THE FIGHT: The State of the States

The failure to pass online poker in the state of California – again! – will become official this Friday. When it does, Pennsylvania will become the only state in the nation with an active online gambling bill. That bill has been tabled by a Pennsylvania House committee chair pending the outcome of online gaming in New Jersey.

That leaves the online poker world looking to Congress while New Jersey gets ready for online play. Congress is likely to be a non-starter. Senate Majority Leader Harry Reid threatened a few weeks ago to “roll back” the old interpretation of the Wire Act that prevented intrastate online gambling if Congress failed to enact an online poker bill.

With the Congress in summer recess, nothing has happened since Reid’s threat, and given far more pressing problems in Congress, the threat is likely to amount to little more than saber-rattling. Reid lacks support from his own party, never mind across the aisle, outside of a few empty sound bites from Senators concerned with “protecting the children”. There also has been little interest in passing legislation in the House, despite Rep. Joe Barton’s latest bill.

Mark Lipparelli

Mark Lipparelli

“I’ve said in the past that the window of opportunity to get something in place [federally] was closing,” former Nevada Gaming Control Board Chairman Mark Lipparelli told CardPlayer this week. “The time to act was during the last 24 months. The complexity associated with unwinding [state legislation] now is probably too great.”

Lipparelli’s statements track the pessimism that has emanated from Washington-based gaming lobbyists since Barton introduced his bill six weeks ago. That reinforcement, unfortunately, is bad news for the vast majority of American poker players, who will have to wait and see if New Jersey online gaming delivers the golden eggs that everyone is hoping it will before they can even hope to see online poker in their own home state.

Even then, the path forward isn’t clear. Lipparelli believes that online compacts are the path of least resistance, with states passing legislation and then opting in to existing regulatory frameworks of states like Nevada or New Jersey. Anything else, Lipparelli cautioned, could be too messy – on a regulatory level – to succeed.

“Less complexity associated with cross-border play or multiple-markets play is going to be the way forward,” said Lipparelli. “I could foresee [a state] incorporating a change in the law that says … a licensed entity from another [state can offer play within the first state]. That’s a simple and effective approach.”

That simple and effective approach will largely depend on how things fare in New Jersey. At last check, 37 companies had applied for licenses to be technology vendors when New Jersey online gaming goes live around Thanksgiving of this year. Some applicants have said that they are working with the Division of Gaming Enforcement to answer and document follow-up questions to the original applications. The process is moving forward.

But will the revenue follow? That’s the question on which THE FIGHT currently hinges.

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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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