US state legalise internet gambling ounce again.
THE state of Nevada has legalised, again, internet gambling. Only this time, people are paying attention.
The first few times the Nevada State Legislature passed laws permitting online gaming, nothing much happened. It has been 17 years since Governor Bob Miller signed SB 318 into law, making Nevada technically the first state to expressly prohibit - and permit - internet betting.
That law is still on the books. An internet operator, anywhere in the world, who accepts a wager from a person who is physically present in Nevada commits a misdemeanor and “may be prosecuted within this state.” Anyone who makes a bet from Nevada via the internet is committing a misdemeanor, regardless of where the person accepting the wager may be. There are a few exceptions. This being Nevada, the Legislature at first exempted only the state’s own licensed casino operators. This was the first time that any government in America expressly allowed its licensees to operate real money games on the internet.
Over the years, the Legislature passed a few more internet gambling statutes. It even told the state’s gaming regulators to gear up for licensing intra-state poker, for the time when federal law made it clear that internet gambling was legal.
It’s unclear why Nevada lawmakers limited the first licences to online poker. Perhaps they were afraid that if people could play blackjack and slot machines from their homes and hotel rooms, they might not spend much time at the resort-casinos.
The politically powerful, biggest operators on the Las Vegas Strip now make a majority of their sales at their restaurants, showrooms and stores. Brick and mortar poker rooms bring in comparatively little revenue. So the Caesars and MGMs don’t mind if visitors play online poker from their hotel rooms at night with other players AFTER they bet against the house at banking games like craps in the casino.
Nevada’s decision to limit internet gaming to poker may have been a mistake. Before 2013 was over, both New Jersey and Delaware had their own online gambling operators. But the eastern states went with full internet casinos. But no sports betting. As early as 1999, courts held that the Wire Act, the major federal anti-gambling law used against online operators, applied only to sports events. So, when the Nevada Legislature began passing laws authorising internet gambling, the statutes were carefully written to exclude sports betting.
Nevada regulators did hold some hearings back then. But no regulations, let alone licences, were issued, because the federal Department of Justice declared that it was not bound by those court decisions. The DOJ sent the Nevada Gaming Control Board a letter stating that it would arrest any Nevada operator that took bets from other states, even if the bets were limited to poker or casino games.
Then, two days before Christmas 2011, the Obama administration announced that it was giving the states a present. The DOJ officially reversed its position on the Wire Act. Henceforth, that statute would only be used against interstate sports and race books.
Read the full article in the October issue of InterGaming.
