THE FIGHT: Christie Concerns, Mississippi Measure, Nevada’s Newbies

With the overindulgences of the holidays firmly in the rearview mirror, online poker regulatory efforts gathered momentum this week, with mixed results.

On the negative side of the ledger, New Jersey Gov. Chris Christie publicly expressed reservations about A-2578, the Garden State’s intrastate online gaming bill. He’s worried that online gaming will cannibalize existing casino foot traffic, thereby working at cross-purposes to the Legislature’s goal of giving Atlantic City a boost. He’s also concerned about “setting up a whole new generation of addicted gamblers” if people can gamble from home.

It’s hard to know how sincere Gov. Christie’s concerns are. He isn’t regarded as much of a social conservative. Hearing Christie talk about the expansion of problem gaming – a social conservative concern – seems out-of-character. As for the impact of A-2578 on Atlantic City casino revenue, most available data suggests that online gaming has no negative effect on land-based gaming revenue. Surely that data has been shared with the governor.

On the other hand, the expansion of land-based gaming in neighboring states has had a direct negative impact on Atlantic City’s bottom line. Without an early-mover advantage in U.S. online gaming, Atlantic City is likely to continue to decline financially. At the very least, a Christie veto would jeopardize Rational Group’s acquisition of the financially-strapped Atlantic Club casino.

Christie is a shrewd politician. Is it possible that his remarks are sleight-of-hand to ensure a maximum amount of lobbying from the gaming industry? Is he looking to wrangle concessions on other issues from state lawmakers who support (and overwhelmingly voted in favor of) A-2578? Might he allow the bill to become law without signing it, charting a middle course between helping Atlantic City and angering social conservatives? Or is he really against the bill and ready to veto it? We’ll find out by February 3, the last date on which Christie can take action.

There was some good news this week. Mississippi State Rep. Bobby Moak introduced a bill that would authorize intrastate online gaming in Mississippi. Moak sponsored a similar bill last year but that effort died in committee.

Mississippi was once a national gaming powerhouse on the strength of casinos in Tunica and Biloxi. Now it lags states like Indiana. If Christie signs A-2578 into law, Mississippi could take a cue from big brothers Nevada and New Jersey and seek to re-capture its former glory by giving Moak’s bill a closer look.

Speaking of Nevada, the Nevada Gaming Commission issued two more online gaming licenses this week. Lottomatica Group S.p.A., the world’s largest lottery operator, received manufacturer licenses for two subsidiaries that create online poker technology. 77 Golden Gaming LLC, the owner of several small Nevada casinos and the local PT’s Pub video poker pub chain, received an operator license for a newly-formed subsidiary that will offer online gaming to Silver State residents.

As Nevada continues to issue online gaming licenses and prepares to deal the first regulated hand of online poker in the United States, it puts itself farther and farther ahead of the rest of the field. At some point one of the other major gaming states – if not New Jersey then perhaps Mississippi or California – has to add its hat to the regulatory ring. That inertia will be critical to opening the U.S. market on a wider basis.

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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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