The Fight … 10 States for ’15

United States poker map

Potential Candidates for Online Legalization

We still have roughly a half a year to go before 2015 is upon us, but legislative bodies around the country are starting to fold their hands when it comes to online gambling expansion this year.

The best shot for online gaming expansion in 2014 was in California, but that state has already seen one “soft” deadline come and go, and come September the door will be fully shut on online poker expansion in the state as the legislature is up against a “hard” deadline.

In addition to California, Massachusetts and Pennsylvania both considered iGaming bills and even budgetary amendments this year, but the bills have died and the amendment deadlines have also come and gone.

More and more it’s looking like 2014 was a year for hearings and talks and not for action.

2015 could be a year of action though, and as many as 10 states will likely be exploring iGaming expansion next year.

The legitimate contenders

California

California is U.S. online poker’s enigma.

The state seems an obvious candidate and has everything necessary for a thriving online poker industry, but the different factions (tribes, card rooms, race tracks) simply can’t reach a consensus on how to move forward, and they’ve taken five stabs at it already, beginning in 2009.

In previous years it was everything from “who would be allowed to participate” to “what kind of revenue sharing model would be put in place” that thwarted efforts, and now that most of those issues have been resolved a new one has emerged: “Bad Actor/Tainted Asset” clauses[i].

After PokerStars partnered with the Morongo Band of Mission Indians, The Commerce Casino, The Bicycle Club, and Hawaiian Gardens[ii], “Bad Actors” became part of the California legislative vernacular in 2014.

If they can get the “Bad Actor/Tainted Asset” issue hashed out there seems little else that could possibly derail the state from passing an online gaming bill in 2015, but I thought the same thing this year when it came to their previous disagreements.

Pennsylvania

Pennsylvania was always the dark horse of 2014.

Despite the introduction of some iGaming bills in 2013 the state had never given online gambling expansion a serious look in the past, and it was going to take a leap of faith by lawmakers (and a rushed bill) to get it done in 2014 … a leap they were unwilling to take.

After a couple of hearings[iii] and the usual assortment of “we’re looking into it” quotes in local papers[iv] it became painfully obvious that not only did Pennsylvania lawmakers lack the appetite to pass an online gambling bill, but to be entirely honest they really weren’t ready to launch an online gambling industry at this point — more education is needed.

Still, Pennsylvania did host two hearings and commissioned a study back in December of 2013 (the positive iGaming findings were introduced in June) and the state seems to be taking the appropriate steps to make 2015 a real possibility.

Massachusetts

Massachusetts has turned into a one step forward two steps backward state when it comes to gambling of any kind, considering a ballot referendum will appear this fall that could repeal the state’s brick & mortar casino bill passed in 2011[v].

If Massachusetts can survive the proposed repeal of their brick & mortar casino law, and if current State Treasurer and online gambling advocate Steve Grossman can win the governorship of the state[vi], then 2015 starts looking a bit more doable for the Bay State.

There are certainly plenty of people in the state who want online gambling to happen, but it’s going to take the stars aligning perfectly to make it a reality.

Maryland

Not much was heard from in Maryland regarding online gambling in 2014, but the state is definitely exploring potential online gambling expansion behind closed doors. The Director of the Maryland State Lottery and Gaming Control Agency Stephen Martino said Maryland was “mapping out” online gambling when he spoke at a Massachusetts online gambling forum in March.

Martino also said Maryland would be taking a “wait and see” approach, specifically keeping an eye on New Jersey in 2014. With Pennsylvania now giving online gambling expansion the old college try Maryland’s hand may now be forced.

New York

Outgoing New York Assemblyman J. Gary Pretlow and State Senator John Bonacic both introduced online gambling bills into the legislature this year[vii], but New York is a lot like Massachusetts in that they are working on expanding brick & mortar gambling, which has put any plans for online gambling on the backburner.

Bonacic called his bill little more than a conversation starter, telling the AP he had no plans to push for it in 2014[viii].

The long shots

Mississippi

Mississippi seems like the proverbial long shot, but the state is a lot closer to passing an online gambling bill than most people seem to think.

Mississippi relies heavily on their brick & mortar casino industry for tax revenue, and with revenue on the decline the obvious solution is online expansion. Mississippi’s legislature approved an online gambling study that would even include sports-betting earlier this year; the study is expected by the end of the year[ix].

Illinois

Illinois is one of the states where you would have expected more movement on this issue than we’ve seen so far, considering Illinois has launched an online lottery. However the state is dragging its feet when it comes to more comprehensive online gambling expansion.

Minnesota

Like Illinois, Minnesota has already expanded into online lottery sales and could be a potential contender for more comprehensive online gambling expansion in the near future — although it should be noted that not everyone is happy with the state’s online lottery[x], especially the slot machine-esque scratch tickets.

Colorado

Colorado would have a much better shot at legalizing online gambling if it wouldn’t take a constitutional amendment to do so, which State Attorney General John Suthers said was the case in a formal opinion he issued in December of 2013[xi].

Washington

Grass roots initiatives in the state could help not only overturn Washington State’s draconian law that makes playing online poker a felony, but could also lead to legalization if Curtis Woodard and the Washington Internet Poker Initiative get their way[xii].

Is there another potential dark horse?

In 2013, Delaware sort of crept up out of nowhere, so it’s not out of the question that a state not mentioned above, such as Rhode Island, Connecticut, or perhaps even a state like Oregon could suddenly catch the online gaming fever and get a bill passed.

If this is going to happen, it’s going to have to occur in a fairly secular state with a legislature firmly controlled by a single party, and a governor receptive to online gaming expansion. If I had to pick two dark horses for 2015, I’d go with Rhode Island and Connecticut.

Both states have brick & mortar gaming and both states are in the ultra-competitive Northeast gaming market.

Rhode Island’s legislature is firmly in the hands of Democrats, with the State Senate breakdown 32-5 with one independent and the State House of Representatives leaning Democrat by a 69-6 margin. R.I.’s governor, Lincoln Chaffee, is a converted Republican, so he has the desire to be fiscally responsible but is not opposed to gaming on moral grounds.

Connecticut is much closer, but still boasts a legislature firmly run by Democrats and moderate Republicans. The Connecticut State Senate is 22-14 in favor of Democrats and the party holds an even stronger edge in the House of Representatives at 98-53. Connecticut also has a Democrat governor in Dan Malloy.

It should be noted that both states would likely have to join Nevada and Delaware’s Multi State Internet Gaming Association (MSIGA)[xiii] to make online gambling a reality.

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August 2014