encouraging people to place bets, earn deposit bonuses, et cetera.

So DC is happening, eye gaming is happening in D.C.

today, as it has been clearly identified.

And these sites, as we've we've also discussed, have no age verification, no responsible gaming tools, no consumer protections, and they generate this much revenue for the district.

Zero.

When you think about it, what's what Chairman Felder, I'm sorry, what what what Councilman Felder has proposed is very different than what is happening today.

DC and other governments across the country have tried to deal with limiting device and how people applying safeguards to digital content online.

So in DC, they are limiting devices in school, which I think is a great thing, but it's not a comprehensive framework to really control and govern behavior.

What Councilmember Felder is proposing proactively puts those guardrails in place before a legal product is offered.

The regulated gaming industry supports strict age and identity verification.

We support geolocation to ensure compliance with local laws.

We support tools that let consumers limit their time and their spending and require real-time monitor to identify risky behaviors.

No other industry comes to policymakers asking for this level of built-in consumer protection.

Yet we stand here before you today saying regulate it, make it safe for the consumers of the district.

And these aren't theoretical tools, as they've discussed.

They're already in place in a number of jurisdictions, and they're effective in controlling behavior and ensuring that layers have a safe and regulated place in which to enjoy this recreational activity.

And let's be clear, this isn't happening in a vacuum.

Not only is it happening in DC, other states are actually looking to license and regulate this.

Cities, states of Maryland and Virginia, we're actively involved in passing legislation and advancing legislation this year.

We suspect that they will advance those legislation soon.

And we want to make sure that DC is held up is held competitive with those neighboring states.

So the choice for the council is pretty clear in my view.

And as a district resident and a parent of two young children, we can allow the current unregulated market to continue without any oversight, or we can establish a safe market that protects consumers, generates revenues, and ensures accountability.

I uh hope the committee will support this important piece of legislation.

Thank you for your testimony, uh, Mr.

Papas.

Uh Michelle McGregor.

Yes, hi, Chairman.

Ooh, if you'd push you button.

Chairman Fruman, uh, Councilmember Felder, thank you for this opportunity to testify today.

Uh my name is Michelle McGregor, and I'm a I'm proud to call DC home for nearly 15 years.

And you know, I think maybe unlike some of the other previous panelists, uh, I have lived here and I've seen firsthand how DC deploys government programs that are funded by tax dollars and creates opportunities for residents to enjoy the city but also be safe and to have access to critical public services.

Um I'm here today, though, not as a citizen necessarily, but on behalf of the Sports Betting Alliance, uh we are in strong support of Council Member Felder's proposal to legalize eye gaming.

Uh the SBA members, many are on the panel today, but are FanDuel, DraftKings, Fanatics, Bed 365, and BedMGM.

Uh our members are proud to offer licensed sports betting in the district, and we hope to have the opportunity to offer eye gaming as well.

I I'm gonna go off the cuff just because I think you've heard a lot of the points.

I think um I think you're right to just really ground the conversation on what is the right public policy for the district.

And um I I fundamentally believe, having worked uh in gaming issues across all 50 states, that um, you know, I've seen data, you've probably seen a lot of data over the past couple weeks that will tell you one thing or another.

Uh but I fundamentally believe, from what I've seen, not only in the U.S.

but in other jurisdictions in the world, that especially with the rise of technology, uh, it's important to meet consumers where they are at and to recognize that if in fact there is an illegal market which, according to the American Gaming Association, has been growing at a 21% rate actually over the past couple years in the legal online gaming.

It's important to say, okay, this is the situation.

How are we going to do this safely?

Um I think legalizing eye gaming in DC is the right public policy approach.

Um, and really it doesn't actually introduce something new to DC.

Not only is it here illegally, but um similar forms of eye gaming is already offered through iLottery in DC.

And last I checked, the lottery is doing a wonderful job regulating that form of gaming, and I think we'll continue to uh impose similar uh regulatory approaches for iGaming.

Um thing I want to highlight uh from the last testimony remarked on Michigan, which has had an eye gaming uh market for five years or so.

Uh they they remarked that there have been several season desist uh letters being issued to illegal operators in recent history.

I think the thing that Michigan missed a few years ago was that they did not close a loophole for illegal sweepstakes and other um unlicensed gaming operators.

That left the door open for these companies to still enter a market and compete with the regulated market, though I will say it's been they've had much less success since a regulated market was established in Michigan.

But Councilmember Felder, you captured this problem in your bill by closing loopholes and in and empowering the Attorney General to have the enforcement capabilities and hopefully the resources to really eradicate an illegal market.

Um the other piece I wanted to highlight was um again, different opinions, but we've seen growing bodies of evidence created from the regulators of those jurisdictions like Ontario and New Jersey and Michigan that that literally articulate that they the regulated market is largely comprised of individuals who are either seeking out legal eye gaming in other jurisdictions or we're operating in the illegal market.

Meaning legalizing eye gaming does indeed help migrate consumers to a regulated market.

And that comes with immense consumer protection requirements and safeguards and coordination with the state and with the regulator to ensure that we identify people who are gambling outside their means and either curtail or in a worst case scenario, but beneficially, uh prohibit them from ever accessing legal gaming.

You know, I don't think it's fair for any government to ever you know uh completely eradicate an illegal market, but you can impose regulations that create friction and can help provide resources to consumers.

Um Connecticut is a great example where um helpline uh calls to the helpline rose since they legalized both sports spending and eye gaming, but that was not a reflection of rising addiction.

That is a reflection of people now realizing that there are there are resources.

There's a phone number to call to seek help.

Um the National Council on Problem Gambling has said that um calls to helplines is not a barometer for problem gambling or addiction.

It really is just again a lifeline to individuals who may need it.

Um that that dynamic is true across other states with legal markets.

So um I'll pause there in the interest of time.

Um happy to answer questions.

Well, thank you very much.

I I do have some questions coming out of your your testimony, and I'll have questions for others on the panel.

The Michigan phenomenon, am I to understand that there was a loophole and they closed it, and that's why the cease and desist orders have been done?

They have since followed up with legislation to um that m mirrors what uh the council member is proposing to uh you know consider that activity illegal and then uh you know susceptible to cease and desist letters.

So if I'll add uh enforcement without legalization is is is basically toothless, right?

Essentially what you've done is you've enforced, but consumer demand is still there.

So consumers will continue to find products that are even further deeper onto the web than that which was maybe even more easily accessible, but they will find a way.

So when you have uh enforcement alongside a legal market, that is when it is truly effective.

In fact, the the Michigan Attorney General's office spoke at a panel here in Washington, D.C.

this past week, and they testified that more than 75 percent of the people that they've issued C and Ds to have complied.

Seventy-five percent.

Many of these are based offshore companies.

So that's an impressive number that you're having 75 percent compliance.

And that's because those companies know they have to comply because consumers have a legal market in which they can go to Okay.

Uh but I just was trying to understand the phenomenon that had been cited in so there was the reference in the earlier panel a large number of cease and desist orders, and you're saying that those are from having closed a loophole that we close in this legislation.

Yes.

They they my understanding was they were trying to suggest that legalizing a market does not eradicate an illegal market.

Um we've seen data that says the opposite, that when given an option, consumers transition to a legal market, but uh pairing that with legal like closing legal loopholes and enforcement action was something that Michigan missed.

So when they followed up five years later, that has now since accelerated the transition from you know eradicating an illegal market.

Okay.

Um you also cited data of some percentage of the participants in the legal market had migrated from the illegal market.

Was that Connecticut that you were what what we were saying again?

The the data from Connecticut Connecticut is just um consumer engagement using helplines for you know reaching out for any problem gaming.

But on the consumer migration data, um, there have been studies performed um, one specifically that um surveyed individuals in states with legal eye gaming, Michigan and New Jersey, and then residents in North Carolina and Illinois.

Just a variance of of jurisdictions.

And across across those four states, the consumers who were participating in legal markets said that they had either previously been participating in the illegal market or traveling to jurisdictions with legal eye gaming to play.

So the composition of a legal market was made up of people who were already playing by and large, anywhere from 60 to 90 percent of individuals.

Okay, I think I believe I've seen this.

This is spectrum or something like that.

Uh yes, exactly.

So uh and for those who have a different view, if they have a reason why they think that the data isn't correct.

There is a lot of data that is out there and claims that are made in different directions, and we are trying to make sure we fully understand it.

We do have I do have the report from Spectrum.

Uh if there's somebody who has a critique of the report from Spectrum, please share it with us.

Uh the reference to the Attorney General of Michigan and her testimony, uh if you if you could send that to us.

Uh I think it was uh from the from the Michigan's uh office.

They were they were here speaking at a panel last week in in Washington, D.C.

So I'm originally from Michigan.

It does it but uh and in and I think the world of the Attorney General, the current Attorney General of Michigan.

So I'd be curious to see what it is that she is saying on this topic.

So if you could uh if you could share that with us.

I think you kind of covered this.

I mean, one of the things that people have talked about is guardrails.

And um of it is slowing the speed of play, setting caps on daily wages, establishing monthly loss limits tied to mandatory cooling off periods or banning credit cards as a source of funds.

For those of you who are in this space in the sports wagering space, it sounds like uh you are doing some or not, if not all of those things.

Um are you doing if you can one by one say whether you're doing those things and whether or not you would expect to do them or open to doing them in the uh in a legalized iGaming market?

Sure.

So uh first of all, with regard to credit cards, DraftGames does not accept credit cards for online sports betting or iGaming in any jurisdiction.

Um so that's that's first and foremost.

Um we do not want people playing on credit, and we do not assert that as an option.

Um I mentioned in my testimony uh various responsible gaming tools that people have access to.

Um there is some reference earlier about how often that's taken up.

Our internal data Draft Games is that 52 percent of our users do use a responsible gaming tool, at least one on our platform.

Um we're working every day to get that number up.

So we're at 52 now.

Our goal is 100 percent.

Responsible gaming is for everyone, um, not just folks that may have an active responsible gaming challenge.

We want everybody to use those tools.

Um something we did this year for the first time to encourage people is we had a Super Bowl ticket uh offer.

So if you uh set in our app a responsible gaming tool and started using that, we would enter you into Raffle for a Super Bowl ticket.

Uh so folks were very excited about that opportunity and and we got some good uptake from it.

Uh we're going to continue doing things like that until we can get you know our our responsible tool usage, you know, as close to 100 percent as we can.

Um so right now we're at 52 and and growing.

And Mr.

Chairman, on behalf of MGM, we've been doing this in Nevada since the beginning of legalized gaming in the country.

And with respect to the um the different tools that we use, we've even gone one step further, and and they had their Super Bowl uh matter.

We we have we we we took an ad we made an ad, someone someone earlier, one of the critics talked about our you know, the advertising and the the plethora of ads.

You still see more pharmaceutical ads and insurance ads than anything else, but they had their numbers and whatever.

So um we went one step further, and we're actually using one of the greatest hockey players in the country, a guy named Connor McDavid who plays Fredminton.

He does an ad for us, encouraging our users to use the responsible gambling tools.

So as Matt talked about at DraftKings, the percentage is 50-something, people who are using them.

We're all trying to get people to use these tools more frequently.

We're used we're utilizing you know celebrities to get them to to get people to do that.

And the goal is, you know, this is a new industry.

This is this industry was legalized in 2018, right?

Uh sports online sports betting, now I gaming.

This is all new.

Responsible gambling tools are new to the states that are legalizing.

So as we get closer to as we as we get more states and and more people using them, they'll become more commonplace.

Okay.

Um If I could add just on the just the member companies on the whole, because there are three that aren't represented here in the sports funding lines.

Across the companies, there are you know, roughly 200 individuals whose full-time job is to uh promote responsible gaming and to curtail problem gambling.

Um above above and beyond that, they the companies invest millions and millions of dollars in addition to whatever tax revenue is appropriated to problem gambling funding because it is it is paramount to the industry, and I think it's truly a you know a cornerstone of what what differentiates the legal market from the illegal market.

Um we are here to be a good partner of the state or the jurisdiction because we want to be successful in giving consumers a form of entertainment.

There is words like profit thrown out on the last panel, and like that's not the goal of gambling.

You know, and in these companies, through their responsible gaming messages, remind consumers that this is supposed to be for fun.

This is supposed to be a form of entertainment that can sustain your interest, you know, for years, not something where you are looking to pay rent or you know, make a living off of.

So I think that distinction is really important.

Just quickly on the advertising.

Um I want to credit the campaign for fair gambling for highlighting the exposure that miners have to advertising on social media.

To be clear, those advertisements are from illegal operators.

Our companies uh adhere to the strictest marketing standards that are promoted by the American Gaming Association, and uh do not target marketing mediums that specifically speak to minors and people underage.

So again, I think it all just plays hand in hand with as you know, as a jurisdiction sets up regulated frameworks, um, you know, the exposure to minors ultimately is going to be less.

And it might not seem that prevalent because a lot of us probably aren't on TikTok a lot, but like you know, this is where these young people are getting, you know, they're like that's where they live.

And um we've seen actually that just the marketing spend by legal operators diminishes because many cases are offshore companies.

They have the whole world to to market too.

When you legalize it, they leave.

All right, thank you very much.

Puzzle a little, because I I don't think I get these advertisements.

I don't know why that sounds like everybody else does, but I don't.

Um Mr.

White in his testimony talked about uh sort of a code of conduct and that a number of the things that are in that code of conduct uh are captured here and some of the things are not captured here.

I don't think I'm gonna do it.

I'm not familiar enough with the code of conduct, but between now and coming out of this, I'm gonna want to understand what's in that code of conduct that's not in what we're talking about here.

And um because I do think and Ms.

McGregor, I hear you when you say in the on the question of profit.

That's not what it that's not what it's all about.

But but frankly, I mean these are businesses, and they're in it to make money.

And we are regulators and the Office of Lottery and Gaming are regulators, and it's uh there is the um There's a statue outside of the Federal Trade Commission of the guy holding the horse, and that's the Federal Trade Commission trying to harness the unbridled energy of capitalism.

And it's our role here.

And so guardrails are very important, and we shouldn't kid ourselves that the folks who are in this business, they're business people who are trying to make a return for their shareholders and owners, and so we all play a role here, but profit also plays a role.

Sir, I think to put a finer point on it is that profitability is about sustainability, right?

So ensuring it's not a quick dash to make profit, it's to ensure that you have a business that's sustainable and your business is sustainable by having a responsible gaming program that encourages healthy behaviors and responsible play.

And that's why the companies are invested so deeply in that.

Wonderful.

Uh councilmember Felder.

Uh thank you, Chairperson.

Uh Matt Robert.

John, Michelle.

I appreciate your testimony.

Um your expertise.

Especially as you guys deal with agam and markets across the country.

Um, one of the strongest aspects of this bill is that it focuses on uh consumer protection.

Uh something that does not exist in today's um illegal market.

My question in each of you can answer if you choose to.

Uh what consumer protection provisions in this bill do you believe are most impactful and where will we strengthen them further.

So uh I'll say first and foremost, the thing that sticks out to me with the unregulated market is a player doesn't even know if they're going to get paid out if they if they do win, right?

So the number one thing here is having the Office of Lottery and Gaming and then also the enforcement provisions uh that the bill puts in for the AG that provides a regulatory framework uh where if somebody doesn't get paid out or if there's some sort of issue, you know, with with uh with a provider with an operator, uh they have recourse.

Right now, there's no you know, there's no recourse if somebody is playing in the illegal market and and an unregulated platform decides not to pay them out or just to shut down and walk away with the money.

There's nothing they can do.

Um a regulated system, they can go to OLG and say, hey, I've got this issue, and and OLG can come in and advocate on their behalf.

So you know that's we talked a lot about responsible gaming today as well, but um, you know, that that's also a portion that that needs to be considered that there's recourse for consumers under this bill.

And just a follow-up.

Uh should the bill require a minimum standards uh for dispute resolutions or player fund protections?

Yeah, that that's exactly what what I'm referencing, yes.

So you know, it it provides the lottery with a dispute resolution process um that we would be held to as legal operators, and we're actually already held to that standard for uh sports wagering.

It would just be expanded to encompass iGaming as well.

Um this bill takes an important step back, dedicating funds and requiring the responsible gaming tools.

Uh but we've heard concerns about whether the level of funding is sufficient.

Uh my question to each of you, uh, how can the district strengthen this responsible gaming framework to ensure we are proactively addressing problem gambling?

I'll just go quick.

I remember from when I testified in sports betting.

There's an issue here in DC where the funding is appropriated, but then it can be swept, I think, by the mayor.

And that has happened to some of the responsible gambling funding in the past, and that is not something that we support.

That is not something that we advocate for.

In fact, when it happened in the district, I remember being on calls with Keith White from NCPG saying, hey, we've got to work on this and make sure that we educate council members and educate the mayor about not eliminating that funding.

Um again, it became it's a bureaucratic battle that goes on DC.

I'm not exactly aware of it, but mental health versus OLG, and I don't want to get involved in that fight, but there's something going on where the funding is being swept, and therefore that funding isn't being properly allocated to gambling addiction services, which we advocate for and want in the bill.

On behalf of our organization, we would certainly support an increase in percentage that goes towards uh problem gambling services and treatment.

Um obviously encouraging uh the growth of the of mental health service providers, uh so treatment providers.

There's uh there's a lack of of treatment providers across the U.S.

So developing programs within the District of Columbia that encourages people to get into the field of of promoting uh of treating uh gambling disorder, I think would be really valuable.

Uh and then finally making sure that the regulators have the flexibility to permit very innovative ways in which to address problem gambling.

This is a a an evolving field of of digital entertainment.

And so making sure that uh we're using uh responsibly advances in AI and other tools to ensure that uh we can intervene on problematic play very quickly and efficiently in a way that helps the the end user, the player.

Uh thank you for that.

I know Michelle, in your testimony, you talked about how iGaming should be fun.

And then um, you talked about responsible gambling.

Could you from your own definitions describe the difference between responsible gambling compared to problem gambling?

Sure.

I you know I I think responsible gambling means that it at its core that uh a consumer is interacting with a platform in a way that is actually entertainment.

And um, you know, similar to how you might budget other forms of discretionary spend to um to be in touch with what you think that limit is for you based on you know your financials and then and sticking to that plan.

And I think you know we all you know, I think sway from some of our financial plans sometimes, but that's why these companies um they have against personnel, they have tools, they have um checkpoints that if um you know I think that's the the benefit actually of an online gaming experience is uh these platforms get to know a consumer's general tendencies and if there are anomalies in their in their engagement, that that by regulation and just by our code of conduct that triggers um a friction point to kind of check in and and you know make sure that people either pause their play or further assessment is done.

So I think that that is our you know, our baseline, and then of course, working with experts in the field, both in-house and externally to ensure that uh we are properly addressing anything that goes beyond that.

Uh well, thank you all.

That concludes uh my questions, Mr.

Chairman.

Thank you.

I have a a few more questions, so I'm gonna hold you for a bit.

Uh Ms.

McGregor, you had said that the companies in your alliance spend millions of dollars on responsible gaming.

I wonder I wonder if the different companies can speak to what your current spend is annually on responsible gaming initiatives and uh and advertisement of those sorts of resources.

I don't have a number, unfortunately, Mr.

Chairman, but as I said, I I refer to this uh hockey commercial that's you know widely played and it's in our rotation of all our advertisements.

It's with Connor McDavid, and it's him and his friend literally saying, hey, these tools, they're pretty cool, you should use them.

And that's you know, that's advertising money that's being spent on responsible gambling, not being not not on an inducement or something to you know make someone gamble more.

Thank you for that question, Mr.

Chairman.

I I don't have that exact spin number in front of me either, but I'm happy to follow up with uh with the committee after the hearing.

Uh what I can say is that you know we've we've also done advertisements.

We we had a national advertisement uh featuring the song, The Gambler by Kenny Rogers.

Um that was focused on a responsible gaming message uh first and foremost.

Um our responsible gaming team is 50 people strong today and scaling.

Um over the last year uh we were able to create 1.3 billion impressions with the public for responsible gaming.

So that that gives you some sense of the scope.

Um I would have to follow up with uh with the dollar amount though.

Um the other thing I would add to what Michelle just said is uh the DraftKings responsible gaming motto is it's more fun when it's for fun.

Um so that's you know that's first and foremost for us positioning ourselves as a fun product, as an entertainment product, uh part of a personal entertainment budget, just like going to the movies, going out to eat.

That that's what we're looking to be a part of and you know, making sure that everybody's playing within that budget.

I think from a quantitative standpoint, the American Gaming Association in the past year did a um economic analysis of the investments on in responsible gaming across industry.

It includes casinos as well, but I think the number was close to half a billion dollars spent in in a calendar year on responsible gaming efforts.

So that that that's the private dollars are not taxpayer um appropriations that are going to anything from the advertising spend, the education, the treatments, and uh supporting you know groups who specialize in in services.

Half a billion dollars nationally for a year.

I mean I will say I was I was a kid when the Certain General's report came out on smoking, and there was a period in which there were I mean I grew up with cigarette advertisements, and then all of a sudden there was cigarette advertisements and then also anti-smoking ads, and I had misunderstood how it had operated.

I thought the cigarette companies had to pay for it, but I think it might have been the networks had to do that.

But I am and this applies more broadly, uh I'm looking for a way to link advertising for gambling spends on advertising for gambling to required contributions to responsible gaming.

Because on the one hand, this is a way where you're encouraging people to do it, and then I worry about that, honestly.

And to the extent that we allow you to encourage people uh should we require you to warn them in the same kind of way that that cigarette dynamic operated when I was a kid.

Uh I'm not asking for you to agree to that now, but I'd invite you to think about that, because I do think conceptually there is a link between your being out there advertising and the need to protect people.

Um what is the American Gaming Association responsible marketing code for sports wagering and how does it apply to your platforms and games?

And it are you familiar with that?

I am.

So what is it and would it apply to iGaming?

So it basically says, and I don't remember the percentage numbers, I apologize, Mr.

Chairman, but it basically says if an audience is 75% adult, then we're okay to advertise.

Correct me if I'm wrong.

But if it's anything less than that, then we're not.

So that's and there was just a bill.

Who just had the bill?

Kentucky.

Yeah.

Kentucky just had a bill that had similar language saying that based on the who the audience is, I think Massachusetts has something about this too at that defenway park.

Depending on who the audience is and who's observing the communication, you can you can only advertise in those areas, in those markets.

So there's a percentage out there, and again, I just don't have the exact number on hand, but the AGA code of responsible marketing says that you have to hit that percentage in order to advertise to that group.

And do you comply with that?

We do.

We do.

And so yes, we do.

And and you know, this goes back to our discussion earlier about advertisements to youth on social media.

That's that's not coming from from our platforms.

Um we we have a policy that we do not advertise in spaces where there's an expectation that the majority of viewers would be underage.

Um that's that's a scenario where we're not involved.

And it sounds like you wouldn't do it even if there was 26 percent of the audience was youth, that it would have to be lower 25 percent or lower in order for that to be a target.

That's right.

Okay.

Um goes to the underage stuff is a concern, and uh boys, uh I guess is a particular concern, but um how do you verify the user's age and identity and how how are your verification methods different from other non-gaming apps that tech savvy youth uh appear to be able to circumvent?

So how how do you we don't want targeting youth, you don't want youth on your on your apps?

What do you do to keep them up?

Yeah, so we use uh know your customer uh KYC technology that's comparable to what uh financial industry uses, right?

So uh KYC, I'm sorry.

Sorry, KYC stands for know your customer.

So we use uh vendors for that technology, and again it's comparable to what the financial industry uses.

Um so the person provides personally identifiable information, and then that's checked against uh databases to make sure they are who they say they are.

Um, for sports betting, we already do this in the district.

Um DC sports betting regulations require entry of the last four Social Security numbers as well for for everybody for us to verify them.

So, you know, even if a kid was able to steal the parents' driver's license or something like that, they wouldn't be able to access an account uh for sports wagering here in the district because they would also have to enter social security numbers which which aren't on a driver's license.

So, you know, we take all that data and make sure that you know the person on the app is who they say they are.

Um I know there's also concerns about you know what what if a parent's logged in, right, and then a kid picks up a phone.

Um what we've got for that is automatic logout on an activity.

So if if a parent is on their own account, sets down a phone, walks away, that account is going to automatically log out you know, once it's inactive for period.

Um then the other thing that parents can do is on top of a password, they can set uh biometric uh uh way to log in as well, just like for you know a banking app uh where it scans your face.

So even if a kid thinks they might be able to guess the password, uh the parents can can set that uh biometric login as well.

So you know that's that's various ways to keep kids uh off the platform.

Um, both steps that parents can take and our robust KYC measures on the front end.

If I could add just one of the things that we we often hear is is children accessing gambling uh products.

Uh the reality is that they're not accessing the legal regulated market, they're accessing the unregulated market that doesn't have those types of uh KYC protocols in in place.

And that's why uh Councilmember Felder's bill is so important is because it does put in these requirements and the industry is saying we want these requirements before we would ever offer a product in your district uh in the district is to ensure that there is uh strict age verification uh compliance uh included in it.

And specifically the 21 and over is a fantastic ad to the bill because that you know that that clarifies a lot of gray area where we're 18 for some things, 21 for others, 21 distinct number, that's helpful.

Okay.

Last question for this panel.

Um if the legislation were to pass the council, what length of time would it would be needed for you as a potential licensee to go from application to full operation?

What is that?

What is that look like?

I mentioned it in my I didn't give a number in my testimony, but I checked with my business and they said six months, Mr.

Chairman.

If we are already operating sports in the district, so we probably have a leg up on those who aren't, but for the seven operators in the district, I think the time frame is within six months.

Um I yeah, I do think six months is is a reasonable goal to hit.

Um I I think we might be able to do even better than that, but that that's you know, on the long end.

Um I don't remember when the budget support act passed a couple of years ago, but but DraftKings launched sports betting, I think, within two months of the bill passing back then.

Um I think it was it two years ago or one year ago?

Well, it will be two years ago that's summer.

Yeah.

Okay.

All right.

Uh thank you very much to this panel.

Really appreciate your testimony.

Councilmember Felder.

We're good?

Okay.

We'll move on to our next panel.

Uh Brian Schroeder.

Juanye Frazier.

Uh Jessica Wellman.

Alfonso Guida.

Great.

And I should say to any of the witnesses who have already testified, if you have not submitted your testimony for the record, please be sure to do so.

And when you are ready, Mr.

Schroeder or you may begin.

Mr.

Chairman, members of the committee, thank you for the opportunity to speak today.

My name is Brian Schroeder.

I am the general counsel at ARB Interactive, the company behind Moto Casino, and the owner of Publishers Clearinghouse.

ARB was founded in 2022 and is the largest U.S.-based social plus gaming company in the country.

Today we have millions of players nationwide who are looking for a fun way to play casual casino-style games on their phones.

Participation in our games is always free, and our sweepstakes is free as well, with clear alternative methods of entry.

While majority of our players never take advantage of any in-app purchases to extend their playing, those that do are rewarded with sweepstakes play.

Additionally, free alternative methods of entry are always available.

We get well over 200,000 mail-in entries per month.

It's important to draw a clear line between sweepstakes-based social plus gaming and iGaming.

In iGaming, players wager their own money on each spin or hand.

And win or lose those funds directly.

In social plus, by contrast, participation is always free.

Players never bet money on game outcomes and prizes or are awarded through sweepstakes promotions.

The same legal framework that has governed publishers clearing house and countless other consumer promotions for generations.

Well, ARB has no position on the broader issues being addressed by Bill 0656.

We are concerned about the provision that would make it effectively impossible to operate social plus gaming in the district.

If social plus gaming is made illegal, we will have to stop operating in the district.

But our players will simply find those unregulated offshore platforms to continue to play.

Banning digital behavior does not eliminate demand.

It pushes it to less regulated, less safe environments.

While our business operations are different than iGaming, there are areas that can follow the same structure that you've laid out for iGaming.

Age and identity verification, any money laundering compliance, geolocation controls, and responsible gaming tools are all required and something where we have significant overlap and would agree to do them.

This is in fact the path other jurisdictions are charting.

Maryland has now rejected legislation to bans social plus gaming two years in a row.

Virginia recently considered a bill substantially similar to this one before you today, and it likewise failed.

We are engaging both legislatures to regulate social plus operators under a specific gaming category.

The district has the same opportunity to get this right by regulating rather than prohibiting.

Regulation also creates real revenue for the district.

Revenue that this bill forecloses entirely.

A licensed social plus framework can capture DC sales tax on any in-app purchases made by district residents, generating immediate and reoccurring revenue.

It can be paired with annual registration and licensing fees for any platform that operates in the district.

The effect of this bill, by contrast, sends every one of those dollars to offshore operators who pay nothing to the district and answer to no one.

This bill will not safeguard district residents from offshore operators.

Rather leave them more vulnerable to predatory practices, which also closes the door for meaningful taxation and that would generate additional revenue.

Social plus gaming is and now is not a phenomenon or a loophole.

It is a natural evolution of the same sweepstakes models that publishers' clearing houses operate legally for decades.

Update it for smartphones, digital ecosystems, and a new generation.

Banning social plus gaming risks pushing consumers away from companies with safeguards like ARB and towards the very bad actors we all want to stop.

The district has an opportunity to lead by modernizing its sweepstakes laws, establishing clarity, strengthening consumer protections, enabling fair taxation, and creating enforceable standards that reflect today's digital reality.

We are eager to work with you to achieve that.

Thank you for your time and your consideration.

Thank you.

Excuse me.

Can you hear me?

I know you need to push it, but is that better?

Yep, sure.

Good afternoon.

My name is Wayne.

Oh, Fraser spelled on my thing.

All right.

Juan Day is my cousin.

Is that the case?

Okay.

I've been here a while.

I'm a little giddy.

My name is Wayne Frazier.

I'm president of the Maryland Washington Minority Companies Association.

We are a trade association that advocates for social and economic inclusion for minority and women-owned establishments throughout the DMV.

We have a number of our members right here in the District of Columbia.

And I am here this afternoon on behalf of my members in opposition to iGaming in DC.

Because as we see it, our gaming enriches those who are operating it, and as I'm educated now, it's offshore, and then those who wish to take advantage of taxing it now.

Everyone else pays the price and the ills and the failures because of it.

Starting early on with the youngsters.

None.

In addition.

In addition, the negative financial effect on the families of the said firms by wasting so much hard-earned income coupled with little chance for return spells doom.

Forevermore.

This type of gaming industry employs the least the least amount of Americans, because most of the employees consist of dealers in specialized fields under the control of camera ready stage table games.

And they're back room parlers.

Regarding reports that minority and women-owned businesses engaged will significantly improve.

Well, this is a myth.

Because there's only third, because there's no third party procurement opportunities.

The District of Columbia will not put out RFPs to help run this to help supply this.

Perhaps the greatest destruction will be the devastation of minority-owned business family, where younger people will become highly addicted in playing these games.

In summary, we see no economic, no positive economic effect that I gaming will bring to the city of Washington, D.C., other than collecting a few more tax dollars, which I understand I needed.

But off of this form, this highly addictive form, I say no.

Thank you.

Thank you for your testimony.

Uh Jessica Wellman.

Thank you, Chair and Committee members.

My name is Jessica Wellman.

I am a responsible and problem gambling advocate here on behalf of my colleague Rob Minick.

Uh Rob was unable to be here today because he is busy telling his story to the world.

Rob has been in gambling recovery for almost four years.

He has a prominent YouTube channel called Rob Odat or O D A A T, One Day at a Time, which is an important concept that they use in Gamblers Anonymous to talk about handling the consequences that come with their problem gambling.

We haven't had a chance to hear from people like Rob yet today, so I think that's why we wanted to make sure that his voice was heard.

And with that, I am going to read Rob's remarks.

If iGaming comes to Washington, D.C., I believe very strongly that it will be a net negative for the citizens of the district.

Constant access is one thing that turns gambling from something occasional into something constant and eventually for so many into something that becomes an addiction.

I know that because I lived it.

I didn't look like what people think a problem gambler looks like.

But the second gambling became something I could do anytime, anywhere, on my phone alone with no friction, that's when it escalated.

I lived in New Jersey at the time that iGaming was rolling out there, and let me tell you, it was not pretty for me.

It stopped being entertainment and started becoming something I couldn't control.

That's what iGaming does.

It removes every natural barrier that's used to protect people.

No drive to the casino, no closing hours, no social pressure to slow up, no real pauses between bets.

It turns gambling into something that can follow you into your bed, your job, your bathroom, and when that happens, it's not just about individual choice anymore.

It becomes a public health issue.

Because the reality is the industry isn't built for people to win.

It's built to keep people playing.

The easier you make it to gamble, the more people will struggle with it.

That's not speculation.

That's what we've seen everywhere this has expanded.

In a place like DC where people are already dealing with stress and rising financial pressures, introducing 24-7 access to gambling in their pocket is not a neutral decision.

It will disproportionately impact the people who can least afford it.

I'm not speaking of this as an outsider.

I'm speaking as someone who knows what it feels like to lose control.

I'm a gambling addict in recovery who made his last bet November the 12th of 2022.

Legalizing eye gaming doesn't create just create more gamblers.

It creates more people like me.

And once that line is crossed, it's not easy to come back from.

We have to be honest about what we're introducing into people's lives and whether it's worth the cost of what will inevitably come next.

A wave of addiction we aren't ready to treat.

I realize I am not Rob, but I'm happy to take any questions from my own experience.

Thank you very much.

Alfonso Guida.

Mr.

Chairman, uh, thank you for having me here today.

My name is Al Guida.

I am a resident of the District of Columbia.

I've lived in D.C.

for 47 years.

I've been a mental health lobbyist for 35 years representing community mental health centers, uh, public authorities, uh, patient advocacy organizations and technology companies in the mental health and addiction treatment space uh for the last 35 years.

Um I am not here today on their behalf.

I'm here as a citizen.

Um I wanted to I've I filed written testimony, but I wanted to just clarify a few points that have come up in the last several uh panels that uh you've been struggling with that uh I hope that my expertise can can address.

First thing relates to uh the American Psychiatric Association uh definition for problem gambling, and I know there's been a lot of discussion about it and very narrow focus on it.

I think that that's likely a mistake.

Um the American Psychiatric Association notes is that eighty percent of problem gamblers have co-occurring conditions, Mr.

Chairman.

Uh they also have uh major clinical depression, substance use disorders of all kinds, alcohol use disorder, opioid use disorders, and a high incidence of uh suicidal ideation.

And then there's this question of, and I know you've been struggling with this, and I know, and uh councilwoman Henderson asked this.

What has happened in states that have past uh eye gaming, New Jersey, Pennsylvania?

The incidence rate for problem gambling appears to have tripled in those states.

So the American Psychiatric Association notes in its diagnostic and statistical manual that the incidence rate of problem gambling is about 2%.

In those states, it appears to have tripled.

Now the reason for that is twofold.

First of all, it's this.

So that again, and the Congress, the the councilwoman referenced the uh the push notices that she got during the during the NBA uh during the NBA uh playoffs.

The thing about the NBA playoffs is they end.

There are timeouts.

The the game ends, the season ends.

Slots don't end.

There are no timeouts.

There are no there are no, you know, the season doesn't end, the game doesn't end.

It's constant.

So between that and the sophistication of the digitally altered algorithms to make them even more addictive than they would normally be, they have hyped up the addictive nature of these algorithms.

Secondly, is the advertising.

Now I mean no disrespect, and I know we had a witness up here that apparently received push notices while he was waiting to her to receive his testimony.

We have to live in the real world, Mr.

Chairman.

The advertising budgets of fan duels and Draft Kings, uh I'm I'm afraid are vastly larger than the individuals that operate illegal illegal eye gaming from the Isle of Man in Barbados.

We just have to live in the real world.

We are surrounded by advertising from these entities now.

So between the algorithms and the advertising, that's what drives problem gambling in the jurisdictions that have passed this legislation, and it's going to happen in the district.

It's going to make a a an already addictive situation worse.

So what's happened in those states is that they have thrown pennies at problem at the at the uh at the problem gambling phone lines and pennies at their at their uh at their Medicaid finance mental addiction treatment services.

Last thing this phone is as addictive as the crack cocaine epidemic and the fentanyl epidemic that has impacted the district in its past 40, 70 years that I have lived here.

So you can't make a distinction between substance use on the one hand and this phone on the other.

It is a very powerful technology, almost as powerful as those substances.

So what you're dealing with here with DraftKings and fan duels is the modern iteration of the Sackler family.

That's the concern, is that you're placing a burden on your mental health and addiction treatment providers in taking this overstated tax revenue from this legislation.

Thank you for the opportunity to testify, Mr.

Chairman.

And I'm happy to answer your questions.

Thank you very much for your testimony.

Yeah, the phone, whatever is on it.

Um the the level of addiction to the phone is really something.

And it all a lot of this conversation is framed in that it is out there, and then what's the right thing to do around it?

So I hear you and I hear you on the idea of how much money gets spent on advertising by these kinds of entities.

Uh that's why before I was looking at the link between advertising and protections for responsible gaming.

Um Mr.

Schroeder, uh this the social I'm trying to understand what it is, because different terms get tossed around and the way it was described, I think it doesn't have a cost going in, does it have a financial reward coming out?

What walk me through how one of your sweepstakes social sweepstakes or whatever the term was works and why I shouldn't think about it as gambling.

So our product is social, which is social casino.

If you'd push your butt.

Our product is a social casino, which has been around for about 15 to 20 years, which is a free-to-play online, simulated casino games.

So you can sign up and register, and you're there's a KYC check done, and then you're able to play for free.

So you just can play a slot machine or blackjack game for free, like Candy Crush.

And then you play through your daily allotment, or you can earn more by um liking a Facebook post or liking an Instagram post or something like that.

You can earn more free-to-play coins.

They have no value, you can't win any prizes or any money whatsoever.

Similar to Candy Crush, after you've lost lives or you've run out of your coins, you can buy an additional package of free coins to play on to promote that, just like a sweepstakes promotion like McDonald's.

We then provide you with sweepstakes coins, which you can able to play and win prizes or something of value, like money.

So you can play it for free without without spending a dime.

And a majority of our customers don't do any purchasing whatsoever.

But if you run out of coins to play for free for that day, and you would like to enhance your experience, you can then buy a package of gold coins that are free to play that come with sweepstakes promotions, which are sweepstakes coins, and you are able to that's where that's where I'm I'm having a harder time following.

So I mean, you buy the coins to play for free.

I mean, you bought the you paid to play, I think.

Unless I'm missing something.

What's that?

I'm sorry.

I mean, if you buy the coins to play for free, you bought the coins play.

You don't you don't you can don't need to buy the coins of play.

You can play for free.

If you run out of the coins, no, no, no, I understand.

I I was with you through you can play for free for a certain amount, and then you can buy coins to and to continue to play, but not for free anymore.

You bought the coins to play, right?

Well, so you bought you bought the coins to continue, like candy crush, an additional life to keep playing.

It's just like Candy Crush if you play it on your phone.

So it's uh it's the only difference between Candy Crush and what we offer is Candy Crush is a game with the candy bars and ours is a can simulated casino game.

But again, your the coins you can play with, you don't win any money with those coins.

Okay.

Then what's the sweepstak coins?

Just like when you buy a hamburger at McDonald's and you can get the tag for Monopoly that you open up and you see, you're given these sweepstakes coins that you can then play with them, and then if you win, you can get a prize of those coins.

Okay.

So there's there's two separate, there's two separate types of coins.

You have the ones you play for free, and then to promote that purchase of those coins when you run out, we then give you a sweepstakes.

It's a coin, but it could be a token.

It's just like the McDonald's thing, when you make a purchase of a hamburger, you have that to promote your purchase.

And then that sweepstake coin that you got access to through your purchase, you could win a prize.

You can win a prize, yes.

Or you could you can win money as well.

Or money.

I want to be yeah, fully transparent.

Yeah.

And so i in a certain way, the free play is the is like an advertisement to get you from the perspective of the folks who are in this business.

They offer the free play in the hopes that folks will purchase the coins and purchase the sweepstakes coins and the and then perhaps win a prize.

So yes.

So our our our consumers, a majority of them don't make a purchase whatsoever.

And the ones that do the median spend in a month is about $35.

Okay.

So you have and they they use that to get the get the coins to then enhance their experience and see if they can win something.

Okay.

It's a it's a promotional, it's a marketing promotional tool, just like sweepstakes have always been.

Okay.

All right.

I was trying to understand the mechanics of what it is.

And great.

Thank you for that.

Does that make sense?

Does that I think that I have it.

Um your concern is that this legislation would shut that down.

Yes.

And it's similar, it's the it's the exact same argument that the prior panel was talking about in terms of if you prohibit it, the money is not going to go away.

It's going to continue to stay in a legal market.

And I think the illegal market is two different groups.

And a legal I gaming market, which is you deposit cash, you play for cash, I bet a dollar on a slot machine or a dollar on a hand.

And then there are offshore sweepstakes operators who also have kind of less safeguards.

Where ARB and several members of our trade association have KYC, age verification, geolocation, responsible gaming tools.

So we are we are doing everything above board.

We want to be regulated.

We want to comply with actually all these consumer protections you have in your bill, we would like to comply with.

But you're prohibiting us by the way, it's by the way it's written.

Okay.

All right.

Well, and I think uh I want to thank you all for your testimony.

I think we well wait, don't go anywhere.

Councilmember Felder uh has an opportunity to ask questions as well.

So Councilmember Felder, if you have any questions.

There you go.

No.

Here, why don't why don't I step to the side, Councilmember Felder and then you uh you can use this for now.

Thank you, Mr.

Chairman.

Uh I just have a couple questions for Wayne.

Um very committed to making sure that small businesses are able to take a part of the in this industry.

Uh should it become legalized as such, the bill includes a 35% C B E participation requirement?

Can you hear me?

Yes.

Which is one of the most robust provisions we've seen, Tad uh to an I gaming bill, it ensures that operators are required to subcontract a portion of the business to certify business enterprises.

My question is what changes would you recommend to make sure minorities and small businesses can fully participate, if any?

Yes, which is the district CBE of what?

Of the overall um district subsidy or fund.

Okay, but there has to be a index or a basis to work off of.

So will you be will the district be gauging um not just the revenue but what the companies will be spending?

So the the way the CBE uh program works, any uh district provided subsidy that receives 30 power uh that any district uh provided subsidy, CBEs must receive 35 percent of it.

Then there's C B E requirements uh that ensure that CBEs are taken into consideration uh on deals.

So in this instance is in this instance rather, uh we are asking um operators to provide a uh CBE participation plan.

Okay.

So we want to make sure that they have a seat at the table.

Okay.

So picture this, a room like this, huge room like this, subdivided into different areas where the gaming, the different games will take place, you'll have cameras zoomed in.

Um, and consider what would the owner operator of that facility purchase beyond paying those individuals who are dealing, and any equipment that may be manufactured, produced by an outside third party.

Um, what other opportunities are there?

I can think of a few.

One, meaning security, physical security.

The building would have to be secured inside and out 24 hours a day so long as they're playing.

Um I can't think of much more.

So what opportunities are there for the owner of the gaming eye gaming company, what opportunities are there for them to third party procure out to facilitate the smooth operation of their business?

Maintenance of the building.

But then the district would have to be able to understand those types of third-party contracts that are being procured, and then determine what those annual dollar amounts are, and then work your formula of 35 percent.

But again, our members don't see any main value in that because there's so few opportunities that will be procured.

Uh no, thank you for that perspective.

Uh for my conversations uh uh with folks, there may be additional opportunities and marketing, promotion supply, et cetera.

But nonetheless, I do appreciate uh your input.

I would just uh conclude this um group with just one more final question.

Uh we've seen in states like Michigan that certain sweep state style platforms have evolved in ways that closely resemble real money casino gaming, operating in a gray area without consistent regulation, consumer protections or accountability.

My question is what lessons from Michigan enforcement actions should we be applying as we shape this framework?

So I I'll take that question.

If you look at the Michigan situation, when the C Cys Letters came out, I want to say the end of 2023.

And this is you could look at the gaming revenue that generated prior to the CDs came out, and then after the C and D came out, what you'll notice is Michigan's uh gaming revenue of the seven states that have online gaming, it's the sixth lowest in terms of growth.

And I would think that if if sweepstakes was cannibalizing that space, you'd see a much higher growth.

And that doesn't that doesn't exist in Michigan.

So I think there's a misnomer there that if you bar sweepstakes from operating, you're going to see uh uh uh increase in your mind gaming.

You're not.

I think I would ask you to look to Arizona, which issued a bunch of C C letters towards the end of 2025, uh or middle of 25.

Uh most of the operators left the state, and if you go to Arizona now, the worst offshore operators are still operating in the state because there's nothing you can do to enforce it as a as a body or your attorney general can't stop those offshore operators.

So it becomes very difficult.

So the good operators like ARB and the other people leave following a valid C Cys layer, and you're left with the most egregious offshore operators, which is why we're asking to be included in the bill to be regulated, and then additionally to go to your question, counselman in terms of consumer protections.

All the consumer protections that you are suggesting in the bill, uh Sweepstakes operators would be glad to comply with.

The over 21, the age of verification, we do it now.

So I would say Michigan's a is an example of if there was such a large uh problem with those businesses when they issued the C C the Cislayer's revenue would have gone up a lot more than the sixth is the sixth best growth.

That suggests that's probably not quite accurate.

And Arizona shows you what happens, which is the valid good operators want to follow the law leave, and you're left with the most egregious offshore operators who are not accountable to anyone.

Thank you for that.

Uh I appreciate your response.

And and and just want to uh clarify this way.

When we talk about creating opportunities for small business owners and CBEs, uh, should the district legalize this, we believe that there may be opportunities uh for CBEs uh in the areas of technology and compliance, uh identity verification, uh fraud detect detection and cybersecurity uh services, geo compliance tools, data analysis, et cetera.

Uh so just wanted to put that out there for the record.

But we I we ARB fully supports that uh that position.

I think it's a great idea.

You should definitely look at Pennsylvania where they had some problems in for in enacting that because the licensing requirements you put on the vendors can sometimes negatively affect WB and um CBE kind of entities.

So it just says that FYI just you want to try and balance that out.

It can be a problem sometimes and actually affect when the small businesses comply with the licensing hurdles.

Thank you so much.

I appreciate your feedback.

Uh Mr.

Chairman.

Little musical chairs, but thank you again to this panel.

And we have uh one last name on the list.

Uh Aaron Sanchez is Aaron here.

Okay.

Not seeing Aaron, uh let us now turn to our virtual witnesses.

Uh before turning to our virtual witnesses, I'm going to offer some guidance about using the Zoom platform.

All witnesses participating in this webinar are currently listed as attendees in Zoom.

This means that your microphones are muted and your cameras are turned off.

I will call all virtual witnesses to testify on panels of four at a time.

Once I call your name, a member of my staff will make you a panelist.

If you wish to appear on video, you must click the button in the toolbar at the bottom of your screen that looks like a video camera.

Please remain muted until it is your turn to testify.

When it is your turn to testify, please unmute yourself.

Once all virtual witnesses testify in each panel of four, I and other council members may ask a round of questions.

So please stay on the Zoom muted until you are recalled.

For any technical difficulties, you can send a message to the host, which is labeled as Committee on Human Services, and they will follow up with you.

Additionally, if you are having trouble gaining access to Zoom and you have pre-registered, you can reach out to my team at humanservices at DC Council.gov and they will try to resolve your issue.

So now with our virtual witnesses, Ricardo Cornejo Rivas, Lloyd Melnick, Stacey Wismand, Tori Key, and actually I said panels of four, but all we have is five listed, so I will list the fifth person, Dave Nangle.

Okay.

Mr.

Rivas, when you are ready.

Thank you very much.

Just uh wanted to do a quick check if everybody can hear me.

Um, thank you very much.

I really appreciate it uh for allowing me this time to uh testify in such a uh such an important piece of legislation today.

Good afternoon, Chairman Fruman and members of the committee.

Thank you for the opportunity to testify today on behalf of Caesar's Entertainment on Bill 26-0656, the Internet Gaming and Consumer Protection Act of 2026.

Um my name is Ricardo Cornejo Rivas, and I serve as Vice President of Online Gaming for Caesars Entertainment.

Caesars is one of the largest gaming and hospitality companies in the United States, and we are proud to be one of the district's licensed sports wagering operators through Caesar Sportsbook in the capital at the Capital One Arena as well as a mobile sports operator.

CSER supports Internet Gaming and Consumer Protection Act of 2026.

Um noted in the set several reports, uh, an estimated 700 million is already being wagered by district residents on regulated offshore and i gaming platforms.

This bill brings that activity on the district and loyalty oversight with DC standards, DC consumer protections, revenue dedicated to DC priorities, and importantly, protects home rule around non-district regulated activities.

Mobile sports wagering has shown what a well-regulated competitive market can deliver in the district.

Tax revenue is flowing to the general fund.

Residents have access to safe secure platforms with robust responsible gaming tools, and licensed operator or put licensed operators such as us are pushing illegal offshore sites to the sidelines.

We particularly commend the Bill Certified Business Enterprise Participation Requirement.

Our work with CBE partners has been one of the most rewarding parts of operating in the district through marketing, technology, and professional services.

We have seen firsthand how that this requirement strengths local businesses and keeps gaming dollars circulating in DC neighborhoods.

We strongly support the 35% CBE participation requirement in Section 508, and we are committed to meeting and exceeding it.

Caesar is also strongly supports the inclusion of Live Dealer Games.

Live Dealer Studios are not just another product, they are an economic development tool.

They create on-site jobs for dealers, technicians, producers, and support staff.

These are exactly the kinds of skilled good-paying positions that should be created right here in the district, employing district residents.

Lastly, I must say that Caesars believes that iGaming uh operator licensing in the District of Columbia should be limited to the existing sport wager and licensees.

This ensures that iGaming launches with operators that have a proven record of regulatory compliance, consumer protection, and community partnership in the district.

This ensures uh this approach also leverages existing regulatory infrastructure, it mirrors best practices in other jurisdictions, and ensures that the District of Columbia is licensing operators that it already knows and trusts.

Thank you again for this opportunity to testify.

I look forward to answering your questions and to continue working with you on this important piece of legislation.

Thank you very much.

Lloyd Melnick.

Thank you, Mr.

Chairman, distinguished members of the committee for this opportunity to lend my voice today to the continued discussion and about the future of interactive social games, not only iGaming in the district.

I am Lloyd Melnick, Chief Growth Education Officer of VGW, the largest developer and operator of Social Plus Games in the world.

I have over 30 years of experience in the Social Plus and other gaming spaces.

Uh previously working for companies including Disney and Zynga, which you may know from Farmville or Words with Friends.

At its core, VGW is also an interactive company, like those I have previously worked at.

We have disrupted the traditional video game industry by developing new kinds of free-to-play games, as Mr.

Schroeder described earlier from ARB, that have met increasing customer demands for fun, competition, and community.

We provide entertainment, and when we look at competitors, it is not only social plus game companies and traditional video game companies, but also Netflix, Paramount, and everyone else trying to entertain consumers.

It is not, however, eye gaming companies.

That is a different space.

That is a space that we are not even playing in.

By banning Social Plus games, DC would be setting the precedent that future interactive entertainment innovations entering the district are not welcome.

You will also be costing the district valuable sales tax revenue and the opportunity to create a tax and regulatory regime, which we are calling for for this fast growing entertainment business.

Casino themed games are not new.

They are for those players who do not want the stress or cost of risking real money in land-based casinos.

Our games merely share mechanics with casino games without a player ever having to spend a penny.

Let me stress that.

In fact, the majority of our players, well more than 50%, most of whom are between 35 and 54, never spend a penny.

Not one casino can say that, ever.

That's not illegal iGaming.

It is social gaming, much like the other apps that are probably on your phones today.

Some of our distractors, detractors, I'm sorry, claim social plus sites do not have responsible social gameplay or anti-money laundering or other player protections.

And that's also simply not true.

We have a dedicated, responsible social gameplay team with 20 people, most of whom who have social worker experience dedicated to protecting players.

We have purchase limits, activity reminders, take a break options, and exclusions lists.

We meet the most stringent anti-money laundering criteria out there, not only complying with U.S.

law, but also under EU regulation and that of our payment processing partners.

These are facts provable by playing our games, not just opinions or conjecture.

We do not do this because we have to for PR purposes.

We do it and have been doing it from well before I joined BGW seven years ago because it is why is right for the player.

As a video game company, our focus is on the player and long-term retention, not short-term profit.

In closing, I look forward to being a part of a continued conversation in the months and years ahead of how we can offer and continue offering our social plus games in the district under a strict regulatory and taxation regime.

I thank you for your time and look forward to answering any questions.

Thank you.

Thank you.

Yes, good afternoon, Mr.

Chairman and members of the committee.

I thank you for the opportunity to speak here today.

My name is David Nangle, and I am associated with the National Association Against Eye Gaming.

But I have a little story to tell you.

For over 22 years, I had the honor of representing a big city in Massachusetts in the State House of Representatives.

But I come before you not as a former legislator, but as someone who has lived through the devastating consequences of a gambling addiction.

My addiction consumed my life.

It led me to betray the trust of those I love, make deeply regrettable decisions, and yes, ultimately served time in federal prison for financial crimes related to my gambling addiction.

But I've accepted my responsibility and I've worked hard to rebuild my life.

But through the painful journey, I've come to understand that how destructive and how uncontrollable gambling addiction can be.

That's why I'm here today.

Legalizing eye gaming is not progress.

It's a gateway to greater harm.

It invites more people, especially vulnerable individuals, into the same spiral of loss and devastation that I experienced.

Experts have warned that it is eye gaming is up to ten times more addictive than other traditional forms of gambling.

Unlike physical casinos, iGaming never closes.

Just a virtual casino in your pocket 24-7.

There is no Narcan for gambling, no emergency antidote, no quick reversal.

When someone overdoses on opioids, we can administer not and save a life.

But when someone like myself spirals into gambling addiction, there is no such rescue.

The damage is slow, silent, and often irreversible.

It's bankruptcies, lost homes, broken marriages, and children left wondering what happened to their college fund.

We wouldn't you wouldn't be just expanding access to gambling.

You would be accelerating the harm.

Making it more accessible doesn't make it safer.

It makes the damage faster, deeper, and more devastating.

I'll close with this.

Uh pauses and so forth.

However, with iGaming, it is it places a casino in everyone's pocket for 24-7.

The technology is built to keep people playing for as long as possible.

And from my own experience, I can tell you that constant accessibility is exactly what fuels addiction and creates more and more issues as we go forward.

And again, I thank you very much for your time.

Thank you for your testimony.

But were the apps that you used, were they uh was it a legalized regulated iGaming, or was that one of the offshore apps that uh that we've also been talking about?

No, you can answer you, Mr.

Chairman.

No, here in Massachusetts, the bill uh went into a study about a month and a half ago, so it'll come back next year again.

We know that the that the fight is not over to stop the iGaming.

So it was temporarily temporarily put into a study up here just about six weeks ago, Mr.

Gibbon.

And I myself, I'm 65 years of age, as I say, I'm an old dinosaur.

And when I used to gamble, it used to be a 66, so careful there, buddy.

Well, Bob, you're better than me, but uh my day started when I was 16 years old.

I had a 44 44-year gambling addiction that I hid from family members from my colleagues in the legislature, etc.

But I used to bet with the casinos, go to the racetracks, and uh bet at the racetracks, betting the horses and betting with the local bookies on the corners.

I'm sure they're all over the country still.

But then I used to go to the casinos down in Connecticut.

So the eye gaming uh wasn't around like it is in those seven or eight states, and I didn't participate in any of the sports betting.

Uh my my world came crashing down on February 18th of 2020, when uh everything got out of control and I was actually picked up by federal authorities, et cetera.

So mine was never the eye gaming.

I never got onto any of those platforms.

Okay.

All right, thank you very much.

Thank you.

Uh thank you, Mr.

Monik, uh Mr.

Rivas, thank you very much for your testimony.

We had a little bit of back and forth about uh the the social gaming sweepstakes in the last panel.

I think I think I understand it, so thank you for your testimony.

Uh Mr.

Revis, same thing where we had a couple of operators on an earlier panel, so I do believe that we've been able to cover those things.

Uh I will react a little.

I mean, I hear you about trusted partners, but also limitation of access.

Uh pulling up the drawbridge for would be a big step, it seems to me.

Uh uh if I were you, I would ask for it, but if I were me, I'd be reluctant to do it.

Um but with that I will turn to uh Councilmember Felder.

Uh thank you, Chairman.

Uh, within the last panel, um one of the panelists spoke of one a uh one of the panel pardon me, one of the panelists spoke on the right uh on a real uh concern regarding whether or not this bill goes further enough to provide small and minority-based business opportunities to be involved.

Uh in the bill, I'm calling for a 35% CBE participation requirement.

Um my question is can you speak to how operators might meet this requirement and or if you anticipate challenges?

I could speak to that since uh I know that my testimony addressed it.

Um I can uh kind of speak in in our experience being um in other jurisdictions, uh, council member.

Um I think um what uh what we've been um what what we've experienced in the past, right, is jurisdictions that uh that have uh different postings on site or service uh that are placed within the jurisdiction to support online casino games.

That comes with a sort of support uh from uh labor standpoint, also comes from uh from a personnel support that that could make it should the the guidelines be the same in the district of Columbia, then that that would also be an opportunity for us to meet the 35% requirement.

Um another one, um at least uh just from uh a supplier standpoint, right?

So various suppliers will have different types of presence within each jurisdiction for either game studios that are designing games, um also uh live dealer uh live dealer game presenters that would be uh within several jurisdictions wherever live dealer studios are mandated to be inside of the jurisdiction.

That is another way in which um supplier partners of ours are also able to meet the 35% uh uh requirement.

So there's there's multiple ways beyond some of the items that you also mentioned, which are within marketing, which in our kind of boots on the ground creating awareness about the different products that we uh that we provide.

But there's there's various ways in which in which uh we would be able to meet that.

Uh thank you for that.

Uh that's my only question uh for this panelist.

All right, thank you, Councilmember Felder.

All right.

Well, with uh is there anyone here in the room who had hoped to testify who hasn't had an opportunity to testify other than the government witnesses who I'm gonna call in a minute.

And is there any oh Eric Ah oh wonderful?

Uh we had you on the list for this morning, and then I had you on the virtual okay, wonderful.

When you're ready to see uh accommodation here.

I actually just to uh just to close it out also.

Is there anyone else online who had been who had hoped to testify who hasn't been called on yet?

Okay.

So with that, Mr.

Sanchez, when you're ready, you can bring us home.

Uh thank you, Mr.

Chairman, and the council apologies for the delay and uh the accommodation here.

Um I really appreciate the opportunity to testify.

Uh again, my name is Aaron Sanchez, and I'm a resident of Ward 7, uh just off East 16th and uh in cap uh East Capitol and 16th.

Um I bring to this hearing a firsthand perspective as a first responder, having dealt with the behavioral health crises and downstream mental health conditions.

As the former EMT for your DC fire department in a subconscious as a sub as a subcontractor through American Medical Response.

I'm here today to express strong opposition to the fast tracking of this bill.

Um I think we've heard today long discussions, not enough data.

Um, you know, respectfully urge the council to prevent this kind of controversial legislation from being uh shoved into this ongoing budgetary process.

Um I want to focus on two issues here that I believe have not been adequately addressed.

The uh disapproportionate harm that this will cause to young men, many of them who look just like me, and the economic reality that this proposal uh is an extraction of wealth uh from the DC residents without building pretty much anything in return.

Uh first on harm online gambling is not the same as uh uh traditional in-person uh gaming.

It's faster, more accessible, more isolating, 24 hours a day, seven days a week.

I have a lot more on that, but we've heard it all today.

So uh specific to for uh young men in particular who are already hyper-represented in these sports betting online gambling market.

Um I think it's a uh a furtherance of this dangerous environment.

Uh and you know, these apps are created to be as addictive as possible.

Many of them have actually retained those addiction specialists to achieve just that.

In Ward 7, uh many young people already navigating economic instability, limited access to behavioral health services, and targeted digital marketing.

It's not just the policy choice.

This is truly a risk multiplier if not taken into account in a uh common sense way.

I think the same communities that we're trying to stabilize and invest in are the ones that are most likely to be negatively impacted by increased exposure to online gambling.

Um it's unsafe and increasing the addiction gambling threats to residents of the district will invariably dem uh increase the demand on first responders and exacerbate the the burnout crisis that we have seen today.

Uh second, the economic argument.

I've uh also spent the last ten years of my life working in restaurants, bars, uh holding every non-managerial position from dishwasher to bartender uh from busser to line chef.

Uh this proposal is being framed as a revenue opportunity for the district, but we should truly be honest uh about where that revenue is coming from and where it will ultimately be going.

Uh unlike uh a brick and mortar casino, eye gaming does not create a physical footprint in our communities.

It does not build housing, it does not anger commercial commercial corridors, does not generate construction jobs or long-term employment opportunities at scale.

This I gaming bill wouldn't bring opportunities for working class people like me in the way that brick and uh brick and mortar proposal would, and instead it allows large out-of-state operators like DraftKings, Fnatics, FanDuel, Bet 365, VETMGM, to siphon money uh directly from DC residents with the shallow promise of tax revenue.

Uh I really just want to take this last 10 seconds to appreciate that Councilmember Felder, we met actually last year at your um your uh uh community barbecue at Fort DuPont, Randall Circle Park, and after doing some more research on this matter, I see that you have a proposal to revitalize Reservation 13 that promises 10,000 jobs and a grocery store near the RFK development.

I commend you for exploring these types of uh uh um uh proposals to bring prosperity to Ward 7, and I encourage the members on this diet to uh work with him uh on on this on this matter.

I believe I might be over time.

You take your time.

Um I guess lastly, um truly deserves the investment um that builds opportunity, and and I just want to caution the council from moving towards things too quickly that would just you know again extract wealth and exacerbate harm.

I really appreciate you guys for putting this together today.

Um I look for I welcome, honestly, I welcome continued conversation to work with your office on on uh a common sense approach, truly.

Okay, thank you very much.

Thank you for your testimony, thank you for your work as a first responder.

We have been in in the abstract, if it wasn't if there were no eye gaming out there, it would be a different conversation, but there is eye gaming out there, which changes the conversation.

I don't think that that decides it definitively, but it is a very important element.

I mean, the the folks who you're talking about who are vulnerable to what extent does regulating it improve the landscape and to what extent does it not?

I think is a legitimate question.

But thank you for coming forward from your perspective.

It's a good move to come in your jacket.

I don't know, maybe you're coming from work, but it's a powerful statement in and of itself, and so thank you very much.

Councilmember Felder.

Uh no, thank you.

I mean, I echo uh the sentiments of uh uh Chairman Fiome.

I mean, uh I appreciate your testimony as a Ward 7 resident, uh as uh someone who works for FARE MS, uh, and I definitely look forward to further discussions and conversations on this matter.

Appreciate you.

All right, thank you.

All right.

We will now be joined by uh Randy Burnside, executive director of the Office of Lottery and Gaming and his team.

I invite each person who will testify on behalf of OLJ today, OLG today uh for the second time to join us at the table in front of me.

It is the practice of this committee to place our government witnesses under oath.

Please raise your right hand.

Do you swear or affirm under penalty of law that the testimony you are about to provide to the committee on human services is the truth, the whole truth, and nothing but the truth?

Uh you may begin your testimony.

Good afternoon, Chairperson Freeman, members of the Committee on Human Services and Committee staff.

My name is uh Thomas R.

Burnside, and I serve as the executive director of the Office of Lottery and Gaming.

Thank you for the opportunity uh to testify today regarding the proposed Internet Gaming and Consumer Protection Act of 2026.

Joining me are my colleagues Ridgely Bennett, our chief counsel, Peter Alvarado, our director of regulation and oversight, and Alex Akpajori, our agency fiscal officer.

When evaluating any proposed gaming legislation, I constantly look at three key considerations.

First, does the legislation align with the district's existing gaming framework and create a meaningful revenue opportunity for the district?

Second, does it establish strong consumer protection and responsible gaming provisions to safeguard district residents?

And third, does it provide the necessary resources to ensure effective oversight and implementation?

And in my professional assessment, the bill in its current form satisfactorily meets all three of these criteria.

Importantly, the bill also addresses persistent issues stemming from sweepstakes operators and unregulated offshore gaming platforms.

OLG is aware of more than 30 or more than 20 unlicensed online sweepstakes sites operating in the district in what we would consider a gray area at this time, because district law currently does not specify what sweepstakes are.

By doing so, it enhances consumer protections and helps ensure that lawful gaming operators, those who comply with our regulations and contribute to the public good through licensing fees and tax revenues are not placed at a disadvantage.

Legal regulated eye gaming exists in multiple states now.

Those states include Connecticut, Delaware, Rhode Island, West Virginia, Pennsylvania, New Jersey, and Michigan, and the State of Maine is in the process of joining that group.

Having previously worked at the West Virginia Lottery for more than 14 years, the agency that oversees and regulates eye gaming in West Virginia, I have a strong understanding of this form of gaming, the regulatory framework that works there, and how it successfully fits within the overall legal gaming ecosystem in that state.

Well, there is the likelihood of some cannibalization occurring, such as a negative impact on the DC lottery's eye lottery.

I have no doubt that iGaming would more than make up for it with the additional revenue it will generate on an annual basis.

The consumer protection measures and responsible gaming framework in this bill are significant and robust.

I appreciate that it establishes specific safeguards such as setting the minimum age of 21, identity and age verification, anti-money laundering compliance, geolocation requirements, and an array of responsible gaming safeguards.

The bill also includes language to provide significant funding to the Department of Behavioral Health.

This bill also provides a regulatory assessment equal to 2% of each licensed operator's adjusted gross gaming revenue to the OLG that will allow OLG to properly provide oversight and regulation of the industry.

I believe the bill in its current form will create a regulated revenue generating gaming line that fits into our current legal gaming framework.

I also have several technical changes that were attached to my uh testimony for the council's consideration.

My staff and I are happy to answer any questions you may have regarding the bill, and I thank you for the opportunity to testify today.

Thank you very much, Director Burnside.

Um my first question was going to be about your overall assessment of the bill, but I think that you have been pretty clear about that.

I'm curious your assessment of the marketplace because there's been a fair amount of conversation about illegal eye gaming and how that fits into the landscape.

And I wonder if you can speak to that if you have.

Okay.

Um here's what I know.

I live in the Navy Yard, and every day I am served ads on my phone for what are what I consider illegal gaming operators that that resemble casino style games.

Uh our team has looked at uh what currently exists and we've tried to explore uh avenues, and at one point I was ready to fire off a series of cease and desist orders to more than 20 such operators.

Uh I had to stop that because our legal team said that our district laws don't specify certain things in them that that would allow me to do that.

So that's what I do know.

When you look at the statistics and the numbers that are thrown about, there are multiple uh the American Gaming Association will give you a number, Spectrum Gaming will give you a number.

You really have to look at the source and the formula that was used to devise those numbers, Mr.

Chair.

So I I don't want to throw out a number because, in all honesty, no one I think has an exact number.

I do know it exists.

I do know that it's significant and it will continue to exist because it it does throughout the country.

And I know that efforts to block uh DNS stop them from payment providers uh could be successful uh as we heard in earlier testimony.

Those are great avenues to per pursue, and I know that other states are are looking at that.

Uh but I would say that it is significant based on our population.

Uh also here in the DMB uh with our greater metropolitan population outside of uh Washington itself.

All right, thank you very much.

Um what was the experience like in West Virginia when they moved to legalized eye gaming in the context of the illegal eye gaming that may have been going on before?

West Virginia did not at the time uh put into its laws specifics regarding uh defining what sweepstakes were.

Uh prior to my departure from there, uh there were a couple of cease and desist letters that were sent out by the lottery director uh that that were effective and and uh a couple of ways of stopping some of those uh entities from operating.

Uh I I do know this.

In the overall gaming landscape in West Virginia, iGaming did generate revenue year over year that has increased while at the same time coexisting with the lottery itself and the other forms of gaming in West Virginia.

West Virginia has limited video lottery, West Virginia has table games and a brick and mortar casinos uh with slot machines.

Uh the limited video lottery that I mentioned is bars and taverns that have what look like slot machines uh up to 10.

Uh they have a very robust gaming ecosystem there.

They also have a good strong responsible gaming program and a problem gambling program that is funded by the lottery and by those entities.

And if you would, um I do want to make a comment based on some of the previous uh testimony regarding responsible and and problem gambling.

Um it was mentioned that in our code we don't have certain safeguards available on our current platforms.

But I do want to put this out because I have heard that narrative multiple times.

Uh the OLG maintains industry standard RG protections on all of our sports waging operators that go beyond what our code uh has codified.

So I want to make that clear.

Here in Washington, D.C.

today, our legal gaming operators that have sports wagering apps have a lot of those protections that were discussed earlier.

Just because it doesn't appear in code doesn't mean it's not in our rules which govern those games and our minimum internal controls for each of them.

So I want to make that that point clear.

Okay.

So that prestiges uh I go over one of the one of my questions was going to be what key changes do you have would you propose?

And I would welcome you to codify those.

Absolutely.

But I think I think we won't go through them.

Thank you very much for answering that question very, very specifically.

Um then just in thinking about if this were to happen, how does it play through?

And you talked about the rules.

What kind of timeline would you see for OLG to implement this, including the promulgation of rules, taking into account all the different concerns that you've heard here today?

Yes.

What would that look like?

Well, first and foremost, I I want to make a statement too about responsible gaming and problem gambling.

Uh problem gambling is a horrible consequence to go through.

And a certain percentage of our population suffers from addiction tendencies.

There's no doubt about that.

In my 15-year career working at two of the best lotteries in the United States, in my opinion, um I had the opportunity to work a lot uh with the folks with our problem help network in West Virginia, the first choice health systems, which operates their 1-800 gambler.net program.

I got to talk a lot to people who suffered from gambling addiction.

I got to talk a lot with the counselors who deal with it every day, and it is real.

But I want to put into context too that the understanding that there is a great number of people that that play games every single day in this country and here in the district, whether they be lottery games, whether it be sports wagering, and they do so as entertainment in a fun and enjoyable way, and they do not put themselves at risk.

When I look at the statistics that I do know, the National Council on Problem Gambling, for instance, is a source that I trust.

They estimate that between 2.4 to 3 percent of our population suffers from uh problem gambling.

That that's what we're talking about.

So in a city of 700,000, uh I'm thinking that we have probably 10 to 17,000 or so people that suffer from this that can also be masked by other deals like alcoholism and so forth.

But I just want to put that into perspective.

I'm not minimalizing the impacts.

They are real.

I I am in a family that has had someone who didn't suffer from a gambling addiction, but they had a shopping addiction, and thanks to Amazon and TEMU caused a bankruptcy with one of my relatives.

So I understand.

I understand how marketing works, I understand the psychological impacts, and I understand what addiction is, and it's a terrible thing.

And that's why uh in my position, I want to make sure that we have the most robust safeguards possible, not just for responsible gaming, but for problem gambling addiction at the at the end as well.

Okay, well, and thank you for that.

That is uh an important question, important issue.

I mean, 14 to 17,000 is a big number.

It's significant.

And that's it it goes back to a lot of the conversation today.

It's out there.

Those 14 to 17,000 folks might be vulnerable to it today through illegal gambling sites, and then would they be more protected if there were legal gambling sites out there?

Let's just leave that on the table.

But I I had the my question had been about just the timing of implementation.

The timing of implementation.

Uh there would have to be a public hearing period after we draft our rules.

Is that correct?

Or no hearing?

No, because the uh the bill allows for emergency rulemaking or requires emergency rulemaking within 90 days of passage.

So there would be a period of time for rulemaking, which is when we would put in uh everything that would build the systems, how they would operate, the requirements and so forth.

Uh once that was completed and put out there, then the prospective uh operators who would be interested in getting a license uh would be able to apply for our license process, which it would be established once those rules were in place.

And then I imagine it would take a series of months for them to stand up their gaming platforms in order to provide the games.

I mean, I think we heard from them six months.

And the one said they thought they could do it more quickly than that.

But then in terms of putting together rules, is that in anticipation I'm not asking for a promise, but is that three, four, or five, six months to put together rules?

I I hate to put myself in a corner because I do know things can happen that impact uh the development of that, but I think we could move pretty quickly to that.

Um Ridgley, do you want to you're the one that would have most of the writing?

So the bill currently requires emergency rules within 90 days, and I think that we could meet that requirement because there are already good models in place that we could base our rules on.

Okay.

Uh I have gone over, so I will now turn to Councilmember Felder.

Uh thank you, Chairperson and uh Director, thank you for your uh opening remarks.

Uh we know that expanded access to gambling can increase risk for vulnerable populations, which makes prevention and treatment uh funding critical.

Is the current proposed funding statute starting at $500,000 annually sufficient to meet that anticipated need uh from your experience?

Uh thank you for the question, Councilmember.

I actually read the bill differently.

So I'm glad that that you you said that.

Is it $500,000 annually?

Because the way I read the bill was $500,000 monthly.

No, it's it's $500,000 annually starting.

Okay.

Thank you for that clarification.

That that that changes things for me.

Um based on what I know uh from from funding in my previous position in West Virginia.

I I think that that number needs to be closer to $750,000 or $1 million.

Okay.

Uh based on what I've seen from the NCPG data.

Uh that they recommend $1 per potential uh person impacted uh as a model, and I and I agree with that.

I do know this.

In West Virginia, uh their their program, they actually bid it out to a health care provider who maintains their program through their Department of Health.

And they have a website, 1800 Gambler.net.

I would recommend to the council to review that.

Uh they produce an annual report every single year.

And I do know that that in annual uh annual report for 2025, they had a lot of good data that I think would be useful to council to look at because West Virginia has all these different forms of gaming, many that we do not have yet.

But we do have games of skill, which is growing already uh operating in the district.

We have legislation for commercial bingo that no one has acted on yet from the outside to get a permit, but that could happen.

Uh we have this legislation that you drafted, Mr.

Councilmember, uh involving eye gaming.

Please keep in mind that all of these different types of gaming do have some cannibalization that occurs on the existing lottery.

But with that understood, also know that we have casinos all around us.

They're in West Virginia and they're in Maryland.

You go across the river here, there's a large MGM facility.

People have access to gaming.

They will game.

Uh I have no doubt about that.

Uh the opportunities are there.

Uh and it impacts our business at the OLG.

Now the difference between the government operator and our commercial friends that have invested in our district is we have a great deal of desire to protect our people and do what's best for the residents of our city no matter what.

Uh that's part of the responsible when it talks about our revenue generation.

So I would just urge council to please consider all of the impacts in the gaming ecosystem.

I am not pro or against this legislation.

Uh I feel that my role as an advisor, I'm not a policymaker.

Uh that goes to our elected officials.

And I'm happy to have me and my team talk to you about any proposed gaming legislation at any time.

But please understand responsible gaming needs to be a part of it.

I feel like that is here in this bill.

And even a step further, this bill actually deals with problem gambling, and that's something I have not seen in previous DC legislations.

Uh it also has the 35 percent CBE requirement, which I think is rather impressive, and also a 2 percent uh to establish a fund that that looked like it was uh for problem gambling addiction services.

So I I think that was very important.

And I will add this because I think you're gonna go there soon, both of you.

Um based on my experience in West Virginia dealing with they did see an increase in responsible gaming uh contacts that went to their network.

And I like to deal in the facts of what I do know instead of hypotheticals.

And in West Virginia, they saw a significant increase in the amount of contacts to their problem gambling helpline when they added sports wagering and iGaming.

Now keep in mind they already had your traditional lottery, they already had casinos that were land-based with table games and slot machines, and they had over 8,000 BLTs in operations in bars and taverns across the state of West Virginia.

And the total number of people in fiscal year 25 seeking help for gambling addiction through their hotline was 1,511.

And 14 people went through a treatment facility for gambling addiction that was paid for by the lottery in West Virginia.

And their entire program runs on roughly 1.5 million dollars a year.

So they did get 4,0206 contacts to their helpline.

Fifteen, 11 of them were for individual seeking gaming addiction help.

So I think that's important to understand.

That is a state much closer in size population-wise to the district.

I know we've heard a lot about Pennsylvania and Michigan this morning, but those states all have more than 10 million in population.

I'm trying to think about the impacts to the city.

Other things to consider that these other states don't have to worry about.

We are so small that we are surrounded by two of the largest gaming states in the country, Virginia and Maryland.

They have massive large lotteries that are very successful.

We have a casino industry that is very successful in Maryland.

And we have a powerful i lottery with the Virginia lottery next door.

We also have historical horse racing now in Virginia.

And we've always had these things just a further to the West in West Virginia.

That said, we also get a lot of cross-border play from people who live in Maryland and Virginia and work here in the district.

Thank you for that.

And just a follow-up.

A 25% tax rate positions DC on the higher end compared to some jurisdictions will may impact operator and uh participation and competitiveness.

My question, Director, is does the proposed tax rate strikes the right balance between maximizing revenue and maintaining a competitive legal market?

I I believe it that it does, and here's why.

I know that in other states, such as West Virginia, the I gaming uh operators are tethered to the brick and mortar casinos by contracts.

So there's a certain deal there in a lot of other states where this exists, where the land-based casinos have a contract with what's called a skin, an operator uh for for the app.

So we don't have a casino here in Washington, D.C.

We never will uh because of federal law that does not allow Class A machines.

So uh with that absence, that 35 percent uh I think can fill that void in my professional opinion.

And and just a follow-up, should the council consider a phased or tiered tax structure?

Um I I I don't believe so.

Uh I I think what I've seen in the bill uh is is appropriate uh for the industry, uh what I I know.

Um I do know that suppliers matter.

Uh I do know that the regulatory oversight uh matters and a consistent funding source to OLG to make sure that we can do our audits that we need to do in the regulatory.

Um I do know also with the CBE requirement uh that that develops potential businesses here in the district.

Um I did see where the bill you know mentioned the development of potential gaming operations and so forth.

Um I just encourage the committee to make sure that you put the control of anything like that under the appropriate agency.

The OLG is not public health experts.

We are not.

Uh that needs to be DBH or subcontractor of DBH when it comes to problem gambling.

They're the experts, they are the health care providers, they deal with mental illness, health, addiction, uh, they need to be in control of that.

Uh we don't we don't have the capacity to do that, nor would we want to.

We're more on the responsible gaming side, and that is making sure that protections are in place for people to play properly and make sure they know where to go for help if they do have a problem.

Okay.

All right.

Thank you very much, Councilmember Felder.

So I mean you've had uh you you've jumped into the swimming pool on sports wagering, and you've done a fair amount of research and audits in the sports wagering setting.

I'm curious.

What lessons learned from the sports wagering setting you would draw if we were to move into I gaming.

Do you would you expect the process to be similar, similar people doing the jobs?

How does regulation of iGaming compare to and build off of regulation of sports wagering?

It's very similar.

Our offer our oversight and regulation team, uh our auditors, our investigators, uh they could do both jobs.

I I feel comfortable in that.

The big uh issue that would come with with staffing would be if we were to test games from suppliers.

And that would not be my recommendation to get into that business.

I know several other states do, some do not.

They rely on third-party testing labs to test games to make sure that they meet the the rules and regulations of the different jurisdictions that they operate in.

Uh there is an a significant expense in that, which I would try to avoid uh repeating that here.

Uh and and still you still have the same protections in place and the ability to uh fine or remove a game when necessary if it doesn't function properly or there's a consumer problem with it.

Uh so overall, uh I don't imagine it costing us a lot to stand up.

But but the testing is a significant thing.

I mean, you probably don't have to test the accuracy of a sports wagering, but you do have to test this.

You want to make sure games function the way that they're supposed to.

Uh what you don't want is to put out on a platform a game that may display the wrong payout amount or issue that that could that would be a problem.

Uh you want to make sure that the game ha functions the way it's supposed to, the payouts are the way they're supposed to, and all of those sorts of things.

Okay.

So I mean what I'm hearing is that there is a lot that's transferable, but this is the issue that is.

That is one issue, and that's why I would put the onus back on the industry, uh the licensees to to do the testing, uh using a third party that we would license and tell them they had to go to rather than try to do that internally.

Okay.

So setting aside the testing, and I think I'm hearing you say that OLG does OLG currently have the staff to initiate an application process and develop the rules for I gaming.

We do have a staff to do that.

Uh there will be some training that would be necessary once we we stand up the program if it if it were to become law.

Um I would imagine uh that that we would be able to train our people in the period of time allotted.

And is that a is that a cost that can be absorbed in the agency's current operations or are there additional costs?

I would prefer that if we we would have that.

Uh but right now I I understand uh if this were something that council and the executive wanted to do uh we could absorb that initial, knowing that we would get two percent later on once the operations began.

Uh so and and on the 2 percent, what do you project the aggregate amount from that assessment would be in the initial 12 months?

It would depend on the number of operators and suppliers that applied to the program.

Um I hate to venture a guess, uh Mr.

Chair.

Uh I would but I would say I would imagine everyone that has a sports wagering license in the district now would be interested.

Uh knowing what I know.

Uh well actually I would say the Class A and the Class C operators, Peter, what's our total right now?

Class A, Class C is uh five.

It's five.

Five.

Yes.

So there's the possibility of five entities coming forward.

And then you're you don't know how many are would come forward in the U.S.

There may be more.

The market, it depends on a lot of factors of who would be interested.

They have not filled out all of their iGaming platforms.

I believe there are eight in operation in West Virginia, but it may be ten don't hold me to that.

It may have changed in my year here in D.C.

So I mean a lot of numbers here.

I think we would at some point there is going to be a projection about how much iGaming would happen and how much revenue would flow from it and then how much 2% would be.

But that 2%, would you use that to backfill and support your general operations or do you have specific uses that you think about specific uses for iGaming for for auditing compliance, uh investigating, so forth.

We do we do find problems from time to time with with any of our licensees, whether it's traditional lottery or or sports wagering.

And we've issued some fines in the past over things that do occur.

That's just part of constant oversight and proper regulation.

Okay, so just making sure that I I understand it.

And this if this were to happen, there's a first phase of putting together rules, getting getting applications in, processing those applications, getting the then the operators would have to get their their uh their operations stood up in the district.

All of that, the rules are will be like things that you've seen in other places, so that's not rocket science in a sense.

The getting their operations up, these are likely to be folks who are already doing sports wagering here, know the the regulatory framework here, also maybe doing eye gaming in other places, again, not a major thing.

And then once they came, they were up and in operation, then the two percent fee happens, and that's where the new work of auditing day-to-day is happening, and that's where you can do the things up to then with your current budget, but once that happens and you're in day-to-day oversight of the operations, that's where you need the two percent.

And that's why it can happen in a sense seamlessly.

Yes, sir.

Okay.

Uh sweepstakes.

So I you heard me ask about this.

And can you talk to me about what sweepstakes gaming is?

And and one of the things that you might you would have heard the different witnesses talk about was don't ban us, regulate us in the same way.

And so if you could speak to that about what is it about the sweepstakes that concerns you the most?

They present like casino games, the and and there's an element of risk involved, and people receive money in exchange for for that risk.

So it's the very definition of uh wagering online.

Uh you know, I I have great respect for our laws.

And these people that that operate in that gray area, they don't pay taxes.

Uh they're they're not listed as to an entity that does business in the district.

Uh uh, but but they are they are taking revenue away from other companies who have invested in the district and and play by the rules, and and they pay significant fees to offer sports wagering, for example.

Uh and uh on their platforms.

Uh and so uh I I I just think it it's in our best interest uh for any of those entities that are out there like that, apply for a real license.

Apply for a gaming license if it becomes legal.

Uh apply for a sports wagering offer uh license if you want to offer it.

Go through the legal steps.

Uh but you you have these entities who who take advantage of a lot of times it's the elderly population who will will use social media to reach people uh and different means.

And it would be nice to have laws that are drafted to specify what the these entities are and give some legal backing to being able to try to stop them.

Maybe going to, like has been mentioned earlier, uh DNS or the large social media companies and being able to get these ads taken down in our jurisdiction if it were deemed to be illegal.

But I mean part of what the folks from that industry were saying is don't ban us regulators.

Okay.

And I think part of the Well, well, pla play social, I I don't I do not read this law to be banning things like words with friends and farm bill.

Those are not casino style games.

Those are play social games.

There may be uh and uh you would have to obviously talk to people in that industry to to better understand what their concern is.

Uh but but that's not what I'm referring to when we're talking about sweepstakes.

I'm talking about online casinos who call themselves casinos.

They're often based in foreign countries uh that that are constantly hitting people with ads uh to play games and win real money.

I mean, I have to say I'm not we'll be looking more into this and there will be more conversation on it.

Some of the conversation was it's free.

You don't have to spend a nickel on this.

And actually as a road to gambling, that worries me maybe even more because it can bring somebody in on an assumption that there's no risk, but then you start getting into a thing where you're you're putting money forward and it is and it's turned into something.

But I I'm gonna want to understand on this question of ban or regulate.

Uh I'm uh I think that's a legitimate question that's been raised by the testimony, and we'll have more conversation.

I'm sure I'll hear more from the industry on this.

But now I am two minutes over and I will turn it over to Councilmember Felder.

Uh thank you, Mr.

Chairman.

Uh Director, I'm pretty sure you heard this uh from our public witnesses of my questions pertaining to CBE participation.

Uh I'm not sure if you've seen this in West Virginia, uh like how small and local businesses were integrated into procurement opportunities in West Virginia.

Uh nonetheless.

My question is if you have, how should the district ensure that the uh CBE requ that this requirement leads that the C B E requirement leads to meaningful uh economic inclusion rather than uh superficial compliance?

That's a good question, council member.

Uh West Virginia does not have CBE requirements in their law.

Uh the the thing that tethered their iGaming platforms to brick and mortar casinos.

That that was the connection there.

Okay.

Uh there are four destination casinos and then their historic resort.

Um so that was the tieback to put it in job creation aspect of what those facilities offer in that state.

I do know that the district has very robust CBE policy.

I've been very impressed in my first year here with everything we do.

The lottery, for instance, meets its CBE goal every year, and we're always looking for ways to grow businesses.

And along those lines, uh I think there are a lot of opportunities in marketing and promotions that that these companies could all look to.

And currently all of our sports wagering ANCs already have CBE plans that are approved and functioned through DSBLD.

And so obviously, they're doing it now.

Uh so the these companies can find ways to do that.

Uh I did notice in your your draft legislation uh the commitment of a certain percentage to go to a development fund.

I would recommend putting that under the control of uh a government agency that that develops grants and so forth for things in that technology sphere of those items that you mentioned uh in your legislation uh making that specific so that you make sure it gets to where you where council intends it to go.

Uh thank you for that, Director.

Now, uh Director, within the bill um it proposes an open license structure with no caps on operators, which could significantly uh shape the market.

My question is what are the benefits and risk of having no caps on the number of operators from your perspective?

The market will mature on its own.

Uh we're already seeing that in the sports wagering market.

Uh I I think free enterprise should dictate uh making it open to anyone uh who meets the requirements to a chance to come in.

Uh I do know in the bill that that each operator was given two skins uh that that allows them to do different branding.

Uh skins have value in in the gaming sphere, how you brand it and so forth.

Um I think the bill fits uh what I see in the industry today, and it would be a workable model here if council chooses to go that direction.

And is there um any lessons uh that we can draw from other jurisdictions?

Oh, absolutely.

Uh technology is changing rapidly.

Uh how people connect, how they communicate, how we work, how we play is changing at faster than ever speeds.

And and it's something that that hits really close to home for all of us because we see it.

We're all on our phones constantly, screen time, all of this.

We're in a cashless society now.

Most of the lotteries in this country are still cash-based.

They don't allow credit cards, they don't allow debit cards to be used.

Uh if you're in you're a cash-only business in a cashless society, you have a problem.

Now, fortunately here in Washington, we've been innovative.

Council and the executive have always been good about keeping lottery on the front end of a lot of things historically.

Uh all that that I would ask uh being here only a short time so far, uh, is that always consider the impacts of responsible gaming on our population.

Always consider the competition that we face every single day.

Maryland has a massive $2 billion lottery.

Virginia has a massive $2 billion lottery.

We have casino gaming all around us.

These things take away from the entertainment dollar.

On top of that, you have other things.

You have social gaming that causes people to spend money.

You have uh, and it's not gambling.

It's literally I'm playing a game, and to get an advantage, I need to buy gold or or whatever in the context of that game to continue playing.

A lot of our younger people are looking at these things.

Yes, it's out there.

We are not going to change how society operates and functions, but we have to change with the times in order to remain relevant and to continue to do our jobs to produce revenue for the people of the district.

And uh we're we're diligently trying to do that, and I appreciate council uh taking time uh to to talk to us about any gaming legislation that comes up because everything does affect each other.

It really does.

And whether you choose to go the route of eye gaming or if you choose to invest more in games of skill, which already exists and will be growing, that's only taxed at 10 percent, for instance.

And those are machines that present like slot machines, but their mechanics are a little different, but they're already available in our bars and taverns in the city today.

And and that's there.

Uh if you decide to do historical horse racing or any other type of legislation that comes forward, understand paramutual wagering on a machine, they still present like slot machines.

That will still be a casino-like environment that you look at.

Uh these are all things to take into consideration as policymakers.

I'm here to advise.

My staff's here to advise and help.

Uh, but at the end of the day, these are the decisions that we live leave up to our elected officials.

And uh I'll leave it at that.

No, I appreciate that.

Now there's a real concern that this legislation may be perceived as expanding gambling rather than regulating the existing problem.

Could you speak to how should the district communicate this policy shift to residents?

I would just say that online gaming exists here today.

You can go across the border and play place a bet with sports wagering, or you can do sports wagering here.

Times are changing.

Our numbers games, which are 60% of our revenue, there's a decline that's occurring.

And a lot of it is because the players who enjoy those games are aging and they're passing away.

We see other players playing different types of games.

And just a follow-up, uh what public education effort should a company implementation.

So this become legalized?

Oh, absolutely.

The responsible gaming aspect of it, uh, the revenue, what it would be used for, what it would go to.

Um I know that you know, council and the mayor and the district overall is facing some uh financial headwinds being part of the OCFO, we know that.

What what what what's uh projected.

Uh we've lost 40,000 federal government jobs, for instance, in the past year.

We see that in our lottery sales.

We see that impact.

We have reduced foot traffic at our retailers.

And I would be remiss, Mr.

Councilmember, if I didn't say this based on some of the things that I heard earlier, if if you will give me uh 13 seconds or so.

Um we have 333 retailers in this city that sell lottery.

They share in more than 11 million, 11 and a half million in commissions each year uh from their sale of lottery.

We help augment their businesses.

That number is down to 333 from a much higher amount prior to the pandemic.

Telework has greatly impacted the district, the amount of foot traffic.

All of our businesses see it.

Uh but but there are opportunities there.

Uh but I know the comment was made earlier that we have a $50 scratch-off ticket in the city.

Uh I I want to say that we also have $1 scratch-off tickets.

We have games at every price point, and online people can play our games for as little as 10 cents.

And our average play on some of our online tickets, uh, the average bet, the most common bet is 50 cents.

All right, so let's make that clear.

The people who play lottery is a they're a cross-section of our society.

It's every economic background.

I have data to support that, and I'm happy to share with council and so forth.

But I want to make that clear.

We do not prey on the weakest members of our society.

Uh it you can see that that people play of every socioeconomic background.

We have a very diverse city.

We have some of the highest GDP per capita in the United States, and we have products that that people uh play at different price points.

And I just want to make that that very clear.

And then just one final question, which I don't think this was talked about, uh, anti-money laundering.

Yes, sir.

Um given the financial nature of eye gaming, strong anti-mon money laundering protections are essential.

Uh could you speak to how will uh AML requirements be integrated into the regulatory framework?

They are already there with our sports wagering and and our iLottery.

They are built into what we do today through our internal controls and regulations.

Everything we do is industry standard, and I'm very proud to have this opportunity to come to Washington and be here and be part of our community and lead what I feel like is a great lottery.

We are a small lottery with a lot of unique challenges, but we have great people and a lot of institutional knowledge.

Uh I know uh based on history.

I have read a lot of things that have happened in the past, uh, but something that that that makes me excited is since 1982, this lottery's generated more than 2.4 billion for our people.

Something that's not been mentioned at any point today in my budget hearing or in this hearing today is how much we pay out in commissions, how much we pay out in prizes to our players.

Last year, just the traditional lottery alone, almost $129 million in prizes, our number one expense.

And for our sports book operators as well is our prize and payouts.

They're rather significant.

So people do win money, and when they do win money, they usually reinvest it in the economy of where they live.

And we do get a lot of cross-border play.

Something that has hurt us lately is telework and things that have occurred, and there are fewer people come into the district, fewer foot traffic at retail.

So we're trying to be innovative and look at different ways to offer entertainment to people who are interested.

Thank you, Director.

And that uh concludes my question for you, Mr.

Chairman.

Thank you.

Thank you very much, Councilmember Felder.

We're getting there.

But one more round.

It's been a long day.

You you were here this morning, me too.

Yes.

Um and that cross-border thing, I thought I thought one of the things that was so interesting this morning was on the sports wagering side, that the answer to the question that there is a breakdown of how many, how much of the the participation is DC residents and how much of it is folks from out of state, and the majority not by a lot was from out of state.

So that that was an interesting observation.

Any reason to think it would be different in the iGaming setting?

Uh I do not.

I I imagine we have a great number of commuters.

Having lived here for just over a year, I know a lot of the people around me live in Maryland.

They may work here, but but they live in other and when they go home, they're gonna, you know, buy and and do what they do uh there.

But when they're in DC, you know, that's the opportunity to uh have them spend some of their money here in the district while they're at work, hopefully.

Okay.

Uh I want to sort of check through some of the things, the guardrail questions that I think exist in the sports wagering world, but it's helped me understand how it would work in the iGaming setting.

So the current sports wagering law requires that rules and regulations governing sports wagering include maximum wagers that may be accepted by an operator from one any one individual on a sport event.

This type of guardrails sort of maximum spends seems reasonable for the purposes of sports wagering.

In your experience working with operators in this uh these platforms, has it worked in practice, these kinds of maximum.

And how would that apply in an eye gaming setting?

Uh the same functionality and RG tools that we have for sports wagering translate over to the online casino aspect.

You can have cooling off periods, uh you can have uh robust monitoring of what would be flagged as a potential problem account where where someone is spending too much money.

Uh you can put in a lot of different opt-ins for cooling off periods for different players, but even more so, you can set limits in terms as a council, as a government, uh minimizing uh what you think might be the right amount to spend on a daily, weekly, monthly, annual basis, even.

Um there's all sorts of different functionality that that could happen.

And I mean you got another.

And then Peter, let him Peter deals with this on a daily basis.

I I think the other thing that comes into play with the with the sports wager and operators is they all have the AML obligations.

And through the AML anti-money laundry and through the anti-money laundering um uh programs that they have, they monitor the amount of spend uh of these accounts.

And so when they have a like a new customer, they'll monitor and usually typically have them at lower levels, and then they monitor for spikes.

Uh and then they'll come back and sometimes they'll put limits on them.

And uh and so they'll they'll that's done sort of through the AML apparatus where they put limits on some of their players and in some cases even um uh cut them off uh if need be if they feel that it's uh it's too dangerous, suspicious.

Okay so that's interesting.

So the the the premise of the question was we have these these things in the sports wagering context do they work?

The answer is yes.

The next question is are they transferable?

And I think the answer that I'm hearing is yes they are transferable ironically one of the things that makes them transferable is a separate benefit which is the anti-money laundering which means that you're tracking the activity of each account and how much is being spent for anti-money laundering purposes but it also is applicable to spikes in behavior and and trends that that you can use to protect and so it's transferable between the between the mechanisms between sports wagering and eye gaming.

Cooling off periods same kind of thing yeah that yeah they they would have I I see it as that in the in the i gaming context they would also be uh uh have those controls in there those RG tools for cooling off periods so they would have to uh you know have a mechanism so they can some of them can maybe uh cool off maybe for a week, two weeks or um also limit their time played amount played and of course the self-exclusion program would continue to apply uh as it applies right now to lottery and sports wagering they would have that and in in in our self-exclusion plan or program that we have here in the district is when you self-exclude let's say you're a lottery player and you're self-excluded because of your lottery play you get self-excluded not only in lottery but in every every so it it impacts every so you can't just self-exclude for one particular game type of game all right uh and would you expect to put these kinds of things in regulations or how would you how would you how would you give teeth to this?

I think we would we would put them we would put some of these in in the uh in the regulations and then separate uh but related to that we typically produce uh minimum and minimum internal control standards these are more detailed that cover very detailed uh procedures and and uh that they have to follow um and so they work hand in hand with the rules the regulations and then are they uh by definition incorporated in the license that there's minimum standards that they need to comply with and that's a requirement of having and retaining the license?

Yes that that's a continuous requirement and then when we update the uh we call them the mix the minimum control standards when we when we update them we send them to all the operators to remind them of some updates here some uh sections that we may have uh updated one of the other things that we heard was the one one phenomenon is these these your phone is 24-7 somebody said casinos are open 24-7 there was there was conversation about it happens fast there's no pauses and there's also conversation about you can slow down the play to what extent are would you contemplate do having requirements like that to slow the play so there's a pause as part of and we're hearing this more and more in the social media context how how do you see that issue and is that a thing that could be captured in regulations or minimum operating standards.

I I think it can be captured um one of the things is as Randy indicated earlier uh we're since we're not the first into this i gaming space here uh my staff is is starting to reach out to the regulators of the other jurisdictions that have i gaming right now to to see how their what their approach is to that kind of activity and see if that's something that maybe we want to borrow and maybe something that would work here.

So we're actively involved right now in talking to the other jurisdictions about you know the the more detailed types of of rules and and internal controls that they institute.

And how about linking to credit cards?

How would you see that?

So far I think in um at least the ones that I know of that they they haven't linked it to credit cards.

It's been I don't want them linked to credit cards.

I don't want people playing on credit I'm just wondering what kinds of things do you have tools that you could keep that from happening.

Yeah I I think uh could defer to council but I I believe uh there's a district law rule that uh or maybe maybe an internal policy that uh prohibits the use of credit cards.

We we could put that in a in the rules as we develop the rules.

As we develop the rules.

I mean, forms of payments that are acceptable.

There's there's sort of a series of things.

There's slowing the speed of play, setting caps on daily wagers, establishing monthly loss limits uh tied to a mandatory cooling off period, banning credit cards as a source of funds.

Is it fair to say that all of those things would be could be contemplated in the way in which you regulate this area?

Yes, I think I think so.

Given the the nature of eye gaming, uh the the sort of how we've been talking about the rapid uh way of play, I think these are all things that we'll take into consideration in in drafting the rules and the internal control standards.

And I mean I guess there's a question of whether or not we should suggest something like that in the legislation itself.

Um I would always prefer that the council or the elected officials, if you feel strongly about something like that to prevent any misunderstanding whatsoever, put it put it in the codify.

With the caveat that we can do rulemaking a lot faster than changing legislation, and especially with the different forms of payment that are developing constantly.

So if there is some flexibility where if you say no credit, X, Y or Z, or anything else that the that the that OLG may promulgate by rules so that we can capture things quickly if a new form of payment comes up.

I mean I wonder if I wonder if maybe part of the answer, I don't want to get into micromanaging it.

Um maybe there's even something in the uh the report on the legislation that suggests that these be areas that you explore so that it gives you guidance from the legislature without providing uh without us trying to get into the business of all of the details of the things that you're gonna be an expert on.

Certainly.

And we and uh we are also very amenable as is every agency that if you have comments on rules on taking those into consideration.

So as we publish rules and have a comment period in the final rulemakings, uh we would take those type of things in consideration.

Also, when you talk about credit and gambling, the credit card companies themselves are very restrictive in what they will allow, if they will allow it at all.

Many charge a higher interest rate on gambling debt, many don't allow it at all.

So there are a lot of regulations in place that make it difficult to gamble on credit because most people look at that as bad debt.

Okay.

So I mean it's a little bit tricky here because the legislation calls for emergency regulations and so that whether or not there is a comment period, but I think that we need to stay in commun.

If this should happen, we need to stay in communications to make sure.

And we had this conversation earlier today about a couple of other topics in front of you.

So the emergency regulations under the ADA only lasts for a short period of time.

So generally what happens is when we issue regulations we do emergency and proposed at the same time, and that way the emergency go into effect, but at the same time we're taking public comment on the final rules which go through the full process.

So the thing that I want to be careful about is you could have emergency regulations and then enter into contracts based on the emergency regulations, and then the permanent legis regulations could be different, but the contracts are already in place, so it could so I think we want to be together through that process.

One part of the back and forth earlier was we want all these guardrails.

We also want if we have it, we want regulated eye gaming to displace unregulated eye gaming, and we would be putting requirements on regulated eye gaming that may to what extent should we be worried that we would overload it such that we then didn't displace unregulated eye gaming.

I know it's a concern uh that that you have.

Uh however, there's no guarantee when someone plays one of these unregulated sites that they're even going to get paid at the end of the day.

Um I think that the strong regulated industry being available, being able to uh promote its product and offer people something that they know is regulated by the government uh will bleed some of that away from the unregulated market.

But I I just can't imagine someone having an option of something that you know is regulated versus something that's unregulated not being interested in doing that.

Okay.

So you're not too worried about these kinds of requirements intended to protect the consumer.

No, sir.

I think consumer protections are a good thing.

All right.

How do the proposed licensing and renewal fees in this legislation compare to what you've seen for those for online sports wagering and for those for this industry and other places?

They're comparable.

The $2 million fee uh for a five-year period.

Um I did notice that the renewal fee went down to 500,000.

Uh that that's not normal from what I've seen in some other places.

Uh normally it's uh sometimes I see it go down by 50 percent, but but not by by that much.

Uh the supplier uh license fees that that were in the legislation uh were actually higher than what I've seen in some other places, but I think they're appropriate.

Um I don't think there's anything in it that would uh cause a qualified entity from wanting to do business here to not try to enter the market.

Okay.

The proposed bill allows the district to enter into reciprocal agreements with a territory, tribal jurisdiction, or other lawful jurisdiction, otherwise known as a permissible jurisdiction.

And I gaming patrons can be located in a district or in a permissible jurisdiction.

For those of us less familiar with how this functions in practice, what impact, if any, would the location in which a patron plays have on the calculation of an operator's gross gaming revenue and associated taxes in the district.

So help me understand this permissible jurisdiction.

So the whole concept around that uh centers around live dealer games like poker, okay?

And the aspect of we're in a small jurisdiction that would not have many players.

West Virginia was in a similar situation, a smaller jurisdiction with not that many people interested.

But you can get into a compact with other gaming states such as Pennsylvania or New Jersey, and then your players can play at the live dealer table with people in those other states.

And the way that the money works with that is based on a percentage of play from your jurisdiction going into it.

So money doesn't really cross state lines.

Uh you have to be careful about uh a lot that goes into that.

But that whole concept is to offer gaming uh in in various jurisdictions uh that way where you can have bigger pools to draw from for those certain games.

So there will be like a studio, for instance, let's say in Philadelphia, uh, where you'll have someone uh live dealer on camera on your your phone or or your computer, and they're dealing you a hand of cards that is physically happening there in that studio.

And you could be playing with people in Pennsylvania, West Virginia, and the District of Columbia at that table for that particular hand.

Okay, that's interesting.

I mean it puts it it reminds me, I think it's like 10 years ago.

We're we're almost done, but I but I was at a Thanksgiving dinner and we went for a walk maybe before the dinner and uh and somebody was telling me about playing poker online.

So it was a phenomenon that was out there even ten years ago, and I said uh well, what happens?

I mean, if you don't have enough players, and the person said at any given moment there are a million people around the world playing poker online.

Like finding a player was not a problem.

Uh maybe that speaks to again it's out there in one way or another.

All right.

That finishes the questions that I have and everybody else is gone, and I tried to give Councilmember Henderson a heads up that we were coming to the end.

Okay.

She said she's gotten tied up on other things, but I think you can expect to hear from her.

Okay, excellent.

I look forward to it.

And then before we close, is there anything else that you want to say about this topic?

I I think it's been covered at length.

Um I appreciate Council's uh willingness to uh to to have our input and to talk to us today about it.

Um I just want to to reiterate that you know the lottery has existed since nineteen eighty two.

And there are a lot of good things that have come from the lottery.

Um there's a lot of good revenue that's been produced for Washington over this period of time.

Uh, a lot of retailers have benefited in their commissions.

Uh a lot of our community ha has benefited in and winning prizes.

I mean, that that's why we exist.

Lotteries exist uh to take care of our people in our different r uh jurisdictions to generate that revenue for good programs to occur.

Uh gaming's going to take place, whether whether we regulate it or not.

People are going to spend their entertainment dollars doing these sorts of things.

And I and I just want to just want to say that uh I appreciate the chair and the council for uh the time today to talk a little bit uh about the future and what the gaming landscape may look like and and we are always here uh to uh provide counsel and help in any way we can.

Uh and and again I'm happy to be here and happy to uh always uh answer any questions council may have at any time.

But again, uh we're here for the people.

That's why we exist.

So thank you.

All right, really appreciate it.

Um this concludes today's public hearing.

If you plan on submitting written testimony for the record, please do so by uploading it to the council's online hearing management system before the record closes at five PM on May eleventh, twenty twenty six.

The time is now five eighteen PM and this hearing is adjourned.