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,