Gaming Rises—and Falls—Sweeten Pot of Opportunities for Lawyers
Slices of the gaming pie may be getting smaller as more jurisdictions vie for gamblers' dollars, but the industry's expansion—and contraction—has meant more opportunities for lawyers to get in on the action.
Gaming lawyers from multiple jurisdictions abounded in Philadelphia this week as the applicants and current casino operator license holders vie for or oppose the second casino license up for grabs in the city. More than 30 law firms were listed on the Pennsylvania Gaming Control Board's website as representing either applicants, existing license holders or manufacturers of gaming equipment. And that was for just one casino in one city. The firms included some of the largest in Pennsylvania, a number of smaller Harrisburg-based firms, several out-of-state firms and even one from Australia.
In the decade since the Pennsylvania Race Horse Development and Gaming Act of 2004 was passed, a number of Pennsylvania firms have made a foray into the world of gaming law, with some tailoring their practice to Pennsylvania's specific law, others looking regionally, and some utilizing the resources of their international platform to offer gaming services in multiple markets. But New Jersey firms, as evidenced just by the list of firms involved in the Philadelphia license application process, are still very much a player in the Pennsylvania market as clients look to their 35-plus years of experience with gaming in Atlantic City.
Greenberg Traurig, an international firm with nearly 40 offices around the world, has had a gaming practice concentrated in its Chicago, Las Vegas and Miami offices. But in an effort to capitalize on the growing gaming market in the northeastern part of the country, the firm hired longtime Gaming Partners International General Counsel Laura McAllister Cox as a shareholder in its Philadelphia office earlier this month.
Cox spent about a decade at Gaming Partners, a manufacturer and distributor of table game equipment, serving as the company's sole in-house lawyer. Prior to that she spent several years at Cooper Levenson, an Atlantic City-based firm known for its work in the gaming industry.
"I'm leaving a situation where I had one client and lots of different areas I had to service," Cox said. "Here I will have lots of clients but the ability to have 1,700 lawyers to assist."
Cox said Greenberg Traurig represents operators, manufacturers and distributors, online companies and investors in the industry. Within that realm, the firm handles issues such as gaming regulatory work, government relations, litigation, employment, M&A and securities work.
Cox said Pennsylvania is reaching a level of maturity in its casinos and is also experiencing potential new casinos opening in the market. She pointed to other states in the Northeast, such as New Hampshire, Massachusetts and New York, that are getting involved with gaming. All of this plus what is happening in New Jersey were reasons Greenberg Traurig wanted to expand its gaming practice to the region, she said.
Greenberg Traurig is also looking beyond U.S. borders.
"I think we are seeing a bit more of an international focus in that traditional, U.S.-based companies are looking to extend their reach to abroad," Cox said.
And many foreign companies are looking to come to the United States, she said, making cross-border work in the gaming space another opportunity for law firms.
The gaming industry is in a unique spot in that it is both expanding to new markets and seeing many existing markets suffer bankruptcies and casino closures.
The gaming industry is an "exceptionally competitive market," said Duane Morris Cherry Hill, N.J.-based partner Hersh Kozlov. "The margins are narrowing in the gaming industry with the competition. ... There aren't new gamblers coming out with new casinos, so the pie is getting cut."
And sometimes, clients get cut too. Kozlov and his team at Philadelphia-based Duane Morris represented ownership of the Atlantic Club Casino in Atlantic City as it closed its doors earlier this month. The firm has been involved in the recent Philadelphia casino license process as well as many of the recent Atlantic City casino bankruptcies, he said.
Aside from Pennsylvania and New Jersey, Duane Morris also does a lot of work through its Baltimore office in Maryland gaming as well as handles matters in Delaware.
Whether it's game development, game theory, casino approval, casino refinancing, game approval or employment law issues, the legal work is varied, Kozlov said.
As some of Atlantic City's marketplace contracts, the New Jersey gaming scene has expanded with the recent approval of Internet gaming. Kozlov said his firm represents the casinos where the servers taking bets have to be housed and has handled contracts with Internet service providers.
Kozlov said it's only a matter of time before other jurisdictions such as Pennsylvania look at Internet gaming.
Cox agreed Internet gaming is something to watch.
"That's sort of a situation where the world is watching to see how that regulatory model works," Cox said. "Internet gaming is only legal in three states in the United States right now. It's a developing story. Even Pennsylvania is watching closely."