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January 20, 2019

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It’s poker only for online gambling in Nevada, for now

Online poker

Julie Jacobson / AP

Casino industry representatives and exhibitors watch an online poker game during industry’s G2E conference, Tuesday, Oct. 4, 2011, in Las Vegas.

Ask gaming lobbyists what Assembly Bill 114 does, and they’ll tell you it legalizes online poker in Nevada.

But the bill — which the Legislature rushed to the governor’s desk in a record-breaking seven hours last month — actually says nothing about poker.

Instead, it legalizes “interactive gaming,” a term that would open the door to all kinds of online gambling — slot machines, blackjack, roulette.

But for political reasons, and to some extent competitive reasons, Nevada’s industry wants to focus only on poker. Indeed, the regulations written to implement online gambling in Nevada restrict games to poker only.

That stands in stark contrast to New Jersey, which passed a law last week legalizing the gamut of online gambling.

Nevada’s in a bit of a race with New Jersey to establish itself as the gold standard in industry regulation with an eye toward partnering with states looking to enter the online gaming realm, but needing an established regulatory structure.

So limiting its online offering to poker could put Nevada at a bit of a disadvantage in that race.

“It certainly doesn’t make us more competitive,” said Mark Nichols, an economist with the Institute for the Study of Gambling and Commercial Gaming at UNR. “On the one hand, it could hurt us because New Jersey is offering more options. But a state may want to wade into this more slowly.”

Nevada’s decision to limit online gambling to poker, however, may have much more to do with politics than gaining a competitive edge in the market.

The state Legislature moved ahead with its bill only after Congress failed to pass a federal online gambling law — an effort Senate Majority Leader Harry Reid has doggedly pushed to little avail.

Key to Reid’s strategy for managing a hornet’s nest of competing interests at the federal level is limiting online gambling to poker.

To opponents of gambling in Congress, he could argue federal action is needed to halt the coming tidal wave of state-by-state gambling operations, while carving out special consideration for poker — which gamers describe as a player-vs.-player game of skill rather than a player-vs.-house game of chance.

Competitively, poker rooms don’t bring a sizeable profit to Nevada’s bricks-and-mortar casinos — many of which are closing the venues. While other games online may keep patrons from visiting a resort to the detriment of the casino’s bottom line, poker doesn’t pose as much of a threat.

So with Nevada’s own senator at the helm of pushing poker-only federal legislation, the Silver State’s casino industry couldn’t exactly be moving in the opposite direction back home, said Mark Lipparelli, who was chairman of the Nevada Gaming Control Board when the 2011 Legislature first authorized the board to begin licensing online gambling operators.

Nevada Resort Association lobbyist Pete Ernaut concurred.

“We worked in concert with Sen. Reid and his staff to limit it to poker for a variety of both political and competitive reasons,” Ernaut said, noting he’s still optimistic federal legislation will pass.

But if online gambling beyond poker takes off, Nevada’s industry has an out.

Rhetoric is one thing and black-and-white law is another. As it’s written, Nevada’s online gambling law, first passed in 2001 and amended in 2011, still allows for any kind of gambling.

The regulations limiting casinos to online poker can be changed much more easily and quickly than state law, especially when the Legislature meets only for 120 days every other year.

And depending on what happens with the industry, that change could be coming.

“We have proceeded with the assumption that it’s just going to be poker for now,” said A.G. Burnett, chairman of the Gaming Control Board. “That was to be cautionary, to make sure we did things right before we allowed all other types of games.”

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