Onilne Gaming in the U.S.: Reservations from the Reservations

I watched that hearing yesterday of the U.S. Senate Committee on Indian Affairs, titled “What’s at Stake for the Tribes.” You might recall this is the second such hearing for that committee, following an earlier one back in November.

If you’re curious you can read the testimony from yesterday and view the hearing yourself over on the committee’s web page, although if you happen to dial up the video skip to about the 44-minute mark because for some reason the actual hearing doesn’t start until there.

With that opinion from the Department of Justice first made public in late December indicating an altered position regarding the Federal Wire Act, the tribes and those representing their interests are now viewing the prospect of online gambling in the U.S. as not just a possibility but likely. And, as I cracked after the first hearing, there appear to be a lot of reservations coming from the reservations when it comes to the possibility of legally-sanctioned online gaming coming to the U.S.

In fact, now there appears to be more explicit fretting over negative consequences for the tribes should individual states start moving forward with offering online gaming. Such appeared to be the sentiment being expressed by some of the witnesses yesterday, anyway.

I. Nelson Rose, the gambling law professor, was there as a witness and his testimony -- outlining his speculative view of what will be happening as we move forward with states lining up to pass legislation, establish regulations, issue licenses, and start offering online gaming (either intrastate or with other states as a “consortium”) -- seemed to me as though it probably mostly confirmed the tribes’ fears that their significant gaming revenues were going to be in danger.

Meanwhile, Patrick Fleming, an attorney who is serving as the Litigation Support Director for the Poker Players Alliance, appeared to be trying assuage such fears, suggesting instead how online gaming need not necessarily eat into the profitability of the tribes’ brick-and-mortar casinos. Fleming also made an effort to distinguish poker from other casino games, but I’m not sure how significant that argument really was in this context.

In the end, the hearing again seemed to demonstrate how discussions about online gaming on Capitol Hill have tended to veer away from being marked by moral objections to gambling, generally speaking, and are becoming more focused on practical questions regarding (1) how it is all going to work, and (2) who is going to benefit financially.

As I mentioned yesterday, I was a guest last night on the poker podcast “Keep Flopping Aces” with Lou Krieger and Shari Geller, and we did spend some of the hour talking about the prospects for online poker in the U.S. both on the state and federal levels.

When asked by Lou to predict whether or not we’d see any online poker in the U.S. in 2012, I had to say I didn’t think so. While things are moving on the state level -- having progressed the most in Nevada -- it still feels to me like logistical concerns may require significant time to pass before anyone is actually playing online poker in the U.S.

And as far as the idea of an interstate “consortium” goes, I can’t help but think the feds won’t stand idly by and allow that to happen without some sort of meddling that’ll at least delay such a development if not prevent it altogether. (I could be way off-base in thinking that way, but I guess I’m still mired in a believe-it-when-I-see-it mode for a lot of this.)

Meanwhile, I suppose there always exists the possibility of some surprise addendum to a federal bill to allow for online poker. In fact, there was some of that talk coming out of the rumor mill yet again this week -- i.e., that Harry Reid was again primed to try to do just that by adding an online poker bill to an upcoming payroll tax bill. I might have accounted for that possibility when answering Lou’s request to make a prediction, but I feel like there are so many variables affecting the prospects of a federal bill succeeding that it is hard for any of us amateur prognosticators to foresee that turn of events.

I was reflecting on Lou’s question again today, and thinking how in fact there still are a lot of months to go here in 2012. Still, with all of the various political forces in play -- Indian gaming being just one of them -- it continues to seem like the odds are mighty slim that online poker could be legally offered anywhere in the U.S. before the year is out.