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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Gaming industry's indecision blamed for demise of federal Web poker measure

29 May 2013

LAS VEGAS -- A former Nevada congressman turned lobbyist said Tuesday that the gaming industry’s indecisiveness toward online gambling a few years ago scuttled chances for passage of a federal bill to legalize and regulate Internet poker.

Jon Porter, who represented Nevada’s 3rd Congressional District for three terms, said casino companies also were late in recognizing that American Indian tribes and state lotteries needed to be included in the discussion when the issue came up again in 2012.

“Those are some powerful groups,” Porter, president of Porter Gordon Silver, said during a panel discussion at the International Conference on Gambling and Risk Taking at Caesars Palace.

“Each time the issue came up, the industry had a different perspective,” said Porter, who was joined on the panel by former Gaming Control Board Chairman Mark Lipparelli and Ultimate Gaming Chairman Tom Breitling. “(The industry) was sending too many mixed signals.”

Porter, Lipparelli and Breitling spent 90 minutes discussing a variety of gaming industry subjects beyond the panel’s scheduled topic of how Internet gaming can coexist with brick-and-mortar casinos.

Breitling, whose company is majority-owned by Station Casinos, said Ultimate Poker, which was launched April 30, is an example of online gaming and traditional casinos working together.

The website, the nation’s first legal pay-to-play Internet poker site, has signed up half of its registered players at Station Casinos’ properties throughout Las Vegas.

Ultimate Gaming is co-branding its summerlong $1 million marketing effort with Station Casinos, and players will soon be able to redeem loyalty points earned from gambling on the website at Station Casinos’ properties.

“We’re creating jobs, generating tax revenues and protecting players,” Breitling said. “We’re learning every single day.”

All three speakers expressed a desire for passage of federal legislation that would legalize online poker.

Porter was the only one of the three to express optimism that a bill might make it through Congress during the current term.

“It will come back this session,” he said. “It won’t be a stand-alone bill. It will be attached to something else.”

Porter, a Republican, credited Senate Majority Leader Harry Reid, a Nevada Democrat, with pushing the legislation forward. However, many Republicans won’t support any bill authored by Reid.

“Senator Reid can’t do it alone,” Porter said.

Lipparelli, who oversaw the drafting of Nevada’s Internet poker regulations, and Breitling said a state-by-state solution seems to be the focus of casino companies.

Besides Nevada, New Jersey and Delaware have approved online gaming laws. Other states, including California, are exploring the subject.

“Without an overarching federal bill, states are moving ahead,” Lipparelli said. “Nevada has a good set of initial regulations. I’m sure they will be revised. We’ll discover areas where we pushed too hard and where we didn’t push hard enough.”

The speakers said Internet gaming is not going away. The underlying questions concern how gaming companies, states, regulators and federal lawmakers will embrace the activity.

Breitling said Ultimate Gaming plans to participate in New Jersey, even though operation of the websites is relegated solely to Atlantic City casino operators. In an interview after the panel discussion, Breitling said the company is exploring partnership roles with Atlantic City casino owners.

All three panelists gave differing answers as to whether European online gaming giant PokerStars should be able to participate.

The company, which is owned by the Isle of Man-based Rational Group, paid $731 million to the U.S. Department of Justice last year to settle alleged money laundering, bank fraud and illegal gambling charges surrounding the federal government’s April 2011 crackdown on illegal Internet poker.

Earlier this month, a deal for PokerStars to buy the troubled Atlantic Club in Atlantic City collapsed.

Porter said he thought Nevada could be left behind if New Jersey gaming regulators were to license PokerStars. Lipparelli said Nevada needs to judge each license applicant case by case.

Nevada’s gaming regulations prohibit an online gaming company from entering the state for five years if it took bets from Americans after 2006.

Breitling said PokerStars should be banned because the company “took millions of dollars from Americans and never paid federal or state taxes.”