Nevada Pulling a Munson With Regulated Online Gambling?

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Let’s say you’re Nevada. You watch as New Jersey Governor Chris Christie effectively green-lights regulated online gambling. And as Poker Stars, the undisputed leader of the online poker industry in arguably every regard, prepares to take their talents to Atlantic City.

Would your reaction be to immediately introduce legislation that makes it more difficult for online gambling companies to do business in your state?

That was Nevada’s effective reaction. And it’s just the latest in a string of increasingly inexplicable steps backward on regulated online gambling.

Nevada’s new online gambling bill

I’m no expert on the nuances of state-level politics in Nevada. So I won’t pretend to understand how Governor Brian Sandoval – who called his state’s race with New Jersey to regulated online gambling “critical” on February 8th – could be so thoroughly blindsided by House Majority Leader William Horne only days later.

Sandoval wanted an amendment that would allow Nevada to enter into interstate compacts. Why the original regulations weren’t written to allow for this is a mystery unto itself. Horne introduced a bill allowing for that change, but his bill also:

  • Increases the license fee by 100% to $1mm (renewal fee also doubles to $500k).
  • “Prohibits the issuance of a license to operate interactive gaming for a period of 10 years after the effective date of this bill for certain entities that, after December 31, 2006, operated interactive gaming involving patrons located in the United States.”

Full text and bill info here. Early reports incorrectly suggested that businesses who operated in the U.S. prior  to 2006 would be blacklisted. So, Party Poker would be clear, but PokerStars would potentially face hurdles.

Sandoval’s reaction was predictable. Via the Las Vegas Review-Journal:

Sandoval spokeswoman Mary-Sarah Kinner said: “Governor Sandoval does not support the increased fee and will work to resolve this issue before the legislation is passed into law.”

But no mention of the bad-actor clause.

Why is Horne undermining Sandoval on this issue?

I’m sure there’s nothing more going on here than typical partisan jockeying and the politics of leverage, but that’s the problem: This issue should be significant enough to Nevada that these “standard” parts of the legislative process are set aside.

Of course, there are more entertaining theories:

Built to fail?

Despite a legislative head start and numerous inherent advantages, Nevada is now in the awkward position of watching as states like Delaware and New Jersey make headlines with rapid progress on regulated online gambling while news from Nevada consists primarily of the political infighting and additional delays.

Sounds pretty much like a Munson to me. But hey, it’s not easy doing things with a hook for a hand.

- Chris is the publisher of Grove also serves as a consultant to various stakeholders in the regulated market for online gambling in the United States.
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