Gambling Officials Look to Hill to Impose Order Online as States Move on Legalization

Several speakers agreed that poker is the obvious thin edge of the wedge and a federally legislated framework is needed to make the market larger and more orderly than states alone can. Without congressional action, “all you will have done is create a huge morass,” said Jan Jones, a senior vice president of Caesars Entertainment and a former Las Vegas mayor. State lotteries were noted as would-be entrants; representatives of Indian tribes complained that their casino operations are at risk; and several speakers gave at least lip service to getting all the players to the table to set the rules.

A December opinion by the Justice Department that the federal Wire Act allows states to permit betting other than on sports has “energized” them, even if it wasn’t radically disruptive of the conventional wisdom in substance, said California state Sen. Lou Correa, D-Santa Ana, who unsuccessfully sponsored a bill to regulate Internet poker. “You have reinvigorated interest in passing legislation,” but “legally, it’s probably not that significant,” he said.

Activity is stirring in the legislatures of California, Connecticut, Delaware, Iowa, Mississippi and New Jersey, he said. With DOJ’s action, the attitude in Iowa went from “the feds'll probably just preempt us” if the state legalized online gambling, to “we better get on this” ahead of congressional legislation, said Kirk Uhler, US Digital Gaming’s government affairs vice president.

Republican Gov. Chris Christie wants to sign a legalization bill in New Jersey, but he’s up for re-election and holding off for political reasons, said Barbara DeMarco, a lobbyist in the state. The Division of Gaming Enforcement is drafting regulations, she said. “I have to think that if they're moving forward, the governor is behind that effort."

"Nevada is leading the way,” and California -- with 2 million poker players “the largest market in this nation” -- “is watching Nevada very closely,” Correa said. In December, Nevada’s Gaming Control Board adopted the country’s first online gambling regulations, for poker, said Chairman Mark Lipparelli. Almost 30 applications have been received from inside the state and out, he said. The first independent test labs to certify operators probably will be registered by early June under regulations approved this year, Lipparelli said. “Fairly routine issuance of licenses” will follow the selection of a first pool of applicants for processing around June and a second in July, he said. But it’s not clear exactly when betting will go live, Lipparelli said.

The Illinois and New York lotteries are preparing to go online, and other state lotteries are considering the move, said Chairwoman Leslie Lohse of the California Tribal Business Alliance. They threaten tribal gaming across the country, she said. So do the social games that betting would be allowed on under California’s SB-1463, sponsored by the Senate president pro tem and the chairman of the committee of jurisdiction, said Michael Lombardi, Augustine Band of Cahuilla Indians’ gambling commission chairman. “It’s almost anything goes” under the measure, he said, rather than allowing only poker, over which tribal casinos have no legal monopoly in California. “This bill won’t get out of committee” without major changes to remove Indians’ objections, Lombardi declared. “No way, no how.” He said he hopes by next year to see an alternative bill.