eGaming Review December 2013 | Page 45

COMING TO AMERICA STATE NEW YORK STATUS: POPULATION (M) GDP PER CAPITA (000s) 20M $57.8 SOURCE: EILERS RESEARCH, LLC MARKET SIZE ($) 800 700 600 500 400 300 200 100 0 $420 BLURRED LINES Nevada’s Republican Governor Brian Sandoval has been a vocal supporter of the Silver State’s leading role in the industry, but when former Republican Senator and long-term online gambling detractor Jon Kyl joined forces with Senator and Majority Leader Democrat Harry Reid to make a federal poker bill it looked as if real change was coming. Reid and Kyl appeared to be a winning partnership before political motivations inevitably took over. The relationship crumbled when the pair began quarrelling over where the bill should be introduced – in the House of Representatives or the Senate where Reid rules the roost. The fallout meant the bill never saw the light of day, despite many politicians saying it was the best chance of legalising internet poker at a federal level. Since then, federal legislation has dropped off the agenda somewhat and progress looks ever more likely on a state-by-state basis only. However, don’t write off intervention from Washington just yet. Conventional wisdom would say Congress, and particularly the Republicans, wouldn’t support egaming on a federal level. However, Jon Porter, former US Congressman and now CEO of Porter Gordon Silver www.egrmagazine.com Communications, says the real issue to date has been that the industry itself hasn’t supported it collectively. “Basically, only two groups pushed online gaming [at a federal level] – Caesars and the Poker Players Alliance,” he says. “Forty three states with lotteries were left out of the debate and 28 states with tribes were left out of the conversation until the very end of 2012. Subsequently, both the lotteries and most of the tribes fought federal action.” FEDERAL INTERVENTION Calls for some kind of federal online gambling legislation have not always focused on putting in place a national licensing and regulation framework or tax levels for online gaming, but far more the need to implement guidelines and standards around areas such as suitability and player protection. This, perhaps the most likely and agreeable of outcomes, would see Congress play a minimal role and ostensibly allow states to continue as they are. A draft bill with those intentions has already been introduced by Representative Peter King. HR 2282 would see the federal government take control of licence criteria, enabling them to decide who would be allowed to operate and under what circumstances. King’s legislation would grandfather in the frameworks implemented in Nevada, Delaware and New Jersey, introducing a set of licensing controls overseen by a newly created Office of Internet Gambling Oversight within the Treasury Department. Crucially, it gives both Native American tribes and lotteries a say in the role they play, giving them a chance to apply for a licence or opt out. However, there is the lingering threat that a federal bill could emerge, which would, at worst, force states such as New Jersey to reverse the progress they have made, or at best hand over some of their tax revenues. And that’s not even taking into account the possibility of a bill aiming to ban egaming altogether. “The biggest threat to the success of egaming at the state level is the success of egaming at the state level,” says Larry Walters, a gaming attorney at Walters Law Group. “The more it appears to work and generate revenue for states, the more interested the federal government and legislators will become in getting their piece of the pie. “As more states start to consider and legalise egaming, especially if they form compacts together, that will be seen as a threat to federal control and could spur the federal government to act. Whether that is in the form of legalisation and taxation or outright prohibition is still an uncertainty,