A casino-backed group pushing for federal legislation to make online poker explicitly legal says regulating online card play nationwide won’t hurt state lotteries.
Fair Play USA released a data analysis on Tuesday that showed no correlation between spikes and dips in the online poker market with changes in revenues for state lotteries.
Eugene Christiansen, a founding partner with the firm that wrote the analysis, Christiansen Capital Advisors, LLC, said the data showed that poker and lottery games are fundamentally different. Poker isn’t a threat to the lottery, he said, comparing the games to different beverages like milk and wine.
“Wine and milk satisfy different consumer appetites,” Christiansen said. “Similarly, playing online poker and buying lottery tickets are fundamentally different forms of consumption. They really have nothing in common other than their legal status as gambling.”
The analysis is in response to a report from a rival group that wants states to regulate and tax Internet gambling if it’s ever legalized, and for lotteries to offer the games. State-run lotteries are offered by 43 states, plus the District of Columbia, Puerto Rico and the U.S. Virgin Islands.
Running online poker operations that allow players to gamble real money is illegal because of a 2006 law that prevents financial institutions from processing the transactions. That law didn’t stop thousands of players in the United States from playing anyway, until the U.S. Justice Department began cracking down on sites earlier this year, stopping play for the vast majority of players.
With the top sites out of the U.S. market, others in the gambling industry sense an opening and want to fill the void. Major casino companies, including Caesars Entertainment Corp. and MGM Resorts International, back federal regulations of online poke. They say the Internet is a medium where gambling requires federal oversight rather than a patchwork of state laws.
The Public Gaming Research Institute, which opposes federal regulation , says states would lose $1.4 billion in funding if online poker is allowed.
“With states facing more revenue shortfalls, a federal online poker initiative would exacerbate revenue shortfalls being faced by governors and legislatures in lottery states,” the institute said in its October report.
Marisa McNee, executive director of Fair Play USA, said the group wants regulations that allow states to opt out if they don’t want their residents to be able to play poker online.
Paul Jason, CEO of the Public Gaming Research Institute, said Tuesday that the issue is about more than just the possible crossover between lottery and poker players.
“The Internet will be the organizing principle for all gaming, wagering and gambling in the future. Anyone attempting to compete in the broader industry, whether it be in casino gambling or lottery or whatever, must be a premier operator on the Internet,” Jason said.
“The direct impact of lottery players migrating a portion of their spend over to (Internet) poker does not even scratch the surface of what this will mean to states and their lotteries.”