By Martin Owens
Internet Gambling Goes Back to the State House Circuit
"Anything worth doing is worth doing slowly... VERY slowly". . .
Gypsy Rose Lee, famous exotic dancer
I've been scratching my head to find a proper comparison for the annual spectacle of state legislatures wrestling with the notion of legalizing Internet gambling. Not the Lincoln Douglas debates. The Civil Rights Act? Hardly. In fact, the process bears less resemblance to politics than it does to another disreputable but popular entertainment- those old time girlie shows. Naturally, the music and the steps vary from place to place. But at the end of the day, it's the same song and dance. Here are some of the more interesting recent developments.
New Jersey Tango
The tango is a ritualized seduction. The passive partner lets the leader win- but only after a good credible resistance to make it interesting. Governor Chris Christie may not come to mind as a great dancer, but in the political ballroom he is whirling an intricate and adept tango, a foil for his state legislature's yearning for Internet gambling. He has just handed them a 'conditional veto' on their latest legalization bill. A refusal? Not hardly. Everybody is still dancing to the same rhythm. . Only a few minor changes are really required. (Only a few more passes, my dear, and then you shall have what you want, I swear.) But Christie insists on them to cover his flank with the GOP, as he still has his eye on a White House run in 2016. This way, New Jersey gets much-needed revenue, but the Governor can tell conservatives that he fought to the end, and at least made sure it was safe for the long-suffering public. And why not? If ever there was a man who knew how to have his cake and eat it too....
Delaware square dance
No doubt about it, it's the quiet ones you have to look out for. Nobody thought of Delaware as a leader in the race to legalize Internet gambling. Then again, it is called the First State. Just as the persistent tortoise outran the hare by never giving up and waiting for his chance, Delaware might just be the first state to actually open up and operate Internet gambling. The enabling legislation was passed late last year. This is nothing new; several states have already done it. The difference with Delaware is that they didn't stop the music, and are hoping to have an Internet gambling program - including poker ,slots, roulette, and blackjack - up and running by September of this year.
Delaware's dance is a square dance- controlled by a central caller, with all the moves set out in advance. In this case the caller is the State Lottery, which has just issued a Request for Proposals asking for plans and bids from interested online operators to come in and set up the state system. The deadline may be a little ambitious, and the state estimates of $8 million in revenues for 2013 alone might turn out to be a shade optimistic, given that the state's entire population is under 1 million, and the program will follow UIGEA guidelines of only offering gambling to residents. Nevertheless, first is first. If Delaware wins the distinction of actually opening up online gambling, it will confer 'first mover advantage' on the operators who opened up there, and possibly the state itself, depending on what sort of contracts are signed. Just as important, the authors of this Delaware legislation have kept careful track of new developments such as social media and smart phones, and have written them into the plan. The usual cheerful predictions have been made, that it's only the matter of a few weeks or days now. We wait and see
If there's any place they understand striptease as a way of life, it's got to be Sin City. The fun and excitement is all generated by drawing out the process as long as possible. The belle artiste onstage appears to be dressed scantily, but actual practice reveals layer after layer, piece after piece. to be peeled off slowly, enticingly, to bawdy brass band music, as the crowd roars out approval and orders more drinks.
Nevada's I-gaming striptease has been the longest in the nation. Its enabling legislation for Internet gambling was passed more than 10 years ago (a glove falls to the floor). New guidelines have been proposed (a sequin pops off her shoulder strap). Mergers and discussions are taking place between big Vegas resorts and online gambling software giants (She unbuckled her skirt. There's another one underneath.). State gambling authorities are issuing online gaming licenses ( hot-cha! There go the sleeves!). And so the band plays on, with the promise of Internet gambling opening up any day now.
But the most recent development just may be the big unzip that everybody's been waiting for. Legislation has been proposed which will allow Nevada to sign interstate online gambling compacts with other states. This is a very logical and necessary step, for a national network of some description is necessary sooner or later. But hold on- the measure might be loaded up with sweeteners and special deals that make it unpassable ( well, whaddya know, folks, under That layer...) And the horns keep playing: bum-DA-DA, bum-bum-DA-DA, bum-bum-DA-DA...still waiting for the blue spotlight. This spring, maybe.
California Two Step
As usual, they do things a little bit different in California. Once again, State Senator Rod Wright is walking point on the effort to license and legalize Internet poker in the Golden State. This time, however, he is also fielding a measure to allow sports betting as well. The same state licensed operations which are eligible for Internet poker licenses will be allowed to take sports bets as well, including Internet bets, so long as the clientele is limited to California residents.
The Senator is performing the remarkable feat of dancing with two partners at once: to get Internet poker, which some gaming tribes don't like the look of, he holds out the promise of sports betting, which everybody would love.
Legalizing sports betting, even in-state only, would seem to be following the same path as New Jersey, steering for collision with PASPA, the federal law that prohibits further licensing of it. But California was one of the first states to legalize marijuana locally, and others are now following suit. If the Feds do not choose to make an issue of it, this particular controversy may play out in the same way - the wall gets knocked down a brick at a time instead of with a bulldozer, but either way it goes down.
But perhaps the most interesting development in Sacramento has been the emergence of Republican support, particularly for the sports betting measure. Even with recent tax increases, California's fiscal picture is far from rosy, and so the GOP has chosen practicality over morality. As Groucho once remarked, 'it's not the money that's important- it's the amount.'
Initial hearings are scheduled for March
If there is a race to legalize Internet gambling at the state level, it is a very deliberate one, and the hardest race to handicap I ever saw. It may be that Nevada will put a few finishing touches on its program and open up in a few weeks, as advertised. Perhaps New Jersey will pursue its advantages and get underway about the same time. California might be heard of, perhaps in late summer or fall, provided nothing turns up to knock the gambling legislation off the schedule, as has happened before. Or Delaware might be the surprise candidate to beat everyone to the punch.
But it is Nevada, whether they open up first are not, that is truly pointing the way to the future of Internet gambling in the USA. Only with interstate compacts and agreements can a national network of I gambling be established, and American operators take their place in what is irretrievably a global market, like it or not.
Place your bets.
Mr. Owens is a California attorney specializing in the law of Internet and interactive gaming since 1998. Co-author of INTERNET GAMING LAW with Professor Nelson Rose, (Mary Ann Liebert Publishers, 2nd ed 2009) ; Associate Editor , Gaming Law Review & Economics; Contributing Editor, TSN. Com
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