The Politics of Gambling – 2012 Election Edition
Gambling is one of the few industries that shaped as much by political forces as it is by economic forces. That’s why the upcoming national and local elections in the United States incredibly important everyone in iGaming, whether they’re in the US or not.
Because there are so many angles to the politics of gambling, here’s a few of the factors affiliates should be watching when Americans go to the polls on November 6.
So far it looks as though the outcome of the biggest race of all, Mitt Romney vs Barack Obama, might not impact the gambling industry much at all.
On paper, Romney and the Republicans support a complete ban on online gambling. But in practice, they tend to be a little more flexible.
As governor of Massachusetts Romney supported the expansion of Bay State casinos, though he later backed away from that position. While an anti-gambling position is in line with his Mormon faith, he’s certainly not above the occasional wager.
But Romney is also a cut-and-dried business man who isn’t likely to stand in the way of big business, especially in key battleground states like Nevada.
Because his positions are frequently, uh, evolving getting a read on what President Romney would do is tough.
President Obama, on the other hand, doesn’t seem all that interested in shutting down online gambling at all. After all, his administration is responsible for the Christmas reinterpretation of the Federal Wire Act of 1961 that, essentially, legalized online poker.
For now, Obama seems content to let the states sort this issue out while he fries much bigger fish.
Gambling & the States
Most of the political action in the gaming industry these days is taking place on the state level. Remember, the housing crash decimated property tax revenues across the country, making any revenue generating initiative an attractive option to cash strapped states.
Here are the states that have some sort of gambling initiative on the ballot this year.
- Arkansas – Two amendments are on the ballot in Razorback country, one aimed at expanding casinos; the other would allow them to stay open 24 hours.
- Maryland – Question 7 asks whether video lottery outlets should also be able to run table games, too.
- Ohio – The Ohio Youngstown Casino Amendment asks whether Youngstown should be the fifth Ohio city to have land-based casinos.
- Oregon – Three different measures are asking the same, basic question, “Should Oregon allow privately owned casinos?” A portion of the revenue would go to the State Lottery Commission.
- Rhode Island – Residents are being asked if they want to expand the scope of state owned casinos in America’s smallest state.
Online poker bills aren’t on the ballot in any states this year, but expect to see plenty of them come and go when state legislatures take session at the first of the year.
Politicians in states like Colorado are already working on bills to expand the scope of licensed casinos to include intrastate, online poker initiatives.
With Washington hopelessly gridlocked by partisan politics, the states have been forced to take the lead on gambling issues, but that doesn’t mean the Feds have forgotten them entirely.
Nevada Senator Harry Reid (D) and Arizonz Congressman John Kyl (R) have been working on a bill to regulate online poker but have come up laughably short. The two lawmakers have been bickering over who should actually introduce the bill and which House of Congress to actually introduce it in.
So far Reid is blaming Kyl for not gather enough Republican support for the bill, while Kyl blames Reid for not introducing the bill in the Senate. That two Senators from the states with the most to gain from an online poker bill can’t get it going speaks volumes on the state of American politics.
At the same time, draft versions of H.R.2366.IH that are circulating on the Internet are anything but impressive. Some high, or low points, of the proposed legislation include:
- A complete ban on non-poker igaming.
- 15 month blackout period before sites could be licensed.
- Limiting licenses to companies that already have land-based casinos.
- Provisions giving Nevada a big hand in crafting national poker legislation.
- Penalties for players with funds in unlicensed sites. (This language has since been removed.)
Almost no one thinks that this bill will be passed anytime soon, though it may be introduced during the upcoming lame duck Congressional session.
In fact, outside lobbying interests, particularly the Poker Players Association (PPA) have already expressed their displeasure the bill.
If a Federal bill ever passes it’s going to be because powerful lobbying interests have pushed it through. Already we’ve seen the player penalties removed from draft versions of the Kyl/Reid bill thanks to pressure from the PPA.
Because the big gaming companies have more to gain from Federally legislated online poker than smaller companies, expect them to turn up the heat on their preferred legislators after the election.
The American People
So now we know what all the politicians and lobbyists think, but what do the American people think about online gambling? They’re actually in favor of legalization by a very wide margin.
According to a recent survey conducted by CasinoFYI.com, a full 81% of Americans have no problem with legal, regulated online gaming. (What’s more, a full 93% of respondents said that they hadn’t gambled online in the past year.)
In general, Americans are becoming more receptive to regulated vice, as is evidenced by referendums to legalize marijuana sales in Washington and Colorado.
They’re also, no doubt, excited by the prospect of revenue producing businesses that allow for improved city services. After all, legalized online poker might be a good trade off for more libraries or police officers on the street.
After the Election
For better or worse, gambling just isn’t an issue politicians outside of Nevada are willing to embrace in public, especially during an election year (with a few notable exceptions such as New Jersey Governor Chris Christie).
It’s fair to say that igaming issues won’t be on most politician’s radars until they know exactly how much power their party is going to grab next Tuesday.
Until then, hang on to your hats because it looks to be a pretty wild ride.
How do you think the 2012 US election will impact the gaming business? Share your thoughts in the comments section below.