As internet poker licensees scramble to try to become the first to open for business and offer intrastate online poker in the state of Nevada, there still may be changes to the law that could affect how wide of a net the operators can cast.
We already told you about Assembly Bill 5, which aims to allow the Governor to enter into compacts with other states to allow for interstate online poker. As the law currently stands, poker operators would only be allowed to accept players from within the Silver State’s borders and could not venture out to other states until either the Federal government passes a law allowing it or until the U.S. Department of Justice notifies the state that it is ok to do so. AB 5 strikes all of that, putting the power in the state’s hands.
AB 114, whose major proponent is Assembly Majority Leader William Horne (D-Las Vegas), also allows for interstate poker compacts with other states. The bill, which was introduced last week, also adds a “bad actor” clause, prohibiting any operator that continued to provide online gaming services to U.S. residents after December 31, 2006 from receiving a license for ten years. This means that the two largest online poker sites, PokerStars and Full Tilt Poker, would persona non grata for a decade.
The aspect of AB 114 that has drawn the most criticism is a change that would double the licensing fees for all approved operators. Initial online poker licensing fees would jump from $500,000 to $1,000,000, while renewal fees would increase from $250,000 to $500,000. Assemblyman Horne wants this change to be made to discourage “fly by night” companies from entering the market. “We don’t want some average American Joe Six-Pack with a server in his garage starting an online gaming operation,” he said. “We want to have serious entrepreneurs entering this arena.”
He added that he believes, “…we are selling ourselves cheap. We have this Lexus product and we’re putting this Saturn price tag on it.”
Some opponents of the fee increase see it as pointless, as licensees must already be hotel resorts with unrestricted land-based gaming licenses and would therefore not be handcuffed by higher fees. They would, though, be mad about it, particularly because it would appear to be a money grab without any good reason.
Governor Brian Sandoval opposes the raising of fees and has said he would veto the bill should it get through the legislature. Because of his distaste for it, though, many in the Assembly do not appear that they will vote for it. They do not want to pass a bill they know will be vetoed.
In the Senate, Senate Bill 9 was introduced, the primary goal of which is to impose the same 6.75 percent tax rate on operators’ tournament profits as is imposed on cash games. In Nevada, brick-and-mortar tournaments are not subject to tax because they are viewed as loss leaders for the more profitable areas of the casino. Tournaments require a good deal of floor space that could be allocated to other games, as well as additional staff and utilities. As an online tournament requires none of these things, the writers of SB 9 believe that they should not be extended the tax exemption.
