10 US States Primed For Regulated Online Gambling In 2014

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Monday, February 10th, 2014 | Written by Stephen Smith

A study entitled ‘U.S. Internet Gambling in Focus‘ released by Gambling Compliance last week, has found that at least 10 US states will consider legalizing online gambling in 2014. The report looked at both the expansion of US online gambling in 2013, as well as developments which are expected to take shape this year, and as the company’s research director and report author Chris Krafcik, explains:

“In 2013, 10 states considered legislation that would legalize online casino-style gambling, which was a historic high. This year is shaping up to be at least as busy.”

US states looking to authorize online gambling in 2014

Of the 10 states which considered online gaming legislation in 2013, only three actually authorized online gambling within its borders, although Nevada, unlike New Jersey and Delaware, currently restricts itself to just online poker. This year, the Gambling Compliance report predicts at least 10 states are expected to seriously consider bills to authorizes or expand internet gambling, including California, Colorado, Hawaii, Illinois, Iowa, Louisiana, Massachusetts, Mississippi, and Pennsylvania. New Jersey, on the other hand, will seek to massively expand its already regulated market by opening up real-money online gambling to gamblers from other states and countries.

Federal online gambling unlikely in election year

Currently, the re-interpreted 2006 UIGEA statute allows for state-by-state legalized online gambling, although most industry experts agree that a Federal Online Gambling Bill would present the best way of ensuring a viable market with consistent laws spread out across all states.

Nevertheless, online gambling remains a divisive topic amongst politicians and this year it is unlikely to gain any ground in Congress considering the Republican Party’s historic opposition toward regulated online gaming. Furthermore, being an election year will ensure further gridlock at a federal level, and as the Gambling Compliance report, explains:

“It is an election year, which means that virtually all politically controversial subjects, including Internet gambling, will be seen through the risk-averse lens of re-election. Still, behind the scenes, proponents and opponents will continue to jockey for position as Senate leadership continues to weigh up a blanket Internet gambling prohibition amid continued online expansion at the state level.”

Intratstate solutions a first step

The report also suggests that even though different states would initially seek to introduce regulated online gambling within the boundaries of their own states, they will subsequently permit regulators authority to allow companies to form interstate compacts in the future.

In spite of Caesars and MGM’s vocal support for a Federal Online Gambling Bill, for instance, and a strong belief individual US poker markets will struggle to attract sufficient numbers of players to their sites, these major gambling operators have nonetheless embraced recently passed intrastate online gambling laws in Nevada and New Jersey. Basically, operators are not waiting around idly until a federal solution is introduced some time in the future, and as Caesars Interactive Entertainment CEO Mitch Garber, explains:

“We live under a State by State regime in land based gaming and embrace it today as the prevailing online solution. It is our belief that it is not too late for a Federal bill given that only Nevada, New Jersey and Delaware have legalized online gaming, however we are succeeding at growing a meaningful business in Nevada and New Jersey and see momentum toward a rollout of future state by state legalization, and compacting between states which will address the issue of scalability. So, we are very happy with the rollout of the first states and we are actively working to get the same result in a number of additional states. That is our focus.”

Opposition from anti-online gambling interests

The ‘U.S. Internet Gambling in Focus’ study also suggest some key states could still push for legal online gambling this year, especially California which, wary of a drive by Native American tribal leaders to legalize Internet poker, may call for action on a bill before the legislative session ends on August 31st.

Nevertheless, significant opposition to legalization of online gambling either on a state or federal level exists, most notably in the form of advocacy group, the Coalition to Stop Internet Gambling. Las Vegas Sands CEO Sheldon Adelson was instrumental in setting up the opposition group and despite his huge business interests in gambling, the 80 year-old has made it his personal mission to ban Internet gambling in the US. In fact, the billionaire casino owner has labelled online gambling as “a toxin which all good people ought to resist,” while Stop Internet Gambling echoing his sentiment, suggested that the only businesses to profit from its legalization would be giants like MGM and Caesars, while America’s middle classes would suffer “spiraling debt and job losses.”

Noting that a lot of work lies ahead before online gambling becomes an established industry nationwide, the report said,”These are exciting times. The regulated U.S. Internet gambling market is just beginning to take shape.”