It seems 2010 is bound and determined to make history on the US regulatory front. With New Jersey looking to succeed where Washington failed, it’s time to take stock of just what the prospect of legal online gaming in the US means for the rest of the industry.
Starting with what may be the most significant aspect, the US will forfeit their ability to use their criminal justice system to go after international operators. Extradition treaties traditionally require that an extradition-worthy crime has to be a crime in both jurisdictions, which is why the US hasn’t been able to get at ‘targets’ in licensed gaming jurisdictions like the UK, Ireland, the Philippines, Antigua, Costa Rica et al. With the US joining these jurisdictions in offering legal online gaming, the Dept. of Justice doesn’t even have their own half of that equation anymore.
Second, those US government figures who like to paint online gaming as inherently corrupt/dangerous/evil will no longer be able to frame the debate strictly according to their terms. With elements of that same US establishment hanging out their own shingle, the mainstream media will no longer accept the anti-gambling crowd’s rhetoric as gospel.
On the contrary, the public image of online gaming will undergo a Cinderella-type makeover, attracting more consumers who suddenly realize that the dirty, filthy girl who used to scrub their toilets is actually kinda cute. In the long run, this expansion of the player base can only benefit the large international online gaming companies that see no reason to prevent US residents from spending their money on a product that has long been deemed permissible under international trade law.
Third, the US is going to find it a good deal tougher convincing other nations to assist their attempts to choke off these international companies’ eCom transactions. Fourth, while online gaming is going to get a lot easier in Jersey, sports betting isn’t going to happen anytime soon – if ever.
Finally, this is the first fallen domino in a chain that we have been predicting for a long time now. Online gaming will continue to gain toeholds across the US on a state by state basis, much like we have seen unfolding across Canada this year. The difference is that sports betting faces a much greater challenge south of the border, due to the federal PASPA prohibition. Some of the more timid states may opt for the poker-only option, using the old ‘skill v. luck’ argument to justify their timidity, and, of course, some states (we’re looking at you, Utah) will opt out entirely, leaving their market entirely in the hands of the international operators.
All told, New Jersey’s one small step is one giant leap for the online gaming industry. It validates what we have been saying all along – gambling is a great form of entertainment, and we see no reason why any responsible adult should be prevented from enjoying it.