Internet poker: Federal standards would benefit Nevada

Michael Gaughan's South Point Poker made history last week, becoming the first U.S. casino to be licensed to operate an in-state, real-money poker website. Lawrence Vaughan, chief operating officer, predicted an October launch.

It's great news for Nevada. But a checkerboard of up to 50 intrastate poker networks, each with its own regulations, is hardly ideal. The best outcome for Nevada operators - more licensees are on the way - would be federal legislation enabling Internet gaming nationwide. With its long and successful regulatory history, Nevada would be best-positioned to lead that industry.

Review-Journal gaming writer Howard Stutz warned Sunday that this window of opportunity may not last forever.

"What seemed like a tremendous decision for the gaming industry nine months ago - the re-evaluation of the Federal Wire Act of 1961 - may not be so advantageous for Nevada unless Congress takes steps to enact Internet poker legislation" soon, Mr. Stutz wrote.

States dealing with tight budgets are looking at the huge Internet poker market and are increasingly open to taxing it. Seeing no progress at the federal level, lawmakers in several states are in various stages of adopting regulations to allow full-scale online gaming within their own borders.

"There are different standards for gaming regulation in one state versus another," Station Casinos Vice Chairman Lorenzo Fertitta says. Absent federal law, "We know some companies will shop for the lowest common denominator. We could start seeing bets being taken away from Nevada."

Americans were spending an estimated $26 billion annually gambling online before federal prosecutors indicted the operators of three of the largest Internet poker websites in April 2011. Closing those sites effectively walled off Americans from the online gaming universe.

"Those betting tourists might stay home and spend a significant portion of their budget online," Mr. Fertitta warns. "You think we just went through a bad economy over the last three years? That could be nothing compared to effect of full-blown Internet gaming on a state-by-state basis. That's why we're so focused on some kind of federal structure."

The problem is that federal online poker legislation remains bottled up in Congress. Fast action on a complicated issue isn't likely before November. The budget and tax policy matters that Congress has put off will require its immediate attention after Nov. 6.

But Internet gaming and the taxes it can produce are important fiscal issues, not just in Nevada but in numerous other states struggling to avoid program cuts. If Nevada's congressional delegation can present it from that perspective - and if the industry is ready with model legislation - our lawmakers could find enough support to gather some momentum on this issue early next year.

Given the jobs this could bring to the hardest-hit economy in the nation, it should be a top priority.