Will The Consumer Protection Angle Work For Pushing Online Gambling Regulation?

May 5, 2016
Will The Consumer Protection Angle Work For Pushing Online Gambling Regulation?

In the past week, we have seen a new point of emphasis in the battle to legalize and regulate online gambling: Consumer protection. First, it came up in California, then again in Michigan.

During hearings in both states, Poker Players Alliance Executive Director John Pappas was asked to show — via a live demo on the internet — how easy it is to access offshore sites from the two jurisdictions.

It’s not as if the idea that offshore, unregulated online gambling sites are easily accessible to Americans had never come up previously. But to say that it had been a point of emphasis over other concerns — like revenue that could be generated by states — would be inaccurate.

So why the change from iGaming proponents? And can it help the progress of bills?

Why the change in tack?

There are probably several reasons why the idea of consumer protection is being pushed more by lawmakers and those who want to see online gambling proliferate at the state level. But two are likely key:

Trying something new

We have only seen a few states even take up the issue of online gaming since New Jersey, Nevada and Delaware jumped in the pool.

In those states that considered iPoker and iGaming previously — New York, Pennsylvania and California — some progress has been made, but legislation has never gotten very far. So, trying something new is definitely worth the effort.

There’s also the idea that it can piggyback on another form of gaming.

Using the daily fantasy sports playbook

Legislation has been introduced in more than two dozen states in the past year pertaining to the regulation and legalization of daily fantasy sports.

The calling card of those efforts: Consumer protection. In most cases, the revenue that DFS would generate from the bills being considered is so little that it might not even cover the cost of regulation.

But we’re now seeing the iGaming movement try to use the DFS argument: Regulate the industry so people know their money and the games are safe.

Why is DFS getting traction (three DFS laws have been passed by states so far, with more likely on the way) while online gambling does not? Part of it is simply the starting point:

  • DFS is going to take place in states whether the legislature acts or not, in some cases. Online poker, however, has to formally be authorized to take place in any state.
  • DFS players appear to be contacting legislators and government officials in droves in many states.

To the latter point, there was this from Pappas:

Does this give online gambling bills a better chance?

In theory, yes, the consumer protection angle should provide some more hope for iGaming legislation.

First, trying something new when old methods have resulted in little tangible success is a welcome change.

Highlighting the idea that people are playing online poker and casino games anyway — without the benefit of any government oversight or protection — could, and should, be a topic that resonates with those in government. It is one that is clearly resonating with many regarding DFS, which has many of the same concerns in play.

Will a new emphasis on consumer protection help any iGaming bills get to the finish line? It’s too early to tell, but it’s certainly worth a try.

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