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Best of Howard Stutz

Gaming Guru

Howard Stutz

Momentum grows for regulated U.S. online poker

6 September 2011

LAS VEGAS, Nevada -- Based on headlines alone, 2011 has been a bad year for Internet poker.

Federal indictments in April shut down three of the largest online poker sites that catered to Americans. Other popular Web portals cut their access to U.S. gamblers after the legal action was unsealed.

Also, four states and the District of Columbia failed in efforts to legalize the activity.

But the game has shifted.

Caesars Entertainment Corp. Chairman Gary Loveman optimistically told investors on Aug. 9 that members of Congress view the federal legalization of Internet "as inevitable."

Senate Majority Leader Harry Reid, D.-Nev., echoed those sentiments a few days later. In a meeting with members of the Las Vegas Review-Journal's reporting staff, Reid said he expects Congress to take up debate on legalizing Internet poker "soon," although he wasn't ready to commit a time frame.

Many are now looking toward the "supercommittee," the 12 senators and representatives charged with finding some $1.5 trillion in debt savings over a 10-year period.

With estimates of Americans having wagered $6 billion annually on the activity, Internet poker proponents said there is just too much money -- and too many potential tax dollars -- on the table for the committee of six Republicans and six Democrats not to at least consider federal legalization and regulation.

"There's a lot of speculation that the committee will take a serious look at Internet poker," said Las Vegas attorney Greg Gemignani, who is chairman of the technology and Internet division of Lionel Sawyer & Collins' gaming practice.

One reason for optimism is the appearance of Sen. John Kyl, R-Ariz., on the panel. The conservative Kyl joined Reid earlier this year in supporting online poker legislation.

"It's no longer a question of if, but when," Loveman said of Internet poker's legalization.

Caesars stands to benefit more than any Nevada casino operator if the U.S. legalizes Internet poker. The company owns the lucrative World Series of Poker and operates Internet poker websites in Europe that capitalize on the popular brand.

Federal legislation is all that's needed for the company to launch an American-based pay-for-play World Series of Poker website.

Meanwhile, Nevada has begun the process of adopting regulations, allowing the state to license and oversee Internet poker providers pending federal approval. State gaming regulators released the first draft for industry review on Aug. 24.

Gaming Control Board Chairman Mark Lipparelli said he hopes to have the regulations set by Jan. 31.

"We can't predict what may happen with any national legislation and we have attempted to frame these regulations in a manner that will provide appropriate flexibility," Lipparelli said.

Gemignani and his partner at Lionel Sawyer & Collins, former U.S. Sen. Richard Bryan, have long advocated Nevada as the hub for regulating Internet casinos once federal approval of Internet poker takes effect.

With Congress seemingly headed down that road, the firm will host a workshop on Internet gaming for Nevada's media next week at the University of Nevada, Las Vegas' Boyd School of Law.

"This is all-new territory for many states, but Nevada has the people intimately familiar with how gaming regulation works," Gemignani said.

The nationwide shutdown of Internet poker began April 15 with the indictment of 11 individuals, including the founders of PokerStars, Full Tilt Poker and Absolute Poker, on charges of money laundering and bank fraud.

But the action didn't stop poker players. Traditional casinos saw their poker business increase. The World Series of Poker at the Rio attracted a record 75,672 players and a record- high prize pool of $191.9 million. Other Internet poker players moved to Canada, the Caribbean, Europe and jurisdictions where the activity is legal.

"Obviously, the appetite for poker has not dropped off," Gemignani said.

It's that hunger for the game -- and its potential revenues -- that has Internet poker players hoping the last four months of 2011 will be better than the first eight months of the year.
Momentum grows for regulated U.S. online poker is republished from