(In Part One of our interview with Nevada gambling lawyer David Gzesh we discussed what legal online gambling in the US might mean for affiliates. In Part Two, we’ll focus on what might be in store for the two big players in the US market, Nevada and New Jersey.)
Nevada
Q: With Nevada seriously considering interstate poker compacts, do you think that online gaming in the US will be dominated by one or two big state players (Nevada, New Jersey?) and lots of states sending them players?
A: Great question. What will drive compacts; market incentives or politics ? We might see the emergence of competing Gaming Compacts.
For example, I think a New Jersey led group, which may have the best software or liquidity including international play, might compete with both a California-anchored compact and a Midwest Compact among lottery-dominated States.
This road has been trod before, in lotteries, with two large pools emerging for prizing.
Q: How likely is it that the Nevada model will be adopted part and parcel by other states?
A: I practice gaming law in Nevada. I like the competitive model best. However, I can see how another State might opt for one “online gaming network”, with competing brands licensed as skins.
Also, a single backbone makes regulation much easier for the State. It also makes some practical sense, in the same way that a State builds/maintains its highway system.
As traditional State lottery service providers currently are acquiring traditional licensed casino gaming supply companies, clearly some folks are hedging their bets on how this develops.
Q: Nevada is known for strictly regulating gambling, but have they bent the rules for operators who served US players?
A: No, Nevada looks at each applicant on its ow merits, conducts a very complete investigation of where the applicant is now and how it is likely to operate under state regulations. Perfection is not a the standard.
New Jersey
Q: What are your thoughts on New Jersey’s efforts to legalize sports betting?
A: New Jersey has legalized sports betting already and issued its regulations. What is going on is litigation, brought by the NFL and other sports leagues, challenging that legalization. The central issue is whether the PAPSA federal law can be invoked to block what New Jersey has already done.
PAPSA has been challenged by New Jersey as an impermissible federal regulation of States, rather than a permissible federal law directed at individuals’ conduct.
Who knows, perhaps if New Jersey prevails, the NFL will seek a new federal law to prohibit individuals outside 5 States from betting on sports anywhere else, a new 45 State Volstead Act ?
Q: If New Jersey prevails, will other states attempt the same thing?
A: Yes. If New Jersey wins the litigation attacking the NJ legalization, other state will follow along. The margins for recreational sports betting are huge. Delaware’s system, limited to parlay betting has shown the impact of entering new markets.
Finally
Q: How likely is it that the Federal Government will pass an online poker bill?
A: Everyone says to me, “It is dead.” However, I can see some Federal legislation to bless multi-state compacts. In fact, the maneuvering among States is ongoing already.
David Gzesh is a gaming attorney, with uniquely practical experience in the online gaming industry. He speaks frequently on affiliate marketing, counsels both US-facing and ROW affiliates and entities, and is interested in advising parties looking at the emerging US market(s). Contact him at David@Gzeshlaw.com.