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AGA Prefers State-By-State Online Gambling Regulation in U.S., Says Chief

April 19, 2010 (CAP Newswire) – The American Gaming Association (AGA) made a big splash in the news last month when it announced that it was no longer opposed to Internet gambling. That story was picked up not only by all the prime online casino news sites but a good deal of mainstream media sources as well.

More recently, AGA chief executive Frank Fahrenkopf has elaborated on exactly what he thinks of the idea of legalized online gambling, and the realities and the politics of the situation. For starters, he thinks that most of the AGA memberships would prefer if regulation happened on a state-by-state basis, as opposed to a federal level — although he doesn’t rule the latter out. 

“We’re at this point in time open to the question of whether it’s a federal or state regulatory regime, although I must tell you I think a majority of the board would favor the states,” Fahrenkopf told Card Player’s Stephen A. Murphy.

When asked to explain the statement, Fahrenkopf said, “Anyone who has been in the gaming industry for the last 30 years, we have an old saying — ‘We don’t want the camel’s nose under the tent,’ in terms of the federal government and their regulatory regimes and taxes. There’s the fear that the federal government, if it starts regulating and taxing internet gambling, they’re going to say let’s just make it a federal system and tax everything.”

Fair enough. What’s left unsaid, however, is that a state-by-state regulatory scheme may include a much more complex reality than a federal system. For starters, many states are working to ensure that only in-state online gambling companies are allowed to market to their citizens, and that could create chaos with the online casino affiliate marketing world, which tends to center around larger national and international brands.

Fahrenkopf, however, doesn’t see it happening that way. According to his vision, a handful of states would set the rules for all of online gambling in the U.S. “The net result would probably be that Nevada and New Jersey are the places where regulatory control would take place, but it would be done in a way where each state didn’t have to deal with it. … 

“Let’s say a state like Alabama said they wanted internet poker. Well, they don’t have a regime that could regulate it. They don’t have the law enforcement, they don’t have the experience. I think it would be natural that the regulatory controls and licensing would be done by experienced jurisdictions, like Nevada and New Jersey.”

Fahrenkopf also goes into considerable detail about the political background of the struggle to delay the UIGEA, as well as the likelihood of a “poker carveout” that would exempt poker from the U.S. anti-online gambling crusade. “[T]he argument that poker is different — I think that has legs.” Read the complete interview here, at

Background: Fahrenkopf has a history of conservative politics, having served as chairman of the Republican National Committee for a large chunk of the 1980s. He has led the AGA for fifteen years and is based in Washington.