Online gaming here to stay

I am fully aware that there are people who are against online gaming. Certain politicians have fundamental religious and moral opposition to gambling in general. And there are even people in the gaming business, most notably Sheldon Adelson of Las Vegas Sands, who've stated that they are against online gaming because they don't believe the technology exists to prohibit minors from playing.

I understand - and respect - where the people against online gaming are coming from.

But two landmark moments over the past seven months have made the debate between the differing viewpoints irrelevant.

The first came last December. That's when the Department of Justice ruled that the wire act applies only to sports betting and states are free to approve any form of online gaming that does not include wagering on sports.

The second came this past week, when Nevada issued its first online gaming licenses. They went to Bally Technologies and IGT as manufacturers and services providers. More than 25 companies have filed for some form of online gaming license in Nevada. Many other license applications will be reviewed during the remainder of 2012.

There is no going back in time. Nevada will be the first state to have regulated online gaming, beginning with online poker in 2013. Many states will follow. Minnesota has already approved online bingo and pull-tabs in order to fund a new stadium. Illinois has already passed legislation for the online sale of lottery tickets. The governor of New Jersey is considering a bill that allows a full suite of online casino games.

At least 25 different states are thinking about starting online gaming in one form or another. The budget deficits that many of these states face will inevitably add pressure to regulate online gaming to generate new sources of revenue.

There is simply no escaping the fact that online gaming is here. It's here in the same way that you can order the music you want over the Internet. It's here in the same way that you can buy the books you want over the Internet. And it's here in the same way that you make your hotel reservations online. You can't uninvent technology and you can't stop innovation.

In fact, Internet gaming has already been with us in a way that we don't want. Millions of Americans have been and continue to gamble on roughly 1,700 Internet websites that are offshore, even though these businesses are not legal, unregulated and offer no consumer protections.

These offshore sites are taking in between $4 billion to $6 billion a year from American citizens without paying a cent in taxes or putting a single job into the American economy.

Given these realities, it seems the debate is no longer about whether online gaming should be legalized. It is about the best and most prudent way to legalize it in a form that will create thousands of high-tech jobs and boost the economy.

What we really need to be spending our time thinking about are the answers to three questions:

- How are we going to make sure that the players get a fair game and that deposits are protected?

- How are we going to make sure that minors do not participate?

- How are we going to give online gaming companies a level playing field?

The answers to these questions can become very complicated. But here are some basic solutions that we might propose.

For starters, we should ask the federal government to pass legislation that will put in place rules, laws and consumer protections for online poker. If the federal government does not do this, we are going to have a Wild West scenario where each state that legislates online gaming will have its own set of rules enforced by its own sheriff. And what will follow is truly unfortunate: A race to the bottom whereby states will "compete" by setting the bar lower and lower, leading once again to a largely unregulated environment.

We need to ensure that online poker is fair and honest by setting forth the same strict scrutiny that is currently in commercial poker rooms.

The technology does exist to prohibit minors from playing online poker. We need the federal government to back this technology up with rules and laws.

We need to mandate a transparent record of all transactions to stop money laundering and to protect player funds.

We need the federal government to strengthen the Unlawful Internet Gambling Enforcement Act of 2006. In doing so, the federal government needs to define and eliminate illegal Internet gambling and establish unambiguous penalties for it.

The federal government should also provide law enforcement tools to crack down on rogue operators and shut down illegal sites.

This issue is far more complicated than these few suggestions. But I'm offering a starting point. I think you'll find that the protections that my company is seeking are the same protections that are beneficial to all Americans.

Tom Breitling is co-founder and chairman of Fertitta Interactive and Ultimate Gaming. He writes from Las Vegas.