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California and New Jersey Race to Pass America’s First Intrastate iGaming Laws

May 19, 2010 (CAP News Wire) – At last week’s Global iGaming Summit and Expo (GigSE), held in Montreal as an international forum for the Internet casino business to gather and discuss industry trends, an interesting competition emerged between U.S. states New Jersey and California over which would be the first to pass online gambling laws within their respective states — and what the costs were of failing to do so.

“I think there’s a race to be first,” said New Jersey’s William Pascrell a Partner for the Princeton Public Affairs Group, at CasinoCityTImes. “We’re going to be the first state in the nation to have this bill passed. I’m confident in that.”

Pascrell goes on to explain the source of New Jersey’s drive to monetize the state’s online casino business: “I think we’re fighting a real malaise. I think brick and mortar casinos have been asleep at the switch in New Jersey. You’ve had an economic downturn, you’ve had the states bordering us bringing in all kinds of new opportunities … We are not looking to get in a war with the brick and mortars, we believe we can help them and they in turn can help us, and it can be a good effective partnership that creates jobs, creates revenue and creates new opportunities.”

And what’s been grabbing headlines in recent days is the apparent agreement of iMEGA’s Joe Brennan that New Jersey will indeed by the first state to regulate online gambling, again according to CasinoCityTimes: “New Jersey seems to us to be the most likely state to be successful at the intrastate level,” Brennan said in a panel discussion at GiGSE. “Based on its status as a leading regulator of the land-based industry, New Jersey is in a position to lead and be a worldwide launching pad for the online industry.”

Not everyone agrees that New Jersey will be the first. “This year, California is so desperate that it will do anything to raise money,” counters I. Nelson Rose, a Whittier Law School professor who’s known for commenting on online gambling legalization issues. “On our ballot in November is legalizing marijuana, purely for tax reasons. And if you’re going to legalize marijuana, Internet poker? Who cares about that?”

“I think we’re going to have Internet poker on an intrastate basis relatively soon,” agrees Lloyd Levine, former Assembly Member of the  California State Legislature, in the CasinoCityTimes article. “I’m not sure which state is going to be first, I’m hoping it’s California, and I think once you get that first state legal, you’ll probably see a couple of other states follow, and then I think when you see those states follow, you’ve got California which has a large population which means it’s got a big Congressional delegation. … Once you start getting these larger states to get an intrastate model going, that’s also going to give those states significant clout in the federal government.”

“I believe we will have established Internet gaming with poker-type games by the end of the year,” New Jersey State Senator Raymond Lesniak told “It means a lot to New Jersey because we have a wealthy state and a densely populated state. It will be a big boost to the economy if we are able to get it going.”

So, which state will get there first? Or will the federal plan to regulate online gambling, led by Representatives Barney Frank and Jim McDermott, beat them both to the punch, thus rendering these arguments moot (or perhaps opening the door to even more legal headaches as the states then challenge the federal law, looking for autonomy within it)?