Why Doesn’t Nevada Have Online Casino Games?

John Mehaffey April 27, 2013 768 Reads

Nevada became the first state to pass online poker regulations in July 2011.  The law compelled the Nevada Gaming Control Board to draft online poker regulations by January 31, 2012.  These regulations were passed in December 2011.  Online poker has yet to go live in Nevada and there is no definitive date for that to happen.  Some industry observers have wondered if Delaware will beat Nevada to the US virtual poker table.  Delaware is intent on going live on or before September 30, 2013.  Delaware’s law also includes online casino games.

Other States Will Offer House Games

Nevada seemed to be a trailblazer by becoming the first state to legalize and regulate online poker, but Washington DC’s council had already passed both online poker and casino games at the time through the district’s lottery.  Washington DC repealed this law after Nevada passed online poker regulations. 

New Jersey passed a bill through their legislature that would have allowed both online poker and casino games in 2011.  Governor Christie vetoed this bill because at the time he did not feel that offering online gambling outside of Atlantic City was legal under the New Jersey Constitution, even if the servers were located there.  Governor Christie eventually signed a similar bill into law in February 2013.

While neither bill that was passed by lawmakers in these jurisdictions went into effect before Nevada passed an online poker bill, the intention was evident.  Two years later it is clear that online casino games are coming to some states. 

Liquidity Needed for Online Poker

Online poker requires a large player pool for success.  That would force most states to enter into gaming pacts with their neighbors and other states across the country.  This presents the possibility that their residents’ income could find its way across state lines.  That is the last thing state governments want.  Local governments have a hard enough time keeping money within the country, much less within their state.  A region without experienced players may find interstate online poker an even harder trigger to pull, especially if their player pools would be pitted against seasoned players in Nevada or New Jersey, states that are perceived to be experienced when it comes to gambling.

Online casino games are much easier to manage.  It does not matter how small or inexperienced a state’s population is, the blackjack table or video slot screen is always a click away.  There is no need for other players to join the table to help pry the player from his money, which regardless of perception, is the ultimate goal of state lotteries that often offer games with a payback as low as 50%. 

Online poker is a subtle way of grinding players down through the rake.  The problem is that most state lawmakers and lottery leaders will not perceive it in this way.  They will see how much more effort online poker requires compared to a virtual blackjack table that most of their players will not play correctly or slot machines that will break most players quickly and effortlessly.  This point of view may be short sided, but the ease of access for gamblers will be a concern for many state operators.  This is especially true if a lottery model is adopted.   

Nevada had hoped to become the main player in the untapped US online gaming market.  Unfortunately for them, both Delaware and New Jersey will launch online casino games before they will.  Nevada’s Crossover Day, which is when a bill dies if it has not been approved by committee, has already passed.  This means that if the Nevada Gaming Control Board is unable to find a way to incorporate casino games into the existing online poker law, or a special session is not declared to address the issue, Nevada will be late to the online casino party.  Since the Nevada Legislature only meets every two years there may even be other states in the game by the time Nevada has approved online casino games.

Opinion: Casino Games Are not Good Public Policy to Launch US Online Gaming Market

I personally feel that online casino games are not a good public policy for states at this time.  It is not that I feel online casino games are inherently wrong, I just feel that its existence early on will affect online poker game quality and its perception by states considering online gambling. 

One can argue that Texas Hold’em, Omaha and Seven Card Stud are games of skill that allow skilled players a chance to win, even with a rake.  The problem is that most casino games are unbeatable and to most casual players, lawmakers, lottery corporations and observers, these house games would be compared to online poker if allowed at the same time.  This could make it a harder sell to states that may hear how online slots were not played responsibly in the first states to offer it.  While debatable, this was one reason these games were excluded from Reid/Kyl.

It is too soon to tell what will become the most popular game to US internet players.  If brick and mortar casinos are an indicator of online play, slots will be the favored game among online gamblers.  If that is the case then the future could be tough for online poker’s expansion.  This is especially true if slot losses are used by opponents to squash future regulation.  Regardless, Nevada should be prepared to offer any game that competing states are willing to offer.  It may be too late by the time the Nevada Legislature meets again in 2015.  Two years could be a lifetime in the US online gambling market.