Ready or not, iGaming’s new world arrives ahead of schedule,
“The future is already here – it’s just not evenly distributed.”
― William Gibson
Some events can stop the world. But very few can make things run backwards. The Corona plague is one of these. Different problems, different events can cause gambling, especially state-sponsored gambling, to wax or wane, or even shut down. This year, coronavirus has done what nobody thought was possible: it caused America’s Triple Crown to reverse the order of the three thoroughbred races. The pattern has been immutable since the 1930’s: first, the Kentucky Derby in early May, then the Preakness about two weeks later, and finally the Belmont at the beginning of June or so.
This year, they ran the Belmont first, on June 20. This race used to be the Triple Crown’s big endurance test at a mile and a half. This year it was shortened to a mile and an eighth, now the shortest of the three. The Derby, traditionally the speed event, remains a mile and a quarter, but is now scheduled for September 5th. And the Preakness, the middle distance at a mile and three sixteenths, is scheduled for early October.
Even with the dates and the distances mixed up, the most striking feature of this year’s Triple Crown is the attendance, the number of fans physically showing up to watch the race. This year, there may not be any at all. The Belmont ran to an empty grandstand. The Preakness might allow some physical fans to attend, but that’s not final as of this writing. The Derby is scheduled to have limited, tightly supervised attendance. But there are no guarantees. If entire states, such as California, can reimpose and even intensify lockdown orders in response to rising infection rates, an individual horse race may not stand much chance of holding out if a return to statewide confinement is decreed.
New platform., old bottleneck
Since there is no vaccine yet for the Covid virus, we are left with preventive measures, such as face masks and “social distancing”- that creepy Orwellian term that means keeping everybody else 6 feet away.
But while diligent attention to the new hygiene commandments may be a desirable behavior from the public health point of view, it’s kind of lacking in the entertainment department. The whole idea of going to a gambling venue is to relax a little bit, ease off on the strict rules and do something a little bit risky, a little bit fun. But the Corona decrees, demanding diligent attention to the rules, is what they call a buzz kill. Takes all the fun and glamour out of it. So, while the brief re-openings did look good, how can we be sure it wasn’t just pent-up demand, soon to be exhausted?
Perhaps, we can get an idea from California’s Indian casinos. All 60-odd of them shut down when the first lockdown was decreed, but when Gov. Newsom reinstated the quarantine on most business activities, the tribes did not close a second time. They rely on a theory of “tribal sovereignty”, meaning in this case that the tribal authorities can open or close their gambling operations without reference to the state. Business was good, but also limited. Tribal gaming authorities all complied with previous guidelines as to personal distancing and mandatory masks. Which means they operate at about 30% of their former capacity-in effect, business is down two thirds. Even if they do make it through the pandemic, it will be a tight squeeze, nonetheless. The gaming tribes’ traditional rivals, California’s municipal card rooms, have no sovereignty to protect them. It is feared that many of them will close for good.
It’s clear that much of America’s future gambling will be online, especially on mobile devices like smart phones and iPads. But yet again, legally we aren’t ready.
The jurisdiction question remains unsolved. If a poker site in a foreign country is accessed by a resident of, say, New Jersey, does that give New Jersey jurisdiction over that poker site? If a foreign resident should access a site located in New Jersey, would that give the foreign government jurisdiction over the Jersey operation? We still don’t have a hard answer, a real adjudication of this issue. And jurisdiction is probably the most important question about Internet and interactive gaming. It determines who gets the money-the tax revenues and fees.
And while we’re on the subject, should state borders count at all in supervising online gaming?
Let’s take Jane, a dedicated poker player and a resident of New Jersey. She can sign into a licensed online poker operation in the Garden State,
but if, while playing poker online, she should cross the state line into New York, her link to the Jersey poker operation will automatically disconnect, and not restored until she logs in again from a location inside New Jersey’s state limits.
But why? What law would she be breaking if she participated in a few hands of poker while out of state? New York has a law against “promoting gambling (that they don’t license)”. But is Jane “promoting gambling” or offering gambling services to the people of New York? The short answer is, she couldn’t if she wanted to. Each player is limited to one account on an online gaming site and allowing third parties to use that link is grounds for cancellation of her account. In fact, since the physical location of the poker operation is in New Jersey, it can be argued that the gambling, the actual game, is taking place at the operator’s computer service site. No New York residents are being offered gambling services, because the operator has measures in place to weed out unsuitable players. Especially from the wrong URLs.
Is it, deep down, a matter of money? America solved that problem long ago, Allowing state governments to license online betting on horse races ( using the pari-mutuel system, to be sure) in no less than 31 states, in fact, depending on the network, players can bet on horse races literally all over the world-from Canada to Hong Kong, from Australia to Britain, France, and Germany.
But there has never been any hint of a serious squabble. Everybody knows how much they’re supposed to get, and when. In point of fact, it is widely believed that the American thoroughbred industry owes its continued existence to multistate and multinational betting programs.
Could other forms of gambling use this approach when going online and mobile? Obviously.
There is a solution here if they want one, or there is a fight here if they want one. All it will take is one dedicated party to make the various state and national systems meld together.
Unfortunately, so far, that party has not been identified.
Mr. Owens is a California attorney specializing in the law of Internet and interactive gaming since 1998. Co-author of INTERNET GAMING LAW with Professor Nelson Rose, (Mary Ann Liebert Publishers, 2nd ed 2009); Associate Editor, Gaming Law Review & Economics; Contributing Editor, TSN. Comments/inquiries welcome at [email protected].
