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Online Poker Legislative Update

A Look at Three States Efforts to Introduce Online Poker Regulation

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Senator Harry ReidSenate Majority Leader Harry Reid’s Internet Poker Act of 2010 has been dead for nearly two months now, placing a hold on any chance of federal online poker regulation in the United States in the next year.

Though there are reports that Rep. John Campbell has partnered with Barney frank to introduce a House bill that will regulate online poker, it appears that shifting Congressional power towards the GOP will hurt any chance the bill has of getting off the ground. With Arizona Senator and staunch online poker opponent Jon Kyl announcing retirement, only time will tell when another push is made at the federal level to legalize and regulate online poker.

That being said, the push for legislation at the state level remains strong in a few key areas of the country. Here, we get an updated look at what’s happening on the political front lines.

New Jersey

Governor Chris ChristieThe New Jersey legislature made history in early January, becoming the first state to pass legislation in favor of an in-state internet gambling system. Under the proposed bill, Atlantic City casinos would be able to offer online gambling both internationally and to New Jersey state residents.

In addition to poker, the legislation allows for the offering of games such as blackjack, craps, slots, roulette, baccarat and pai gow. According to a study commissioned by the Interactive Media Entertainment and Gaming Association (iMEGA), a New Jersey intra-state gambling system could raise up to $250 million in revenue and bring in an additional $55 million in taxes.

All that left to make it official is the signature of Governor Chris Christie, which would make the bill a law. Joe Brennan, chairman of iMEGA stated in January, “We are very close, tantalizingly close right now and I think within the next month, you will likely see New Jersey become the first regulated iGaming market in the U.S.”

Though most industry experts are optimistic that the bill will become law, Brennan was hesitant to lean one way or the other. “Governor Christie has become the subject of an awful lot of speculation within the industry right now. I would suggest that probably 95 percent of the speculation is probably completely off target. We’ve been most active on this and if you asked me today which way Governor Christie would vote, I would honestly have to say I don’t know with certainty.”

Christie has not publicly commented on the bill, but his 45-day deadline is fast approaching. Should he simply choose to ignore the bill, it will automatically be passed into New Jersey law.

Florida

Rep. Joseph AbruzzoIf New Jersey does indeed become the first state to license and regulate online poker, Florida may not be far behind. With a target of July 2011, state legislators are currently investigating a number of ways to expand into the online gambling market.

The current push is for state pari-mutuel facilities to begin to offer online poker through existing third party websites. The facility would then takes it’s cut and the state would earn revenue through the taxes paid on the rake.

According to Rep. Joseph Abruzzo, the bill’s author, regulating online poker in Florida is just one of many ways the state can cut into it’s $3.6 billion deficit.

“It’s common sense,” he said. “There are hundreds of thousands of players in Florida in unregulated and unprotected offshore sites. Why not legalize, regulate and bring in revenue from something that’s already occurring?”

Of course, there are other obstacles to deal with besides the obvious anti-gambling groups. By law, the Seminole Indians are permitted to offer any form of gambling that is legal in the state. The state recently negotiated a compact with the Seminoles to allow them to offer blackjack in exchange for real, uncapped poker. Previously, players were forced to buy-in for no more than $100 in any game. Before that, each bet was limited to just $2.

Should pari-mutuels earn the right to offer online poker through third party sites, the Seminoles would likely do so as well. With less legal loopholes to jump through, they’d probably be the first up and running, hurting the state’s chances for a big tax revenue windfall.

California

Senator Lou CorreaWhile the talks heat up in New Jersey and Florida, California keeps finding roadblocks in their path towards online poker regulation. In an effort to chip away at the state’s $26 billion deficit, Senator Lou Correa authored Bill 40, also known as California First, The State Funding, Job Creation and Online Gaming Accountability Act.

According to the bill, only existing card rooms and California tribal governments in the state would be able to offer iPoker on the state’s only approved network. State residents would be legally allowed to play on the network, as would current California visitors, but allows their winnings to be transferred into a player’s bank accounts.

A second piece of legislation, Bill 45, was introduced by Senator Rod Wright. While Bill 40 focused mainly on online poker, Bill 45 leaves open the possibility for licensing other types of online gambling. If either bill should pass, Californians would be completely cut off from the current off-shore sites that offer poker.

According to an economic impact study, an online poker system in California would earn roughly $1 billion in tax revenue and bring in 1,100 new jobs over the next decade. Though most politicians are in favor of some form of legislation, deciding the specifics of who to include in the carve out is taking longer than initially anticipated.

 
 
 
 

Comments

robtr3
10 years ago

I don't quite understand this part of the California section of this article: "If either bill [Bill 40 or Bill 45] should pass, Californians would be completely cut off from the current off-shore sites that offer poker."

The reports on the other two states in this article doesn't mention this possiblity. Do New Jersey and Florida also stand to be cut off from the current off-shore sites that offer poker? Either way, why would any of these three states be cut off from the current off-short sites should their respective pro-iPoker legislations pass and become law?

 
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RuptureAchilies
10 years ago

I think the difference between the California bill and the New Jersey or Florida bill, is that it specifically outlaws out of state casino operators including off shore poker sites, where New Jersey and Florida are silent regarding off shore casino operators.

What is the incentive of off shore operators to comply with state law? Most likely, any bill that has a chance of passing through Congress and the Senate will ban off shore casino operators that have previously operated in the United States in violation of state laws. Therefore any internet casino operator that wishes to participate in the US market legally once it is regulated has incentive to follow current state laws. This is exactly the reason Poker Stars and Full Tilt have banned players from Washington state.

 
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