GPWA Times Magazine - Issue 40- February 2018

Committee to outlaw iGaming. Doing so through the DOJ would avoid Congressional action and give Adelson a win – an important consideration in an election year. It’s a clear existential threat. On the state level, iGaming’s problems are not existential in nature. They’re political – and they’re numerous. Online gaming simply isn’t a priority in most states, even those strapped for cash. Legislators on both sides of the aisle oppose online gaming. Democrats worry online gaming is an addictive activity that targets the vulnerable. Republicans are morally opposed to it. Voters aren’t pushing for it. And most importantly, the online poker generation has yet to take over the halls of power, so there isn’t a natural government constituency for it. As a result, moving legislation through state legislatures is a cum- bersome process with few champions. Will this change over time? Yes. As legislators who are comfortable with e-commerce and the internet age are elected, online gaming will move from a scary unknown in the minds of older legislators to a logical revenue source in the minds of more modern ones. But we’re still a decade away from that. There’s one form of gaming that the state legislators are ready to accept right now, though: sports betting. This change, too, is generational. Twenty years ago, you would have found little support for legalizing sports betting at the state level. But as a generation of legislators came of age playing fantasy sports and visiting Las Vegas to bet on sports (federal law permits sports betting inNevada and three other states), attitudes have changed. In the U.S., betting on sports is now viewed as a normal activity, not a threat to sports leagues or the credibility of the game. At least two dozen states, if given the opportunity, are interested in legalizing sports betting in the next five years. And they just might get that chance in 2018. In December, New Jersey argued before the U.S. Supreme Court that the federal ban on sports betting should be invalidated and that New Jersey should be allowed to offer sports betting. The case has three potential outcomes: • The Supreme Court invalidates the federal law banning sports betting, and every state becomes free to authorize it. • The Supreme Court makes a narrow ruling that allows just New Jersey to offer sports betting. • The Supreme Court upholds the federal ban. A ruling is expected in the first quarter of 2018. If the Supreme Court invalidates the federal ban on sports betting, states will move quickly to authorize it. New Jersey will be the first state to legalize it. Others will follow suit in rapid fashion – some in 2018 and even more in 2019. If the Supreme Court upholds the federal ban on sports betting or limits sports betting to just New Jersey, expect to see a federal push to legalize sports betting within five years. Too many states – Republican and Democratic – want this to happen. Even the major sports leagues know sports betting throughout the U.S. is inevitable. The NBA already supports legalizing sports betting. The rest of the leagues are preparing for it now. The push to legalize sports betting opens a narrow window to accelerate the legalization of online gaming throughout the country. Any legislation authorizing sports betting will inevi- tably include language that allows punters to bet online or on smartphones. The online gaming industry needs to ride the coattails of sports betting and make sure any new legislation includes language that authorizes wagering at online casinos and poker rooms. Legislators prefer to deal with issues like this just once. If the industry misses this chance, the door could be slammed shut for a decade. Why should affiliates care about this? First, sports betting is an information-rich business that is perfect for affiliates. There’s going to be a gold rush in the U.S. sports betting market, and affiliates need to be ready for it. Just as importantly, if online casinos and poker rooms successfully ride the coattails of sports betting, some of the most populous states in the U.S. – California, New York and Illinois (along with Pennsylvania, which has already authorized online gaming) – will open their markets for casino and poker affiliates. It’s rare for massive new markets to open up like this, and affiliates need to be ready – just in case. None of this matters, of course, if the industry isn’t ready to take advantage of the opportunity. Online gaming advocates have been woefully inept in pushing their case so far. But if they can get their act together, the opportunity is there. They just need to take advantage of it. A Narrow Window of Opportunity Vin Narayanan has been involved in the gaming industry for over a decade and is the former edi- tor-in-chief at GPWA and Casino City Press. He is currently based in Hong Kong, where he runs his own consultant group. If iGaming advocates fail to take advantage of this opportunity , online casinos and poker rooms could be stuck in the wilderness for another decade . 23 W W W . G P W A T I M E S . O R G