Gaming:

Will GOP’s surge be a deal-breaker for expansion of online poker?

ASSOCIATED PRESS

In this April 29, 2013, photo, a sample poker game is played on the Ultimate Gaming website in Las Vegas. Federal legalization of online poker appears to be unlikely with Republicans in charge of Congress.

More than a year and a half after Nevada legalized online poker, the game still hasn’t taken off here.

And Tuesday’s election results don’t offer much hope that Congress will help improve the situation.

Revenue from online poker has been notably sluggish since the state started disclosing numbers in February. Experts say the game would be more popular — and lucrative — if Nevadans could legally gamble online with pools of players from other states.

Sen. Harry Reid has supported federal legalization of online poker. But now that he’s losing his majority leader status amid the Republican takeover of Senate control, progress on the issue doesn’t seem likely anytime soon.

The new Congress could move against online poker, given that the Restoration of America’s Wire Act, legislation that would outlaw all forms of Internet gambling, was authored by Republican lawmakers. Plus, Las Vegas casino mogul Sheldon Adelson has spent heavily to make online gaming illegal — and to get Republicans elected, too.

Despite these factors, the new Congress could do nothing on online gaming, which is also what happened during the last session. The Restoration of America’s Wire Act initiative made little progress after being introduced in March.

Online Poker Report’s Chris Grove wrote this week that he expects “little beyond the status quo” of inaction from both Reid’s lame duck Senate and the new Republican-controlled chamber. He said there doesn’t appear to be enough political will to actually pass online gaming legislation.

Adam Krejcik, managing director for digital and interactive gaming at Eilers Research, agreed.

“People have been talking about this forever, and it doesn’t really appear we’re any closer to getting it this session,” he said. “It’s really come off the radar.”

That means states are on their own to develop the online gambling industry.

For Nevada, until the pool of players expands significantly — with or without the federal government’s help — the game will likely remain a drop in the bucket of statewide gaming revenue.

Online poker’s best month this year was June, when the game brought in more than $1 million for the first time — thanks mostly to the World Series of Poker. The live event prompted an influx of online players.

But it’s been downhill ever since.

In September, the most recent month on the books, online poker revenue was just $693,000. It was the first time the state reported a year-over-year revenue decrease.

“Even if it tripled or went up by 10, it would still be one of the smallest components of overall Nevada gaming revenue,” Krejcik said. “If you’re just talking about (online) poker, the only thing that you can really see driving a higher jump would be opening up and partnering with other states. It’s hard to envision another scenario where the market would increase dramatically.”

Nevada officials are already working on expanding the pool of players. Gov. Brian Sandoval signed an agreement with Delaware earlier this year that will allow people in both states to play online poker with one another.

Jim Barbee, chief of the state Gaming Control Board’s technology division, said the agreement should become reality for online poker players sometime in the spring. He couldn’t say exactly when.

“Since the governor signed the agreement, we’ve been quite aggressive from both jurisdictions to try to make this happen,” Barbee said. “But the important thing here is we haven’t established a go-live date. We’ll go live with the system when it’s ready to go.”

Delaware won’t dramatically increase Nevada’s online poker market, though. Its population is less than half the size of Clark County alone.

A similar agreement with New Jersey, the only other state with regulated online gambling, would have a larger effect. Sandoval has spoken to New Jersey about the possibility, but no announcements have been made yet.

Still, Seth Palansky, a spokesman for online gaming operator Caesars Interactive, said the addition of Delaware would be helpful because the state is in a different time zone. That means it can help “spread out the window” of when games are happening, he said.

Caesars Interactive’s WSOP.com is one of three legal online poker sites operating in Nevada. Palansky said lessons learned over the last year have allowed the website to establish itself and lay the groundwork for future expansion in the fledgling online gambling industry.

“The great thing is the regulations are working as they intended,” Palansky said. “All the checks and balances that are in place are working well. Nevada set out to be first and set out to show, like they did in the land-based gaming world, that they can put in the right rules and offer the right roadmap to make this a safe, legal and compliant industry. And I think that will bear fruit for Nevada as other states come on board.”

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