GPWA Times - Issue 20 - March 2012

apply. There are 68 tribes that have signed gambling compacts with the state, 91 li- censed cardrooms, four racetracks and three ADW operations. Few of them have any background in online gambling. That means many opportunities are on the way for skilled and experienced overseas op- erators to partner with the locals in the Golden State. Other, smaller states such as Florida and Iowa have also examined measures for ex- panded Internet gambling, with addition- al interest being voiced in Connecticut and Mississippi. It is difficult, however, to put through controversial measures of this kind with legislative bodies which are not full-time, but meet only for a few weeks each year. The detailed outreach needs to be done before the lawmaking sessions officially open. So far, not much of that has been visible. Another negative factor is the relatively small size of such jurisdictions. Under the UIGEA, a state can offer iGaming inside its own bor- ders. The question is whether states with smaller populations can provide a worth- while market of online gamblers. Cross licensing? Which brings us to the central fact about Internet gambling: it is a global market. Using digital technology over long dis- tances enables operators to assemble vi- able, profitable pools of paying custom- ers precisely because those pools are not restricted to a limited geographic area. And the regulators and legislators who control licensed American gambling al- ready realize this. Horse racing and state lotteries already regularly operate across state lines, pulling in customers for MegaMillions, Superlotto and Simulcast bets. (The horse bets, via Internet servic- es, were the ones pronounced illegal by DOJ. No action was ever taken.) The rule of thumb for U.S. gambling cross-border is that if the states say there’s no prob- lem, there’s no problem. Closer examination of both the Wire Act and the UIGEA would seem to reinforce this. In plain English, both say that if gam- bling is legal at Point A, and legal at Point B, then transmission of betting and gam- bling information between Point A and Point B is also legal. Add to that the Tenth Amendment to theU.S. Constitution, which reserves all powers not enumerated to the federal government to the states and peo- ple, and a clear argument emerges that in- dividual state governments may do practi- cally anything they choose with, to or about gambling, including online gambling, even including online gambling over their re- spective borders, so long as it is properly supervised, licensed and administered. Indeed, one might go further and argue that there is no real obstacle to American jurisdictions offering their Internet gam- ing programs abroad. Certainly operations based abroad have been reaching into the American iGaming market for years. To be sure, it probably isn’t time to ad- vance such interconnections. To take the first few steps is crucial even if they are small ones. Once iGaming is a confident and familiar thing, there might be advan- tages in further integration. First on their own, then together, the states are begin- ning to take those first important steps. .................................................................... Martin Owens is a California attorney specializing in the law of Internet and interactive gaming and related issues, serving clients worldwide since 1998. He co-authored Internet Gaming Law with Professor Nelson Rose, America’s senior authority on gambling law (Mary Ann Liebert Publishers, second edition 2009), as well numerous other articles. He is an Associate Editor for Gaming Law Review and Economics magazine and a regular contributor to The Sports Network and assorted other gaming publications. Comments and inquiries welcome at to mowens@trade-attorney.com . 27