The Road to Interstate Poker

Found myself spending time this morning trying to follow this joint meeting of the two judiciary committees of Nevada’s Assembly and Senate in which they discussed A.B. 114, a bill that would revise some of the provisions of the state’s law governing interactive gaming.

The live feed was a little choppy, often freezing up and resetting and thus making it tricky to follow every exchange. In fact, it was a little headachy at times, kind of resembling the whole stuttering, start-and-stop-and-start again nature of online gambling legislation in the U.S. over the last several years.

Nevada, of course, passed its own online gambling bill (for online poker only) back in June 2011, and about six months later the Nevada Gaming Control Board approved regulations to provide a framework for licensing and operating online gambling in NV. At the time a number of companies had already applied for licenses, and by now many more operators, technology providers, and service providers have applied with many having now been approved.

It was at the end of 2011 when that new opinion from the Department of Justice regarding the Wire Act first appeared, an opinion clarifying that the half-century old law about taking bets over the phone across state lines only applied to sports betting. That was taken by many to open the door to a new era of online gambling in the U.S. Following Nevada’s lead, Delaware passed an online gambling law last year, and several other states have had bills proposed. In fact it now appears that New Jersey is on the verge of passing its own online gambling law, with Governor Chris Christie perhaps about to sign a revised bill into law next week (after having earlier appeared poised to veto it).

So we have individual states passing laws and preparations being made to start allowing for certain kinds of online gambling in the U.S., with sites in Nevada sounding as though they’re ready to go live within the next few months. (In fact, I believe at least one might have already has gone online with play money games.)

A lot of the discussion to this point has focused on states offering “intrastate” online gambling -- i.e., for licensed sites to serve individuals within the state, including residents and visitors. However, that reinterpretation of the Wire Act did appear to allow for the possibility of a state offering online gambling to individuals not physically within its borders. Such a development would obviously be significant when it comes to online poker where having a sizable enough player pool to keep games going and achieve “liquidity” is crucial.

And so among the sections of A.B. 114 comes one specifically noting how “The Governor, on behalf of the state of Nevada, is authorized to: (1) Enter into agreements with other states, or authorized agencies thereof, to enable patrons in the signatory states to participate in interactive gaming offered by licensees in those signatory states; and (2) Take all necessary actions to ensure that any agreement entered into pursuant to this section becomes effective.”

A.B. 114 covers other ground, too, including further defining terms with regard to so-called “bad actors” (i.e., those who continued to serve U.S. customers post-UIGEA) and the time period they’d have to wait before applying for licenses as well as increasing the fees for the initial issuance of a license and for renewals. But for those of us living other states, it was that section about Nevada possibly trying to offer some interstate online poker that has pricked up our ears.

When my feed wasn’t cutting out, the discussion at today’s joint meeting seemed refreshingly informed and constructive, with Governor Sandoval and Gaming Control Board Chairman A.C. Burnett among the witnesses who testified.

There was some disagreement over the amount of the licensing fee ($500,000 or $1 million?), as well as some questions regarding how long the “bad actors” should have to wait before applying for a license (five or 10 years?). Ultimately those matters were resolved, and the meeting ended with a unanimous vote in favor of the bill.

Now A.B. 114 goes to the full Assembly for a vote, and it sounds as though things might move quickly with Sandoval perhaps signing it into law relatively soon (like today, even). Here’s an article just posted by the Las Vegas Sun detailing this morning’s meeting and its significance.

Getting back to that section regarding agreements with other states, or interstate “compacts” that would allow non-Nevada folks to play online poker on the NV sites, there were some questions about how that would work, including how exactly Nevada and the other states would be sharing revenue in such cases. Assembly Majority Leader William Horne also clarified that Nevada probably would not be entering into compacts with other states that had their own online gambling licensing regime in place.

That sounds a little like we might have certain states (e.g., Nevada and New Jersey) being kind of like central “hubs” offering online gambling to certain other states with which they establish these agreements, although to be honest I’m not completely sure how it would all work. (Or even if it ever will.)

In any case, those are among the many specifics that will eventually have to be hammered out by those drawing up the regulations (assuming A.B. 114 gets signed into law). As of now, looking into the future is kind of like that choppy feed, with visions of progress and actual change occurring interrupted by stasis and uncertainty.