N.J. poised for online poker; is Fla. next?

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By Scott Long

With U.S. Sen. Harry Reid failing in his attempt to permit online poker on the federal level during the recently concluded lame-duck session of Congress, momentum has shifted to individual states to fill the regulated Internet poker void.

With a 63-11 vote in January, the New Jersey Assembly sent a bill allowing online poker in the state to the desk of Gov. Chris Christie. And in December, a Florida lawmaker reintroduced a bill to establish an intrastate online poker system in the Sunshine State. Online poker legislation has been filed in California, and a handful of other states and D.C. have whispered about possibly doing the same.

Intrastate poker is not a complete remedy to federal inaction, as it would allow only residents of those individual states to play on the networks. But it could attract new players to online poker who have been hesitant to get online with the murky legality of the existing online poker industry, while providing for the protection that many online players believe regulation can provide.

With the governor’s signature (or inaction) the only step left, New Jersey is leading the tide of intrastate poker. Christie has not made his stance on Senate Bill 490 publicly known, but he can sign it, veto it or let it become law without his signature if he doesn’t act on it within 45 days of the Assembly’s vote, which was Jan. 10. The bill, which passed the Senate 29-5 in November, has been advanced overwhelmingly by both houses, a rarity with gaming legislation that may bode well for its eventual success since a veto would be less likely to stand.

The law would allow any Atlantic City casino to pay a licensing fee to establish its own online poker site with a tax rate of 8 percent. The site’s servers would need to be housed in the actual casino, but players could make their wagers from home or anywhere else where it’s permitted. Players are limited to New Jersey residents who fill out the required forms, including age verification.

Caesars Entertainment, formerly Harrah’s, is expected to be a big player, since it owns many Atlantic City casinos and has established an online presence in Europe.

In Florida, Rep. Joseph Abruzzo in December refiled House Bill 77, which never advanced in the 2010 legislative session since it lacked a Senate companion bill. But now Sen. Miguel Diaz de la Portilla, R-Miami, is drafting a Senate companion bill.

Abruzzo’s bill differs from the New Jersey bill in that it establishes up to three hub providers to offer poker games. The state’s brick-and-mortar poker rooms can become affiliates of the hubs, in essence operating their own “skins” on the main site. Play is limited to Florida residents who are physically in the state at the time of their wager.
The eventual success of either state’s bills likely will hinge on whether the sites can attract enough daily traffic to satisfy players who sign up for accounts. By limiting play to just each state’s residents, and by allowing multiple operators in each state, the bills risk narrowing too far the available player pool, especially since online poker providers such as PokerStars and Full Tilt Poker will presumably still be able to flourish despite the Unlawful Internet Gambling Enforcement Act.

The Florida bill includes a line that reaffirms that operators who don’t abide by state and federal laws and tax regulations are forbidden to offer poker in the state, and also forbids operators who have accepted wagers from Florida residents since enactment of the UIGEA from applying to become a hub operator until they’ve gone three years without accepting such wagers.

Supporting materials for the Florida bill state the UIGEA forbids players from out of the state to play on an intrastate platform.