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Gov. Sandoval favors Federal Solution to Online Poker Measure

Posted on April 19th, 2011

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The Federal Government has found a new ally in its bid to snatch the operation and regulation of online poker from the hands of the state and its finding it in the unlikeliest of places. Their newfound proponent: Gov. Brian Sandoval who Monday said he prefers Congress to take the lead in approving proposals for online poker instead of deferring it to the states for a piecemeal, individual and compartmentalized, approach to online gaming. “I do believe that online gaming is the future,” said Gov. Sandoval during an appearance on “Nevada Newsmakers.” The Republican governor adds that Nevada is in prime position to take advantage of regulations that the federal law passes in favor of online gaming owing to its already established gambling base. Las Vegas is home to almost all of the most recognized names in the gambling business and everyone who starts out on a gambling business plans to someday make it big in Las Vegas.

One of the glaring holes that any legislative body needs to address is the ambiguity in the way laws are formulated with regard to online poker. In the technical sense, it is not illegal in the United States to operate online poker outlets; what is illegal are poker games where the participants are asked to wager actual money based on the outcome of the games. These provisions were contained in the Unlawful Internet Gambling Enforcement Act of 2006 that currently limits potential online poker proposals to intrastate operations alone. A bigger and broader approach would require the action of Congress to amend this law and allow for cross border operations as would be the norm in a federally-regulated online poker industry.

On Monday, Gov. Sandoval aired his support for a federal initiative by writing to the chairman of the Assembly Judiciary Committee detailing his arguments most notably as to why Nevada is not in conflict with the federal law pertaining to online gaming. “I don’t want the state to be in contravention of federal law. If the federal government legalizes online poker, the state should be the one that sets up regulatory structure and the investigatory structure.” Sandoval said in an interview.

The Nevada legislature actually already has an online gambling bill on the floor. Assemblyman William Horne (D-Las Vegas) filed the bill on March 10. The bill seeks to allow online poker operations within the state as well as expand it into foreign countries where it is not banned effectively making the U.S. a worldwide supplier of online gaming services. Should this bill earn the approval of discerning lawmakers, the Nevada Gaming Commission will be tasked to formulate the enforcement regulations for Internet poker possible through already existing means used by casinos. In Las Vegas, for example, patrons are allowed to use hand-held betting terminals within areas of the casino in order to make bets even as they are eating or doing something else.

According to Sandoval’s letter, the state is finding it tricky to navigate the minefield of federal legislation pertaining to the ban as the scope is not easily drawn. He says it was “vital that we not undermine the state’s credibility as a regulator of gaming.” Sandoval also called on the legislature to “strive to be the leader in the emerging online poker industry” by pioneering a framework that would allow the state regulatory agencies to serve as a model of “integrity and innovation.” The nature of online gambling is dynamic enough that the state has to remain steadfast in its resolve to deliver fair gaming.

Oher prominent Las Vegas players favoring a federal approach are Caesars Entertainment Corporation and MGM Resorts International. Both companies believe they can become eligible to operate the network should it be rolled out for bidding and a federal approach would minimize the variations among states as to the nature of regulatory framework to be put in place. Thus far, Sandoval has the ears of Democratic Majority Leader Sen. Harry Reid who said “Sandoval is right; legalizing online poker can’t be done at the state level. In most instances it is totally a violation of federal law.” Nothing was mentioned about players wanting to play craps online.

It remains to be seen whether the federal government can put forward a more acceptable version of the bill. For now, the states just plod along. Regardless of the method, proponents believe it’s only a matter of time before the country have a working version of an online poker bill.