January 4, 2012 (updated April 9th)
You just may see legal, licensed and regulated online poker in the USA in 2012 with or without federal level action. By April 2012, six states are considering inrastate online gambling bills and some are already considering blocking any possible future federal legislation. For a list of US states with full details of their efforts, please see our Poker per State page.
On Dec 22nd, The Nevada Gaming Commission approved internet poker regulations. This means that Nevada is establishing a framework for regulating online poker. Whether this will be a national network, a state network or an interstate network under Nevada supervision will depend on the progress of federal bills and state efforts in 2012.
The Nevada Gaming Commission has already begun taking applications for companies to operate poker sites on the internet. The companies that receive such licenses will be able to legally offer Nevada residents a place to play online poker. This approval process can take as little as 90 days for companies that already own regular gaming licenses.
If federal legislation lags and stalls for the next few years, other states can decide to legalize internet poker and join NV by combining player pools across states. This option was only recently made available after the Department of Justice’s recent announcement that the Wire Act preventing wagers across state lines only applies to sports betting.
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This debate went on in March 2012 as the National Conference of State Legislatures spoke out against the federal legalization of Internet poker pushing instead for regulation at the state level. They believe that the government should respect the Justice Department’s ruling on the Federal Wire Act and would oppose any efforts by Congress to preempt state authority over online gaming. The letter goes on to say that States have long been able to make similar decisions on other forms of gambling and were successful in their efforts. Therefore it is their belief that internet gaming should be treated the same way.
If federal legislation does pass, states and Indian territories will share the burden of regulation as a proposal by Rep. Joe Barton suggests. Once federal law is in place, Nevada will already have approved companies to which it has issues licenses and will be ready to go. States like California and New Jersey may want to handle their own regulation but other states may chose to let Nevada oversee and regulate poker on the internet in their state.
“Nevada is essentially moving ahead without a federal law,” said John Pappas, executive director of the PPA (Poker Players Alliance). “Should it become federal law, I think Nevada will be in the position to be one of the first states certified to issue licenses. I think a lot of states would rather not take the regulatory burden upon themselves and would say what’s good enough for Nevada is good enough for us.”
If this should happen, the approved regulation by the NV Gaming Commission could be quite important since they might be used by the largest regulatory body post-legislation. These regulations are of course not final as of yet and subject to change.
Here are some interesting points in the proposed regulations.
- Affiliates are allowed.
- Player fund transfers are not allowed.
- Site operators must make sure that players have only one account.
- Operators may pay a fixed sum to celebrity players for marketing purposes as long as the operator does not profit beyond the rake.
- Promotional/bonus credits can be offered by the operator.
- An operator must maintain at all times a reserve of cash, cash equivalents, an irrevocable letter of credit, bond, or combination thereof, equal to the sum of all the players’ funds.
- The ceiling for maximum rake is 10%.
Other States
Although The District of Columbia was the first jurisdiction in the U.S. to legalize online gaming last april, officials are still divided whether or not the government should move forward. Last year a councilman inserted language in a budget bill that allows poker and other games to be played online. There was no obstruction from Congress within the 30-day objection period so the bill turned into law.
D.C. remains the only jurisdiction besides Nevada to have approved internet gambling within its borders but a repeal bill also introduced last year by council member Tommy Wells could ultimately amend the law and reverse the legalization.
Although New Jersey has fallen from grace in the gambling industry, New Jersey Gov. Chris Christie supports online gaming as long as its headquarters is Atlantic City. He now backs Sen. Raymond Lesniak hoping that NJ won’t be left behind. Ohio and Iowa are also interested in the online gaming space after DOJ’s clarification on the Wire Act. Iowa even conducted a study showing that it could bring in $3 million of yearly tax revenue for the state.
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Not all states share the idea that online gaming should be legalized and regulated. California and especially Utah still show strong anti-gaming sentiment. Utah even has legislation in the pipeline that would ban online gaming before it is even legalized just in case federal regulation ever gains traction.
In any case, Nevada seems to be spearheading the race for regulation and legalization of online poker. It is the hopes of the PPA that these steps taken by the most prominent gaming state in the US shows lawmakers and congressmen that are on the fence that a well regulated and accredited body is ready to support and manage online poker. Whatever the future may look like for internet poker in the US, Nevada clearly wants to be at the center of it.
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