As the only state that has already enacted online poker legislation, all eyes are on Nevada as the probable first player to offer intrastate gambling in the U.S. marketplace. Coming as somewhat of a surprise to some industry observers, the Silver State is proposing the lowest online gambling license fees of any states considering online gambling.
Though not yet set in stone, Nevada gaming officials have come up with figures of $500,000 for a one-year license and half that to renew it after the first year. By comparison, Massachusetts and Florida both are considering $10 million license fees that would earn credit against gross revenue totals, with Massachusetts also asking for $500,000 yearly from its license holders. California's online poker proposal has set license fees at $30 million that would also allow for credit against revenue.
Although those proposals are a long way from becoming legislation, the numbers being bandied about are obviously significantly higher in other states than Nevada, which also has the nation's lowest tax rate of 6.75 percent.
The license fee structures were discussed at a Nevada Gaming Policy Committee meeting last week in which American Gaming Association president and CEO Frank Fahrenkopf gave a presentation on the state of U.S. gaming. The committee is scheduled to meet again next month in hopes of solidifying suggestions to be used as a basis for regulations in the 2013 legislative session, including the fee structure for licensing.
Some members of the committee felt that Nevada license fees were a bargain and that perhaps an increase was in order, while others felt that higher fees may cause some companies to seek licensing elsewhere. But this is all uncharted territory and no one yet knows how regulated online poker in the U.S. will work out. For instance, if interstate online poker is eventually put into place, will gambling entities seek states with the lowest fees, or will fee structures be modified to show equality among states that have formed interstate agreements? Then again, perhaps federal lawmakers will come to their senses and enact legislation that will allow for a consistent fee structure among states that choose to opt in.
But in the absence of federal legislation and as the first state to blaze the trail of offering online poker to players in Nevada, the Silver State can become the hub of Internet gambling in the U.S. just as they had done with land-based casinos. The benefits of added revenue to the state in that regard can certainly offset some of the additional funds that could possibly be obtained with higher licensing fees.