GPWA Times - Issue 20 - March 2012

Forget about a federal solution Congress is not riding to the rescue in the near future. When Senate Majority Leader Harry Reid failed to attach online poker legislation to the payroll tax bill in February, the hopes for federal online pok- er legislation in 2012 died. The ultimate problem – besides the fact the House of Representatives won’t pass online poker legislation as a standalone bill, thus forcing the Senate to attach it to must-pass legislation in order to get it passed – is that Reid is caught in an awk- ward political position. The House of Representatives is controlled by Republicans, while Democrats control the Senate and the White House. But on critical pieces of legislation – the types Reid would like to attach online gam- ing legislation to – Reid doesn’t have any juice. House Republicans negotiate with the White House to reach a deal and the Senate ends up swallowing it. As a result, Reid isn’t in a position to force online gam- ing legislation through. The prospects for Reid gaining the juice he needs don’t look good either. The Democratic majority is expected to slim or disappear completely in the November elections. If Reid is in the minority, he won’t be able to push online gaming at all. And if his majority in the Senate narrows – and President Obama wins reelection – Reid’s position will be slightlly worse than it is now, and he won’t be in a good position to attach legislation. The House of Representatives is a virtu- al lock to stay in GOP hands, so there’s not much help for online gaming propo- nents there. And if one of the Republican presidential candidates (most likely Mitt Romney or Rick Santorum) wins theWhite House, you can kiss online gaming legislation good- bye in the near future. Both oppose it. If you’re looking for a silver lining, UIGEA architect Sen. Jon Kyl is retiring this year, so that removes an impediment to online gaming. But that’s it in terms of silver linings. States will come along slowly The best hope for online gaming right now is that individual states will license and regulate intrastate gaming – that is, gaming solely within an individual state’s borders. Nevada has already adopted online poker regulations and is expected to issue opera- tor licenses this year. But Nevada’s popu- lation is only about 2.7 million, so there won’t be that many players there. And those players won’t be able to play with players in other states. New Jersey’s governor appears to have climbed aboard the online gaming train (Gov. Chris Christie vetoed previous online gaming legislation) according to recent re- ports, so the Garden State could pass online gaming legislation (casino, bingo and poker) this year. If New Jersey passes full online gaming legislation, it puts the pressure on Nevada – which wants to be the first, biggest and best in gaming regulations – to consider online casino regulations. But outside of New Jersey, population 8.8 million, and Nevada, online gaming’s future is a bit murkier. Yes, the pessimism rises again. California is considering an online poker bill. And the bill picked up important sup- port when the President Pro Tem of the California Senate, Darrell Steinberg, co- sponsored the bill. But powerful Indian tribes in the state oppose the measure. They’re worried online poker will hurt their existing brick-and-mortar business, or that they don’t have the resources to compete online, and as a result, they don’t want online poker to come to California. Opposition from Indian tribes derailed previous efforts to pass online poker leg- islation in California, and these politically powerful tribes are capable of killing legis- lation again this year. In Iowa, a socially conservative House is a serious roadblock to online poker leg- islation. It’s hard to see how online gam- ing clears the Iowa legislature in the near future. And it’s too early to handicap the chances for Mississippi’s legislation. These states, and others, will eventually pass online gaming bills; after all, they did adopt land-based gaming. But it will take time. The first land-based casinos outside Nevada in theU.S. sprang up inAtlantic City in 1979. In 2011, Massachusetts finally voted to ap- prove brick-and-mortar casinos. And in 2012, Ohio’s first brick-and-mortar casinos will open up. It’s taken more than 30 years for land-based gaming to expand across the country, and it’s still not everywhere. It won’t take 30 years for online gaming to expand across the country. The ubiquity of the Internet, combined with pressure on Congress to set standards for the states re- garding online gaming, will see to that. But it will take time. The expansion of gam- bling, which is how many see online gam- ing, rarely passes the first time around. So we’re looking at a few years before we even see limited adoption. Do I hope I’m wrong? Absolutely. I want licensed and regulated online gaming to come to the United States. I want to be- lieve that it’s right around the corner. But when I count up the votes, I can’t help but be a pessimist. Vin Narayanan is the managing editor of the GPWA Times Magazine. You can follow him on Twitter @casinocityvin ‘‘ When Senate Majority Leader Harry Reid failed to attach online poker legislation to the payroll tax bill in February, the hopes for federal online poker legislation in 2012 died.” 33 Regulated, widespread online gaming in the USA is coming — but not right now