Regulators Shrug Off Sluggish Start For U.S. Internet Gambling

 

20 May, 2014 - Tony Batt, GamblingCompliance

 

Gambling regulators and executives on Monday brushed aside concerns about the disappointing start of Internet gambling in the United States, and urged states to harmonize their oversight efforts to keep the federal government from interfering.

 

 

“The people who say it’s not doing well enough are like the two parents who look at their five-month old, and say, ‘It doesn’t speak any languages,'” California Gambling Control Board commissioner Richard Schuetz said.

 

“Let’s get our expectations in line,” Schuetz told about 200 gaming officials who attended the first day of the 18th annual East Coast Gaming Congress at Borgata Casino & Spa in Atlantic City.

 

New Jersey regulators and the gaming industry “have formed a new model for how to launch a new regulated business in this country,” said Tom Ballance, president and chief operating officer of the Borgata.

 

David Rebuck, director of the New Jersey Division of Gaming Enforcement, agreed, saying Internet gambling operations are not just an extension of brick and mortar casinos.

 

Internet gambling has had “mixed results” so far, but it is too early to draw conclusions about the industry’s future, Rebuck said. 

 

Rebuck downplayed last month’s 20 percent decline in online poker revenue for New Jersey.

 

"About 30 percent of revenue in New Jersey is derived from poker. Seventy percent comes from traditional casinos games,” Rebuck said. 

 

In addition to poker, there are 325 online casino games in New Jersey, according to Rebuck. 

 

Since New Jersey flipped the switch in November, online gaming revenue increased each month in the Garden State until April when it fell to $11.4m from $11.9m in March.

 

In a brief interview with GamblingCompliance after he spoke Monday, Rebuck said he was not concerned about last month’s decline. 

 

“Until I have a full year under my belt, I’m not going to worry about the numbers,” Rebuck said.

 

Rebuck stressed the importance of collaboration among regulators in different states as Internet gambling expands. 

 

“Nothing should scare you more than when you see in one of the federal bills the [U.S.] Department of Commerce creating the office of Internet games czar,” Rebuck told the audience of gaming professionals.

 

Rebuck was referring to an Internet poker bill drafted but never formally introduced by Senate Majority Leader Harry Reid of Nevada.

 

Mark Lipparelli, a former chairman of the Nevada Gaming Control Board, agreed that states should strive for compatibility in Internet gambling regulations because federal regulation no longer seems to be a realistic alternative.

 

“I would give advice to any new jurisdiction to seek as best they could a harmonization of what New Jersey and Nevada have done,” Lipparelli said. “I don’t think we need to reinvent the wheel on this.”

 

Brian Mattingley, chief executive of 888, said a study by his company showed only 10 percent of New Jersey residents are aware that Internet gambling is legal in the state. Meanwhile, 40 percent of players are gambling on illegal offshore websites. 

 

Gaming attorney Jeff Ifrah said this disparity can be traced to the marketing of New Jersey online gambling sites primarily by European companies.

 

State Senator Raymond Lesniak, a New Jersey Democrat, has been a persistent critic of the marketing on Internet gambling in the Garden State.

 

But even though online gaming revenue in New Jersey has not met his expectations, Lesniak said Internet gambling already is making a valuable economic contribution.

 

“These additional revenues are keeping the light on in our casinos and keeping people employed,” Lesniak said.