Leading gambling regulators from Nevada, California and Iowa agreed there was a nine- or ten-in-ten chance that states would eventually reach agreements, or compacts, for interstate online gambling.
But getting there likely will not be easy, panelists conceded.
Regulators said key challenges include how to share online gaming tax revenues, as well as overcoming possible divergent licensing suitability criteria between jurisdictions.
“Those [issues] in themselves are extremely complex if you’re looking intrastate,” said Daymon Ruttenberg, general counsel of the Illinois Lottery, which has been lined up to regulate online gambling in Illinois under legislation introduced in the state’s Senate.
“If you try to add on another state, whether it be Nevada, Iowa, each layer is going to add another level of complexity that’s going to make it more and more difficult,” Ruttenberg said.
“But I think there are places where you can find common ground and start from there, such as what you’re looking at in the form of technical standards, and try to bridge that gap and then hope you find more and more common ground.”
California already has substantial regulatory experience in inking dozens of complicated inter-jurisdictional gaming compacts with the state’s Indian nations, said Richard Schuetz, California gambling control commissioner.
If California legalizes online poker, interstate compacts are likely to be discussed because American poker players “are going to want to be on the biggest game in the United States, and that is unquestionably ours,” Schuetz told GiGSE delegates, citing the state’s population base.
“I’m confident we can execute this,” Schuetz said. “These are difficult issues, but we’ve been dealing with difficult issues and solving the issues in this state for a long time.”
Discussion on interstate online agreements arguably is most advanced in Nevada.
In February, the Silver State adopted Assembly Bill 114, which expressly permits Nevada’s governor to enter into online agreements with other states, but not foreign countries.
Nevada’s Gaming Control Board opened a public consultation last month to help craft regulations to govern compacts.
So far, it has received input from more than a dozen companies, including European online specialists 888 and Bwin.Party Digital Entertainment.
Interstate agreements “are not problematic from a legal standpoint” and probably will not require any federal approval, Control Board chairman A.G. Burnett told GiGSE delegates.
Instead, the most obvious challenges for Nevada and other jurisdictions will be licensing reciprocity, taxation, and establishing consensus that the agreements will be mutually beneficial, Burnett said.
“I think those are the three top issues,” he said.
Many observers see compacts as a critical component in maximizing the potential of the U.S. online market.
On one hand, established gambling operators are keen to avoid repeating some of the overlapping regulatory requirements and elevated compliance costs already faced by casinos and suppliers in the land-based industry.
Technology providers are also wary of the significant investment that would be involved in establishing servers or data centers in multiple states, according to comments submitted to the Nevada Gaming Control Board by Bwin.Party, SHFL Entertainment and others.
But perhaps the major driving factor is the economics of online gambling.
With player liquidity so critical to the vitality of online operations, interstate agreements will be especially important for smaller U.S. jurisdictions and for peer-to-peer poker games where players compete against each other rather than the house, GiGSE panelists said.
Of the three states that so far have legalized Internet gaming, many observers believe New Jersey, with around 8.9m people, likely will be able to support a viable online casino and poker market on its own.
But Nevada is currently restricted to online poker only for a population of less than 3m people, albeit boosted by the influx of gambling tourists.
Silver State regulators are also getting “up to speed” with online casino games, and could regulate them within a 90-day window if the state’s gaming industry and policymakers want to expand Nevada’s online market, Burnett said.
Meanwhile, Delaware’s three racetrack casinos and the state lottery, without compacts, would be limited to offering online games to just 900,000 or so people within Delaware’s borders.
The state’s racinos do see Internet gaming as a “new avenue of profit,” but not a major one, said Christer Farr, senior vice president for Delaware Park racetrack.
“Online is not going to give us $200m, not right now; not in its current environment,” Farr said.
No comments:
Post a Comment