Web poker, one state at a time

In his State of the State speech five months ago, Gov. Brian Sandoval asked the Legislature to speed passage of legislation to make Nevada the first state with legalized, regulated online poker. Lawmakers complied with the governor’s request, and the reasons for the urgency become clearer with each passing week.

That action gave Nevada’s gaming companies a head start not only in launching sites that allow real-money card games, but in positioning themselves to enter larger states’ markets. Because Congress hasn’t repealed the 2006 federal ban on Internet wagering or passed an exemption for interstate Web poker, online gaming can move forward only on a state-by-state basis. Those games must be confined within a state’s borders.

However, if enough states legalize online poker, they can enter compacts that allow players to compete across state lines. That could start happening as soon as next year, Poker Players Alliance Executive Director John Pappas told the Review-Journal’s Howard Stutz last week.

New Jersey recently legalized online gambling and could have its first real-money website up by Thanksgiving. New Jersey law requires gambling websites to partner with a casino in Atlantic City, where Nevada gaming companies have stakes, by June 30. Mr. Pappas, who lobbies on behalf of his national organization’s 1.2 million members, said California and Pennsylvania could legalize Web gaming next year. Their huge populations make them desirable partners for Nevada, which already has a regulatory structure in place.

“Once you get some of these bigger states, that are not viewed as a traditional gaming state, then momentum can build,” Mr. Pappas said. “There are those in Congress who are concerned about the expansion of gaming. Doing nothing, however, could lead to a bigger expansion of gaming.”

Mr. Stutz reports that at least two pieces of Internet gaming legislation could be introduced by the July Fourth recess, but Mr. Pappas isn’t optimistic about their chances. That’s why his organization is focused on state legislation.

A federal solution — one set of rules, no player risk of federal prosecution, no website risk of being shut down by the Department of Justice — is far preferable to a patchwork of state laws and compacts. But if enough states — especially large ones — move forward, federal lawmakers finally might realize they’ve enabled a huge end-around. Nevada’s congressional delegation shouldn’t give up on such legislation.

One Nevada site, Station Casinos-owned Ultimate Poker, has been up and running for two months. Other companies soon will follow with their own sites, just as other states inevitably will legalize Internet wagering. There’s simply too much commerce and too many potential tax dollars at stake for states to avoid it.

For now, Nevada has a limited player pool. But regardless of how that pool grows, Nevada is in a great spot to lead this new and growing industry.