States now look towards regulated on the internet
A minimum of a half-dozen states -- including Nevada -- and also the District of Columbia have enacted laws or are contemplating regulatory changes that would allow some form of Internet poker within their boundaries.
States that operate lotteries could also move forward with On-line poker initiatives.
How pervasive individual states become in internet poker activities continues to be the topic of debate among gaming industry financial analysts and gaming attorneys.
The U.S. Department of Justice announced Dec. 23 it revised a long-standing opinion on the federal Wire Act of 1961, which made all forms of Internet gambling illegal. The brand new opinion, sought by the Ny and Illinois lotteries, Justice Department attorneys said the Wire Act applies simply to sports wagering, not to the sale of lottery tickets on the internet. The reinterpretation seemingly cleared a path for federally regulated On-line poker websites serving American gamblers.
Not too fast, Deutsche Bank gaming analyst Andrew Zarnett said.
In a recent research report, he told investors that the hyped-up enthusiasm expressed by many people On-line poker proponents toward the prospects of federal legalization was misplaced.
"We do not feel it offers clarity that the Department of Justice has softened its stance on all Internet gaming," said Zarnett, who analyzes and researches the high-yield debt of countless casino companies.
Still, Zarnett said the debate over Internet poker has changed from "whether" some forms of the game is going to be legalized to "when" Americans could gamble for the money on their home computers.
NO CONCLUSIONS YET
Vegas gaming attorney Jennifer Carleton, a shareholder with Brownstein Hyatt Farber Schreck, cautioned that future Justice Department opinions could reverse the latest interpretation.
"Without any doubt, the opinion has significantly altered the gaming landscape with regard to the placing and receiving of wagers on the internet and perhaps paves the way for states to permit online poker along with other forms of Internet gambling," Carleton said. "Gaming practitioners and entrepreneurs interested in Internet gaming must remain alert, attentive and proactive throughout rapid legislative and regulatory changes that's likely to follow."
Nevada Gaming Control Board Chairman Mark Lipparelli said further analysis of the opinion is needed.
"Clearly, there is a significant transfer of policy understanding," Lipparelli said. "But it's too soon to leap to any final conclusion."
With Congress showing little outward movement toward passing any gaming legislation -- lawmakers are looking at two On-line poker bills -- Zarnett said the attention has turned toward individual states.
Using history like a guide, Zarnett said On-line poker would unveil on the state-by-state basis very much the same as other kinds of gambling, including lotteries, horse racing and casinos.
"Already some states are working tough to prepare for-profit online gaming," Zarnett said. "It is clearer now that not-for-profit state lotteries is going to be involved, possibly even possess a first-mover advantage."
Nevada approved On-line poker regulations on Dec. 22 to take advantage of a company opportunity should Congress overturn a ban on Internet wagering. Their state would function as the licensing and regulatory arm for internet poker providers.
The regulations also permit the state's casino companies to operate Internet poker sites limited to in-state players.
Lipparelli said the company has received 10 applications for interactive gaming from casino operators, equipment providers and manufacturers. It's unclear just how long investigative process will take. The technologies being proposed will require proper vetting.
