THE FIGHT: A Big Win for Online Poker in New Jersey

Yesterday, New Jersey Gov. Chris Christie (R) conditionally vetoed the state’s latest online gaming legislation. While that “veto” word sounds ugly, in truth it was a big win for the online poker legislative fight.

It was a win because Christie acknowledged that it’s past time to move on this issue. It was a win because he said that New Jersey should be a national leader in online gaming. And it was a win because he told the Legislature that, with a few minor changes, he will sign the bill into law.

“I have concluded that now is the time for our State to move forward, again leading the way for the nation, by becoming one of the first States to permit Internet gaming,” Christie said. “In the wake of the devastating losses suffered by our residents in recent months, we must embrace new ideas to fuel our reconstruction and continued prosperity. Internet gaming should be a part of that effort.”

Yes, Christie did veto A-2578. But yes, it was a big win.

The bill’s main Sponsor, Ray Lesniak (D), expects that an amended version of the bill, with the governor’s requested changes, will be back on Christie’s desk within a few weeks. At that point, the governor’s signature will be a formality. Cards could be in the virtual air in the Garden State by the end of the year, if everything goes smoothly.

Things don’t always go smoothly though. We expected the first hands of regulated online poker in Nevada late last year, but to date none of the licensees have been able to get their software past Nevada’s stringent compliance standards. This week three of the earliest licensees, including South Point Poker, requested and received software testing extensions through the end of August.

Anecdotally, I’ve heard that part of the problem may be that Nevada requires certain stress testing with upwards of a thousand concurrent users, which cannot be done “in house”. Licensees seem to be having issues satisfying that requirement. The regulatory framework of poker also continues to evolve under the licensees’ feet. With Nevada now looking at reciprocal agreements with other states for purposes of player pooling, licensees will need to take that into account in their software builds.

Could similar compliance issues crop up in New Jersey? It’s certainly possible. Given Gov. Christie’s repeated concerns about problem gaming, New Jersey’s software compliance process rates to be as stringent as Nevada’s. Hopefully licensees will carry over some of the lessons they’ve learned in Nevada to New Jersey.

Of course, no installment of THE FIGHT is complete without some bad news. Mississippi’s latest online gaming measure, introduced early last week by Rep. Bobby Moak (D), is already dead. It didn’t get out of committee this week. That marks the second time in two years that Moak has failed to move a bill through Mississippi’s legislative process.

Obviously it would be great for poker players if every state passed an online gaming law. But given the state of the industry today, if the price of passing a law in a medium-population state like New Jersey (pop. 8.9 million) is having a bill die in a small population state like Mississippi (pop. 3.0 million), I’ll take it. Now if we could just get a large-population state like California or Florida on board, maybe the dominoes would really start to fall.

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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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