[Federal Register Volume 68, Number 123 (Thursday, June 26, 2003)]
[Notices]
[Pages 38090-38098]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-16168]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. National Council on Problem Gambling, Inc.; 
Proposed Final Judgment and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. Section 16(b)-(h), that a proposed Final 
Judgment, Stipulation and Competitive Impact Statement have been filed 
with the United States District Court for the District of Columbia in 
United States of America v. National Council on Problem Gambling, Inc. 
(``NCPG''), Civil Action No. 1:03 CV 01279. On June 13, 2003, the 
United States filed a Complaint to obtain equitable and other relief to 
prevent and restrain violations of Section 1 of the Sherman Act, as 
amended, 15 U.S.C. 1. The United States brought this action to enjoin 
NCPG from engaging in an allocation along state lines for the provision 
of problem gambling services in the United States. The proposed Final 
Judgment, filed at the same time as the Complaint, requires NCPG to 
eliminate the anticompetitive conduct identified in the Complaint.
    Copies of the Complaint, proposed Final Judgment and Competitive 
Impact Statement are available for inspection at the U.S. Department of 
Justice in Washington, DC in Room 215, 325 Seventh Street, NW., and at 
the Office of the Clerk of the United States District Court for the 
District of Columbia, Washington, DC.
    Public comment is invited within sixty (60) days of the date of 
this notice. Such comments, and responses thereto, will be published in 
the Federal Register and filed with the Court.

[[Page 38091]]

Comments should be directed to Marvin N. Price, Jr., Chief, Chicago 
Field Office, Antitrust Division, U.S. Department of Justice, 209 S. 
LaSalle Street, Suite 600, Chicago, IL 60604, (telephone: (312) 353-
7530).

Constance K. Robinson,
Director of Operations.

Stipulation

    It is stipulated by and between the undersigned parties, by their 
respective attorneys, as follows:
    1. A Final Judgment in the form attached hereto may be filed and 
entered by the Court, upon the motion of any party or upon the Court's 
own motion, at any time after compliance with the requirements of the 
Antitrust Procedures and Penalties Act, 15 U.S.C. 16, and without 
further notice to any party or other proceedings, provided that 
plaintiff has not withdrawn its consent, which it may do at any time 
before entry of the proposed Final Judgment by serving notice thereof 
on defendant and by filing that notice with the Court.
    2. Defendant shall abide by and comply with the provisions of the 
proposed Final Judgment pending entry of the Final Judgment by the 
Court, or until expiration of time for all appeals of any Court ruling 
declining entry of the proposed Final Judgment, and shall, from the 
date of the signing of this Stipulation, comply with all the terms and 
provisions of the proposed Final Judgment as though the same were in 
full force and effect as an order of the Court.
    3. This Stipulation shall apply with equal force and effect to any 
amended proposed Final Judgment agreed upon in writing by the parties 
and submitted to the Court.
    4. For purposes of this Stipulation and the accompanying Final 
Judgment only, defendant stipulates that: (i) The Complaint states a 
claim upon which relief may be granted under Section 1 of the Sherman 
Act; (ii) the Court has jurisdiction over the subject matter of this 
action and over each of the parties hereto; and (iii) venue of this 
action is proper in this Court.
    5. In the event plaintiff withdraws its consent, as provided in 
paragraph (1) above, or in the event that the Court declines to enter 
the proposed Final Judgment pursuant to this Stipulation, the time has 
expired for all appeals of any Court ruling declining entry of the 
proposed Final Judgment, and the Court has not otherwise ordered 
continued compliance with the terms and provisions of the proposed 
Final Judgment, then the parties are released from all further 
obligations under this Stipulation, and the making of this Stipulation 
shall be without prejudice to any party in this or any other 
proceeding.
    6. Defendant represents that the undertakings ordered in the 
proposed Final Judgment can and will be satisfied, and that defendant 
will not later raise claims of hardship or difficulty as grounds for 
asking the Court to modify any of the undertakings contained therein.

Dated: June 13, 2003.

For Plaintiff United States of America

R. Hewitt Pate,
Acting Assistant Attorney General.

Deborah P. Majoras,
Deputy Assistant Attorney General.

Constance K. Robinson,
Director of Operations.

Marvin N. Price, Jr.,
Chief, Chicago Field Office.

Frank J. Vondrak,
Assistant Chief, Chicago Field Office.

Rosemary Simota Thompson,
Attorney, Chicago Field Office, IL Bar #6204990.

Attorneys, Department of Justice, Antitrust Division, 209 S. LaSalle 
Street, Suite 600, Chicago, Illinois 60604. Telephone: (312) 353-
7530. Facsimile: (312) 353-1046.

For Defendant NCPG, Inc.

Sanford M. Saunders, Jr., Greenberg Traurig, LP,
800 Connecticut Avenue, NW., Suite 500, Washington, DC 20006. 
Telephone: (202) 331-3130. Facsimile: (202) 261-0150.

Final Judgment

    Plaintiff, United States of America, filed its Complaint on June 
13, 2003. Plaintiff and defendant, National Council on Problem 
Gambling, Inc. (``NCPG''), by their respective attorneys, have 
consented to the entry of this Final Judgment without trial or 
adjudication of any issue of fact or law. This Final Judgment shall not 
constitute any evidence against or an admission by any party with 
respect to any issue of fact or law herein.
    Therefore, before the taking of any testimony and without trial or 
adjudication of any issue of fact or law herein, and upon consent of 
the parties, it is hereby
    Ordered, adjudged, and decreed, as follows:

I. Jurisdiction

    This Court has jurisdiction of the subject matter of this action 
and of each of the parties consenting hereto. The Complaint states a 
claim upon which relief may be granted against the defendant under 
Section 1 of the Sherman Act, 15 U.S.C. 1. Venue is proper in the 
District Court for the District of Columbia.

II. Definitions

    As used in this Final Judgment:
    A. ``Agreement'' means any contract, arrangement, or understanding, 
formal or informal, oral or written, between two or more persons, at 
least one of which is the NCPG or a member of the NCPG.
    B. ``And'' means and/or.
    C. ``Any'' means one or more. The term is mutually interchangeable 
with ``all'' and each term encompasses the other.
    D. ``Certification'' means NCPG's formal approval or endorsement of 
training programs for problem or compulsive gambling counselors.
    E. ``Communication'' means any disclosure, transfer, or exchange of 
information or opinion, however made.
    F. ``Customer'' means any person, whether governmental or private, 
including casinos, Indian tribes and other entities, who sponsors, 
funds, arranges, purchases, solicits, or facilitates the procurement of 
any problem gambling services.
    G. ``Including'' means including, but not limited to.
    H. ``Member'' means any person who is an organizational, 
individual, affiliate or any other type of member of the NCPG.
    I. ``NCPG'' or ``defendant'' means the National Council on Problem 
Gambling, Inc.; any parent, predecessor, or successor of that 
organization; any joint venture to which such organization is or was a 
party; and each officer, director, employee, attorney, agent, 
representative, consultant, or other person acting on behalf of any of 
them.
    J. ``Person'' means any natural person, corporation, company, 
partnership, joint venture, firm, association, proprietorship, agency, 
board, authority, commission, office, or other business or legal 
entity, whether private or governmental.
    K. ``Problem gambling services'' means all services relating to the 
treatment or prevention of problem or compulsive gambling, including 
dissemination of information regarding problem gambling, telephonic 
hot-line or help-line services, training of problem gambling 
counselors, certification of various problem gambling training 
programs, and provision of any product or service aimed at assisting 
problem gamblers.
    L. ``Problem gambling services provider'' (``PGSP'') means any 
person involved in the provision of problem gambling services, 
including the NCPG and any NCPG member.

[[Page 38092]]

    M. ``Relating to'' or ``relate to'' means containing, constituting, 
considering, comprising, concerning, discussing, regarding, describing, 
reflecting, studying, commenting or reporting on, mentioning, 
analyzing, or referring, alluding, or pertaining to, in whole or in 
part.
    N. ``Selling'' means offering for sale or actual sales of any 
problem gambling services.
    O. ``Year'' means calendar year or the twelve-month period on which 
business records are based.

III. Applicability

    A. Final Judgment applies to defendant and to those persons in 
active concert or participation with defendant who receive actual 
notice of this Final Judgment by personal service or otherwise, 
including each of defendant's officers, directors, agents, employees, 
successors, and assigns.
    B. Defendant shall require, as a condition of any merger, 
reorganization, or acquisition by any other organization, that the 
organization to which defendant is to be merged or reorganized, or by 
which it is to be acquired, agree to be bound by the provisions of this 
Final Judgment.
    C. Nothing contained in this Final Judgment is intended to suggest 
or imply that any provision herein is or has been created or intended 
for the benefit of any third party and nothing herein shall be 
construed to provide any right to any third party.

IV. Prohibited Conduct

    Defendant is hereby enjoined from directly or indirectly:
    A. Initiating, adopting, or pursuing any agreement, program, or 
policy that has the purpose or effect of prohibiting or restraining any 
PGSP from engaging in the following practices: (1) selling problem 
gambling services in any state or territory or to any customer; or (2) 
submitting competitive bids in any state or territory or to any 
customer.
    B. Adopting, disseminating, publishing, seeking adherence to, 
facilitating, or enforcing any agreement, code of ethics, rule, bylaw, 
resolution, policy, guideline, standard, certification, or statement 
that has the purpose or effect of prohibiting or restraining any PGSP 
from engaging in any of the practices identified in Section IV(A) 
above, or that states or implies that any of these practices are, in 
themselves, unethical, unprofessional, or contrary to the policy of the 
NCPG.
    C. Adopting, disseminating, publishing, seeking adherence to, 
facilitating, or enforcing any standard or policy that has the purpose 
or effect of:
    (1) Requiring that any PGSP obtain permission from, inform, or 
otherwise consult with any other PGSP before selling problem gambling 
services or submitting bids for the provision of problem gambling 
services in any state or territory or to any customer;
    (2) requiring that any PGSP contract with, provide a fee or a 
portion of revenues to, or otherwise remunerate any other PGSP as a 
result of selling problem gambling services in any state or territory 
or to any customer;
    (3) sanctioning, penalizing or otherwise retaliating against any 
PGSP for competing with any other PGSP; or
    (4) creating or facilitating an agreement not to compete between 
two or more PGSPs.

V. Permitted Conduct

    A. Nothing in this Final Judgment shall prohibit any NCPG member, 
acting alone and not on behalf of or in common with defendant or any of 
defendant's officers, directors, agents, employees, successors, or 
assigns, from negotiating any lawful terms of its business relationship 
with any national, state, or local government entity, or any private 
entity.
    B. Provided that such activities do not violate any provision 
contained in Section IV above, nothing in this Final Judgment shall 
prohibit any NCPG member from working with another person in a valid 
joint venture.
    C. Provided that such activities do not violate any provision 
contained in Section IV above, nothing in this Final Judgment shall 
prohibit the NCPG from sanctioning or terminating a member according to 
a process described in the NCPG by-laws.

VI. Notification Provisions

    Defendant is ordered and directed to:
    A. Publish the Final Judgment and a written notice, in the form 
attached as Appendix A to this Final Judgment, in Card Player magazine 
within 60 days of the entry of this Final Judgment.
    B. Send a written notice, in the form attached as Appendix A to 
this Final Judgment, to each current member of NCPG within 30 days of 
the entry of this Final Judgment.
    C. Send a written notice, in the form attached as Appendix A to 
this Final Judgment, to each person who becomes a member of NCPG within 
10 years of entry of this Final Judgment. Such notice shall be sent 
within 30 days after the person becomes a member of NCPG.

VII. Compliance Program

    Defendant is ordered to establish and maintain an antitrust 
compliance program which shall include designating, within 30 days of 
entry of this Final Judgment, an Antitrust Compliance Officer with 
responsibility for implementing the antitrust compliance program and 
achieving full compliance with this Final Judgment. The Antitrust 
Compliance Officer shall not be an officer or a director of an 
affiliate of the NCPG. The Antitrust Compliance Officer shall, on a 
continuing basis, be responsible for the following:
    A. Furnishing a copy of this Final Judgment and the related 
Competitive Impact Statement within 30 days of entry of the Final 
Judgment to each of defendant's officers, directors, and employees, 
except for employees whose functions are purely clerical or manual and 
do not address issues related to the provision of problem gambling 
services.
    B. Furnishing within 30 days a copy of this Final Judgment and the 
related Competitive Impact Statement to any person who succeeds to a 
position described in Section VII(A).
    C. Arranging for an annual briefing to each person designated in 
Section VII(A) or VII(B) on the meaning and requirements of this Final 
Judgment and the antitrust laws.
    D. Obtaining from each person designated in Section VII(A) or 
VII(B), certification that he or she: (1) Has read and, to the best of 
his or her ability, understands and agrees to abide by the terms of 
this Final Judgment; (2) is not aware of any violation of the Final 
Judgment that has not been reported to the Antitrust Compliance 
Officer; and (3) understands that any person's failure to comply with 
this Final Judgment may result in an enforcement action for civil or 
criminal contempt of court against NCPG.
    E. Maintaining: (1) A record of certifications received pursuant to 
this Section; (2) a file of all documents related to any alleged 
violation of this Final Judgment; and (3) a record of all 
communications related to any such violation, which shall identify the 
date and place of the communication, the persons involved, the subject 
matter of the communication, and the results of any related 
investigation.
    F. Conducting a program at each annual meeting of the NCPG on this 
Final Judgment and the antitrust laws.
    G. Reviewing codes of ethics, rules, bylaws, resolutions, 
guidelines, agreements, and policy statements to ensure adherence with 
this Final Judgment.
    H. Reviewing the purpose for the information or creation of each 
committee and subcommittee of the NCPG in order to ensure its adherence 
with this Final Judgment.

[[Page 38093]]

    I. Attending all meetings of the NCPG's affiliate committee and 
viewing the proceedings to ensure adherence with this Final Judgment.

VIII. Certification

    A. Within 60 days after the entry of this Final Judgment, 
defendants shall certify to the plaintiff that they have designated an 
Antitrust Compliance Officer and have distributed the Final Judgment 
and related Competitive Impact Statement in accordance with Section VII 
above.
    B. For 10 years after the entry of this Final Judgment, on or 
before its anniversary date, defendant shall file with plaintiff an 
annual statement as to the fact and manner of its compliance with the 
provisions of Sections VI and VII, and of any potential violations of 
the terms and conditions contained in this Final Judgment.
    C. If defendant's Antitrust Compliance Officer learns of any 
violations of any of the terms and conditions contained in this Final 
Judgment, defendant shall immediately take appropriate action to 
terminate or modify the activity so as to comply with this Final 
Judgment.

IX. Plaintiff's Access

    A. For the purpose of determining or securing compliance with this 
Final Judgment or determining whether this Final Judgment should be 
modified or terminated, and subject to any legally recognized 
privilege, from time to time duly authorized representatives of the 
Antitrust Division of the United States Department of Justice, 
including consultants and other persons retained by the United States, 
shall upon written request of a duly authorized representative of the 
Assistant Attorney General in charge of the Antitrust Division, and on 
reasonable notice to defendant, be permitted:
    1. Access during defendant's office hours to inspect and copy, or 
at plaintiff's option, to require defendants to provide copies of all 
books, ledgers, accounts, records, and documents in the possession, 
custody, or control of defendant, relating to any matters contained in 
this Final Judgment; and
    2. To interview, either formally or on the record, defendant's 
officers, directors, employees, or agents, who may have their 
individual counsel present, regarding such matters. The interviews 
shall be subject to the reasonable convenience of the interviewee and 
without restraint or interference by defendant.
    B. Upon the written request of a duly authorized representative of 
the Assistant Attorney General in charge of Antitrust Division, 
defendant shall submit written reports, under oath if requested, 
relating to any of the matters contained in this Final Judgment as may 
be requested.
    C. No information or documents obtained by the means provided in 
this Section shall be divulged by the plaintiff to any person other 
than an authorized representative of the Executive Branch of the United 
States, except in the course of legal proceedings to which the United 
States is a party (including grand jury proceedings), or for the 
purpose of securing compliance with this Final Judgment, or as 
otherwise required by law.
    D. If, at the time information or documents are furnished by 
defendant to plaintiff, defendant represents and identifies, in 
writing, the material in any such information or documents to which a 
claim of protection may be asserted under Rule 26 (c)(7) of the Federal 
Rules of Civil Procedure, and defendant marks each pertinent page of 
such material, ``subject to claim of protection under Rule 26(c)(7) of 
the Federal Rules of Civil Procedure,'' then 10-days notice shall be 
given by plaintiff to defendant prior to divulging such material in any 
legal proceeding (other than a grand jury proceeding) to which NCPG is 
not a party.

X. Duration of the Final Judgment

XI. Construction, Enforcement, Modification, and Compliance

    Jurisdiction is retained by this Court for the purpose of enabling 
any of the parties to this Final Judgment to apply to this Court at any 
time for further orders and directions as may be necessary or 
appropriate for the constructions or carrying out of this Final 
Judgment, for the modification of any of its provisions, for its 
enforcement or compliance, and for the punishment of any violation of 
its provisions.

XII. Public Interest

    Entry of this Final Judgment is in the public interest.

Appendix A

    On June 13, 2003, the Antitrust Division of the United States 
Department of Justice filed a civil suit alleging that the National 
Council on Problem Gambling, Inc. (``NCPG'') had engaged in certain 
practices that violated Section 1 of the Sherman Antitrust Act. NCPG 
has agreed to the entry of a civil consent order to settle this 
matter. The consent order does not constitute evidence or admission 
by any party with respect to any issue of fact or law. The consent 
order applies to NCPG and all of its officers, directors, employees, 
agents, and assigns.
    Under the consent order, NCPG is prohibited from directly or 
indirectly initiating, adopting, or pursuing any agreement, program, 
or policy that has the purpose or effect of prohibiting or 
restraining any Problem Gambling Service Provider (``PGSP'') from: 
(1) Selling problem gambling services in any state or territory or 
to any customer; or (2) submitting competitive bids in any state or 
territory or to any customer. The NCPG is also prohibited from 
directly or indirectly adopting, disseminating, publishing, seeking 
adherence to or facilitating any agreement, code of ethics, rule, 
bylaw, resolution, policy, guideline, standard, certification, or 
statement made or ratified by an official that has the purpose or 
effect of prohibiting or restraining any PGSP from engaging in any 
of the above practices, or that states or implies that any of these 
practices are, in themselves, unethical, unprofessional, or contrary 
to the policy of the NCPG.
    The consent order further provides that the NCPG is prohibited 
from adopting or enforcing any standard or policy that has the 
purpose or effect of: (1) Requiring that any PGSP obtain permission 
from, inform, or otherwise consult with another PGSP before selling 
problem gambling services or submitting bids for the provision of 
problem gambling services in any state or territory or to any 
customer; or (2) requiring that any PGSP contract with, provide a 
fee or a portion of revenues to, or otherwise remunerate any other 
PGSP as a result of selling problem gambling services in any state 
or territory or to any customer. Finally, the NCPG is prohibited 
from adopting or enforcing any standard or policy or taking any 
action that has the purpose or effect of: (1) Sanctioning, 
penalizing or otherwise retaliating against any PGSP for competing 
with any other PGSP; or (2) creating or facilitating an agreement 
not to compete between two or more PGSP.
    The consent order does not prohibit the NCPG from negotiating 
any terms of its business relationship with any national, state, or 
local government entity, or any private entity. It also does not 
prohibit the NCPG member from working with another person in a valid 
joint venture to meet the needs of problem gamblers in ways that do 
not otherwise violate the consent order. Finally, it does not 
prohibit the NCPG from sanctioning or terminating a member pursuant 
to its by-laws, as long as such action does not otherwise violate 
the consent order.
    Copies of the Complaint, proposed Final Judgment and Competitive 
Impact Statement are available for inspection at the Department of 
Justice in Washington, DC in Room 200, 325 Seventh Street, NW., and 
at the Office of the Clerk of the United States District Court for 
the District of Columbia in Washington, DC.

Newspaper Notice

    Take notice that a proposed Final Judgment has been filed in a 
civil antitrust case, United States of America v. National Council 
on Problem Gambling, Inc. (``NCPG''), Civil No. ----. On ------, the 
United States filed a Complaint to obtain equitable and other relief 
to prevent and restrain violations of Section 1 of the

[[Page 38094]]

Sherman Act, as amended, 15 U.S.C. 1. The United States brought this 
action to enjoin NCPG from engaging in a territorial allocation 
along state lines for the provision of problem gambling services in 
the United States. The proposed Final Judgment, filed at the same 
time as the Complaint, requires NCPG to eliminate the 
anticompetitive conduct identified in the Complaint. A Competitive 
Impact Statement filed by the United States describes the Complaint, 
the proposed Final Judgment, the industry, and the remedies 
available to private litigants who may have been injured by the 
alleged violation. Copies of the Complaint, proposed Final Judgment 
and Competitive Impact Statement are available for inspection at the 
Department of Justice in Washington, DC, in Room 200, 325 Seventh 
Street, NW., and the Office of the Clerk of the United States 
District Court for the District of Columbia, Washington, DC.
    Interested persons may address comments to Marvin N. Price, Jr., 
Chief, Chicago Field Office, Antitrust Division, U.S. Department of 
Justice, 209 S. LaSalle Street, Suite 600, Chicago, IL 60604, 
(telephone: (312) 353-7530), within sixty (60) days of the date of 
this notice.

Competitive Impact Statement

    The United States of America, pursuant to section 2(b) of the 
Antitrust Procedures and Penalties Act (``APPA''), 15 U.S.C. 16(b)-(h), 
files this Competitive Impact Statement relating to the proposed Final 
Judgment submitted for entry in this civil antitrust proceeding.

I. Nature and Purpose of the Proceeding

    On June 13, 2003, the United States filed a civil antitrust 
Complaint alleging that the National Council on Problem Gambling, Inc. 
(``NCPG'') had violated Section 1 of the Sherman Act, 15 U.S.C. 1. The 
NCPG is a national trade association controlled by its state 
affiliates. Its activities are directed toward advancing the interest 
of its state affiliates who offer products and services to address the 
social problem of compulsive gambling. The NCPG does not distribute 
products or services through its affiliates. All NCPG officers except 
one where elected from the ranks of its state affiliates, which control 
the NCPG board of directors.
    The Complaint alleges that, from at least 1995 until at least 2001, 
the NCPG orchestrated an unlawful territorial allocation of problem 
gambling products and services along state lines. On June 13, 2003, the 
Untied States and the NCPG filed a Stipulation in which they consented 
to the entry of a proposed Final Judgment that requires the NCPG to 
eliminate the anticompetitive conduct identified in the Complaint.
    Under the Final Judgment, the NCPG is prohibited from directly or 
indirectly initiating, adopting, or pursuing any agreement, program, or 
policy that has the purpose or effect of prohibiting or restraining any 
Problem Gambling Service Provider (``PGSP'') from engaging in any of 
the following practices: (1) Selling problem gambling services in any 
state or territory or to any customer; or (2) Submitting competitive 
bids in any state or territory or to any customer. Under the Final 
Judgment and thereafter, ``problem gambling services'' include all 
services relating to the treatment or prevention of problem or 
compulsive gambling, including dissemination of information regarding 
problem gambling, telephonic hot-line or help-line services, training 
of problem gambling counselors, certification of various problem 
gambling training programs, and provision of any product or service 
aimed at assisting problem gamblers. The NCPG is also prohibited from 
directly or indirectly adopting, disseminating, publishing, seeking 
adherence to, facilitating, or enforcing any agreement, code of ethics, 
rule, bylaw, resolution, policy, guideline, and standard, certification 
or statement that has the purpose or effect of prohibiting or 
restraining any PGSP from engaging in any of the above practices, or 
that states or implies that any of these practices are, in themselves, 
unethical, unprofessional, or contrary to the policy of the NCPG.
    The Final Judgment further prohibits the NCPG from adopting, 
disseminating, publishing, seeking adherence to, facilitating, or 
enforcing any standard or policy that has the purpose or effect of: (1) 
Requiring that any PGSP obtain permission from, inform, or otherwise 
consult with any other PGSP before selling problem gambling services or 
submitting bids for the provision of problem gambling services in any 
state or territory or to any customer; or (2) requiring that any PGSP 
contract with, provide a fee or a portion of revenues to, or otherwise 
remunerate any other PGSP as a result of selling problem gambling 
services in any state or territory or to any customer. Finally, the 
NCPG is prohibited from adopting or enforcing any standard or policy or 
taking any action that has the purpose or effect of: (1) Sanctioning, 
penalizing or otherwise retaliating against any PGSP for competing with 
any other PGSP; or (2) creating or facilitating an agreement not to 
compete between two or more PGSPs.
    The United States and the NCPG have agreed that the proposed Final 
Judgment may be entered after compliance with the APPA, provided that 
the United States has not withdrawn its consent. Entry of the Final 
Judgment would terminate the action, except that the Court would retain 
jurisdiction to construe, modify, or enforce the Final Judgment's 
provisions and to punish violations thereof.

II. Description of Practices Giving Rise to the Alleged Violation of 
the Antitrust Laws

A. Description of the Defendant and Its Activities

    The NCPS is a not-for-profit corporation organized and existing 
under the laws of the State of New York with its principal place of 
business in Washington, DC. All state affiliates are members of the 
NCPG board of directors. The NCPG's state affiliates, as a group, 
control a majority of the seats on its board of directors. The board 
has the sole authority to elect the NCPG's officers. As a trade 
association, the NCPG lobbies Congress for funding for problem gambling 
programs in general, conducts an annual conference, and offers books, 
videotapes and other publications about problem gambling.
    The NCPG offers a few limited problem gambling services to its 
members. It maintains a website and sponsors a national telephone help-
line, which is operated by the Texas affiliate. Other affiliates may 
pay to use this help-line in their own states or set up their own help-
lines. The NCPG also sponsors a national gambling counselor 
certification program. This program does not train counselors, but 
generally accepts training conducted by state affiliates.

B. Description of the State Affiliates and Their Problem Gambling 
Services

    The NCPG has 34 state affiliates. No state has more than one 
affiliate. All of the state affiliates are separately incorporated, 
non-profit corporations. The state affiliates provide problem gambling 
services to individuals, as well as government entities, casinos, 
racetracks, and others who are trying to assist problem gamblers. These 
problem gambling services include training and certification program 
for problem gambling counselors, telephone help-lines, and responsible 
gaming programs, workshops, and educational kits.
    The NCPG does not create the services offered by its affiliates, 
nor does it significantly help its affiliates create these services. 
Each state affiliate creates its own individualized problem gambling 
services to meet the perceived needs of its customers. For example, 
some state affiliates target problem gambling in various ethnic 
populations, while others focus on problem gambling in high schools or 
among the eldery.

[[Page 38095]]

Consequently, the types of problem gambling services sold by each state 
affiliate are different from those sold by other state affiliates. Each 
state affiliate directly markets its problem gambling services.
    Public and private parties seeking problem gambling products and 
services have few, if any, alternatives to the state affiliates. In 
most instances, the only bidder for the business is the NCPG affiliate 
within the customer's state. Several state affiliates have also offered 
services outside of their borders, which prompted defendant's unlawful 
territorial allocation. In a few instances, a party unaffiliated with 
the NCPG has submitted a bid for a customer's business.

C. The Illegal Territorial Allocation Agreement

    Beginning at least as early as 1995 and continuing until at least 
2001, the NCPG, through its officers and directors, and its state 
affiliates, facilitated, organized, promoted, and advocated an unlawful 
territorial allocation between and among the state affiliates for the 
provision of problem gambling services in violation of Section 1 of the 
Sherman Act, 15 U.S.C. 1. The territorial allocation was a horizontal 
agreement among the state affiliates of the NCPG which was effectuated 
by the NCPG. The purpose of this unlawful territorial allocation was to 
prevent the NCPG's state affiliates from offering or selling problem 
gambling services outside of their home states, thereby eliminating 
competition between and among the state affiliates of the NCPG.
    Although many of its activities are in the public interest, the 
NCPG was acting illegally to curtail competition by establishing the 
territorial allocation. Its purpose in doing so reflected the desire of 
a controlling majority of its state affiliates to prevent competitive 
incursions by other state affiliates. In response to incipient 
competition from certain state affiliates, state affiliates met and 
agreed with the NCPG to adopt, publish, and enforce resolutions, 
policies, guidelines, and certification standards to limit the 
provision of problem gambling services across state lines. The 
territorial allocation was enforced by threats of sanctions, including 
fines and revocation of NCPG membership, and threats to deny national 
certification to counselors trained by out-of-state affiliates. These 
actions reduced competition among state affiliates, leaving customers 
with few, if any, choices other than the affiliate in their state. The 
territorial allocation deprived customers of the benefits of free 
competition, stifled innovation, and decreased quality.
    In contrast to the legitimate, pro-competitive territorial 
allocations put into effect by many associations, the territorial 
allocation agreed to by the state affiliates and orchestrated by the 
NCPG curtailed competition among the state affiliates, without 
enhancing economic efficiency. When territorial allocations enhance 
economic efficiency, they may be pro-competitive. For example, when a 
manufacturer of a product sets up exclusive territories for its 
distributors to encourage them to maximize their sales, advertising, 
and promotion efforts, while at the same time providing them with 
assurance that they, and not other sellers of the manufacturer's 
product, will reap the benefits of their efforts, the public as well as 
the product manufacturer may benefit from their competitive efforts, 
vis-a-vis other competitive products. Thus, by limiting ``intrabrand'' 
competition for the product, ``interbrand'' competition among the 
competing products may be increased. Here, however, there is no 
``product'' offered by the NCPG to its state affiliates. the NCPG does 
not create problem gambling services or products that it then 
distributes through its state affiliates, nor does it make an effort to 
identify the best problem gambling services or products among those 
sold by its affiliates or to encourage them to adopt any set of best 
problem gambling services or products. Instead, each of the state 
affiliates independently creates and sells its own problem gambling 
services and products, many of which are unique. For example, the 
Minnesota affiliate has developed a 60-hour counselor training program 
which also is offered as an interactive, web-based course. The 
Minnesota affiliate also consults with public policy think-tanks 
focused on the problem of compulsive gambling, such as one held at 
Harvard University. Other state affiliates, including the Texas 
affiliate, create and distribute publications in Spanish to meet the 
needs of Hispanic problem gamblers. Still other state affiliates 
sponsor programs for troubled teenagers, such as the Washington 
affiliate's ``Gambling, Addictions, and At-Risk Youth.'' Thus, the 
territorial allocation deprived customers of the benefits of free 
competition among the different services offered by different state 
affiliates.
    The state affiliates agreed to have the NCPG implement and enforce 
the territorial allocation agreement in several ways. At a 1995 meeting 
in Puerto Rico, the NCPG state affiliates agreed to modify the 
Affiliate Guidelines to discourage competition between and among the 
state affiliates, requiring an out-of-state affiliate to get permission 
from the in-state affiliate before seeking business in that affiliate's 
state.
    The following year, when some state affiliates continued to bid 
out-of-state, the state affiliates passed a resolution imposing 
sanctions against any state affiliate that attempted to compete outside 
its home state. Later in 1996, the state affiliates agreed with the 
NCPG Board Directors to adopt an ``Ethics Resolution'' setting forth 
the agreement to allocate territories as an ethical standard. It also 
required that a fee or a portion of revenues be paid to the in-state 
affiliate who consented to another affiliate providing in-state 
services. Affiliates failing to heed the Ethics Resolution were subject 
to sanctions, including fines or revocation of NCPG membership. In 
1999, the NCPG incorporated the provisions of the Ethics Resolution 
into a formal Affiliate Agreement, which was ratified by a majority of 
state affiliates.

D. Effects of the Agreement

    The unlawful territorial allocation has had the effect of limiting 
choice, reducing quality, and stifling innovation in the development 
and sale of problem gambling services. Customers have been deprived of 
the benefits of free and open competition in the purchase of problem 
gambling services, including the benefit of choosing among a variety of 
problem gambling services offered by different state affiliates. 
Prospectively, eliminating the unlawful territorial allocation will 
have the effect of increasing choice, increasing quality, and 
encouraging innovation.
    The territorial allocation has been effective because the NCPG has 
had the means and the will to enforce it against affiliates that have 
sought to compete across state lines. Accusations of unethical conduct 
have dissuaded customers from contracting with offending affiliates. 
Withholding credit for problem gambling counselor training has 
prevented affiliates from offering training programs outside their home 
states. Threatening affiliates with the loss of NCPG membership also 
has served to confine affiliates to their home states because some 
states will contract only with the NCPG members.
    Although the territorial allocation has been largely effective in 
preventing interstate competition, a few affiliates, most notably the 
Minnesota affiliate, have sought business outside their home states. 
These transgressions frequently precipitated NCPG enforcement actions 
that achieved their anti-competitive

[[Page 38096]]

purpose. For example, when the Minnesota affiliate sought a contract 
from the State of Nebraska, the NCPG asked that Minnesota withdraw its 
bid and support the efforts of the Nebraska affiliate. As a result, the 
Minnesota affiliate decided not to actively pursue the contract. When 
the Minnesota affiliate offered a gambling counselor training program 
in the State of Missouri, the NCPG warned that it would not grant 
credit for the training, thereby discouraging students from signing up 
for the program. Consequently, the Minnesota affiliate dropped the 
program. The in-state program that ultimately was provided was inferior 
because it employed less qualified instructors than the Minnesota 
affiliate proposed to use. In at least one instance, the Minnesota 
affiliate bid successfully in another state. It won a contract with the 
Arizona lottery by offering a far more comprehensive program than did 
the in-state affiliate. The Arizona affiliate complained to the NCPG, 
precipitating a hearing on sanctions against the Minnesota affiliate.

III. Explanation of the Proposed Final Judgment

A. Prohibited Conduct

    The proposed Final Judgment prohibits the defendant from engaging 
in multiple categories of prohibited conduct. These prohibitions are 
intended to prevent the defendant from using a territorial allocation 
scheme to pressure PGSPs not to cross state lines to compete for 
contracts. These provisions will also bar the defendant from adopting 
policies which imply that competition between PGSPs across state lines 
in unethical, unprofessional, or contrary to the policy of the NCPG.
    Section IV.A of the proposed Final Judgment contains a general 
prohibition against any agreement by the defendant that hinders any 
PGSP from: (1) Selling problem gambling services in any state or 
territory or to any customer; or (2) submitting competitive bids in any 
state or territory or to any customer. Section IV.B contains a 
prohibition against any agreement, code of ethics, rule, by-law, 
resolution, policy, guideline, standard, certification, or statement 
which implies that the competitive practices listed in Section IV.A are 
unethical, unprofessional, or contrary to NCPG policy. Section IV.C 
prohibits the defendant from adopting, disseminating, publishing, 
seeking adherence to, facilitating, or enforcing any standard or policy 
that: (1) Requires any PGSP to obtain permission from, inform, or 
consult with any other PGSP before submitting a bid or making a sale in 
any state or territory or to any customer; (2) requires any PGSP to 
contract with, provide a fee to, or a portion of revenues to, or 
otherwise remunerate any other PGSP as a result of selling in any state 
or territory or to any customer; (3) sanctions, penalizes, or otherwise 
retaliates against any PGSP for competing with any other PGSP; or (4) 
creates or facilitates an agreement not to compete between two or more 
PGSPs.

B. Limiting Conditions

    Section V of the proposed Final Judgment contains certain limiting 
provisions that clarify the scope of the prohibitions in Section IV. 
Section V identifies specific activities that are unlikely to restrict 
competition and are not prohibited by the decree. Specifically, Section 
V.A states that nothing in the proposed Final Judgment limits any 
individual NCPG member from acting independently in negotiating any 
terms of its business relationships. Section V.B states that NCPG 
members may enter into valid joint ventures, as long as such activities 
do not violate any of the provisions of Section IV. Finally, Section 
V.C states that the NCPG retains the right to sanction or terminate any 
member according to the process described in its by-laws, provided that 
such activities do not violate any provision contained in Section IV.

C. Additional Relief

    Section VI of the proposed Final Judgment requires the defendant to 
publish a notice describing the Final Judgment in Card Player magazine, 
a gambling industry publication, within sixty (60) days after the 
proposed Final Judgment is entered. Section VI also requires that 
written notice be sent to all current members of the NCPG within thirty 
(30) days after the proposed Final Judgment is entered. A copy of the 
written notice also must be sent to each new member of NCPG during the 
ten-year life of this Final Judgment.
    Section VII requires the defendant to designate an Antitrust 
Compliance Officer who shall not be an officer or director of an 
affiliate of the NCPG, and to set up an antitrust compliance program to 
ensure that its members are aware of and comply with the prohibitions 
in the proposed Final Judgment and the antitrust laws. Defendant must 
furnish a copy of the Final Judgment and this Competitive Impact 
Statement to each of its officers, directors, and non-clerical 
employees who address issues related to the provision of problem 
gambling services. To ensure compliance with the Final Judgment, the 
Antitrust Compliance officer is also required to: (1) Conduct a program 
at each NCPG annual meeting on the antitrust laws; (2) review the NCPG 
code of ethics, rules, by-laws, resolutions, guidelines, agreements and 
policy statements; (3) review the purpose for the creation of each NCPG 
committee and sub-committee; and (4) attend all meetings of the NCPG 
affiliates committee and review the proceedings.
    Section VIII requires the defendant to certify the designation of 
an Antitrust Compliance Officer and the distribution of the notice 
required by Section VII. It also requires the defendant to submit to 
the United States an annual statement regarding defendant's compliance 
with the Final Judgment. If the Antitrust Compliance Officer learns of 
any violations of the Final Judgment, defendant must take appropriate 
steps to terminate the activity so as to comply with the Final 
Judgment.
    Section IX of the proposed Final Judgment provides that, upon 
request of the Department of Justice, the defendant must submit written 
reports, under oath, with respect to any of the matters contained in 
the Final Judgment. Additionally, the Department of Justice is 
permitted to inspect and copy all books and records, and to interview 
defendant's officers, directors, employees, and agents.

D. Effect of the Final Judgment

    The parties have stipulated that the Court may enter the proposed 
Final Judgment at any time after compliance with the APPA. The proposed 
Final Judgment states that it shall not constitute any evidence against 
or an admission by either party with respect to any issue of fact or 
law. Section III of the proposed Final Judgment provides that it shall 
apply to the defendant and each of its officers, directors, agents, 
employees, successors, and assigns and to any organization to which it 
is to be merged or reorganized, or by which it is to be acquired.
    The Government believes that the proposed Final Judgment is fully 
adequate to prevent the continuation or recurrence of the violations of 
Section 1 of the Sherman Act alleged in the Complaint, and that 
disposition of this proceeding without further litigation is 
appropriate and in the public interest.

IV. Remedies Available to Potential Private Litigants

    Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover

[[Page 38097]]

three times the damages suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment will neither 
impair nor assist the bringing of such actions. Under the provisions of 
Section 5(a) of the Clayton Act, 15 U.S.C. 16(a), the Final Judgment 
has no prima facie effect in any subsequent lawsuits that may be 
brought against the defendant.

V. Procedures Available for Modification of the Proposed Final Judgment

    The United States and the defendant have stipulated that the 
proposed Final Judgment may be entered by the Court after compliance 
with the provisions of the APPA, provided that the United States has 
not withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest. The Department believes that entry of this Final Judgment is 
in the public interest.
    The APPA provides a period of at least sixty (60) days preceding 
the effective date of the proposed Final Judgment within which any 
person may submit to the United States written comments regarding the 
proposed Final Judgment. Any person who wishes to comment should do so 
within sixty (60) days of publication of this Competitive Impact 
Statement in the Federal Register. The United States will evaluate and 
respond to the comments. All comments will be given due consideration 
by the Department of Justice, which remains free to withdraw its 
consent to the Final Judgment at any time prior to entry. The comments 
and the response of the United States will be filed with the Court and 
published in the Federal Register.
    Written comments should be submitted to: Marvin N. Price, Jr., 
Chief, Chicago Field Office, U.S. Department of Justice, Antitrust 
Division, 209 S. LaSalle St., Suite 600, Chicago, Illinois 60604.
    Under Section XI of the proposed Final Judgment, the Court will 
retain jurisdiction over this action, and the parties may apply to the 
Court for orders necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment. The proposed 
Final Judgment will expire ten (10) years from the date of its entry.

VI. Alternatives to the Proposed Final Judgment

    As an alternative to the proposed Final Judgment, the Department 
considered litigation on the merits. The Department rejected that 
alternative for two reasons. First, a trial would involve substantial 
cost to both the United States and to the defendant and is not 
warranted because the proposed Final Judgment provides all the relief 
the Government would likely obtain following a successful trial. 
Second, the Department is satisfied that the various compliance 
procedures to which the defendant has agreed will ensure that the 
anticompetitive practices alleged in the Complaint are unlikely to 
recur and, if they do recur, will be punishable by civil or criminal 
contempt, as appropriate.

VII. Standard of Review Under the APPA for the Proposed Final Judgment

    The APPA requires that proposed consent judgments in antitrust 
cases brought by the United States be subject to a 60 day comment 
period, after which the Court shall determine whether entry of the 
proposed Final Judgment is ``in the public interest.'' In making that 
determination, the Court may consider--
    (1) The competitive impact of such judgment, including termination 
of alleged violations, provisions for enforcement and modification, 
duration or relief sought, anticipated effects of alternative remedies 
actually considered, and any other considerations bearing upon the 
adequacy of such judgment;
    (2) The impact of entry of such judgment upon the public generally 
and individuals alleging specific injury from the violations set forth 
in the complaint including consideration of the public benefit, if any, 
to be derived from a determination of the issues at trial.

15 U.S.C. 16(e) (emphasis added).

    As the Court of Appeals for the District of Columbia has held, the 
APPA permits a court to consider, among other things, the relationship 
between the remedy secured and the specific allegations set forth in 
the government's complaint, whether the decree is sufficiently clear, 
whether enforcement mechanisms are sufficient, and whether the decree 
may positively harm third parties. See United States v. Microsoft 
Corp., 56 F.3d 1448, 1458-62 (D.C. Cir. 1995).
    Including this inquiry, ``the Court is nowhere compelled to go to 
trial or to engage in extended proceedings which might have the effect 
of vitiating the benefits of prompt and less costly settlement through 
the consent decree process.'' \1\ Rather,

    \1\ 119 Cong. Rec. 24, 598 (1973). See United States v. Gillette 
Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public interest'' 
determination can be made properly on the basis of the Competitive 
Impact Statement and Response to Comments filed pursuant to the 
APPA. Although the APPA authorizes the use of additional procedures, 
15 U.S.C. 16(f), those procedures are discretionary. A court need 
not invoke any of them unless it believes that the comments have 
raised significant issues and that further proceedings would aid the 
court in resolving those issues. See H.R. Rep. No. 93-1463, 93rd 
Cong. 2d Sess. 8-9 (1974), reprinted in 1974 U.S.C.C.A.N. 6535, 
6538-39.
---------------------------------------------------------------------------

absent a showing of corrupt failure of the government to discharge 
its duty, the Court, in making its public interest finding, should * 
* * carefully consider the explanations of the government in the 
competitive impact statement and its responses to comments in order 
to determine whether those explanations are reasonable under the 
circumstances.\2\
---------------------------------------------------------------------------

    \2\ United States v. Mid-America Dairymen, Inc., 1977-1 Trade 
Cas. (CCH) ] 61,508, at 71,980 (W.D. Mo. 1977); see also United 
States v. Loew's Inc., 783 F. Supp. 211, 214 (S.D.N.Y. 1992); United 
States v. Columbia Artists Mgmt., Inc., 662 F. Supp. 865, 870 
(S.D.N.Y. 1987).

    Accordingly, with respect to the adequacy of the relief secured by 
the decree, a court may not ``engage in an unrestricted evaluation of 
what relief would best serve the public.'' United States v. BNS, Inc. 
858 F.2d 456, 462 (9th Cir. 1988), (quoting United States v. Bechtel 
Corp., 648 F.2d 660, 666 (9th Cir.), cert. denied, 454 U.S. 1083 
(1981)); see also Microsoft, 56 F.3d at 1458. ``Indeed, the district 
court is without authority to `reach beyond the complaint to evaluate 
claims that the government did not make and to inquire as to why they 
were not made.' '' United States v. Microsoft Corp., 231 F. Supp. 2d 
144, 154 (D.D.C. 2002) (quoting Microsoft, 56 F.3d at 1459). Precedent 
---------------------------------------------------------------------------
requires that:

the balancing of competing social and political interests affected 
by a proposed antitrust consent decree must be left, in the first 
instance, to the discretion of the Attorney General. The court's 
role in protecting the public interest is one of insuring that the 
government has not breached its duty to the public in consenting to 
the decree. The court is required to determine not whether a 
particular decree is the one that will best serve society, but 
whether the settlement is ``within the reaches of the public 
interest.'' More elaborate requirements might undermine the 
effectiveness of antitrust enforcement by consent decree.\3\
---------------------------------------------------------------------------

    \3\ United States v. Bechtel Corp., 648 F.2d at 666 (emphasis 
added); see also United States v. BNS, Inc., 858 F.2d at 462-63 
(district court may not base its public interest determination on 
antitrust concerns in markets other than those alleged in 
government's complaint); United States v. Gillette Co., 406 F. Supp. 
at 716 (court will not look at settlement ``hypercritically, nor 
with a microscope''); United States v. National Broad. Co., 449 F. 
Supp. 1127, 1143 (C.D. Cal. 1978) (same).

    The proposed Final Judgment, therefore, should not be reviewed 
under a standard of whether it is certain to eliminate every 
anticompetitive effect of a particular practice or whether it

[[Page 38098]]

mandates certainty of free competition in the future. Court approval of 
a final judgment requires a standard more flexible and less strict than 
the standard required for a finding of liability. A ``proposed decree 
must be approved even if it falls short of the remedy the court would 
impose on its own, as long as it falls within the range of 
acceptability or is within the reaches of public interest.'' \4\
---------------------------------------------------------------------------

    \4\ Microsoft, 231 F. Supp. 2d at 153 (quoting United States v. 
American Tel. & Tel. Co., 552 F. Supp. 131, 151 (D.D.C. 1982), 
(citation omitted), aff'd sub nom. Maryland v. United States, 460 
U.S. 1001 (1983)); see also United States v. Alcan Aluminum, Ltd., 
605 F. Supp. 619, 622 (W.D. Ky. 1985) (standard is not whether 
decree is one that will best serve society, but whether it is within 
the reaches of the public interest); United States v. Carrols Dev. 
Corp., 454 F. Supp. 1215, 1222 (N.D.N.Y. 1978) (standard is not 
whether decree is the best of all possible settlements, but whether 
decree falls within the reaches of the public interest).
---------------------------------------------------------------------------

    Moreover, the court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States has 
alleged in its complaint, and does not authorize the court to 
``construct [its] own hypothetical case and then evaluate the decree 
against that case.'' Microsoft, 56 F.3d at 1459. Since the ``court's 
authority to review the decree depends entirely on the government's 
exercising its prosecutorial discretion by bringing the case in the 
first place,'' it follows that the court ``is only authorized to review 
the decree itself,'' and not to ``effectively redraft the complaint'' 
to inquire into other matters that the United States might have but did 
not pursue. Id. at 1459-60.

VIII. Determinative Materials and Documents

    There are not determinative documents within the meaning of the 
APPA that were considered by the United States in formulating the 
proposed Final Judgment.

Dated: June 13, 2003.

    Respectfully submitted,

Rosemary Simota Thompson,
Attorney, Chicago Field Office, IL Bar #6204990, Department of 
Justice, Antitrust Division, 209 S. LaSalle St., Suite 600, Chicago, 
Illinois 60604. Telephone: (312) 353-7530. Facsimile: (312) 353-
1046.

[FR Doc. 03-16168 Filed 6-25-03; 8:45 am]
BILLING CODE 4410-11-M