Legal Online Gambling Could Force These Companies to Readjust
Wall Street Journal (Cheat Sheet)
By James Flaherty
February 23, 2013
Online gambling has officially been legalized in the state of Nevada after an emergency bill was passed through the Assembly and Senate in an effort to beat New Jersey as the first state to allow online betting.
Governor Brian Sandoval, a former chairman of the Nevada gaming commission, was pleased with his state’s efficient construction and passing of the bill, reports RT. “This is a historic day for the great state of Nevada,” Sandoval said in a statement. “Today I sign into law the framework that will usher in the next frontier of gaming in Nevada. This bill is critical to our state’s economy and ensures that we will continue to be the gold standard for gaming regulation.”
There are those who do not share Governor Sandoval’s sentiments, such as Las Vegas Sands (NYSE:LVS), MGM Resorts (NYSE:MGM), and Wynn Resorts (NASDAQ:WYNN), who all rely in part on gambling. Early analysis on the online gambling bill suggests that Nevada will be able to partner with other states to allow citizens across the country to gamble legally (excluding sports betting) from the comfort of their own homes. This would undoubtedly decrease the amount of customers that casino resorts are able to lure to the desert.
Why travel hundreds, if not thousands, of miles to stay in an expensive hotel and lose your money when you can do so from your couch? This is a question that companies heavily reliant on gambling need to address, especially if states start forming partnerships to allow online gambling in order to reap the tax benefits.
The chairman of the state’s gaming control board, A.G. Burnett, believes that such partnerships would be legal under the Wire Act of 1961, which in the past has prevented states from enacting similar measures.
“We feel pretty certain that an agreement with another state would be legal because it is some form of compact,” Burnett said in an interview with the Los Angeles Times. “We are being cautious and researching so that we do things appropriately. We are not going too fast and don’t want to offend the federal government in any way. But we need to allow our licensees to compete.”
Further developments on this bill are worth keeping an eye on, and any more successes could force Las Vegas Sands, MGM Resorts, and Wynn Resorts to create innovative ways to lure gamblers to their casinos.