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November 22, 2014

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Nevada Legislature unanimously passes online poker bill

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Andrew Doughman

Surrounded by Nevada legislators, Gov. Brian Sandoval signs an online poker bill into law, Thursday, Feb. 21, 2013. The law will allow Nevada to move ahead with online poker in the absence of federal action.

Updated Thursday, Feb. 21, 2013 | 4:12 p.m.

The Nevada Legislature today fast tracked an online gaming bill, declaring it an emergency measure to get it to Gov. Brian Sandoval for a signature today.

After a 90-minute hearing before a joint meeting of the Assembly and Senate Judiciary committees, both houses of the Legislature voted unanimously to pass Assembly Bill 114, which would allow Nevada to move ahead with online poker in the absence of federal action and to join in interstate compacts that would expand the customer base for Nevada casinos.

Sandoval signed the bill just before 4 p.m. today. The entire process took less than seven hours.

“We’re going to do it now,” said Assembly Majority Leader William Horne, D-Las Vegas. “We’re going to beat New Jersey.”

In his State of the State speech, Sandoval declared online poker legislation to be his most immediate priority and called on lawmakers to pass it within the first 30 days of the session. That timetable sped up when New Jersey passed similar online gambling legislation earlier this month.

Both states are in a race to become an online gambling hub, hoping to use existing gaming regulations to help new states enter the gaming market.

Shortly before the Senate's unanimous vote Thursday afternoon, Senate Minority Leader Michael Roberson had a few words for New Jersey.

"To the great state of New Jersey, Nevada is still No. 1 in gaming and will continue to be," he said.

New Jersey Gov. Chris Christie vetoed the first bill passed by the Legislature in his state, but he is expected to sign an amended bill as early as next week.

“This is good-natured competition,” said Pete Ernaut, lobbyist for the Nevada Resort Association, in reference to New Jersey. “If we get there first, fantastic. If we get there within 24 to 48 hours, it’s not a big deal.”

Ernaut said the competition is the “gaming version of the space race.”

“This is a historic day,” Sandoval said before signing the law in the old Assembly chambers, where Nevada first legalized gambling in 1931. “This is the day we usher Nevada into the next frontier of gaming.”

The Republican governor praised the bipartisanship effort to hasten the bill through the legislative process.

“We said ‘saddle up, let’s do this’ and we got it done,” Horne said.

“I think this was record fast,” Sandoval said. “This is an extremely important bill for our economy.”

The unanimous passage came after Sandoval and Horne reached a compromise on how much to charge for an online poker license. Horne had wanted to double the current license fee to $1 million.

He backed down from that, agreeing to a compromise that would allow the Nevada Gaming Commission to increase the $500,000 fee in certain circumstances. The legislation would also allow the commission to lower the fee, as needed. That's the opposite of Christie's take. He wants New Jersey to increase its tax rate on Internet gambling revenue.

In an example of the bipartisan support, Sandoval and Horne sat side by side to testify in support of the compromise legislation.

"It makes me proud know we can get in a room and put our heads together and make this happen," Horne said after the bill passed both house.

Republican and Democratic support for the bill helped it sail through the Assembly and Senate to the governor’s desk, where Sandoval could be one of the first governors in the country to sign an online poker bill.

“It is important that we move quickly,” Sandoval said, arguing that Nevada must maintain its edge in being responsive to changes in gaming technology and culture. “Other states are on the verge of approving similar measures. It is vital that we move quickly.”

The online poker law will legalize online gambling for the first time in Nevada, allow Nevadans to play online poker with players in other states, and potentially net Nevada millions of dollars in licensing and other fees.

The bill repeals a Nevada law that says the state should wait for federal action authorizing online gaming. A federal proposal failed this past year, spurring states to push their own gaming proposals.

“We cannot wait any longer for Congress to act,” Sandoval said to a legislative committee Thursday.

Even without federal approval, Sandoval said the state should be in “good legal standing” to enter into interstate compacts exclusively for online poker, and his administration will communicate with the federal Department of Justice as Nevada crafts the compact language that would be authorized under this proposal.

Calling it a “new frontier,” Sandoval said that although the bill talks about “interactive gaming,” he believes federal law precludes any interstate compacts involving gaming other than interactive poker.

Additionally, Ernaut said the Nevada Resort Association favors poker because it is a player-versus-player game.

“We don’t want to have undue competition for those who have spent billions of dollars building these beautiful resorts in Las Vegas and Reno, and that’s why we’ve limited it to poker,” he said.

Gaming regulators will address many of the specifics and mechanics of what online poker will look like for consumers.

“Those sort of things would have to be hammered out in interstate agreements,” said A.C. Burnett, chairman of the state’s Gaming Control Board. “Our staff have traveled the world during the past five years to understand how online poker is regulated overseas.”

Overseas gamblers have played online poker for years and Americans have played illegally.

“This essentially legitimizes and regulates what is already going on,” Burnett said.

Delaware is the only other state to have an online gambling law in place, but many are examining proposals similar to Nevada’s.

“This is a multibillion dollar industry that we haven’t been participating in,” Horne said.

The bill puts pressure on the state’s gaming regulators to use their expertise to craft the specific language of interstate compacts that appeal to other states that may not have as much history in regulating gambling.

They will have to address regulatory requirements including fraud and identity theft protection, age verification and geolocation technologies.

“In these agreements, we’re hoping that our regulatory framework that we have developed over the decades will be part of the selling point to jurisdictions that don’t have that,” Horne said.

Horne said the idea is to partner with states that have larger populations than Nevada, which would provide millions of customers for land-based casinos that also operate licensed online poker websites.

The price of entering into that market had been a sticking point for Horne and Sandoval.

Horne previously advocated a $1 million licensing fee and $500,000 renewal fee for online gaming licenses. The governor did not support Horne’s proposal, which had doubled the fees.

The bill passed with an amendment that knocked the fees back down to $500,000 for a license but allows the state’s Gaming Commission to increase the licensing fees to up to $1 million or lower them to $150,000.

Under the bill, operating licenses for gaming establishments would only be available to a “resort hotel that holds a nonrestricted license to operate games and gaming devices.”

The bill would ban for five years some companies who illegally participated in the online gaming market between 2006 and 2011.

Horne said the ban is a compromise between a “Pete Rose” and “single game suspension” punishment for companies that didn’t play by the rules and could now have an unfair advantage if they entered the legal market proposed under Nevada’s bill.

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  1. Kudos to the Legislature for listening to the voters.

    It's at least a start.

  2. Comparing apples to oranges. New Jersey has FULL online gaming, Nevada has only online poker. Online poker has much smaller base, a death sentence for the bill since Nevada population is already too low to sustain these businesses. New Jersey has a MUCH LARGER population and can offer full gaming. Advantage, NJ.

    And you confuse "fees" with "tax"... Nowhere in this story does it say what Nevada will tax online gaming revenues. NJ will tax gross gaming revenues 15%. What will Nevada tax? And remember, much lower online poker revenue, so at least NJ gets a substantial tax for its residents. Advantage, NJ.

    Nice try, Nevada, but you lose.

  3. "The bill would ban for five years some companies who illegally participated in the online gaming market between 2006 and 2011.

    Horne said the ban is a compromise between a "Pete Rose" and "single game suspension" punishment for companies that didn't play by the rules and could now have an unfair advantage if they entered the legal market proposed under Nevada's bill."

    A thinly veiled protection for the state's casinos, so they can develop their poker sites before these established international companies come in.

  4. If they did like NJ did, the big online companies would pay money for Nevada land-based casinos. Nevada is missing the boat there, as well.

  5. Terrific! Now people in Nevada, as well as New Jersey, will be able to GAMBLE from their homes, offices, etc.

    In the comfort of their home, people will be able to LOSE their RENT/MORTGAGE money, dump the food budget down the Internet pipeline, and maybe wind up in foreclosure; losing their car, destroying their family, and their children's future. And further, "online GAMBLING" in the home will - by observation - TEACH CHILDREN, how to fritter away money.

    This is NOT just my opinion. For over 30 years of playing Craps (not often), I have observed thousands of (would be) gamblers win - but mostly lose. The American Gaming Association also AGREES that "GAMING" (they avoid saying: "GAMBLING") CAN BE addictive. But the AGA will also ARGUE that this (infectious) practice of GAMBLING is not addictive to EVERYONE. Yet, there is no "safe" way to control the fever that gambling produces - which can lead to addiction.

    GAMBLING requires money to play. If gambling is not addictive, why do we see lives, family income, and savings destroyed by GAMBLING? Thus Gambling is, obviously, DESTRUCTIVE to the lives of a family.

    Most Casinos have a PAMPHLET that offers "help" for "problem gamblers." You can call an 800 NUMBER if you think you need help. HOWEVER, by then the damage to your fnances has already been done.

    You have spent cash, written checks, used credit cards, borrowed (or even stolen) money, or obtained casino credit - and in effect, GAMBLED AWAY - money that you need to live. The result is now that your life has been DESTROYED.

    Plus, (1) the 800 number will NOT HELP YOU WHEN you need it. They say someone will call you back (maybe). But if you are in Las Vegas, good luck in your "moment of need." (2) Secondly, at HOME - there will be NO PAMPHLET to remind you to call someone. And if you gamble while at the OFFICE - you may put your employment at risk.
    D
    CONCLUSION: As I have said for over 20 years - gambling has its place, and only those who can afford to "throw money away" - should even THINK about GAMBLING. We know that GAMBLING is risk-based. That is why there are ODDS, and the odds are always in favor of the "HOUSE."

    For many people GAMBLING IS, indeed, an addiction. And when ONLINE GAMBLING is approved by "high and mighty" legislators in each State, or Congress - those elected officials will have FINISHED destroying what CASINO Gambling; the HOUSING/WALL STREEET "Depression;" and new Federal taxes, rules, and regulations did not accomplish (so far).

    That is: DESTROYED OUR ECONOMY, PURGE OUR SAVINGS, and enabled people to SPEND THEIR INCOME FRIVILOUSLY - at HOME - even if their wife, or husband, or parent is opposed to it.

    Bottom line: Casinos and "online" operators MUST WIN. The odds say they will. If YOU could win, then THEY would lose and be out of business. So if they will win, and you will lose - what's the point in making access to the risks of gambling SO EASY - and in HOMES?