The 50-State iGaming Initiative: Hawaii to Iowa
Internet gaming, also known as iGaming, is spreading on a state-by-state basis. Nevada, Delaware, and New Jersey have already passed legislation and are reaping the tax benefits, while other states such as California and Pennsylvania are primed to follow in their footsteps.
Despite efforts by Sheldon Adelson and his cronies, it seems iGaming is inevitable, but as I. Nelson Rose, Professor of Law at Whittier Law School, said in a Casino Enterprise Management gaming forecast, it’ll take time.
“Two years ago, I wrote that developments on the Internet are like dog years,” Rose said. “It might have taken five decades to go from complete prohibition to today, when every state except Utah and Hawaii has commercial gambling. It won’t take nearly as long for every state to have Internet poker and casinos.”
For an in-depth look at iGaming in the United States, check out the recent PokerNews feature The Future of Online Poker in the U.S. — Is Your State Next? by Matthew Kredell.
While some states are actively involved in the iGaming discussion, others have yet to enter the fray. To help make sense of it all, PokerNews will undertake a 50-state initiative; one that seeks to update you on the current iGaming landscape for each state in the union.
We’ve already taken a look at 10 states, and you can check them out below:
- Part I — Alabama, Alaska, Arizona, Arkansas, and California
- Part II — Colorado, Connecticut, Delaware, Florida, and Georgia
In this article, we take a look at the next five states (alphabetically) in quick synopses. Be sure to check back in the coming months to see where the remaining 35 states stand. You can also learn more about your state, and how you can make a difference, by exploring the Poker Players Alliance website at theppa.org.
Hawaii (Population of 1.392 million as of 2012)
As Rose said, Hawaii is one of only two states without any form of gaming (no casinos, lottery, horse racing, etc.). However, unlike Utah, there are proponents for gaming. In 2010, the idea of bringing a casino to the state was bantered about in the legislature, though the effort ultimately failed.
In 2013, S.B. No. 768, a bill aimed to bring iGaming to the islands, was introduced to the legislature, and it made some strong points.
"The legislature finds that Internet wagering on games of chance and games of skill has evolved into a core form of entertainment for millions of individuals worldwide," the bill said. "In over eighty-five jurisdictions across the world, Internet gambling is a legalized, regulated, and taxed activity that generates billions of dollars in revenue for governments. Currently, the United States is the largest unregulated Internet gambling market in the world. It is estimated that millions of Americans have wagered billions of dollars annually on unregulated, offshore websites, resulting in significant revenues escaping the United States economy."
It went on to say: “The legislature also finds that tens of thousands of Hawaii residents are estimated to participate in illegal online gambling on unregulated Internet websites. These gambling websites are operated by illegal offshore operators not subject to regulation or taxation in the United States. Questions often arise about the honesty and the fairness of the games offered to Hawaii residents, but neither federal nor Hawaii laws currently provide any consumer protections for Hawaii residents who play on these websites. Moreover, tens of millions of dollars in revenues generated from online gambling are being realized by offshore operators serving Hawaii residents, but no benefits are provided to the State.”
Unfortunately, that bill failed to gain any traction, though it showed that a conversation was being had in the state. Likewise, in 2012, House Bill 2422 was introduced in the Hawaii state legislature. The bill intended to create an Internet lottery and gaming corporation, and the state-run lottery would then be authorized to offer online poker and casino games. The bill, supported by Hawaii Representatives Joseph Souki and Angus McKelvey, also failed.
Furthermore, Hawaii Attorney General David Louie was one of 10 state attorneys to sign a letter calling for a national ban on online poker (and other online gaming), even state-authorized intrastate online poker. That by no means prohibits it, but it is a roadblock.
Chances are we won’t see iGaming in Hawaii anytime soon, but if other states start passing legislation, it wouldn’t be surprising to see the “Aloha State” revisit the issue.
Idaho (Population of 1.596 million as of 2012)
When you think of poker, Idaho is not a state that comes to mind (other than the fact it’s the home state of Kevin MacPhee). That’s not too surprising considering poker was nonexistent in the state until Coeur D’Alene Casino, which is located in the northern part of the state across the border from Spokane, Washington, expanded their gaming options by adding a poker room.
Given that, it should come as no surprise that the state isn’t in the iGaming conversation. In fact, the last time Idaho made a peep was back in 2011 when the United States Department of Justice (DOJ) reversed its position on the 1961 Wire Act. That is when two state legislators weighed in via the Idaho Reporter, and the outlook wasn’t good.
“It depends on how it would be structured," said Jeff Anderson, executive director of the Idaho State Lottery, who admitted any iGaming plans would require they reexamine the state lottery. "We want to make sure that we’re sensitive to the brick-and-mortar retail network for the basic scratch games. And, we would need legislative and the governor’s approval and we have not suggested that we go down that path in Idaho. But, we do support states’ rights for those that wish to do so.”
“I don’t think it is possible in Idaho, at least not in the present (political) environment," said Rep. Vito Barbieri, R-Dalton Gardens. "I would look at it closely to see if it would be something that I would support. But I don’t see, at least for this coming session, that popping up. It seems to me there are too many other issues right now that have got the Legislature pretty much involved and I don’t think that online gambling is going to be something that will come up this session... It’s not something that you would definitely want to write off in the future, but I would say it won’t happen in the present environment.”
Likewise, those sentiments were echoed by Rep. Marv Hagedorn, R-Meridian. In an email to IdahoReporter.com, he said, “I think that the other states' 'rush' to get that business will result in few dollars for them as that market is already pretty much saturated with private companies already offering the same services (many outside the U.S. borders that have never had to worry about U.S. laws over the Internet) ... Idaho needs to have a revenue source that is not a 'me too' type of business. We have the potential for natural gas production royalties that could substantially add to our state revenue helping offset income and sales taxes in the future. We need to think outside the box and not follow the crowd in how we look for revenue needed to provide for constitutional state services.”
Idaho doesn’t seem interested in iGaming, and if the aforementioned politician’s point of views are prevalent, they won’t jump on the bandwagon even if other states start passing legislation.
Illinois (Population of 12.88 million as of 2012)
The fifth largest state in the nation currently has 10 riverboat casinos, but in recent years have been considering adding land-based properties and online gambling to the mix. Last year, Sen. Terry Link sponsored Senate Bill 1739, which sought to increase the number of physical gambling locations in the state from 10 to 23 while also offering iGaming options.
According to the bill, online gambling could generate about $150 million a year, and that several land-based gambling offerings could bring in another $400 million to $1 billion. Unfortunately the bill, which ultimately stalled, was stripped of the iGaming components to make it more acceptable to lawmakers.
Earlier this year, the idea of iGaming was revisited when the Illinois Executive Senate Committee met to discuss the pros and cons of online gambling.
“I’ve been supportive of this ever since we found out from the Justice Department we could do this,” said Senate President John Cullerton. “The point is people are already gambling, and we’re not making any of the money. There are other states that are just getting started that are bringing in some money. So that may play a role in it when we try to pass a budget.”
Governor Pat Quinn has stated that he is open to the idea of gaming expansion, though last year his focus was on a pension reform bill. Now, he turns his attention to a reelection campaign this November, so the gaming issue may have to wait a bit longer.
The good news is that online gaming in Illinois, the first state to offer lottery tickets over the Internet, seems inevitable.
Indiana (Population of 6.537 million as of 2012)
According to the Fairfield Citizen Online, Indiana lawmakers are looking to address the state's rapidly declining gambling revenue. In 2009, the state collected $876 million in casino taxes, but that’s dropped to $752 million in 2013 due in no small part to casinos opening in nearby Ohio.
According to Senate President Pro Tem David Long, he hopes the issue will be assigned to a summer study committee.
"The whole issue seems to revolve around the expansion of gaming and what do you interpret that to mean," Long said. One possibility for expansion is online gaming, but don’t expect Indiana to even consider it.
Indiana is a conservative red state, and Republican Governor Mike Pence is an opponent of iGaming. In fact, the Sheldon Adelson ally recently sent a letter to the Indiana Congressional Delegation stating his opposition.
“While I do not intend to allow Internet gambling in Indiana, some states have since moved forward with Internet lottery sales and other forms of Internet gambling,” Pence said in the letter. “I believe it is necessary for Congress to restore the original interpretation of the Wire Act that prohibited Internet gambling nationwide, and I encourage you to support legislation that would accomplish this end.”
Don’t expect any iGaming movement in Indiana anytime soon, but if casino revenue continues to decline, don’t be surprised if lawmakers suddenly have a change of heart.
Iowa (Population of 3.074 million as of 2012)
Iowa was an early participant in the Internet gaming race. In 2012, the Iowa Racing and Gaming Commission released a study that the legalization of online poker could generate between $3-$13 million in state tax revenue, and the Iowa Senate even approved an online poker measure that allowed state casinos and racetracks to offer Internet poker. That measure eventually died in committee.
The following year, State Sen. Jeff Danielson (D-Cedar Rapids) introduced another bill, but like its predecessor it died in committee. Since then, iGaming movement has come to a halt in the state.
“No discussion in the 2014 legislative session will take place to allow authorization of online intrastate poker to be played via casino portals,” Wes Ehrecke, President and CEO of the Iowa Gaming Association, said in a Gaming Industry Forecast for Casino Enterprise Management. “Rather, the industry will closely watch the introduction of iGaming in New Jersey and Delaware, plus Internet poker in Nevada. This will be an opportunity to learn what is working or not, including their regulations, compacts with other states, etc., and decide on suggested language for a bill to consider in 2015.”
"The Iowa Legislature will not consider any iGaming legislation this year. Although a bill authorizing online poker passed the Iowa Senate in 2011, the Republican controlled House does not want to advance this type of legislation,” added Matt Eide, a native of Fort Dodge, Iowa who serves as an Eide & Heisinger, L.L.C. lobbyist for the Winnebago Gaming Development Corporation. "The state does have a full plate of gaming issues under consideration. The Iowa Racing and Gaming Commission will vote on whether to authorize two new casinos in the state. In the next six months, the Commission will vote on a proposed casino in Linn County (Cedar Rapids) and a proposed casino for Greene County.”
Iowa tried to pioneer iGaming, but now that other states have pulled ahead, they’ve adopted a settler’s approach. Once some other states pass iGaming legislation, expect Iowa to revisit the issue.
Check back in the coming weeks as we bring you more states, five at a time.
*Lead photo courtesy of fc05.deviantart.net.