Summer Launch Eyed For Delaware-Nevada Online Poker Compact

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Monday, March 24th, 2014 | Written by Charles Washington

At the end of last month, the states of Nevada and Delaware signed a landmark agreement to combine their player pools in order to give their nascent igaming industries a much needed boost. At the time the Delaware Finance Secretary Thomas Cook said the system would likely take until the end of 2014 before being implemented, but now that forecast has been shortened after Nevada Governor Brian Sandoval speaking at the iGaming North America conference in Las Vegas on Friday said that their new Internet gaming agreement could launch as early as this summer.

Nevada Governor hopes more states join compact

Nevada has had an igaming industry for almost a year now and while it allows only online poker, Delaware permits various types of gambling games, including poker, baccarat, blackjack and Pai Gow. Nevertheless, both states are amongst the least populated of the USA’s 50 states, making the need to increase liquidity of major importance.

At least 10 other states are seriously mulling introducing online gambling legislation this year, including California, Colorado, Hawaii, Illinois, Iowa, Louisiana, Massachusetts, Mississippi, and Pennsylvania. Not wanting to miss out on an opportunity, Nevada Governor Brian Sandoval has said he is more than happy to lend them the benefit of his experience and help them establish their own online gambling regulatory structure. Speaking to the Las Vegas Review-Journal, Sandoval stated:

“If there are states that don’t have as sophisticated a regulatory structure as we have, that’s something we can offer. If your state doesn’t have the infrastructure, use our capabilities.”

No progress adding New Jersey to deal

On the other end of the scale, New Jersey is the 11th most populated state in the US with almost 9 million residents, and while Delaware’s initial igaming revenues have been miniscule, New Jersey’s have shown promise over the past few months. With but a tenth of the residents of NJ, Delaware generated $145,276 for January, and $166,454 in February, compared to The Garden State which raked in $9.5 million in January, followed by $10.3 million the following month.

Consequently, New Jersey has not been at all keen to share its market with other states, particularly Nevada which it has traditionally viewed as a rival destination to its last based casino industry. In the past Gov. Sandoval is known to have broached the subject with his NJ counterpart to no avail, and apparently Sandoval is still no closer to adding New Jersey to its Multi-State Internet Wager Agreement.

Sandoval doesn’t support igaming in Nevada beyond poker

Unlike both New Jersey and Delaware, Nevada has introduced a poker-only restriction to its igaming model, with Gov. Sandoval highlighting the fact that moving online gambling beyond poker was not in his remit.

“I think poker-only works well because Nevada is not like other states. We have restricted gaming and neighborhood casinos. Poker works well with what we hope to accomplish,” explained the Nevada Governor.

It is difficult to assess the potential impact permitting online casino games would have on Nevada’s land-based casinos, or whether a golden opportunity is being wasted, especially with data for Nevada’s nascent igaming industry not expected to be released until next month. In the meantime, however, we can at least compare the makeup of igaming revenues for the two other regulated states. New Jersey, for instance, has generated $28.1 million over a roughly three month period, with just 34.8% of revenues derived from poker and the other 65.2% from casino games. Conversely, Delaware has generated $563k in revenues over roughly the same period, with 59.9% derived from poker and 40.1% coming from casino games.

In short, casino games contribute a significant proportion of these states’ igaming revenues, with the product likely to grow even greater in importance as a good deal of potential still remains unrealized in these markets.

Sheldon Adelson hopes to spoil the party

Meanwhile, the Nevada-Delaware agreement has found staunch opposition from anti-online gambling advocates, most noticeably Las Vegas Sands CEO Sheldon Adelson, and the Coalition to Stop Internet Gambling. Both are throwing their weight behind South Carolina Sen. Lindsey Graham, who is expected to introduce a federal bill next week designed to restore a pre-2011 countrywide ban on internet gambling.

If passed, Nevada, along with Delaware and Nevada would likely have to dismantle their pioneering igaming efforts, although Gov. Sandoval appears to dispute that claim.

“I’ve been very transparent with the Sands organization,” Sandoval said. “My position is the law of Nevada is the law. It gives us the ability to do what we’ve done with Delaware..I would question whether federal law could come in and supersede our state’s laws.”