Nevada Casino Companies Ready for Intrastate Online Poker, But Federal Measure Still Holy Grail
AGA's Frank Fahrenkopf Gives Presentation to Gaming Policy Committee
The major casino companies are using Nevada as online gaming insurance. The Silver State is close to an intrastate industry, but everyone wants more.
The industry sees Nevada’s effective population (residents plus tourists) as just not enough to make web poker worthwhile. A federal bill authorizing the activity nationwide or a state-by-state patchwork are solutions to the liquidity issue.
The American Gaming Association, the industry’s top lobbying group in the Beltway, is still pushing hard for a federal bill. On Thursday in Las Vegas, Nevada, the group’s President, Frank Fahrenkopf, presented the Nevada Gaming Policy Committee with an update.
Fahrenkopf began by telling the 11-member panel, headed by Gov. Brian Sandoval, that state compacts for Internet poker might not be so easy in the absence of a federal regime. According to Fahrenkopf, the U.S. Congress has authority to approve or deny any state-to-state deal, although it historically hasn’t interfered.
“But I can assure you that with a controversial issue like this, some politicians would want to interfere,” said Fahrenkopf, who represents more than 20 casino companies.
Fahrenkopf expressed concern about lotteries overseeing intrastate markets. He said that most state lottery directors want only their lottery to have the authority to operate online gaming. According to Fahrenkopf, this monopoly would shut out commercial and tribal casinos, as well as parimutuels. He’s also skeptical of their regulatory experience. Some lawmakers in Illinois are currently thinking about allowing the lotto to run online casino games.
Two bills currently in Congress, Rep. John Campbell’s HR1174 and Rep. Joe Barton’s HR2366, appear to be drawing dead, according to Fahrenkopf. The AGA hopes a third bill will be introduced in this Congress, one that would authorize only web poker.
However, the chances of passage appear remote. “I’ve never seen this level of dysfunction in our Congress before,” said Fahrenkopf, the former Chairman of the Republican National Committee. Some federal lawmakers think gambling is “spending eternity in hell with the devil,” Fahrenkopf added. Gov. Sandoval echoed the religious allegories, calling Fahrenkopf’s presentation “enlightening.”
The less than two-hour long meeting, which was watched by about 50 people, was also a pat on the back for Nevada. Fahrenkopf said other states “aren’t even close.” Delaware, New Jersey and California are attempting to legalize web gaming.
Just last week, the Gaming Control Board approved web poker applications for Bally Technologies and International Game Technology. Both go to the Gaming Commission next week for final approval, before the technology inspection phase.
More than 30 businesses are hedging their bets by applying to participate in Nevada online poker. Gov. Sandoval said Nevada could one day be the “nerve center” for U.S. web gaming.
Despite consisting of some of gaming’s heaviest hitters, the Gaming Policy Committee doesn’t have explicit decision-making power. Its purpose is to make recommendations to the legislature. Its primary advice will be in the form of a deletion.
Assembly Bill 258, the legislation that forced the adoption of online poker regulations, has a provision that says Nevada must wait for a federal bill or DoJ authorization to begin even intrastate. The federal clarification of the Wire Act in December 2011 is widely considered to have given the intrastate OK, but Nevada wants to make sure there’s no impediment.
The Silver State will move forward, but one can say goodbye to the aforementioned language in the bill sometime after the next legislative session starts in February.
“In all due respect, Governor, I don’t think you’re going to get a [DoJ] letter saying you can do whatever you want,” Commission Chairman Peter Bernhard said as the meeting was ending.
“Why not?!” Gov. Sandoval joked.
Follow Brian Pempus on Twitter — @brianpempus
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