The State of US Online Gambling: States Considering Expansion

legal-pokerOur four-part series covering the state of online gambling in the United States continues on with a look at the eight states that are seriously considering passing online gambling legislation or expanding their gaming options (Casino, Poker and/or Lottery) into the online arena in 2015.

In this installment we’ll cover California, Pennsylvania, New York, Massachusetts, Kentucky, West Virginia, Florida, and Mississippi.

Most of the states listed aboveĀ are unlikely to get a bill passed in 2015, but expect to see some notable movement in most, if not all of these states – some more than others.

This four part series will cover the state of online gambling in all 50 states, including:

  1. The seven states where online gaming is legal or approval is imminent
  2. The eight states currently thought to be considering online gaming expansion
  3. The reasons why nine states may consider expanding into online gaming in the near future
  4. The reasons why 26 states are unlikely to pass online gaming laws

California remains the frontrunner

Despite failing to get a bill passed in the past half-dozen years, California remains one of the country’s leading candidates for online poker expansion in 2015.

An online poker bill has already been introduced for the upcoming legislative session in California by Assemblyman Mike Gatto, and more are expected in the coming weeks and months.

As always, the question is not whether or not a bill will be introduced, but whether the state’s diverse gaming interests can come together around a single bill. So far this has not been the case.

However, despite several contentious issues still requiring a resolution (namely Bad Actor clauses and the role, if any, of racetracks) California still sits atop the short-list of potential candidates for online poker expansion.

Working in California’s favor:

  • It’s a non-election year;
  • Despite the differences that remain, the sides have compromised on several other issues, including licensing fees and the number of websites allowable per license.

Working against California in 2015:

  • Two online poker champions are no longer in the Senate: Roderick Wright (indicted) and Lou Correa (retired);
  • Two rival factions have dug in their heels on Bad Actor clauses, and there is currently no indication that either will back down;
  • While there has been progress on possible appeasements for small tribes and small card rooms, racetracks (supported by labor unions) have yet to be thrown a bone of any kind.

Final Prognosis: It wouldn’t be surprising if California finally passed an online poker bill in 2015, nor would it be surprising if they once again fail to do so. If I were a betting man I would bet a small amount on the latter being the case. Expect plenty of optimistic talk, but don’t expect a bill to be passed – that way you can be pleasantly surprised if one does manage to get ironed out.

Pennsylvania could beat them to the punch

California is going to get the bulk of the headlines, but don’t sleep on Pennsylvania.

New Governor Tom Wolf ran on a platform that included the realization of former Ed Rendell’s vision of static property taxes and well-funded schools, and the revenue generated from iGaming expansion (even though Wolf has shown an aversion to gambling expansion) could be one of the ways to get the numbers to add up.

Pennsylvania held two online gaming hearings in the legislature in 2014, and received the favorable results of a study commissioned in December of 2013. Furthermore, State Representative Mike Sturla introduced a House Resolution asking Congress to scrap any plans for a federal online gambling ban. In his resolution Sturla also implied the PA legislature should act to preempt such a move.

Final Prognosis: Pennsylvania is my #1 pick for iGaming expansion in 2015 for one simple reason: Unlike California, PA’s progress on iGaming has been slow but steady.

Expect iLottery in Kentucky and West Virginia

iGaming expansion (casino and poker) came to a screeching halt in 2014 but progress was made on one front, online lotteries.

Two states are in the final stages of prepping for a potential launch of online lottery sales, as Kentucky has teamed up with lottery giant GTECH and West Virginia’s lottery director, John Musgrave has indicated the state is exploring online lottery sales, as well as his belief that a bill would not have to pass the legislature in order to implement online sales.

Final prognosis: Both states will push forward with online lottery sales and could be selling tickets online before the close of 2015.

Florida iLottery unlikely

The Sunshine State is also making a legislative push to expand their lottery online, but with anti-online gambling Governor Rick Scott still in office, and a fight already being waged between Sheldon Adelson and Disney over land-based gaming, online lottery expansion in the near future seems more like a visit to the newly constructed Fantasyland than a viable reality.

Final prognosis: Florida’s proposed iLottery legislation will wither and die on the vine.

New York flirting with iGaming

New York finds itself currently in the early courtship phase with online gambling. The Empire State and iGaming may engage in a little handholding and a peck on the cheek in 2015, but the relationship will not be consummated.

2014 saw the introduction of a couple online gambling bills, but Senator John Bonacic, the sponsor of one of the bills, said it was more of a conversation starter than a serious effort to pass online gambling legislation.

Working against New York is the fact that the state just approved three land based casinos, which gives tentative lawmakers an easy out on iGaming – let’s wait until these resort casinos are up and running before we talk about further expansion.

Final prognosis: Expect another bill or two, perhaps a hearing, but don’t expect any real movement in 2015.

Massachusetts: Slow and steady wins the race

Ask anyone who lives in Massachusetts and they’ll tell you that legislation and social change moves about as quickly as westbound traffic on the Mass Pike in the Bay State.

In 2014 the Massachusetts Gaming Commission held an online gaming forum and has seen several drafts of online gaming (mainly lottery) legislation introduced over the past couple years. But that was with pro-online gaming Treasurer Steve Grossman pushing for expansion. Incoming Treasurer Deb Goldberg is a critic of gaming, particularly online gaming.

To understand the dynamics of the state, consider that Massachusetts only expanded into land-based gaming in 2011, and that legislation had to survive a repeal effort in 2014. The idea that online gaming could be coming to the Bay State is a great vision (Massachusetts would be one of the better candidates for iGaming expansion) but the situation on the ground tells me to be prepared for a long slow haul.

Final prognosis: Expect an online lottery bill to be introduced and perhaps even a comprehensive iGaming bill, but don’t expect much movement on either. In fact, based on the office winners, Massachusetts has probably regressed in terms of iGaming.

What happened to Mississippi?

The Mississippi legislature was supposed to be presented with an online gambling study by the end of 2014, but so far nothing has been submitted.

The state may seem like a long shot to expand into online gambling, but considering the positive economic impact land-based casino has had on the state it may not be out of the realm of possibility for expansion.

Final prognosis: Not yet. But Mississippi will likely be one of the first southern states to jump on the online poker/online casino train.


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