Sunday, Sept. 16, 2012 | 2 a.m.
Senate Majority Leader Harry Reid and Sen. Dean Heller are at odds over the course of proposed online poker legislation in a dispute that has been dismissed by some as “political.” The issue is much more serious than that. How the nation moves on online gambling will shape Nevada’s future.
After last year’s Justice Department ruling that essentially defined the federal Wire Act as a ban on online sports betting but not Internet gambling in general, several states have lined up to cash in. Delaware has approved a law that could lead to virtual casinos, and several other states, including California, are considering following suit.
Nevada has approved regulations for online gaming, but it will only apply to gaming within the state. Having virtual casinos in other states will siphon off tourists. Instead of making a few visits to Las Vegas every year, they might cut it to one. Who needs to drive in from L.A. for a weekend when a trip to the couch with an iPad provides full casino action?
The gaming companies will go to the individual states and find ways to profit, but the workers in Nevada and the economy here won’t be so lucky. And it’s not just people who work in the casino industry. If there’s a downturn in tourism to Nevada, there’s a downturn to the entire economy.
Reid has been working diligently for the past few years to pass an online poker bill that would help preserve Nevada’s status as the premier place for gaming. The plan would update the Wire Act to outlaw online gaming except for poker, allowing a few states, including Nevada, to license and regulate online poker companies. The companies would be able to offer online poker nationwide.
Reid was working with Heller and Sen. Jon Kyl, R-Ariz., to try to line up a filibuster-proof majority to pass the legislation this year. Reid lined up more than 40 Democratic votes, but the Republicans were unable to come through.
Instead, Heller wrote a letter to Reid last week telling him that the correct strategy would be to start the bill in the Republican-controlled House of Representatives.
Such an action would essentially kill the legislation. The Republican leadership in the House has opposed online gaming, a position enshrined in their party’s platform this year.
The reality is that there are still illegal online gambling sites, and there is a significant public demand for online poker. And once states start regulating not just online poker but full online casinos — and reaping new tax dollars from them — don’t expect Congress to outlaw them. (They might as well try to pull the plug on state lotteries while they’re at it.)
The failure to act on Nevada’s behalf could seriously harm the state’s future. It also won’t help the nation. On the current course, there will be a patchwork of state regulations on Internet gaming, and that could lead to real problems with the proliferation of full-scale virtual casinos. States with little to no experience with gaming aren’t going to be able to muster the regulatory power needed to weed out shady operators looking to fleece people.
Reid’s proposal should be pursued quickly before this becomes a serious problem. It limits online gaming and wisely puts regulation into the hands of experts. The plan also offers a way to protect Nevada’s economy and opens up a great possibility: With the state’s history and expertise, Nevada should become the hub for online poker technology and regulation, and that could bring a cluster of technology companies here, giving the economy a boost.
That’s a real vision for the future. This has nothing to do with politics and everything to do with helping Nevadans. We hope Heller can find a way to work with Reid and get this plan passed this year.