Is Flurry of States’ Activity with Online Gaming Related to Future Federal Moves?



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After the decision by the U. S. Department of Justice in 2011 that the Wire Act of 1961 only applied to sports betting, it was expected that the individual states would flock to online gaming. It was thought that most of these would be online lottery sales, but the doors were also opened for online casino gaming and poker. That expected “flood” turned out to be a trickle as only three states – Nevada, New Jersey, and Delaware – passed regulations on the industry and opened the doors for action in 2013.

In the three-plus years since then, there have been plenty of states that have flirted with the idea of passing legislation, but there has been no sincere action towards passage of those regulations. With the 2016 General Election, however, and a GOP administration in control in Washington D. C., the potential fates of online gaming are in more question than ever. It bears asking if the current flurry of some states regarding the online gaming question is a result of the potential for federal movement (and not in a good way) on the subject?

In what seems to be a perennial entry, California has once again proposed a bill that would legalize and regulate online poker only in the state. The bill, AB 1677 from the office of longtime gaming advocate Assemblyman Reginald Jones-Sawyer, would open the doors for the largest state in the Union to earn tax revenues from a regulated online poker industry. The major roadblock for passage of the bill, as it has been since the first bill appeared more than a decade ago, is that none of the parties involved in the Golden State – the powerful Indian tribes, the card rooms, and the horse racing tracks, along with the politicians – cannot come to a consensus as to how to move forward.

New York has two bills on each side of the General Assembly (important for passage and forwarding to the governor). New York State Senator John Bonacic has S. 3898 (which has already gone through committee), while Assemblyman Gary Pretlow has introduced A. 5250, which is still in the discussion phase. If these two bills can get passed and are reconciled into one actionable bill, then Governor Andrew Cuomo would be the final arbiter.

Pennsylvania has already counted the money from full online casino gaming (including poker), there’s just one problem…they haven’t passed the regulations for it. Facing such a dilemma, a contingent of Keystone State representatives have presented HB 392, which not only would authorize full online casino gaming but also would open daily fantasy sports in the state. Once again, there’s been plenty of discussion but little action.

Even states that previously hadn’t been “in the pool” with online gaming and poker have decided to jump in. Dabbling with the issue in 2016 has pushed Michigan to consider the passage of online gaming regulations once again (hasn’t moved beyond talking) while a new player entered the game. Hawaii, long an anti-gaming state that actually has laws on the books preventing live gaming, has seen a bill, S. B. 677, introduced for the state to open “internet gaming (a very wide definition)” in the Aloha State.

So why are all these states suddenly rushing to pass (or at least looking at passing) online gaming regulations, be it for full casino gaming or just online poker? One only has to look at the situation in D. C. to be able to ascertain that answer.

When former Alabama Senator Jeff Sessions was cake-walking through his confirmation hearings to be the next U. S. Attorney General, noted anti-gaming Senator Lindsey Graham of South Carolina directly asked Sessions his thoughts about online gaming and its legality. In particular, Graham mentioned the Christmas 2011 decision from the Department of Justice – which, as Attorney General, Sessions would oversee – and the validity of the findings from the previous AG’s staff. In replying Sessions admitted that he already thought that it “wasn’t legal” for online gaming to be conducted and that he would “be revisiting” the decision if he were to be confirmed.

If Sessions were to overturn that 2011 decision by the DoJ, then the entire legality of the state’s rights to conduct online gaming would be destroyed and the enforcement of the Wire Act would be put back in place. No states would be able to pass their own laws regarding the conduct of online gaming inside their borders and the states that have already passed laws would presumably be shut down. Many are hoping (perhaps Pollyanna-like) that those states with laws passed would be “grandfathered” in and allowed to still operate, which would explain the “gold rush” like atmosphere with the actions from those states that haven’t yet passed regulations.

Currently Sessions has his plate full with other things that have plagued the current administration (when seven figures in the administration have met one Russian spy master, there’s a bit of a problem). But sitting out there is billionaire casino magnate Sheldon Adelson, who donated tens of millions of dollars to the GOP and is wanting some return on his investment (hence his meeting with Vice President Mike Pence, another noted anti-gaming advocate). The eventual outcome is not known but the individual states should waste little time if they want to get in under the gun.

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