The Ramifications of Legalized Online Poker in Delaware Could Prove Significant

On the surface, the potential for legalized online poker in The First State of Delaware doesn’t look like it will have much of an impact.  After all, Delaware barely has a population of 800,000.  Unless there’s highway construction, it only takes a few blinks of the eye before one is in and out of Delaware driving along I-95 between New Jersey and Maryland/Washington, DC.  Be sure to FOLLOW GAMBLING911.COM ON TWITTER as we will be monitoring developments on the Delaware front throughout the coming week. 

The reality is Delaware passing such legislation this upcoming week could prove to be a pivotal development in the world of Internet poker.  Gambling911.com has this pegged at better than 75 percent the measure passes through Delaware’s state Senate and ultimately gets signed by pro-gambling Governor Jack Markell. 

Only a handful of church leaders and the Harness Racing industry have opposed Delaware’s attempts to legalize online gambling to date.  Their influence does not appear significant enough to stop passage this coming Tuesday June 26 (2012). 

House Bill 333 is projected to generate $7.75 million in new state revenues, according to the Department of Finance.  A representative for Scientific Games assured the committee that technologies do exist that ensures individuals from other states are unable to gain access to Delaware’s online gambling websites. 

And how might legalized online poker in tiny Delaware impact the rest of the industry?

Ease on Payment Processing, Credit Card Conversions

Banks are likely to back off on restrictions currently affecting US originating Web gambling transactions.  It’s not a given since the online horse racing sector in the US still has difficulties processing credit cards even though they are the so-called “good” online gambling outfits, carved out of the 2006 prohibition, The Unlawful Internet Gaming Enforcement Act (or UIGEA). 

Legalization in Delaware would provide more of a motivation for the banks to ease up on their restrictive policies.  Coupled with Nevada (which will begin allowing intrastate online poker for real money by year’s end) and potentially New Jersey come the fall, there should definitely be more of a push in this direction. 

Gambling911.com has often suggested that the i-Gaming industry should look at the adult entertainment industry as a gauge on what the future holds.  Granted, Internet porn has not endured as long a period of attempted prohibition when compared to Web gambling.  The crackdown on Internet porn during the early part of the last decade when Internet gambling seemed untouchable was supported by credit card issuing banks and lasted no more than two years, if that.  It was a period in which customers had to go through hoops just to access pay sites.  Today there are thousands of free porn sites across the Web. 

State Compacts

There’s been talk that other states would benefit from Delaware legalizing Web gambling, most notably the states of Rhode Island and West Virginia.

Delaware has already formed casino jackpot compacts with both Rhode Island and West Virginia via Cashola, a video lottery game offered by the Multi-State Lottery Association (MUSL) from July 2006 to May 2011.  Cashola has since been replaced by MegaHits. 

It’s probably no coincidence that both West Virginia and Rhode Island recently have come out to suggest they are exploring opportunities involving the legalization of Internet poker. 

And why stop at just West Virginia and Rhode Island when it comes to forming compacts?

Incentives for States to Move Forward Ahead of Federal Legislation

Former Delaware Governor-turned State Senator, Tom Carper, recently addressed the issue of federal online poker regulation with a member of the popular Two Plus Two posting forum. 

Here is an excerpt from that correspondence: 

On the other hand, as Delaware's former governor, I have concerns that these bills could have adverse effects on the First State. Congressman Barton's bill, for example, includes a provision that gives a two-year monopoly on Internet poker operations to established "brick and mortar" casinos. Delaware's state lottery, which generates up to one fifth of the state's revenue (over $287 million) and operates three casino properties, could not enter the market. At the end of the two-year period, then it is up to the U.S. Department of Commerce to determine if a state lottery can be licensed. Additionally, Congressman Campbell's bill would reduce state revenues by 10 percent because there would be less incentive to participate in traditional state gaming.

In conclusion, it only takes one state, regardless of how small a population that state might have, to get the ball rolling across all 50 (barring Utah of course, which has already passed legislation that prohibits its residence from gambling online regardless of federal legislation or multi-state compacts).  

Delaware may live up to its “First State” nickname, not to mention the state’s motto, “Liberty and Independence”.

- Alejandro Botticelli, Gambling911.com