Despite it being an election year in the Golden State, online gambling expert Chris Krafcik thinks it has the best chance, among other U.S. states, of getting something done in 2014 with regards to web poker. Krafcik is the Research Director (North America) for GamblingCompliance and for years has been monitoring developments there.
Right now, just Nevada, New Jersey and Delaware have legal — and operational — online wagering. Others are considering it this year, but in many spots the chances appear low.
California is home to the nation’s top tribal casino industry, and Krafcik said that if they can figure out the nuts and bolts of how online poker would work for the industry there at large, something could advance rather rapidly, as opposed to bills stalling in the legislature, like they have in years past. Momentum does seem to be building.
Card Player had the chance to speak with Krafcik about California’s chances this year, as well as a handful of other topics related to online gaming in the United States.
Brian Pempus: First off, what impact do you think Sheldon Adelson’s anti-web gaming efforts could have on the state level?
Chris Krafcik: Las Vegas Sands is majority-owned by one of the world’s wealthiest men, which means that it can well afford to spend aggressively at the state level to advance its policy agenda. I think the company is likely to have the most success in the two states in which it operates casinos: Nevada and Pennsylvania. Lawmakers and regulators in those states will be inclined to consider the company’s position on Internet gambling because it has skin in the game. By “skin in the game,” I mean the company’s casinos and the jobs and tax revenue they generate. But in other states — say, California or Illinois — the company is less likely to have success chiefly because it does not have skin in the game. So, while the company is positioned to slow or stall the progression of Internet gambling legislation in Pennsylvania or the expansion of Internet gambling in Nevada, it will likely find that task more challenging in other states where it has no casino presence to leverage.
By way of background, Nevada legalized Internet gambling — or “interactive gaming” — in June 2001. The law authorized the Nevada Gaming Commission, with the advice and assistance of the Nevada Gaming Control Board, to adopt regulations governing the licensing and operation of interactive gaming, including the types of interactive games operators may offer. NRS 463.750(1). Currently, operators may not accept or facilitate a wager on “any game other than the game of poker and its derivatives.” Regulation 5A.140(1)(a). This year, however, the Commission and the Board will likely consider whether to expand the types of interactive games operators may offer to include slot games and table games. All this to say that I expect Las Vegas Sands to lobby against any such expansion.
BP: Which state do you think is most likely to legalize online gaming this year and why?
CK: California. If the state’s fractious but politically powerful Native American gaming industry can agree to a consensus Internet poker bill, tribal lobbyists expect that it will move quickly. The bill-passage deadline there is August 31.
BP: Do you think Rod Wright’s conviction will have an impact on California online poker efforts?
CK: In some ways, yes. In others, no. In Sacramento, Senator Wright was considered the most educated lawmaker on Internet poker issues. Some in the Legislature feel that without a politico as knowledgeable as Wright advocating on behalf of the state, whatever Internet poker bill eventually passes could lean too heavily in favor of its Native American gaming industry. Consideration of Internet poker legislation is set to continue without Wright at the helm. Ahead of the February 21 bill-introduction deadline, two lawmakers, Assemblyman Jones-Sawyer and Senator Correa, have signaled their intent to introduce legislation.
BP: Do you think the initial NJ revenue figures will in some way help other states in their respective deliberations on the online gaming issue?
CK: Because the New Jersey market is less than three months old, I think lawmakers in other states will be paying closer attention to the efficacy of geo-location and consumer-protection technology than to how quickly or slowly the market is growing on a monthly-sequential basis.
BP: When do you see a compact of some kind being formed between Nevada, New Jersey and Delaware, or any combination of the two?
CK: That is very difficult question to answer, but my best guess is not for a while. For now, regulators in Delaware, Nevada and New Jersey are focused on proving out their intrastate Internet gambling rules and systems. Even after those rules and systems are proven out, though, there is still the very tricky matter of reconciling one state’s with another’s. To put a number on it: years, not months.
BP: What do you make of Steve Wynn sort of backtracking on his online gaming plans?
CK: Given Wynn Resorts’ exposure to explosive growth in Macau, and with its second casino set to open there in 2016, the company is not nearly as reliant on the U.S. Internet gambling opportunity as some of its rivals are. In light of that, Mr. Wynn can well afford to take his time.
BP: Do you think New Jersey will become the online gaming hub that Ray Lesniak envisions?
CK: Senator Lesniak is among the most forward-thinking lawmakers in the country on Internet gambling issues. He is also a very tenacious fellow. If he wants New Jersey to become a national regulatory hub for Internet gambling, there is certainly reason to think it could happen. At this stage, though, his bill, S980, which would authorize so-called “interstate and foreign Internet wagering,” has not attracted much interest from the Atlantic City casino industry.