Gov. Sandoval seeks federal, not state, approval of online poker

Gov. Brian Sandoval said Monday he supported Congress approving online poker legislation rather than having the issue decided on a state-by-state basis.

“I do believe that online gaming is the (wave) of the future,” the Republican governor said during an appearance on “Nevada Newsmakers,” adding that Nevada should be the first state to take advantage if the federal law passes.

Technically, online poker is not illegal in the United States. But participating in an online poker game where the participants are wagering money on the outcome is illegal.

In 2006, a federal law banned banks and other financial companies from processing gambling transactions across state lines. The Unlawful Internet Gambling Enforcement Act also established the framework for legalizing intrastate gambling.

The law explicitly declared that online intrastate wagering did not constitute “unlawful Internet gambling” if expressly permitted by the laws of a state.

Sandoval sent a letter Monday to the chairman of the Assembly Judiciary Committee outlining his position that Nevada should not be in conflict with federal law.

“I don’t want the state to be in contravention of federal law,” the governor said during a 20-minute television interview. “If the federal government legalizes online poker, the state should be the one that sets up regulatory structure and the investigatory structure.”

Assemblyman William Horne, D-Las Vegas, who leads the Judiciary Committee, introduced Assembly Bill 258 on March 10 that would allow online poker within Nevada and in foreign countries where it isn’t banned.

If approved, the bill would require the Nevada Gaming Commission to adopt regulations allowing for Internet poker. Nevada gaming law allows casinos to operate games through hand-held or wireless devices using electronic money transfers.

Horne’s bill, which is backed by Internet gaming company PokerStars, had one hearing March 24, but the committee hasn’t voted. Horne was unavailable for comment on Monday.

In his letter, Sandoval recognized there was some disagreement about the scope of the ban, but said it was “vital that we not undermine the state’s credibility as a … regulator of gaming.”

He urged Nevada to continue to “strive to be the leader in the emerging online poker industry” by creating an operating framework that ensures the state’s regulatory structure was a model of “integrity and innovation.”

“I would hope that any bill passes will not facilitate the legalization of online poker before the federal ban is lifted, or encourage any action that would hinder Congress’s efforts towards lifting of the ban,” Sandoval said.

Caesars Entertainment Corp. and MGM Resorts International are just two of the resort companies in Las Vegas that favor a federal law rather than a state bill. South Point owner Michael Gaughan has voiced his support for AB 258 as a way to help Nevada reduce its budget shortfall.

An effort by Senate Majority Leader Harry Reid, D-Nev., to pass an online poker bill in December near the end of the last session of Congress failed. In March, a bipartisan measure was introduced in the House that would establish federal licensing and regulation of online wagering, specifically poker.

In Washington on Monday, Reid said he was encouraged by new support from Las Vegas casino owners for legislation to legalize online poker, and by Sandoval’s declaration that he preferred a federal bill.

But Reid added that he has been preoccupied with trying to avert a government shutdown and was unsure when he will have a poker bill ready to introduce in the U.S. Senate.

“We are trying to work through it now,” Reid said when asked about online poker during a telephone call with reporters.

“We have new supporters this go-round we did not have last time,” Reid said, naming Gaughan and Steve Wynn, chief executive officer of Wynn Resorts Ltd.

Plus, “Sheldon Adelson does not oppose it,” Reid said of Las Vegas Sands Corp.’s chairman.

“We have always had the Fertittas,” Reid said of the Stations Casinos Inc. owners. “We have always had MGM. We have always had (Caesars). So I would hope with this added help we can get it done but it is still not done .”

Reid said he hoped support from Republicans would persuade Sen. Jon Kyl, R-Ariz., to remove objections to the legislation. But, Reid said Kyl, too, has been “overwhelmed” by budget issues facing Congress.

“Sandoval is right,” Reid added. Legalizing online poker “can’t be done at the state level. “In most instances it is totally a violation of federal law.”

Despite Reid’s warning, the issue of legalizing of online poker has gathered steam on the state level. Besides Nevada, Florida and California have been debating bills to implement online gambling to raise revenue to help offset budget deficits.

New Jersey Republican Gov. Chris Christie recently vetoed a similar measure.

On Monday, Washington D.C. became the first jurisdiction to legalize online poker. The city council approved a budget last year allowing lottery provider Intra-
lot to operate a poker website accessible only inside district boundaries.

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893. Stephens Washington Bureau Chief Steve Tetreault may be reached at 2020-783-1760 or stetreault
@stephensmedia.com