US States Ignore Federal Delays With Their Own Online Gambling Regulation

In what many industry analysts saw as one of the best opportunities for a federal online gambling legislation package, the 2012 lame duck session has come and gone in the US. After the ruling by the United States Department of Justice in late 2011 that many forms of online gambling were no longer considered illegal, the door was open for a follow-up announcement of a federal interactive online gaming package. That never occurred, and with the election and fiscal cliff doom and gloom hanging over American’s heads, federal passage of online gaming legislation in the United States was pushed to the back burner.

But that doesn’t mean that individual states have waited for the feds to get their act together. Every American is all-too-familiar with the inability of both sides of the proverbial political aisle to agree on just about anything, so legislators at the state level have gone to work. In early 2012, Nevada jumped out to an early lead as a US online gambling authority when they passed online poker legislation before any other state. Delaware enacted similar legislation a few months later, also allowing for a full slate of online casino games for their residents and travelers. Both Iowa and California pushed to become the next online gambling provider in the US, and appear set to finally pass that legislation this year.

And New Jersey Governor Chris Christie has a deadline of February 7 to announce his decision on that state’s online gambling future. Several other states are currently at work forming what they hope will be an online gambling package which will pass favorably through their state legislature. With the fiscal cliff averted for the very near future, and the presidential election of 2012 behind us, the United States government can once again discuss the possibility of a federal piece of legislation which would blanket the entire US regarding online gambling. And while that is still a possibility, many states would prefer to police themselves, ensuring they would keep the biggest part of the financial pie in state coffers.

Jennifer Webb is the Regulatory and Legislative Manager of Americas for Gambling Compliance, and she recently presented some very compelling stats at the 2013 NCLGS (National Council of Legislators from Gaming States) concerning the state of online gambling in the US. In 2012, 9 states seriously considered an internet gambling option to be regulated at the state level, with 2 states passing legislation. 3 “poker only” bills at the state level were considered and none of those passed. Thanks to the 2011 DOJ reversal, selling lottery tickets over the internet was passed in 2 different states, and the median taxation rate for online gambling was 24%.

The findings also show that California, Massachusetts, Mississippi, Illinois and several other states are prepared to significantly discuss their intent at the state level to provide internet gaming this year. And with the passage in 2012 of online social gaming at such revered institutions as Churchill Downs, the marriage of social gaming and online gambling for money is in its infancy, but is relatively a foregone conclusion in some of the United States. Internet cafes in 2012 proliferated, with somewhere between 600 and 1,000 cafes operating in Florida alone, generating over $1 billion in annual revenue. These types of numbers are very appealing to state governments which are still reeling economically from the housing fiasco and economic problems which began in 2008, so look for your state to entertain passage of online gambling in the near future, and check back here for breaking news.