In this week's edition of the Weekly Industry Update, Harry Reid signals a federal bill is making progress and a Black Friday processor pleads guilty in New York. Check out these stories and more in this week's report. Reid: Federal Bill "Making Progress" While Nevada gets ready to regulate online poker and more states follow suit, Harry Reid offered fresh hope that a federal bill could still be in the cards. Harry Reid told a Gambling Compliance reporter that "we cannot have a series of laws around the country related to gambling." Most interestingly, Reid told the reporter that he was "making progress" with Jon Kyl on federal legislation. Jon Kyl has traditionally been one of online gambling's biggest foes but could agree to a internet poker bill if other forms of gambling were barred. Zynga Changes Position on Real Money Poker?: It seems that Zynga, the world's largest social media gaming company, may be softening their position on real money gambling. The company confirmed on Friday that they are now speaking with potential partners to "better understand and explore" the opportunity in real money poker. The entry of Zynga, which has 30 million monthly users, into the real money online poker market would be an undeniable game-changer for the industry. Full Tilt Poker Update: Last week Ira Rubin, one of the payment processors indicted on Black Friday that processed for Full Tilt, pleaded guilt to conspiracy charges in New York. Rubia was alleged to have helped offshore poker companies process billions of dollars in illegal gambling proceeds. As part of the plea deal, Rubia could face 18 to 24 months in prison. In regards to the Full Tilt Poker/GBT sale progress, there have been no major developments since Full Tilt Poker agreed to transfer assets to GBT in the middle of December. PokerScout Traffic Update: Online poker traffic stabilized last week accroding to PokerScout after a large 10% upswing the previous week. PokerScout was the only room in the top five to decline, however. Merge Gaming saw its traffic increase by 3%, likely due to a Bad Beat Jackpot that had increased to $1 million and was subsequently hit hours later. Jottings: Superuser scandal victims sue Ultimate Bet...Internet world rallies behind SOPA opposition, Megaupload seized following day...PokerStars CEO Steps Down...State race for online gambling begins...State profits from internet gambling may be smaller than expected...Iowa lawmaker making push for online poker.
There is never a dull moment in the effort to legalize online poker in the United States. The District of Columbia has become the first US jurisdiction to legalize online gambling, beating gambling centers such as Nevada and New Jersey. A 30-day period for the United States Congress to object to the legislation expired on April 7th. The legislation will now bring online poker to the District of Columbia’s 600,000 residents. It is believed that poker games and other games of skill could be live by the end of the year; however, a large number of the details remain undecided so it is difficult to tell at this point what online poker in DC will look like. Let's take a look on recent developments from other states... Hawaii Hawaii, of all states, tried to garner momentum for regulated poker last month but today a report was issued that said that the bill failed to get a public hearing before a Friday deadline, meaning the bill is now dead for 2011. The introduction of the bill surprised many industry observers since the state is one of two that do not allow currently allow gambling in any form. Iowa Bloomberg has reported that Iowa lawmakers have stated that legislators in the state cannot currently agree on a bill, and efforts to pass a bill there appear to have stalled. Nevada In Nevada, Governor Brian Sandoval has come out saying he favors federal approval of online poker rather than Nevada passing their own state law. He was quoted as saying that he “[doesn’t] want the state to be in contravention of the federal law.” This sentiment is held by Caesars Entertainment, MGR and the new Full Tilt Poker-Stations Casinos partnership. The PokerStars-Wynn alliance is pushing for the bill in the Nevada legislature. Status of state bills: See below for a summary status update on all intrastate bills that have been proposed within the last six months: California: SB40 Florida: SB812 Hawaii: SB 755 Iowa: SB 1165 Nevada: AB258 New Jersey: S-490
Intrastate poker now seems to be heating up in the gambling mecca of the world. The Las Vegas Sun has reported that the Nevada legislature will now consider a bill on whether to regulate online poker in the state. Unlike other bills we have seen introduced in other states, the draft bill released declares that current operators would not be prohibited from licensing provided they have been legally licensed “by a recognized regulatory body” for at least 2 years in another jurisdiction. The bill could also allow Nevada licensed operators to offer their services to other jurisdictions and possibly combine player pools. Yesterday, the Nevada Gaming Control Board approved the partnership between Caesars Entertainment and a subsidiary of 888 Holdings. It now awaits a final decision by the Nevada Gaming commission on March 24th. The move clearly suggests that the company is preparing for likely legislative outcomes, including the provisions as outlined in the latest draft bill. As stated, the bill is still in draft form so it certainly can be changed before it warrants serious consideration, but the details provided thus far suggest this is the *best* bill yet introduced on a state level. While we wait on the bill’s progress, let’s take a look at where we are with the various state bills floating around:
Surprising many, New Jersey Governor Chris Christie issued an absolute veto on S-490, putting to halt efforts to regulate intrastate poker in the state. The bill, if enacted, would have allowed for Atlantic City-based casinos to provide online poker and other forms of online gambling to citizens of New Jersey. It would have been the first pro-online poker bill to pass on a state level in the United States. According to a statement Governor Christie released on the official State of New Jersey website, he acknowledged the intent of the bill to improve New Jersey casino competitiveness but cited issues with the New Jersey constitution, his administration’s policy objectives and the potential allowance of gambling outside of Atlantic City’s borders as reasons for the veto. Despite the bill originally passing by a 63-11 margin in the New Jersey Assembly -- and that a 2/3 vote can override a veto – the leading proponent of the legislation, State Senator Raymond Lesniak, has indicated that he will not lead a charge to overturn the veto. Instead, he indicated that the bill is something that would need joint cooperation from the legislature and the Governor. In a statement of his own, Lesniak said that resolving issues would be vital to help pass a bill "to bring the gaming industry back from the brink of insolvency." He continued, "we need to work as quickly as possible to bring this bill back to the Governor's desk and position Atlantic City to become the Silicon Valley of the high tech gaming sector." Until that happens it appears that online poker is dead in New Jersey, something industry observers are becoming all too familiar with.
While we STILL wait a decision from New Jersey about the fate of their intrastate bill -- we should have word on that by Friday – Iowa has joined the list of states attempting to legalize intrastate poker by introducing the Iowa Internet Poker Consumer Protection and Revenue Generation Act, which is a part of SB 1165, introduced by Jeff Danielson. According to the bill, enacting the law would “create a framework for the state to regulate intrastate internet poker in order to ensure consumer protections and provide to the state additional revenue that otherwise escapes Iowa taxation.” The bill would initially allow for one hub operator (network) that would allow Iowa casinos and racetracks (“skins” of the operator hub) to offer poker games to players. The single poker network would be regulated by the Iowa Racing and Gaming Commission. They would be given the power to authorize additional hub operators, although this doesn’t seem likely at first. Like many of other bills we have seen, only Iowans would be able to participate and they must be physically present in the state to play. Player accounts could be registered by person, mail, telephone or through the internet. Playing on sites not regulated by the Iowa Racing and Gaming Commission MAY be deemed illegal after the passage of the bill. Certainly, current operators would not be able to apply for an instrastateintrastate poker license. The Internet Poker language of the bill is not the only part of SB 1165. Under the legislation, casinos would no longer have their fate in the hands of Iowa voters every eight years as it is now, something operators would clearly be pleased about knowing they can operate indefinitely. Despite this threat to their existence, votes in 2002 and 2010 were over 70% in favor of the continuation of casinos in Iowa, according to the Des Moines Register. The legislation would also make some changes to existing laws pertaining to horse racing. It is very positive that more states are becoming open to the idea of regulating online poker in their states (perhaps this eventually helps nationally), but it’s important to remember that despite all the talk, nothing substantive has happened yet. Maybe that changes in New Jersey later this week.
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