State ofConfusion I
A roundup of the states considering legalizing online gaming by Patrick Roberts
t’s not just Nevada and New Jersey anymore. Following the Department of Justice memo that was issued in December acknowledging that only
online sports betting would be consid- ered illegal under the federal Wire Act, many other states, as well as the District of Columbia, have started to queue up for online gaming. As with most intrastate issues, the
progress and reasons behind legalizing on- line gaming are diverse. The big question, how- ever, is how the systems could be implemented in the states. National lottery organizations are lobbying Congress to pre- vent passage of any federal bill that would legalize online poker or online gaming of any sort, citing a states’ rights argument. Clearly, lotteries are eyeing online wagering as a huge revenue source, one that needn’t be shared with the casino industry. The following is a review of every state that is considering some form of on-
line gaming but in most cases does not consider the actions of any state-run lot- tery organizations.
NEVADA Undoubtedly the state that has made the most progress is Nevada. Beginning last year, the state’s Gaming Control Board has held hearings, brought in consultants and drafted regulations concerning the legalization of online gaming. The regula- tions have been approved by the Nevada Gaming Commission and are slated to go into effect by the end of February. At least five companies have applied to operate online casinos or provide
services for online gaming. Only companies that already hold Nevada licenses are eligible to become licensed, so the players include companies like slot manufac- turers IGT, WMS and Bally and operators like Michael Gaughan’s South Point.
NEW JERSEY New Jersey became the first state to pass a bill legalizing online gaming last year, only to see it vetoed by Governor Chris Christie, who cited a long list of objec- tions to the bill in his veto message. Christie was also heavily lobbied by Caesars Entertainment, the largest gaming operator in Atlantic City, to reject the bill be- cause the company wanted to concentrate on the legalization of online poker at
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the federal level. The bill is back, sponsored by state Senator Raymond Lesniak. While it was
nearly passed in January, it was withdrawn when Christie indicated that, while there were still some aspects of the bill he objected to, he would approve it to keep New Jersey on the cutting edge of the gaming industry and to aid in the re- covery of Atlantic City. Lesniak says he will address Christie’s objections to the bill and resubmit it when the legislature returns in the spring. Still unclear is if Christie will insist on a statewide referendum. In Novem-
ber, voters passed a bill permitting sports betting in Atlantic City casinos and at state racetracks if the federal ban on sports betting nationwide is overturned somehow. Should a referendum be required, it’s likely New Jersey would lose the edge Christie is seeking to maintain.
WASHINGTON, D.C. The District of Columbia City Council last month repealed a bill that would have allowed the D.C. Lottery to set up an online gaming site. The city council’s Finance Committee voted 3-2 to repeal a 2010 law, followed by a rejection by the full 12-member panel. The D.C. Lottery had hoped to make the district the first U.S. jurisdiction
to operate online gaming, with the lottery offering poker and casino games on- line to anyone within district boundaries. Natwar Gandhi, the city’s chief finan- cial officer, added online gambling provisions to the D.C. Lottery’s technology contract with Intralot, a leading supplier of game content and transaction pro- cessing systems.
Maybe the most divided state (with the possible exception of Washington, D.C.) in the online gaming fight is California. In the last legislative session, two competing online poker bills fought for attention, with neither bill prevailing.
Global Gaming Business • March 2012 ]
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