The Intrastate Approach
THE WEEKLY SHUFFLE, 2011-03-13, by Ozone, TwoGunThe battle for online poker's legalization in the U.S. appears to be shifting to a different front. While efforts seem at a stand-still at the federal level, a number of bills are being passed around state assemblies across the country. Some states are seeing online poker as an opportunity to capitalize on a new revenue stream to help balance ailing budgets. Last week, news of a bill in Nevada that may eventually encourage participation from other states riled the poker world into excitement.
The Nevada Bill
Majority Whip William Horne introduced AB258 to the Nevada Assembly on Thursday. According to the Wall Street Journal, the bill is being backed by Rational Entertainment Enterprises Ltd, the company better known for operating PokerStars. The bill would order regulators to allow Nevada citizens to play online poker. Additionally, the bill would not discriminate against sites like PokerStars and Full Tilt for having accepted U.S. citizens in the past as long as they were licensed in another jurisdiction. In other words, the fact that PokerStars is licensed in the Isle of Man is sufficient in the eyes of this bill for it to be granted a license in Nevada.
The most interesting point of note about this bill is that it's being pushed by PokerStars. This leads one to ask: why does PokerStars want an intrastate online gaming bill? Isn't the status quo treating them pretty well?
One possible explanation for why PokerStars may favor this bill is that they feel they are wasting their time hoping for friendly legislation at the federal level. Even if something does get passed at the federal level, which doesn't seem likely, there's a good chance such a bill would discriminate against sites like PokerStars and Full Tilt for having accepted U.S. customers during online poker's prohibition era. Perhaps PokerStars is guiding the fight to a new front: intrastate legislation.
If this Nevada bill passes, it would allow state officials to enter into agreements with other states to service their citizens. For instance, if the Nevada bill passes, a state like California could legalize online poker and allow their citizens to play at the sites licensed in Nevada in exchange for a cut of the revenues. Nevada does the dirty work by breaking the seal on legalized intrastate online poker and other states fall in line by passing legislation that allows their citizens to play at the Nevada-licensed sites. That may be PokerStars' idea, anyway.
For now, the Nevada bill is a pretty big gamble. There are still plenty of hurdles to clear. In passing this bill, the state may find themselves at war with the DOJ. The plan might not work. There seem to be plenty of downsides which again raises the question: why isn't PokerStars just quietly raking in the dough and enjoying the status quo?
If there's one thing we've learned over the past five years it's that online gaming operators, especially those illegally operating in the U.S., tend to have quite the rosy outlook about the possibility of U.S. legislation and how beneficial it would be to them. Maybe PokerStars knows what they're doing in pushing for this intrastate gambling bill. Or maybe they're taking a crap in their lunch box. If this bill actually passes, it will be interesting to see which it is.
The Me-Too Effect
Getting just one of these bills passed will not be too meaningful for poker players in the United States (unless it happened to be in a very populous state like California). However, when one of these bills passes, it will invariably lead to other bills being proposed in other states.
Gambling has been expanding at the brick-and-mortar level for the past few decades in the US. States looking to fill budget gap holes have started turning a blind eye towards the moral arguments against gambling in favor of the extra tax revenue.
If one state passes this legislation, others will begin to follow. The stigma of having online gambling will be broken, and other states (that probably already have gambling) will push for these sorts of bills.
The only drawback to this is that states that do not allow much gambling probably won't follow suit. The advantage of the Harry Reid bill was that states were automatically opted-in to allow online poker. Doing a state-by-state way would almost certainly leave the more social conservative states out. However, it will still likely bring legalized online poker to the most Americans the fastest way.
The Weekly Shuffle is our Sunday column with our observations and commentary on the poker world. Have an idea for an article? Leave a suggestion on the feedback page.
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