Opinion: US states backed for 2015 progress

As far as new egaming legislation is concerned, 2014 was a bust. So what exactly can we expect from state lawmakers in 2015? Undoubtedly the 2014 midterms have changed the political landscape and altered expectations for the coming year. It will be interesting to see whether lawmakers and regulators will continue to take a “wait-and-see” approach, possibly leading to stalled legislation and more legislature-commissioned internet gaming studies. Of course, there is also the possibility that 2015 will be the year more states finally join the ranks of Nevada, Delaware and New Jersey. Here are my odds on the adoption of new state internet gaming legislation in 2015 – it’s time to place your bets.

New York (15-1)

The ink is hardly dry on New York’s Upstate Gaming and Economic Development Act as the state continues to vet the 16 applications to build up to four new bricks-and-mortar casinos in upstate New York. That won’t stop New York from being a top contender for internet gaming legislation in 2015. Behind California and Texas, New York has the third largest population in the union, making it a prime prospect for internet gaming, and specifically, internet poker. Because of its size, New York can maintain a robust market for internet poker without reliance on interstate compacts.

In 2014, online poker legislation was introduced in both the New York Senate and Assembly. The legislation called for the issuance of up to ten internet poker licenses without a requirement that the license be tied to a bricks-and-mortar operation. This could present a point of contention if online poker legislation gains traction in New York. Certain bricks-and-mortar prospects are promising new jobs, tax revenues and licensing fees for the state and would not be pleased to learn that new resorts will have to compete with online gaming in addition to regional casinos. Therefore, it is more likely than not that Governor Cuomo will want to see success with upstate gaming expansion before opening the state up to egaming.

Pennsylvania (12-1)

Pennsylvania was looking like the best bet. It made all the right moves in 2014, including a well-crafted piece of internet gaming legislation and an internet gaming study commissioned by Pennsylvania’s bicameral Legislative Budget and Finance Committee.

However, we now know that Pennsylvania will have a new governor in 2015, Democrat Tom Wolf. Governor-elect Wolf voiced opposition to legalized internet gaming during his campaign and the Republican Senate Majority in Pennsylvania will be under new leadership from state Senator Jake Corman, who voted against establishing casinos in Pennsylvania in 2004 and the subsequent table games expansion legislation in 2006.

Even so, in light of the stabilization in gross revenue from Pennsylvania’s existing casino operators and the prospect that internet gaming expansion may ease a difficult state budget shortfall, the Governor-elect, a businessman, may be open to the discussion. This is particularly likely given the Committee’s study, which projects that egaming could generate $184m for the Commonwealth in year one (including $77m in online poker revenues) and $307m in subsequent years (including $129m in online poker revenues).

California (10-1)

There is no doubt that most experts see California as a front-runner for 2015 egaming legislation. Many expected the Golden State to pass legislation in 2014, but gridlock over the inclusion of a “bad actor” provision and eligibility to offer online poker resulted in the death of two proposed egaming bills – SB 1366 and AB 2291 in 2014.

We already know that internet gaming legislation will be reintroduced in the next session. But don’t be surprised if we see more delays, especially since one of internet poker’s biggest champions in Sacramento, Senator Lou Correa, is now a lame duck who will be running for county office. Ultimately though, the population base and large liquidity pool that California will bring to online poker make it a hotspot regardless of when it enters the market.

Massachusetts (7-1)

On paper, it would appear that Massachusetts would be an unlikely candidate for a successful egaming campaign. Aside from its fledgling bricks-and-mortar industry, the state recently lost its biggest egaming proponent, State Treasurer Steven Grossman, who lost the Democratic primary for Governor to lame duck Attorney General Martha Coakley, and will be out of public office come January.

Coakley, who was listed as one of the Poker Players Alliance’s anti-gaming “jokers”, ultimately lost to Governor-elect, Charlie Baker. While Baker hasn’t exactly publicly embraced egaming, he also hasn’t renounced the prospect as did his opponent, Coakley. Indeed, internet gaming may stand a chance in Massachusetts with Baker at the helm and Republican Senate Minority Leader Senator Bruce Tarr, one of the Commonwealth’s other chief egaming proponents, waiting in wings, having just announced his intention to seek another term as leader of the Republican Senate caucus.

Massachusetts, much like Pennsylvania, made great strides in 2014 to suggest it is a top contender for 2015. Proposed internet gaming legislation – check. Hearing on internet gaming held by the Massachusetts Gaming Commission – check. And the kicker – the state’s overwhelming rejection this election cycle of a ballot measure to repeal Massachusetts’ casino law. It is clear that Bay-Staters unequivocally support gaming expansion, and egaming could be what’s next.

Iowa (5-1)

The Hawkeye State is no stranger to internet poker. In 2012, the Iowa Senate actually passed internet poker legislation, but the measure was not taken up by the House. Similar legislation was reintroduced in 2013, but failed to gain traction.

Wes Ehrecke, president of the Iowa Gaming Association, confirmed that 2014 was Iowa’s “wait-and-see” year given the short legislative session and that a review of New Jersey, Delaware and Nevada would lead to “suggested language for a bill to consider in 2015.” Further, Iowa Governor, Terry Barnstad, is on record saying he would consider internet poker legislation. Barnstad might just get that chance in 2015.

The biggest bet

While legal internet gaming revenue in the US failed to meet projections in 2014, it is a growing industry. Estimates suggest illegal internet gaming in the US is a $4bn-6bn market. The verdict is still out on whether more states will tap into that revenue steam by legalizing egaming. Those states will need to keep close tabs on what is happening at the federal level. As a result of the gains made by anti-gaming figures in 2014 midterm elections, certain factions of the new United States Congress will surely look to pass legislation that would curb the spread of state-legalized internet gaming.

However, in order for such legislation to be successful, it will likely have to include a compromise provision “grandfathering in” those states that have already legalized internet gaming. Thus, the current political climate could lead to states like New York, Pennsylvania, California, Massachusetts and Iowa, and others “going all in” on internet gaming legislation in the coming year.