Net poker’s prospects probably lie beyond ’12

It’s only March, but prospects for federal legalization of Internet poker this year have faded quicker than hopes of drawing an ace on the river card.

When Congress failed to attach online gaming legislation to the payroll tax cut extension in early February, many proponents mucked their hands.

Lawmakers will debate other bills that could serve as the conduit for Internet poker, but it’s unlikely they’ll get very far.

Trying to pin down lawmakers and lobbyists on potential legislation is difficult. With control of the White House and Congress at stake come November, the hope for Internet poker seems to be drawing dead.

One Capitol Hill lobbyist opined that most members of Congress don’t wake up each morning thinking about Internet poker legislation.

The lame duck session — the period between November’s election and the new year, when outgoing lawmakers and departing party leaders try to push through last-minute initiatives –may be Web poker’s last gasp in 2012.

Two years ago Senate Majority Leader Harry Reid and Arizona Republican Sen. John Kyl failed to push through legalization during the lame duck session. Kyl, who is retiring, and Reid, who won’t be majority leader if Republicans win the Senate, might try again.

“Trying to peg a time for Congress is never easily predictable,” said Nevada Gaming Control Board Chairman Mark Lipparelli, who spent part of last week in Washington, D.C.

This dire prediction is not what online poker supporters want to read on the opening day of the iGaming North America Conference at Planet Hollywood Resort. The three-day meeting is designed to introduce commercial casino operators to the Internet gaming industry.

While the federal level has quieted, the action is now with the states.

Nevada has in place Internet poker regulations allowing Intrastate wagering — gambling within the confines of the state’s borders. More than 20 casino operators, gaming equipment makers, and service providers have applied for licenses under Nevada new regulations.

Lipparelli said the board could begin vetting potential online casino operators by early summer. How quickly those operators can launch their websites depends on their readiness to comply with the state’s technical standards and system approvals.

Some have predicted the cards could be in the air — or on the computer screens — by year’s end. It won’t be a large field, however. The virtual poker rooms will only include Nevada residents and others willing to cross state lines to open an account and play.

Hope, however, comes from California, where two state senators introduced an online gambling bill last month. A paragraph in the 46-page bill allows the state to “outsource” the regulatory process to another state with “proven” expertise, i.e., Nevada.

In a perfect world, Nevada and California would form an Internet poker gaming compact where Nevada oversees the activity and the states share revenues. Strip casino operators and Indian casinos could launch websites and compete equally for California and Nevada customers.

But the quagmire that is California gaming and politics seems certain to consume the measure. Too many competing interests will keep the bill from advancing.

Influential Indian tribes control the gaming debate in Sacramento. California card room operators and the state’s racetrack industry want a slice of the pie.

Even if the tribes, card rooms and tracks could get on the same page, Facebook, Zynga and other Silicon Valley social media giants are going to seek a piece of the action.

Last week, Zynga CEO Mark Pincus said real-money gambling could be woven into social games, pending U.S. regulatory changes. He suggested Zynga would partner with a traditional casino company before year’s end.

Former Nevada Rep. Jon Porter said state legalization — Iowa, Massachusetts, Mississippi and New Jersey are discussing Internet poker — could push Washington, D.C., to act. Porter, who became a lobbyist after three terms in Congress, works with the Poker Players Alliance.

He said lack of consensus among commercial casinos, Indian casinos, racetracks and state lotteries stalled the issue.

“The gaming industry itself is the biggest problem. They have put up too many roadblocks,” Porter said.

Still, most proponents are optimistic that Congress will eventually approve Internet poker legislation.

Lipparelli’s message is to look beyond the next 12 months. After passage, he wants to make sure the best business model is created that satisfies all parties.

“If everybody doesn’t come together, it could be a complete nightmare,” he said.

Howard Stutz’s Inside Gaming column appears Sundays. He can be reached at hstutz@reviewjournal.com or 702-477-3871. He blogs at lvrj.com/blogs/stutz.
Follow @howardstutz on Twitter.