Nevada Positioning Itself for Multi-State Online Poker Compacts

Although Nevada has not yet officially launched its online poker market, the Silver State is one step closer to greater player liquidity.

Last week the Nevada Gaming Commission, after consultation with the governor’s office, submitted proposed changes in the statute governing Nevada online gaming to the state legislature. The changes would authorize the governor to enter into multi-state online gaming compacts with other states for purposes of pooling players. In addition, the changes would remove the requirement that Nevada online gaming licensees not offer any interstate games until authorized by, or deemed permissible under, federal law.

The amendment will now work its way through the legislature, starting with the judiciary committee. There’s no timetable for when it might be approved.

That the amendment was proposed is hardly surprising. In December 2011, the DOJ publicly released an internal legal opinion stating that the Federal Wire Act applies only to interstate sports betting. It was a reversal of long-standing DOJ policy to bring prosecutions under the Wire Act in connection with a broad array of alleged interstate online gaming violations. Many industry experts believe that the DOJ opinion paves the way for states to enter into such multi-state online gaming compacts. Nevada, with a total population of only about 3 million residents, naturally would seek to pool its players with those from other states.

The timing of the amendment, on the other hand, is curious, coming less than two weeks after the New Jersey state legislature approved a bill that authorizes intrastate online gaming. That bill has not yet been signed or vetoed by New Jersey Governor Chris Christie, who has until February 3, 2013 to make his decision. Two years ago Christie vetoed a similar measure. The possibility of pooling players with Nevada and Delaware, the only other state to have authorized intrastate online gaming, may be one of a host of factors that, in sum, convince Christie to sign New Jersey’s bill into law.

To date, Nevada has issued online gaming licenses to 17 operators and affiliates. None of the operators have started offering online poker in Nevada, however. The state is still in the process of approving the software and other technology the operators will use and ensuring they are compliant with Nevada online gaming regulations. The first batch of final approvals is not expected before Spring 2013.

Neither Delaware nor New Jersey is as far along with their intrastate online gaming efforts. It could be quite a while before Nevada online poker players see any benefit from the proposed amendment.

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Kevin McGrady

Legislative and Politics Beat Writer: Kevin McGrady practiced corporate law in New York City for eight years before moving to Las Vegas in 2008 to join the gaming industry. Kevin is a graduate of New York University and Columbia University School of Law.
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