New Jersey Chasing Nevada In Race to Offer Online Gambling

Poker News / Short-Stacked Shamus / 03 January 2012 / Leave a Comment

Leaders in brick-and-mortar gambling, Nevada and New Jersey are looking to be leaders in offering online games in the U.S. as well.

Much is still to be determined in the U.S. with regard to online gambling. In any event, it is clear that individual states are presently jockeying for position to be among the first to benefit from offering online gambling.

As the year 2011 came to a close, a newly-publicized opinion by the U.S. Department of Justice regarding the legality of online gambling created a mini-stir in the online poker community. In an apparent change of position, the new opinion states the half-century old Interstate Wire Act prohibiting the accepting of wagers across state lines only applies to sports betting and not other forms of gambling. Meanwhile, the state of Nevada has already approved regulations to begin licensing online gambling within the state, and New Jersey appears poised to push through its own online gambling bill within the next week, too.

The new DOJ opinion came in a memorandum written in September but only made public on December 23. There Assistant Attorney General Virginia A. Seitz responds to a question regarding the legality of two states (New York and Illinois) selling state lottery tickets online, including instances where the transactions involving state residents may happen to cross state lines.

In offering a response to that issue, Seitz notes that the DOJ was "incorrect" in its previous opinion that the Wire Act applied to more than just sports betting, instead maintaining that the law "prohibits only the transmission of communications related to bets or wagers on sporting events or contests."

It should be noted that while the "Black Friday" indictment against major online poker sites and other individuals listed numerous counts, violations of the Wire Act was not included among the allegations. However, the DOJ's earlier opinion regarding the Wire Act had prevented many states from being too eager about offering online gambling, even if the states happened to offer legal brick-and-mortar gambling. Thus has the change of opinion been taken by many as possibly paving the way for states to begin to offer intrastate (i.e., in-state, within borders) online gambling.

Anticipating the possibility of some kind of legislative movement favorable to online gambling, Nevada passed a state bill (A.B. 258) six months before that paved the way for the Nevada Gaming Commission to adopt regulations to offer licenses to companies wishing to offer online gambling. That bill included a contingency stating that before any such licenses could be issued, there either had to be "(1) A federal law authorizing the specific type of interactive gaming" to be offered or "(2) The United States Department of Justice notifies the Board or Commission in writing that it is permissible under federal law to operate the specific type of interactive gaming" to be offered.

It appears the new DOJ opinion stating that the Wire Act only applies to sports betting and not other forms of online or "interactive gaming" satisfies the second requirement of A.B. 258.

Coincidentally or not, it was just a day before the DOJ opinion became public that the Nevada Gaming Commission finally approved its regulations to begin issuing licenses. In fact, there have already been more than a half-dozen applications for licenses to offer online gambling in Nevada.

Meanwhile, it appears that New Jersey -- another U.S. state that allows legal brick-and-mortar gambling -- is perhaps hustling to try to catch up to Nevada and begin offering its own intrastate online gambling.

Yesterday Wayne Parry of the Associated Press reported that N.J. state senator Raymond Lesniak is trying to push through a bill to legalize online gambling within the state before the current legislative session ends on Jan. 9.

New Jersey's legislature had passed a similar bill last spring -- prior to Nevada's passing its bill -- but the state's Governor Chris Christie vetoed it. Most speculated then that the DOJ's earlier position on online gambling may well have forced Christie's hand, meaning a new bill may have a better chance of receiving Christie's okay this time around thanks to the revised DOJ opinion.

Lesniak's statements to the AP regarding the bill emphasized the urgency of situation. "It's the wave of the future," he said, referring to online gambling. "It's going to come and we can be in the lead on it."

Much is still to be determined in the United States with regard to online gambling, including whether or not these new state laws might allow for the possibility of any interstate online gambling, say, between states that have individually legalized it and then agree to operate as a kind of consortium such as happens with multi-state lotteries.

In any event, it is clear that individual states are presently jockeying for position to be among the first to benefit from offering online gambling.

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