With New Jersey going live with online poker later this month, it’s clear that a new era is dawning for gambling in the United States. Until just this year there were no jurisdictions in the United States where an American could play online poker for real money legally. Now there are two, and they’re just the trailblazers. It’s a sweeping change from the Bush Administration era, when the Department of Justice insisted (on shaky legal ground) that all online gambling, even poker, was illegal in the U.S. Yet even with the change in attitude, there remains a distinct lack of action on online poker at the federal level.
Time and again poker players have been given hints that this is the year there would finally be action on online poker at the federal level, only to watch as the issue failed to gain any traction beyond the odd Congressional hearing. This isn’t an accident. The fact is that gambling has never been a political winner for anybody at the federal level, for a number of reasons. If it were, Harry Reid would have already used his position as majority leader in the Senate to push a bill through and we’d all be qualifying for the WSOP in our pajamas. Instead, there’s a web of political considerations that holds back any potential progress on the federal level.
For starters there are all the different stakeholders that would have to be taken care of in any potential deal. How much gambling is acceptable varies from state to state, from places where slot machines greet you when you step off the airplane to others where even the lottery is illegal, with a full range of compromises in between. This fracturing of opinion around the country is why Rep. Joe Barton’s bills have included provisions for states to opt out of federal legislation. It also makes clear that passing one law that affects so many communities with varying standards isn’t going to be a winning play for anybody. It’s telling that the UIGEA was shoehorned into the federal law books via procedural tactics rather than full debate; Bob Goodlatte and Jim Leach had been trying for years to pass a bill to ban online gambling with no success but ran into a complete lack of political will.
Just as not there’s not enough movement to ban gambling outright at the federal level, there also isn’t the political will to make a bill happen. Online poker’s number one draw as an issue at the state level – the revenues that could be taxed to relieve some of the pressure on social programs – looks very small to a government that runs deficits in the trillions. As a result, the handful of federal-level politicians who have taken up online poker as an issue are a fringe minority at best – either gaming industry proponents, poker players themselves, retiring representatives with a libertarian bent, or simply happy to keep the donation channels open from those who regularly take to the felt. They say all the right things about the people’s right to play poker, but in the end they don’t really have the power to get much accomplished. Even those who might have such sway are still bound by the unwritten rules of politics, meaning they would realistically have to wait for a opportune moment that could be exploited to push the issue. It’s hard to even imagine what such an opportunity might look like in today’s environment.
The political situation in the states is much different when it comes to online poker. For starters, the states are on relatively fixed budgets compared to the print-as-you-go federal government. In an economy still hobbled by the financial crisis of 2008, anything that could bring more money into state coffers is usually up for consideration, especially when the subject at hand is an extension of something that’s already legal. Nevada and New Jersey proved that and others among the many states that allow their citizens to play in card rooms will follow. California immediately comes to mind, but any state with legal casinos and a state legislature looking for new sources of tax revenue is an eventual possibility.
The states also have clarity with regard to the law that isn’t present on the federal level, making it easier to know exactly what needs to be done when it comes to legalizing online poker. Whether a state has a constitutional ban on gambling, has a lottery, or already has allows casino gambling in some form, there’s an established process to follow in order to make online poker a reality. Down the road Nevada and New Jersey, having jumped in front of the market, will be able to share their experiences with licensing and regulating online poker with other states who are looking to do the same; they might even be able to help guide the regulation in some way through interstate compacts if their legislatures pass laws to allow them, as Nevada has already done.
It’s clear that the near future of online poker in the U.S. lies with the states. That’s not to say the feds won’t eventually get involved – it’s nearly inevitable that they will. But not until there’s already a thriving industry that they can step in and regulate, and not until there’s a political moment that can be exploited to make that regulation happen.
