Amid the flurry of activity over the past year or so with online gaming and poker, there have been some success stories. The moves by Delaware, Nevada and New Jersey to enact online regulations for the industry (in Delaware and New Jersey’s cases for full online gaming and Nevada’s online poker only laws) have been seen as a golden threshold for many online players. Some states, however, have taken the opposite tack regarding the online gaming question, be it on an intrastate or interstate level.
Earlier this week, the Kansas Senate passed a proposal that would ban online gaming in an attempt to lure a land-based casino to the state. According to Bloomberg Business Week, the vote in the Kansas Senate was 26-11 in favor of banning online gaming and repeal the current laws allowing horse and dog racetracks to have slot machines. This is in an attempt to build a casino in southeast Kansas which, under the previous laws, would have required the investor to put up $225 million; the changes in the law would reduce that investment to only $50 million.
The proposed law is rumored to have the support of Kansas Governor Sam Brownback, a 2008 Republican presidential candidate who withdrew from the primaries before they even started.
In New Mexico, a proposed amendment to the state’s compact with the Navajo Indian Nation could place a similar ban on online gaming activities. Under the current laws, the Navajos share their gaming revenues with the state in exchange for limits on what other gaming options, including lottery, horse racing and slot machines, the state can operate. In that current law, there was no mention of online gaming or poker.
With the revised law, the state would put online gaming and poker on a list of banned activities. If it was allowed, either on an intrastate or interstate basis and regardless of whether it was full casino play or just online poker, the new regulations would allow the Navajo Indian Nation to stop sharing their revenues with the state. The Albuquerque Journal’s Thomas J. Cole quotes Governor Susana Martinez’ spokesman Enrique Knell as saying, “This provision was intended to discourage the adoption of Internet gaming in the state while ensuring that, if it was adopted, revenue sharing continues in light of any new benefit or detriment to the Navajo Nation.”
Cole’s discussion with Knell continued into what Governor Martinez’ office believes the impact of online gaming and poker would be. “While the impact of Internet gaming is uncertain, the state believes that brick and mortar tribal facilities will provide for more jobs and better serve the interests of New Mexico economic development,” Knell is quoted by Cole. “It is also reasonable to believe that social and financial problems related to gambling could be worse if Internet gaming is allowed.”
These two states aren’t the only ones that are apparently pushing themselves away from the table regarding online gaming and poker. Last year, the state of Utah enacted laws that would opt the state out of any federal regulations regarding the issue, if they are ever passed. The Utah law went to the lengths to put it in the state’s Constitution, barring future legislatures or Governors from breaking that law without having to amend the Constitution.
Meanwhile, other states continue to dance around the issue of online gaming and poker. Illinois Governor Pat Quinn is holding up a new gaming bill (with an online gaming component) in an attempt to force the state’s legislature to move on pension reform in the state. California is once again trying to push an online poker bill through its General Assembly (an effort that has been several years in process), while Iowa has dallied with the thought of online casinos in an intrastate format but has yet to actually move on the issue. Other states, such as New York, Hawaii, Florida, Pennsylvania and Mississippi, have either tabled their discussions on the subject or, in the cases of Hawaii and Mississippi, have rejected proposals that would open their states up for online gaming. Florida’s legislature recently passed revised gaming regulations that would make it illegal for electronic devices to accept bets, something that may impact any future for online gaming or poker in the state.
With the federal government’s push to regulate online gaming and poker seemingly dead at this time, it is up to the individual states to move forward. Some online players, however, may not like what their state leadership has to say on the subject.
What about online games that offer gambling for virtual prizes?
Runescape is a game for children which last year added a component called Squeal of Fortune that let’s kids bet up to $200 per day, for pixel prizes. Which means an addicted child could add $73,000 to Runescape’s bottom line.
The operator is Jagex Ltd of Cambridge UK, and the majority owners are Insight Venture Partners, NY. So the normal jurisdiction issues of the internet.
Jagex argues that virtual goods have zero monetary value so charging kids to gamble for them isn’t gambling. Yep, that’s their argument. Nevermind that virtual goods have always had value in Economics and Accounting. Intangibles like Goodwill being one of them. Not that Jagex has much goodwill toward children.