BUSINESS

Nevada bill would share online poker liquidity with other jurisdictions

TAGs: Alderney Gambling Control Commission, intrastate poker network

nevada-poker-bill-share-liquidity-smallA day after the Nevada Gaming Control Board (GCB) approved the suitability of the relationship between Caesars Entertainment and 888 Holdings’ subsidiary Dragonfish, a bill (BDR 41-657) that would legalize online poker has been introduced in the Nevada State Assembly. Majority Whip William Horne (D-Las Vegas) put forth the bill, which is backed by former Speaker (and current PokerStars lobbyist) Richard Perkins. The draft bill can be read in its entirety here.

While there are similarities with the pro-poker pushes in other states such as New Jersey, California, Florida and Iowa, the Nevada bill differs sharply in that it does not appear strictly limited to Nevada residents. Specifically, the bill would enable the Nevada Gaming Commission “to enter into compacts with other jurisdictions where interactive gaming is not prohibited … and authorizing the commingling of games and pots between such jurisdictions.” Could the recent cooperative deal between the GCB and the Alderney Gambling Control Commission have been done specifically with this bill in mind? Operators granted a Nevada license under this scheme would pay 4% of gross revenue derived from players in these “other jurisdictions.”

Another crucial difference in Nevada’s bill is the stipulation that potential operators could not be denied a license “solely because the operator … before the effective date of this act, operates, operated or was associated with, in interstate or foreign commerce and while licensed by another jurisdiction, one or more Internet poker operations which were unlicensed in the United States or the State of Nevada and in which bets or wagers were initiated, received or otherwise made by persons located in the United States.” Given this blanket ‘all is forgiven’ edict, how’d you like to be a shareholder of PartyGaming or any of the other publicly traded companies who ponied up millions to buy their ‘indulgences’ from US federal law enforcement agencies? However, being a shareholder of any of the private companies that were not forced out of the US is looking pretty good right now.

How the feds will react to Nevada’s brazen move is unknown, but presumably they won’t be pleased that a state would attempt to negate their entire anti-online poker stance in one fell swoop. At any rate, the Assembly Committee on Judiciary (of which Horne is Chairman) is scheduled to pore over the bill on March 24.

CalvinAyre.com has always predicted that this would be the way the world would eventually unfold and that US-licensed companies would be taking bets from non-US residents after the dust settled. We have also predicted that private foreign companies would find a way back into the US and not have to follow the public company lead vis à vis settlements where there is no obvious legal issue to be settled (a practice begun by Mitch Garber when he was chief legal eagle at PartyGaming and mimicked by some but not all of the European public companies). This seems to be yet more evidence of why being public is the wrong structure for the online gaming industry.

We are still predicting that the above scenario will not happen any time soon as this will cause a showdown with the feds that will need to be sorted out first. Officially, the federal position remains the same: the Wire Act (and other laws) would render this type of multijurisdictional relationship illegal. We also want to go on the record as saying that if Nevada’s bill does pass, it can only be good for the global online gaming industry. Furthermore. it validates everything we have been saying for years. Online gaming is a legitimate form of entertainment and many jurisdictions are doing it very well already, especially the brands operating in the UK market, which are clearly global leaders in this space.

Watch this site for updates as this is a major development for our industry.

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