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NEVADA LEGALISATION - WHERE TO FROM HERE
Posted 3/25/11 : Legalisation bill stalls in Assembly Judiciary Committee
In an event-filled Thursday, the Assembly Judiciary Committee in Nevada ended on an inconclusive note following an intense hearing into the intrastate legalisation of online gambling.
A series of expert witnesses gave their views to the committee on the first outing of the Pokerstars-supported bill AB258, introduced recently by the chairman of the committee, Assemblyman William Horne.
Economist Jeremy Aguero estimated the state could collect substantial tax revenues annually if online poker is legalised in Nevada - up to $65 million if it captured a quarter of the international market. "Online poker has been among the fastest-growing industries in the world with 8.6 million active players with 2010 revenues estimated in excess of $5 billion," said Aguero, of Applied Analysis.
Proponents of the bill say it could create up to 1,900 new jobs with an average salary of $65,000 a year bringing total annual revenue to more than $100 million.
Opposing legalisation, Peter Ernaut, a lobbyist for the Nevada Resort Association, said: "You don't have that person physically in the building. You're not eating in the restaurants, they're not drinking in the bars, they're not taking in a show or any of the other ancillary activities that are proudly displayed in our resort corridor."
Gigi Levy, chief executive of 888.com, explained that worldwide online gambling revenue is expected to top $24.2 billion in 2011, and reach $26.1 billion in 2012. He claimed that sports wagering accounts for 41 percent of that, while casino games make up 23 percent and poker 19 percent.
The $4.6 billion online poker industry is 60 percent controlled by lion's share operators PokerStars and Full Tilt Poker, Levy said.
Pokerstars has revealed that its 38 million members around the world generate over $20 billion in annual revenues. The company has proposed through its lobbyists that Nevada could also collect taxes from other US states that wish to participate in the industry.
Richard Perkins, a former speaker of the Nevada Assembly and now a lobbyist for Pokerstars, told the committee: “Make no mistake, this is about Nevada jobs, Nevada revenue, and Nevada pride.”
He went on to acknowledge that the federal legalisation of internet gambling would be a more comprehensive and consolidated route, but suggested: “Do you think a federal solution is close at hand?”
"Wouldn't players all over the world rather play at Caesar's online with all the confidence of being a Nevada regulated entity, or Joe's online casino from Aruba?" said Perkins.
Nevada Gaming Control Board chairman Mark Lipparelli asserted he had a neutral perspective on the bill, despite speculation that his Board is likely to bridle at provisions in the measure that would stop it from excluding Pokerstars from a licence on grounds of its continued involvement in the post-UIGEA 'gray area' online poker market in the United States.
The measure currently proposes that Nevada-licensed online poker sites would pay a 6.75 percent tax on the rake generated from players in Nevada, and that operators would also pay a 4 percent tax on the rake collected from players globally, a tempting resource for cash-strapped Nevada, which currently carries a $2 billion budget deficit.
Employing more Nevadans is another attraction, with chairman Horne on record as saying that PokerStars could create over 500 high-tech jobs if the bill were passed.
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