The year started with so much hope. Within the first three months of 2017, there were nine state legislatures considering online poker and/or casinos in some form. Pennsylvania and New York looked to be on a fairly direct path to bill passage. Hope lived for online poker players in the United States that the little industry would finally expand beyond New Jersey, Delaware, and Nevada.
But April brought complications for Pennsylvania and Michigan, bad news for California, and rumors that the new US Attorney General was prepared to overturn the 2011 Department of Justice decision regarding the Wire Act. Let’s take a look at what happened in each situation.
Federal US Online Poker
April brought a great deal of speculation about the legal status of online poker and gambling at the federal level. While it was already known that US Attorney General Jeff Sessions was aware of the 2011 DOJ decision, having revealed during his confirmation hearings of his intention to review it, more information came to light in recent weeks.
In addition to the rumors that Sessions was eyeing a Wire Act reversal, casino mogul and anti-online gaming advocate Sheldon Adelson was discovered to have donated $5 million to Donald Trump’s inauguration. That was in addition to the tens of millions donated to the campaign in 2016. Adelson is not shy about asking for favors in return for his donations, so some – even in the mainstream media – are connecting those dots to indicate that Adelson might be bending Sessions’ ear about the 2011 DOJ ruling. While nothing has happened yet, all eyes are on Sessions.
By mid-March, there were two bills introduced to legalize and regulate online poker and casino games in Pennsylvania, one each for the State House and Senate. Movement was seen in committees, and support for the bills was growing. Then came a bill from five Republican members of the House to prohibit online gambling altogether. Then a Democratic Senator put up a bill to legalize but implement a much higher tax rate and licensing fees than originally discussed.
Even more complications have been added to the discussions since March, as the higher tax rate began to gain popularity among legislators who see the possibility for additional revenue. However, they are ignoring the advice of industry experts, as epitomized by the writers at Online Poker Report, who warn against the pitfalls of overtaxation. Many casinos and online poker operators may choose to refrain from participation in the online gambling market if the initial costs are too prohibitive, which means the industry would not come near its potential, be able to partner with neighbor New Jersey, or garner enough revenue to make it work in the long run.
Yet another complication reared its head when a State Senator suggested the online gaming industry should be administered by the state’s lottery instead of land-based casinos. While the suggestion is new and not immensely popular, the injection of yet another voice to the already-muddled discussion only serves to push the issue further from consensus and floor votes.
It remains to be seen if May will calm the waters enough to focus on the facts and issues at hand.
There wasn’t a peep from the lawmakers in New York about the Senate and House bills despite commitment from both sponsors – State Senator John Bonacic and Assemblyman Gary Pretlow – back in March. While an attempt to put online poker language in the must-pass state budget failed, there were assurances that the legislators were on board to sponsor hearings for debate and forward movement of online poker as a stand-alone issue.
After California Assemblyman Reginald Jones-Sawyer introduced an online poker bill early in 2017, all was quiet on the western front until April. That was when word came from Jones-Sawyer that he did not intend to push the bill or the issue in 2017.
It seems that the talks between those on either side of the issue to find compromise failed to make any progress, and the suitability issue pertaining to PokerStars’ place in the proposed market was a deal-breaker. Jones-Sawyer indicated that a cooling-off period could be followed by new efforts in 2018 that should start at the very beginning and build trust and compromise from the very basics.
One late development in April has the potential to keep online poker from death in California, however. The San Manuel Band of Mission Indians withdrew from the PokerStars coalition, the group of card rooms and tribes pushing or the inclusion of PokerStars in the new market. That left the Morongo Band of Mission Indians as the only tribal partner for PokerStars, while all other major tribes in the state were on the other side of the non-compromising fence. Should Morongo part ways with PokerStars in the future, the landscape of the discussions could change in a very significant way and breathe new life into online poker and the pending bill.
Four bills were introduced to the Michigan State Senate at the beginning of March, and the primary proposal with regards to online gambling easily passed a committee days later. But April brought troubles for the issue, as the Senate fiscal agency’s report highlighted some concerns about constitutionality, the need for a public vote, and tribal sovereignty.
It is tribal sovereignty that may pose the largest hurdle for online gaming, as all tribal compacts on the federal and state level regarding casino gambling and income would require close analysis and oversight. Tribal organizations have already indicated concern, enough that they could stand in the way of any consensus about the proper and legal way to legalize online gaming in Michigan.
Not much will be decided in Massachusetts until the state’s special commission completes its meetings and issues a final report this summer. While some in the legislature come down on both sides of the issue of legislating online gambling, the final study from the commission will give a better indication of any chances for the issue to progress this year.
No news came from the other states currently considering online gaming. Washington, New Hampshire, West Virginia and Hawaii remained quiet in April and have little chance of progress, according to most industry experts.