Gaming analyst: Internet poker will be a state-by-state issue in 2013

Even as the American Gaming Association launches one last push in urging Congress to pass a federal online poker bill by the end of the lame-duck session, one gaming analyst has told investors to prepare for a different scenario.

With federal poker legalization stalled, Deutsche Bank gaming analyst Andrew Zarnett said in a recent research report that individual states most likely will approve online poker in 2013.

“With the likelihood that online gaming does not get passage on a federal basis in this year’s lame-duck session and in the foreseeable future, investors should shift their thinking to what a rollout would look like on a state by state basis,” Zarnett said last week.

Nevada gaming regulators already have approved some 16 companies as operators and distributors of interactive gaming systems. However, the first online poker website, catering only to customers on computers or mobile devices within Nevada’s borders, probably won’t launch until the spring.

“This market will fast become the economic test case for analysis of revenue size, cash flow generation and cannibalization impact as it comes on line,” Zarnett said.

Various issues – such as tax revenue distribution, tribal gaming sovereignty and inclusion of lotteries – will need to be addressed, Zarnett said, for online gaming to be successful on a state by state basis.

“State compacts, framework providing uniformity of rules across different states, and potential issues arising from Tribal gaming, also need to be sorted out, before Internet gaming can be rolled out successfully,” Zarnett said.