PokerStars vs Caesars in Nevada heads up
Last week, Nevada legislators introduced a series of bills that seek to regulate online gambling and poker. The result is a proposal for a new regulatory and licensing structure that’s very favorable to the existing online poker status quo — something unique in the U.S. considering the intrastate focus of similar bills in New Jersey, California, Florida, and Iowa.
“The bill would ask state gambling regulators to create rules for Internet poker operators and companies that make related equipment,” writes Michelle Rindels for the AP.
“It would also specifically prevent the Nevada Gaming Commission from denying a license to popular existing poker sites — like PokerStars and Full Tilt Poker — just because they have been operating offshore in a legal gray area after a federal law effectively banned online gambling in 2006.”
And that’s because the legislation is “backed by Internet gaming giant PokerStars,” per Howard Stutz of the Las Vegas Review-Journal.
In terms of traffic, PokerStars is the world’s most popular online poker site, and it’s getting aggressive in its play for the U.S. market. The company has just hired as a consultant ex-Nevada Gaming Control Board member Randall Sayre, and, as Stutz explains, is “committed to creating a technology center in the state if the bill passes” and is even considering buying a land-based casino in Las Vegas in the meanwhile.
That level of international support is most likely why the legislation seeks to open online poker to all U.S. citizens, not just Nevada residents. “Large casino operators say it is pointless to limit poker to Nevada residents because the state’s population is too small, and other gambling options too plentiful,” reports the UPI.
Because of just this outside support, though, land-based casinos are already loudly opposing the legislation. The biggest land-based casino company in the world, Ceasars Entertainment, has come out against it.
“This is not a bill that we support,” said Jan Jones, Caesars’ senior vice president of communications and public relations. “Our focus is not intrastate, our focus is interstate. It’s federal, it’s putting together an American, an appropriate regulation and licensing regime and taking the jobs and revenues going to foreign companies and bringing it back to America.”
Not only does Ceasars prefer a national U.S. market, it’s already positioning itself to serve that market. The company already has several European market partnerships, and has just received approval from the Nevada Gaming Control Board to hook up some of its Nevada-based operations with 888, a prominent UK-based online gaming brand with robust casino, poker, sportsbook, and bingo offerings.
“Caesars and 888 aren’t saying exactly what they plan to do, but the tone of the questions and responses with regulators indicates Caesars is getting ready to take poker to the masses online,” the Las Vegas Sun’s Richard N. Velotta writes.
Velotta also explains that Mitch Garber, Caesars Interactive Entertainment CEO, “told regulators the company would use its World Series of Poker and Caesars brands in overseas markets through its relationship with 888.”
“[Garber] added that Caesars chose to partner with the company because it has online gaming hardware and software and that his company wouldn’t be writing programs.”
The bill is positioned to succeed legislatively: Vegas’ serious land-based gambling slump goes on unabated and is in need to economic relief. But Caesars’ opposition is serious business. Many attribute the stall of New Jersey’s online gambling plan to Caesars’ power. And consider the numbers at play: In 2009, Caesars’ generated $8.9 billion in gross revenue, to PokerStars’ $1.4 billion.
Because the Nevada bills are designed to favor existing international Internet poker sites, it’s also probably the best option among all recent U.S. legislation for poker affiliates looking to maintain the business they already have.
Is there anything affiliates can do? Normally, contacting your local lawmaker would be a smart course of action. And it still is, but don’t be surprised if it’s billions in lobbying dollars that decides the issue at the end of the day. Until then, though, it’ll be a pretty wild ride out West.
Get more details on the bill’s nuts and bolts in this Las Vegas Review-Journal article.
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