Nevada Casinos Open to Interstate Business

While Nevada casino companies are ready to take on an interstate model for their businesses, most are still awaiting some sort of move from the federal government that will enable more states to participate.

According to industry members, the residents and the floating population of tourists simply isn’t sufficient to make online poker a profitable endeavor; at the moment, however, they are hoping that a federal bill will allow them to operate across the nation, or at least through a network of grouped states. The issue now is one of the sizes of the slice of pie that these companies can enjoy: Nevada alone will only give them a sliver each; a patchwork of states will offer a more sizeable morsel; and a federal law to operate nationwide will give them the whole hog.

This week on Thursday the president of the American Gaming Association, Frank Fahrenkopf, presented an update to the Nevada Gaming Policy Committee; the AGA is the primary lobby group for the industry in the Beltway and is pushing the federal government to make a decision.

In the update to the 11-member panel – chaired by Gov. Brian Sandoval – Fahrenkopf stated that state-based operations for web poker would need the support of a federal agreement. He also said that normally, as well as historically, the U.S. Congress would not deny or veto any agreement between states, but added: “But I can assure you that with a controversial issue like this, some politicians would want to interfere.”

Fahrenkopf also voiced concerns about the lottery business overseeing local state markets, saying that several state lottery directors would only allow their own lotteries to operate online gaming in those states, creating a monopoly that would force tribal casinos and other commercial operations to shut down. He also said he was unsure of the level of regulatory experience brought to the table by lotteries. In Illinois, lawmakers are already considering having online casinos run by the lotto. Fahrenkopf also cited two bills currently with Congress, saying that the AGA hoped that there would be a third to authorize internet poker alone; his view, however, is less than optimistic: “I’ve never seen this level of dysfunction in our Congress before.” He also compared federal lawmakers’ views on gambling to “spending eternity in hell with the devil,” a sentiment that was echoed by Gov. Sandoval, who called the presentation “enlightening.”

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The meeting was less than two hours long and witnessed by about 50 people, and the meeting itself scored points for Nevada; California, New Jersey and Delaware are also trying to legalize online casino games, but Nevada is far ahead of the crowd.

Next week, the formal meeting to approve online poker licenses for Bally Technologies and International Game Technology will be held by the Gaming Control Board. Following that will begin the technology inspection stage of the process.

The entire online gambling industry in the United States hinges on authorization from the Department of Justice to the individual states to open up the doors to internet gamers. According to a provision in the Assembly Bill 258, Nevada will have to wait for word from the DoJ or a federal bill allowing gaming to commence. However, for now at least, Nevada is ready to move forward on the matter.