DE Gov Signs Bill for Internet Slots; First State for Internet Casino Gambling

Delaware to allow online gambling

USA Today

By Doug Denison, The (Wilmington, Del.)

June 29, 2012

DOVER, Del. – Delaware became the first state to enter the realm of legal online casino gambling Thursday with the governor's approval of legislation that allows for full-service betting websites offering slots play and games like roulette, poker and blackjack.

Democratic Gov. Jack Markell signed the Delaware Gaming Competitiveness Act of 2012 into law the morning after the bill passed the state Senate on a close vote that reflected opposition from lawmakers who believe expanding gambling to the digital realm will expand the social ills associated with it.

Proponents hailed the measure as a viable way to help preserve the state's embattled casino industry, which is facing aggressive competition from new venues in the neighboring states of Maryland and Pennsylvania.

"We're talking about a couple thousand jobs," Markell said. "The competitive landscape for this industry has changed dramatically."

Online slot machine play and casino games such as blackjack and poker will be accessible through each Delaware casino's website and controlled centrally by the state Lottery Office. Delaware lottery tickets also will be offered for sale on a state-run website.

Federal law limits online gambling to players within the state's borders, which will be verified using geolocation software.

The state hopes to launch online gambling in 2013 and intends to make betting available on a variety of digital devices including smart phones and tablets.

Other states already offer lottery ticket sales via the Internet and Nevada is moving toward the implementation of online poker play, but Delaware is the only state so far to legalize comprehensive online casino gaming.

The legislation sets aside a portion of the expected profits from online gambling to offset $3.75 million in licensing fees currently paid by Delaware's three casinos, with the caveat that the venues use those savings to fund new marketing efforts or capital expansion projects.

Casinos in Delaware employ about 2,500 people and legalized gambling generates more than $250 million annually in state tax dollars.

"We can help protect the jobs and this revenue source for our state," said Senate President Pro Tem Anthony DeLuca, the lead Senate sponsor of the bill.

"We can keep Delaware at the forefront of developing new and better gambling options.," he said.

The Department of Finance estimates the new gambling offerings will generate $7.75 million in revenues for the state in fiscal 2013.

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Delaware is first to OK full-service casino gambling -- online

Los Angeles Times

By David Zucchino

June 28, 2012

If you love casino gambling and live in Delaware, it won’t be long before you’ll no longer have to make your way to one of the state’s three casinos. By 2013, due to a bill signed into law Thursday, people in Delaware will be free to play slots and roulette on their computers -- and probably on their smartphones too.

The tongue-twisting Delaware Gaming Competitiveness Act, signed by Democratic Gov. Jack Markell, makes Delaware the first state to allow full-service online casino gambling, the News Journal of Wilmington, Del., reports. The vote was close, with strong opposition from lawmakers who fear the law will only add to the social costs associated with gambling.

But the bill’s backers say online casino gambling is necessary to help tiny Delaware compete with casinos in its larger neighbors, Pennsylvania and Maryland. They said provisions in the law for geo-location software will ensure that only people in Delaware are allowed to participate. Federal law limits online gambling to people within a state’s borders.

Casino games will be available to Delaware residents through the websites of the state’s casinos, with betting controlled and monitored by the state Lottery Office. The state hopes to provide online casino gambling by 2013, with access also available via computer tablets and smartphones. (Office workers should probably check with the boss before laying casino bets on the office computer.)

Passage of the bill follows a Justice Department legal interpretation last year allowing states to offer online gambling within their borders.

Markell said the law will protect and promote jobs in the state’s casino industry.

"We’re talking about a couple thousand jobs,’’ the governor said. "The competitive landscape for this industry has changed dramatically.’’

Delaware’s casinos employ about 2,500 people and gambling generates about $250 million a year in state taxes, according to the News Journal. The state’s Department of Finance estimates that the new law will generate an additional $7.75 million for Delaware in fiscal 2013.

Delaware also plans to sell lottery tickets on a state-run website. Other states already sell lottery tickets online, and Nevada is considering online poker games.

"We can help protect the jobs and this revenue source for our state,’’ said Delaware Senate President Pro Tem Anthony DeLuca, who sponsored the bill in the state Senate.

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Delaware Lawmakers Clear Online Gambling .

Wall Street Journal

By ALEXANDRA BERZON

June 27, 2012

Delaware's legislature on Wednesday passed a law that could make the state the first to open its population to a full range of legal online gambling, including Internet blackjack, poker and slot games.

The bill is expected to be signed by the state's governor and comes in the wake of a Justice Department legal interpretation last year that allowed states to authorize Internet gambling within their borders.

Delaware's move marks a significant step in the long-running debate between the U.S. government, states and gambling companies over whether and how online gambling will become legal in the U.S. It is also likely to help spur legislatures and lotteries in other states to legalize or implement Internet gambling, a long-predicted change that is taking more time to materialize than some observers expected.

The Middle Atlantic region has become a hotbed of gambling competition, and Delaware's move could create a domino effect there, experts said. Earlier this year, nearby Maryland's legislature passed a budget that included $2 million from expected online lottery sales.

The Delaware plan was prompted in part by concerns voiced by the state's three racetrack casinos that they might have to lay off workers as a result of new competition from casinos in nearby states, state officials said. The casinos together pay around $10.75 million annually to the state in licensing fees on top of high taxes, which they said was too much of a burden given the new competition.

As a solution, the administration of Gov. Jack Markell, a Democrat, proposed that the lottery run online gambling and use proceeds to allow the casinos to lower their licensing fees by $7.75 million without hitting state coffers.

The state is expecting online gambling to generate at least $3.75 million roughly in the first half-year after it is implemented around January, said Brian Selander, the governor's chief strategy officer. The bill also includes other gambling expansion, such as electronic Keno in bars, to make up the rest of the lost fees.

The new law requires the lottery to use systems that verify that residents are within Delaware and to exclude minors. The law allows the state to explore compacts with other states to share gamblers.

"This opportunity that the federal government has afforded the states gives us a chance to once again preserve the jobs that are out there and with an opportunity to tap into a market of players that we have not been able to reach yet," said Delaware Secretary of Finance Tom Cook.

Yet the bill's opponents said they were uncomfortable with being one of the first states in the country to move into Internet gambling.

"I don't think the state should be sponsoring and making more damning vices available to the public," David Lawson, a Republican state senator, said in a Delaware Senate floor debate Wednesday. "It's one thing to be a lemming but another to be the first lemming off the ledge. I don't think we need to do that."

The Justice Department's new legal interpretation in December prompted state legislatures and lotteries to explore various forms of online gambling and sent several casino and other gambling companies to more vigorously prepare for an online future.

So far, however, some efforts have been stalled by local opposition, including convenience-store owners that sell lottery tickets, local casino companies, American Indian tribes and those concerned about gambling addiction.

Nevada gambling regulators recently authorized their state's first companies licensed to offer online poker, but the state doesn't allow other types of online gambling.

Online gambling bills introduced in Illinois, California, New Jersey and other states have hit roadblocks. Meanwhile, a federal poker bill, preferred by large gambling interests to the state-by-state approach, has yet to be introduced in Congress.

These disappointments were among the factors that led Shuffle Master Inc., SHFL +2.58%a gambling equipment supplier, to announce Wednesday it would scuttle a planned acquisition of an online poker company, said Louis Castle, its chief strategy officer.

Legalization "seems less certain and the timing might be longer than we were anticipating," Mr. Castle said. "That contributed to the risk assessment."

At the same time, several lotteries, some of which are already allowed under their existing state laws to provide forms of online gambling, are quietly moving forward with plans for systems likely to be mostly implemented by existing lottery-technology providers. Lottery directors on Wednesday said the move by Delaware could provide momentum.

"If you can show it's out there and not a bogeyman and we can make it work, I think it's easier to get people on board," said Edward Van Petten, director of the Minnesota lottery. Minnesota is developing a plan to offer instant ticket games such as those similar to Keno, he said.