Online gambling regulations a hot topic at G2E

The Global Gaming Expo (G2E) opened last week with a series of conference sessions on Internet gambling. And with a standing-room only audience of brick-and-mortar gaming executives in attendance, the hot topic for discussion was when Congress would pass legislation that licensed and regulated online gambling.

"If nothing happens in the next 14 days, then nothing will happen in the next two years," said Filament Strategies President Lloyd Levine.

"You'll have better odds at the slot machine than with the new Congress," said Levine, who attempted to pass legislation regulating online poker in 2008 when he was a state legislator in California.

The consensus among the online gambling experts assembled was that federal legislation to regulate online gambling would only pass if Senate Majority Leader Harry Reid (D-Nev.) attached the legislation to an unrelated must-pass bill -- the same way the Unlawful Internet Gambling Enforcement Act was attached the Port Security bill in 2006.

"It's up to Reid now," said Jerome Encinas, director of government affairs for the California Nations Indian Gaming Association. "But his camp is being very close-mouthed right now."

John Pappas, executive director of the Poker Players Alliance, agreed that Reid was the key.

"I think Harry Reid is very critical," Pappas added. "He holds the cards, and unfortunately right now, he's holding the cards to real close to his vest...He's the central figure in all of this."

"The PPA has always believed there would be an opportunity in 2010 to get legislation done," Pappas said. "We believe that the re-election of people like Senator Harry Reid, who would be very influential in (the process of) making that happen, was a positive development. And we hope to see some progress made over next several weeks, between now and when they break around Christmas time."

"There is little chance anything happens between now and Thanksgiving," Pappas added. "But they're going to be back after Thanksgiving. And there are some major tax bills Congress has to consider. And the revenue prospects created by regulated Internet gaming can be an attractive 'pay for' for those bills."

"Every star has to align," said Pappas, when asked how legislation might move through Congress. "Senator Reid, and many of the Nevada gaming interests as well as all the other stake holders need to come to consensus on what a bill is that everyone can support. Then I think there needs to be a vehicle in which you can attach a bill to. There is very little prospect of this legislation going as a standalone bill."

If federal legislation isn't passed, it's likely that the states will be the first to regulate online gambling in the U.S., and that could pose problems for operators.

"The complexity (of regulations) increases exponentially if it's state by state," said Harrah's Senior Vice President Jan Jones.

But it looks like state-by-state regulation is where the online gambling industry in the U.S. is headed. The New Jersey Senate passed legislation Monday authorizing Atlantic City casinos to offer Internet gambling to New Jersey residents and people outside of the United States by a 29-5 vote. The legislation still needs the approval of the State Assembly and the governor.