States racing to set up legal online gambling
By Mark Gruetze
Published: Saturday, April 21, 2012, 2:36 p.m.
April 15, widely known as tax-deadline day, carries a starker meaning for fans of online gambling.
On April 15, 2011, federal authorities shut down U.S. operations of the three largest online-poker sites, stopping thousands of people from playing and tying up millions of dollars they had deposited or won.
Since "Black Friday," actions by the Justice Department, casino and online companies and several states indicate legal online gambling in the United States is tantalizingly close but still months away.
"Any time you're changing laws, whether it's in Harrisburg or Sacramento (Calif.) or any other place, it's time-consuming, an arduous process," Richard "Skip" Bronson, chairman of U.S. Digital Gaming says. His firm, based in Beverly Hills, Calif., provides online-gambling systems.
John Pappas, executive director of Poker Players Alliance, says many people expected virtual cards to be dealt in at least one state by the middle of this year after the Justice Department said in December that the Wire Act did not prohibit online gambling.
"Maybe by the middle of 2013, we'll see (online poker legal in) multiple states, but it's certainly not going to be this year," says Pappas, whose group favors federal regulation.
Bronson doesn't hazard a guess about which state will be first to have online gambling, but says Nevada, New Jersey, California, Iowa and Delaware are pursuing it aggressively.
Pennsylvania, the sixth-most-populous state, is noticeably absent from the list.
When one state starts online play, others will follow suit, as with lotteries and traditional casinos, Bronson says.
Nevada approved regulations for online poker in January. The Las Vegas Review-Journal predicts some websites could be operating by fall if the technology is approved. New Jersey Gov. Chris Christie vetoed an Internet gambling bill last year, but indicated he might sign a revision working its way through the Legislature, news reports say.
Much of the action followed the Justice Department ruling that Illinois and New York could sell lottery tickets online to in-state purchasers. The department also said that except for sports betting, the Wire Act does not prohibit using the Internet for legal gambling in a state. That reversed the department's previous position.
Moves in the casino industry also indicate that legal online poker rooms -- and possibly, games such as blackjack, craps and slot machines -- are coming sooner or later. Major casino companies are partnering with or buying online-game providers. For example, Zynga, whose games include FarmVille and Facebook Poker, is negotiating a deal with Wynn casinos. Slot manufacturers Bally and Aristocrat agreed to work together to provide online-poker networks to casino operators.
The attraction, as always, is money.
"There's no revenue source that can compete with the kind of revenue that can be generated from online gaming," Bronson says.
Research company H2 Gambling Capital, based in Great Britain, predicts legalized online poker in the United States could generate operator revenue of $4.3 billion in its first year, rising to $9.6 billion in the fifth year. H2 says half of that would come from players in eight states -- the seven most populous, plus Massachusetts.
The states' share would depend on their tax rate; for example, an average rate of 15 percent on $9.6 billion would yield $1.44 billion.
Bronson says states eventually will form compacts allowing play to cross state lines, similar to the Powerball and MegaMillions lotteries. Pappas says the compacts could extend to other countries, as well.
One reason is that online poker rooms need at least 70,000 players to have "liquidity" -- the ability to offer a wide enough range of games and betting levels, Bronson says.
The biggest worries about online casinos include keeping underage players off a site; preventing a spread of compulsive gambling; protecting players' money (Full Tilt Poker, a target of last year's crackdown, is accused of using $150 million in players' money for its own purposes); and guarding against cheating and collusion. Supporters say existing software makes those issues easier to handle online than in traditional casinos, which must address similar concerns.
Pappas says a state-by-state approach would emphasize generating tax revenue and involving local companies rather than determining the best setup for players. Bronson says Congress is too divided to agree on a law that brings gambling into every home.
'Gambling with an edge'
Player's Advantage columnist Mark Gruetze is scheduled to appear next week on the "Gambling with an Edge" radio show hosted by video-poker expert Bob Dancer and Michael "Wizard of Odds" Shackleford.
The hourlong show will air live at 10 p.m. EDT Thursday on KLAV-AM1230, Las Vegas; listeners can tune in online at www.klav1230am.com. Dancer, author of video-poker books and software, has hosted the weekly show since February 2011. Shackleford, whose website www.WizardOfOdds.com is an encyclopedia of casino games and strategies, joined Dancer two months ago.
Slot players lost $49.4 million in Pennsylvania's 11 casinos during the week ended April 8, the Gaming Control Board reported. That's up from $47.43 million in the comparable week last year. This week's total includes $959,144 from the Valley Forge Resort Casino, which was not open last year.
The state gets 55 percent of the "gross slot revenue," or what's left of players' bets after jackpots are paid.
Statewide, slot machines have a 90.05 percent payout rate since the fiscal year started in July; for every $100 put in, the machines return an average of $90.05. Payout rates for Western Pennsylvania casinos:
- 89.86%: Rivers; slot revenue for the week was $5.05 million, down from $5.25 million last year.
- 89.78%: Meadows; slot revenue for the week was $4.71 million, down from $4.75 million last year.
- 90.43%: Presque Isle in Erie; slot revenue for the week was $3.28 million, down from $3.29 million last year.
QUESTION OF THE WEEK
Do I have a better chance of hitting a slot-machine payout if I bet less than the maximum• (from Derek Majernik of Brownsville)
No. How much you bet doesn't affect your chances of seeing the jackpot symbols on the payline. That's determined by the machine's random-number generator at the instant you hit the spin button. If you bet less than the maximum, your money will last longer simply because each bet is smaller.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Wildcats win on road
- Kovacevic: A great day to appreciate No. 68
- Steelers safety Polamalu finds himself in tough position
- LeBeau wants to come back as Steelers defensive coordinator
- Officer who left to receive severance pay
- Roundup: Airline execs reap millions after merger; New American Airlines buys 90 jets; more
- Avonmore mayor files EEOC harassment case
- Washington Township OKs tax-neutral $2.6M budget
- Audit finds Jeannette’s accounting deficient
- Duo sought in spate of graffiti
- Security cameras coming to Charleroi