6 States That Could Regulate Online Gambling In 2014
New Jersey and Delaware are set to join Nevada this Fall as the first U.S. states to regulate online real-money gambling. But these trailblazers are being watched closely by their neighbors. How well the new markets perform over the next few months will influence whether legislators in other state capitols press ahead with their own online gambling laws. In this post, the Betable Blog looks at which states are most likely to pass online gambling legislation next year.
California has the potential to become one of the world’s biggest online real-money gaming markets and it is tantalizingly close to regulating. So far this year two gambling bills aimed at legalizing online poker were proposed in the Senate and a third was released in draft form.
After amendments were passed last month and earlier this summer, the proposed bills have aligned on the majority of issues. But, of course, the devil is in the detail. Two of the main interested parties are tribal gaming coalitions – one led by the Pechanga tribe and one led by San Manuel. Their two proposals are nearly identical, but there are some differences on who should be allowed to operate and the best way to exclude companies which have illegally targeted US customers in the past. Most observers agree that if the two sides can agree on a compromise bill then the Golden State could quickly join the ranks of regulated markets.
If a consensus bill appears, it is expected to be put to a vote in Spring of 2014 and if it wins support of lawmakers, the market could launch later that year. The importance of a California market is not to be underestimated. With just over 38 million residents it could quickly become one of the world’s largest online gambling markets – even if only poker is regulated. As an added perk, neighbouring Nevada is already proving a ready case study for how to regulate online gambling, so by the time California makes a move, its regulators will have a good handle on how best to proceed.
Pennsylvania actually has had an online gambling bill drafted for some time. Similarly to New Jersey’s regulatory framework, Rep. Tina Davis’ law would would allow online gamblers to play any game available in the state’s casinos. Licences and account management would be linked to the existing casino licensees and gamblers would need to open accounts in person at a casino to make sure they are of legal age and have not been banned from wagering in the state.
But the bill is on ice in the Committee to Oversee Gaming while Pennsylvania lawmakers take time to examine the effect of online gambling in New Jersey. In particular they will be watching closely to see if brick and mortar gambling venues see any cannibalization of revenue due to players turning to online gaming.
Meanwhile, according to industry watchers, the state Senate is likely to publish its own proposal this Fall. This could easily push house representatives into action again. And if the early signs from the NJ market are promising, look to Pennsylvania to make a legislative move on online gambling early in 2014.
Massachusetts is another state which came very close to legalizing online gambling in 2013. A proposal backed by the powerful state lottery lost momentum and stalled after opposition from house Republicans. The disagreement centered over whether online gambling should be run through the lottery or through the three planned state casinos.
The Republicans are trying to cut the state lottery out of online gambling business, instead intending on handing three licences to the soon-to-be built casinos. The state lottery would prefer to see online gambling used to boost lotto ticket and keno sales. Either way, both sides want to see online gambling regulated the new year’s legislative session is likely to see a new bill proposed.
4. New York
New York state residents are set to vote on whether to bring casinos to the Empire State in November and local industry watchers say the referendum is likely to be passed. That should clear the way to reopen talks on online gambling.
Earlier this year, an online poker bill was proposed alongside the casino expansion, but the measure was iced due to a lack of bandwidth among legislators to tackle two gambling proposals at once. Land-based “Vegas-style” casinos have won the backing of governor Andrew Cuomo and powerful business lobby groups. By the time casinos are legalized, their supporters will be closely watching what is happening in Atlantic City to ensure that the new properties are not put at a disadvantage to regional competitors. Again, signs of success in N.J could motivate lawmakers to act quickly.
While Connecticut lacks a ready piece of draft gambling legislation, powerful industry interests closely watching New Jersey and are expected to soon through their weight behind legislative action. In addition to the state lottery, which like its neighbours is looking to modernize its business via online sales, there is a powerful tribal contingent in the state. Mashantucket Pequot Tribe run Foxwoods casino and Mohegan Sun, one of the largest casinos in the US, is run by Mohegan tribe. Both are interested in online gambling and are looking for evidence from New Jersey.
Maryland has also signalled that it is watching progress in NJ. Earlier this month Stephen Martino, Director Of Maryland’s state lottery told Cardplayer.com, “Two of the four states that are kind of in our competitive area have or are going down the road with some form of online gaming, and that’s something we are going to have to keep an eye on.”
Similarly to Massachusetts, Maryland is in the process of rolling out an expansion of its land-based gambling industry. As new casino are built, lawmakers will be carefully watching to see how online gambling affects the land-based market in NJ and Nevada.
Of all the states, California is looking most likely to put a consensus gambling bill to a vote in early 2014. If successful and if the regulator sets out aggressive timelines like NJ did, it is not outside the realms of belief that California could have a functioning real-money online gambling market by early 2015.
Meanwhile, states on the East coast are more likely to bring their own legislative proposals forward once the NJ market has been up and running for 12 months. The ultra-competitive nature of the regional gambling market will pressure to states like Pennsylvania and New York to act rather than risk endangering the success of their casinos.
2013 was a groundbreaking year for online gambling regulation in the US. Even as prospects of a federal bill dimmed, states have stepped forward and taken the initiative. Online gambling regulation in the US is only going to become more widespread in 2014.