If Everything Goes Right, These Three States Could Pass An Online Gaming Bill

Steve Ruddock January 7, 2016 1181 Reads
Washington online gaming

Once you get past Pennsylvania, and perhaps California, there is little hope for online gaming expansion in the United States this year.

But this doesn’t mean other states aren’t working on online gambling, or that another state couldn’t suddenly spring to life and become this year’s Pennsylvania. After all, at the start of 2015 very few people expected Pennsylvania to have a shot at passing an online gambling bill in 2015 and be the clear frontrunner for iGaming expansion heading into 2016.

The best candidates to be this year’s Pennsylvania are, Massachusetts and New York, but there are also several other states that could position themselves to pass an online gaming bill (in 2016, or more likely 2017) if the stars align.

Here are those three states, and why they are dark horses to pass online gaming legislation:

Illinois

Despite having a strong brick & mortar casino industry, Illinois is a true dark horse, considering that up to this point there has been nary a whisper of online gambling expansion in the halls of the statehouse. That being said, the zeitgeist has online gaming talk heating up in states that are tackling daily fantasy sports, and Illinois is now one of the battleground states for DFS.

Illinois is also one of only three states with online lottery (there used to be four, but the Minnesota legislature rolled back the state’s online lottery offerings last year), and they are making decent money off of it. Because of this, the state already has a solid understanding of intrastate iGaming requirements and could theoretically roll out online gaming regulations fairly quickly.

Bottom line: Illinois has all the hallmarks of an online gambling state: an online lottery; robust DFS discussion; brick & mortar casinos that could benefit from online gambling; and a regulatory agency already in place.

Washington state

Even though the state has brick & mortar gambling, thanks to a 2006 law, Washington state has the strictest anti-online gambling laws in the country. But a bill introduced last year, on the back of the grass roots advocacy of Curtis Woodard, would reverse that law and legalize online poker in the Evergreen state. The bill didn’t gain any traction in 2015, but Woodard and his allies are planning on making a similar push in 2016.

Like Illinois, Washington State is also looking into DFS; but unlike Illinois, Washington State is already a no-fly zone for DFS operators. The state’s DFS discussions are coming from a “legalize and regulate it” perspective, much like online poker, and this is why the two issues could work hand-in-hand.

Washington also has a strong advocate for online gambling in Chris Stearns, the Chairman of the Washington State Gambling Commission.

Bottom line: The archaic (even though it was passed less than a decade ago) online gaming laws in Washington State make it a prime candidate for action. With both DFS and online poker possibly on the 2016 agenda, the sum of the two industries might make a stronger argument for regulation than the individual parts.

*I’d be remiss not to mention that a similar grass roots campaign has been launched by Martin Shapiro in Florida (which is yet another state where DFS could be fighting for its legal life), but that state’s governor seems extremely unlikely to sign an online gambling bill, considering his support for RAWA and historical opposition to online gambling.

Connecticut

The reason Connecticut makes my short-list is two-fold.

First, the state’s two tribal casinos are fighting for their lives as casino expansion has hit warp speed in the surrounding states (Rhode Island, Massachusetts, and New York). This is on top of the previous round of expansion that already took a big chunk out of Foxwoods and Mohegan Sun’s revenue numbers. According to Foxwoods estimates, the opening of the Massachusetts and New York casinos could result in a 30% drop in Foxwood’s revenue, which has already dropped from a high of $430 million (slot handle) in 2007 to $268 million in 2015.

The current idea to combat this is with satellite casinos, but this seems like a fool’s errand, particularly when a non-cannibalistic, and less costly option is sitting right under their noses in online gambling. iGaming is something both sites (on the social, free-to-play side of things) already have experience with.

Second, the legislature has pretty much told the two tribes to come to them when they are ready to expand into online gaming, according to Foxwoods Director of Administration for Interactive Gaming Frank Pracukowski. He said the state has told Foxwoods and Mohegan Sun, “When you’re ready [for online gaming] you come to us,” at the 2015 C5 Online Gaming Conference in New York City.

Bottom line: If Foxwoods and Mohegan Sun don’t disrupt the increasingly crowded regional market, they may find themselves squeezed out, as neither casino is overly accessible from major cities or airports, and will soon be relegated to the “old” casino category.

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