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Poker News | Gambling and the Law

Study Shows Possibilities for Poker Growth in Online Market

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More than three years after the Congressional approval of the Unlawful Internet Gambling Enforcement Act of 2006, the U.S. government and individual states continue to struggle with the issue of online gaming. Attempts to overturn the UIGEA have been thwarted or delayed, and many legislators have yet to make up their minds to support or reject efforts to legalize, regulate, and collect revenue from the lucrative and ever-growing industry.

A new study released by Gambling Compliance examines the issue and notes that online gaming will be tested in 2010, predicting that it has the potential to gain ground should powerful lobbyists have their way. With state lotteries, horse racing entities, some Indian tribes, and a variety of Las Vegas casinos pushing for online regulation and preparing for their places in the industry should it be legalized, there is some significant money being invested in an industry that still seeks the political support to take it to the next level.

Gambling Compliance’s independent analysis of the most discussed issue in gaming, the potential of U.S. legalization, is entitled “Market Barriers: US Internet Gaming” and takes a comprehensive look at the American market and the influence it could have should government officials embrace the revenue-producing industry. One of the study’s authors, Andrew Gellatly, noted, “There is clearly a recognition by some leading policymakers that expanded online gaming offers tremendous potential to state governments. We expect that state lotteries - which have proven their revenue generation abilities and settled their online payment concerns - will lead the next wave of U.S. development toward regulated online gambling in 2010.”

The overall summary of the study reiterated what observers of the U.S. trend toward gaming have previously observed: Economic necessity is forcing individual states to not only expand casino offerings but look to the possibilities of online gambling as an additional revenue source. And since internet poker has proven itself to be more lucrative and less controversial than online casino games and sports betting, that niche has the best chance of seeing success.

One of the most interesting aspects of the Gambling Compliance analysis focuses on state lotteries and their potential impact on the online gaming industry. Lotteries are extremely lucrative for states, which gives power to organizations like the North American Association of State and Provincial Lotteries (NASPL). In order to move forward, the NASPL currently seeks to progress to online lottery ticket sales and internet-based video lottery terminals in land-based facilities, both of which would improve ticket sales and subsequent profits for the states that embrace the idea. States like Illinois have already requested information on the technology and its legality per the U.S. Department of Justice. According to the authors of the study, the next logical step is adding casino games, including online poker, in the process.

Many mainstream casinos have embraced the idea of regulated online gaming as it could add to their gaming empires. Harrah’s is one of them that has already instituted an interactive division to brace for the move into the industry as soon as the U.S. green lights it. But on the other side of the coin, Wynn continues to rally against legalization. And with such differing opinions, both with their money in the pockets of various legislators, the standoff continues for the time being.

The same situation stifles the online gaming fight in states like California, where intrastate online poker has been debated for years, with regard to Indian tribes who control a good portion of the casino industry in the state. While one of the biggest Indian tribes - Morongo - has decided to support intrastate gaming efforts, other tribes are not so quick to do the same and continue to express concerns about its potential imposition on their profitable land-based casinos.

As far as the likelihood of positive movement in the United States considering the Department of Justice’s staunch opposition, Gambling Compliance study authors remarked that one factor has changed the direction, which is the “realistic belief that state-level regulation of internet gambling is viable” and the “once-chilly regulatory environment for federal legislation is thawing.” Several occurrences can be attributed to that, including the ambiguity of the UIGEA and the difficulty of banks in enforcing it, the Obama administration’s effect on a potential “softening of approach in DOJ policy,” and the increasingly urgent need for states to find solutions to state budget deficits.

While the study focuses on the impediments to online gaming legalization in the U.S., it also details the few pieces of the puzzle that need to fit before it becomes a reality. Though some states are already seriously considering the benefits of online gaming and others are welcoming table games to their casinos, it may take time and desperation for others to examine the gaming possibilities. And on the federal level, the proper proposal that satisfies a well-rounded set of legislative requirements has yet to command majority support, but the tide could just be turning on that front as well.

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