Only three of the 50 states in the U.S. have established a system of legalized and regulated online gambling within their borders. More states are gradually working on implementing it as well, but there are still hurdles to jump. For Delaware, New Jersey, and Nevada, victory can’t always stay sweet. Even the slightest step forward brings opposition out of the woodwork. And for Nevada and Delaware’s recent interstate compact agreement, that opponent comes in the form of a Congressman from Utah.
Interstate Internet Poker
Last month, Nevada Governor Brian Sandoval and Delaware Governor Jack Markell of Delaware signed what was called the “Multi-State Internet Gaming Agreement.” This agreement began the United States’ first interstate online gambling compact. It would allow players from either state to play Internet poker in rooms based out of Nevada or Delaware. While Delaware has legalized multiple forms of gaming, Nevada has only made online poker legal, hence the limitation to poker only, of course.
Nevada and Delaware’s relatively small population sizes were a key factor in bringing the agreement into existence. Poker rooms rely on high traffic not only to attract customers, but also to create a consistent number of games with good prize pools. Combining the amount of potential players is a bonus for all involved.
Though the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 effectively made the transfer of funds to and from gambling sites illegal, it left a window of opportunity open. Individual states had the ability to legalize games on their own and, additionally, they could form compacts with other states that had implemented legalization.
Down to the Wire
The political opposition to the recent deal is now planning on introducing a bill that would reverse the Department of Justice’s (DoJ) reinterpretation of the Wire Act, an Act at the heart of Nevada and Delaware’s partnership. In December of 2011, the DoJ reworked how they interpreted the Wire Act, defining that only online sports betting was illegal, and that non-sports transactions could be made across state lines.
Now that states are taking advantage of this change in opinion, it’s served as a call to arms for Representative Jason Chaffetz of Utah. The Republican Congressman wants to release legislation to reverse the 2011 reinterpretation when Congress convenes in Washington next week. Rather than leaving some wiggle room for online gambling, it would revert the Wire Act back to what some believe was its original interpretation. This interpretation would prohibit all online gambling as the Wire Act was written in 1961, a time long before the existence of the Internet had even been imagined, of course.
M.J. Henshaw – a spokeswoman for Chaffetz – spoke of the displeasure at seeing the Wire Act being interpreted one way for 50 years, only to have the DoJ change that opinion right before Christmas in 2011. According to Henshaw, any decision that is made on online gambling in the United States should have to go through Congress.
It’s worth noting that the concept of interstate gambling compacts isn’t unheard of. Nevada and Delaware’s recent decision might have set a new precedent, but similar partnerships have happened before. In the past, states across the country have combined their lotteries’ jackpots in promotions like Powerball or Megamillions. But since Utah and Hawaii are the only states without a lottery or any gambling, a move like this from the very conservative Chaffetz should come as little surprise.