On Thursday, New Jersey Governor Chris Christie vetoed a bill that would have created the first intrastate internet gambling market in the U.S. That decision has opened the door for other states like Iowa to become the first to legalize gambling on the internet within their borders.
On Wednesday, the Iowa State Government Committee voted 9-6 in favor of measure that would legalize online poker in the state. The bill, Senate Study Bill 1165, will soon be eligible for a full vote before the Iowa Senate. It would then need approval from the Iowa House and a signature from the Governor before it becomes law.
The bill, introduced by Senator Jeff Danielson (D-Waterloo) in February, applies only to online poker and states that Iowans would only be able to play other Iowans, similar to the newly regulated online gambling laws in France where players are restricted from playing against people residing outside of the country.
An estimated 150,000 people in Iowa currently play online poker for real money on sites that are not licensed and regulated at the state or Federal level such as PokerStars and Full Tilt Poker. The state believes it could profit almost $40 million annually from the activity if it were regulated, enough incentive for lawmakers to move forward with the bill.
Senator Rick Bertrand (R-Sioux City) voted in favor of the bill because he believes states are in a race with the Federal Government to set up an online gambling structure. “If we don’t make a move now, the Federal Government is going to make a move in the next few years and we’ll lose the revenue,” Bertrand said Wednesday. “I think it’s forward-thinking.”
Others are taking a different stance. Senator Jerry Behn (R-Boone) has stated that voters should have a say in whether online gambling is regulated in Iowa. “This limits the voter,” Behn said. “I think this is really changing the rules in the middle of the game.”
Should the bill pass, operators would be forced to acquire a license in order to run an online gambling site. Affiliate licenses would only be granted to those currently running gambling operations in the state, such as casinos, riverboats, and racetracks. A key provision in the bill states that a hub operator that has accepted bets from Iowans after the passage of the Unlawful Internet Gambling Enforcement Act in 2006 would be forbidden from acquiring a license. This could restrict sites like PokerStars, Full Tilt Poker, UB.com, and even PartyPoker from operating a site within state lines.
A licensed hub operator would pay $3 million upfront, which would be credited against future taxes based on revenues. Affiliates would be charged $250,000 for their license and there would be a fee of $250,000 to renew it each year.
The bill says that approved gamblers could register for an account in person at a state-regulated casino, by mail, by telephone, or by electronic means. They would then deposit funds into an account held by the casino and log on from home to a password-protected site to play at an online poker table.
States like Florida and California are also pursuing their own legislation to regulate online poker within state lines. In Florida, State Representative Joseph Abruzzo (D-Wellington) has proposed legalizing online poker for the state’s existing 23 pari-mutuel racing organizations. In California, there are currently two bills pending to legalize intrastate online poker. Stay tuned to Poker News Daily as these stories develop.
