Opinion: Federal failure paves way for intrastate

Rep. Mary Bono Mack (R-CA), chair of the House Energy and Commerce Subcommittee, dashed some hopes for US internet gambling legalisation this year when her aide announced Friday that for H.R. 2366 ““ the Online Poker Act of 2011, “no mark-up is imminent”, and that the next step for her committee would be a “hearing with federal law enforcement officials sometime next year”.

Many American poker players and egaming observers felt that the momentum of three recent House hearings was surely a sign that federal action was forthcoming and that measurable progress could be achieved, if not by a standalone bill then perhaps embedded in must-pass legislation by the year end. On Monday, however, the Congressional ‘Super Committee’ admitted it had failed to forge a deficit reduction deal, putting an end to the possibility that US internet poker regulation might find a vehicle here.

If online gambling cannot achieve any further traction in Congress this session, what can be expected for 2012 and beyond? In my opinion, one might expect two things: a handful of states pursuing intrastate licensure, regulation, and technical implementation more aggressively, and a continued dialogue at federal level about what internet gambling regulation means for the United States.

Nevada and New Jersey will clearly want to continue to take steps in 2012 to pursue “first-in-flight” status for internet gambling prior to federal regulation after having actively worked on regulation this past summer. Mark Lipperelli, chairman of the Nevada Gaming Control Board, told industry professionals at the US Online Gaming Law conference in Las Vegas last week that his agency would begin accepting applications to license companies to operate internet poker sites starting in February of 2012, and that “once licensed, companies would be able to offer online poker play within the state’s boundaries in closed-loop settings similar to the way some offer sports betting online or by telephone”, alluding to the sports betting mobile application that has already been licensed in Nevada. This came as somewhat of a surprise given Governor Sandoval’s earlier commitment in April 2011 to wait for federal regulation before pursuing internet poker.

In New Jersey, Senator Raymond Lesniak worked diligently this year to propose and pass online gambling law for casino games (not limited to poker), but fell short of obtaining the governor’s signature. Instead, focus was placed on a referendum for support to overturn a federal prohibition on sports betting, which passed by a landslide, deferring the referendum needed for egaming to progress in the state. Expect Senator Lesniak to again propose his egaming bill for NJ in 2012, and a possible referendum for public support to occur this tim,e next year.

On the shortlist of other states that might makes steps towards egaming in 2012 are Massachusetts, that passed expansive land-based legislation yesterday, as well as Iowa, California, and New York. The DC District government, that asserted its right to offer games of skill online, is continuing to draft regulation and engage in community discussions as we speak.

I would expect, as Rep. Bono Mack indicated, that the federal government will continue both internal meetings and external dialogues about what the regulation of a restricted market such as gambling means for the US throughout 2012.

Given the election year, and the amount of topics to discuss and stakeholders such as tribes, lotteries, and state governors whose interests need to be negotiated, internet wagering regulation via a federal approach seems unlikely to be passed until 2013 at the earliest for poker and/or other casino games.

One question to ponder if federalised gaming does not become a reality in the coming years, is will states eventually take matters into their own hands and merge player pools with a “powerball” styled model as some industry experts have proposed? I’m afraid it’s still a matter of watch this space.