WILL OHIO BE ABLE TO ENTER THE ONLINE GAMBLING MARKET?
10th June, 2013 at 03:50:04
Constitutional amendment may make the transition difficult
Although there is no evidence at present to suggest a political will for the state of Ohio to enter the intrastate online gambling market, the publication Plain Dealer considered the options in an article over the weekend, suggesting that a state constitutional amendment effected in 2009 may complicate any such initiative.
The amendment physically restricts any casino gambling to parcels occupied by the Caesar's Entertainment operated Horseshoe casinos in Cleveland and Cincinnati and the Hollywood casinos that Penn National Gaming operates in Columbus and Toledo. No mention of internet gambling is made, but it could be inferred, the newspaper argues.
Lawyer Christy Prince said that the amendment provides fertile grounds for speculation regarding possible online gambling ventures.
"The amendment says casino gaming can take place in only four locations," she said "If I want to go home tonight and play poker... there's an argument that I can't go and play it on my computer."
There could be several solutions to such a conundrum, observers point out. These may include a point-of-consumption definition requiring all online gambling action to emanate (and be taxed) from existing [land] casino licensees in the state.
Gambling law expert Prof. I. Nelson Rose says Ohio could employ some "legal fiction" to comply with the constitutional requirement, following New Jersey's lead in insisting that servers be located on the premises of existing state licensees in the locations defined in the amendment.
Kim Arnold, chief operating officer of the Innovation Group, a gaming consulting firm, thinks the current lack of political interest in internet gambling in Ohio could change if neighbouring states warm to the idea.
"You're right in the heart of a very competitive market," said Arnold, who also leads the company's i-gaming practice. "I don't know how Ohio could not be considering it."
Meanwhile gaming companies are competing for the rights to use the dot.casino domain, The Plain Dealer reports, noting that such rights could net lucrative licensing fees from providers around the world that want the identifier.
"The Internet Corporation for Assigned Names and Numbers, a global governing body, could make a decision later this year," Tom Embrescia of Second Genistry, a Cleveland company, told the newspaper.
The Plain Dealer reports that a survey released earlier this year by the Innovation Group found that a majority of the tribal and commercial-casino operators who responded were exploring online gambling possibilities.
The operators did not view Internet gambling as a significant source of revenue but worried about remaining competitive and wanted to expand their marketing reach.
David Schwartz, director of the Center for Gaming Research at the University of Nevada, has repeatedly down-played the possibility that online gaming cannibalises revenue at bricks-and-mortar casinos, observing that the Internet alternative could reach a desirable and commercially rewarding younger demographic with a preference for mobile action (see previous reports).
The current consensus appears to be that Ohio will be slow to join any internet gambling initiative; given its history of resistance to land gambling until pressure from operators finally brought some movement.
The state currently boasts four land casinos and seven so-called racinos, five of which are still under development.
Whether competition from neighbouring states will evolve into a real threat is open to speculation.
Pennsylvania saw an online gambling legalisation initiative launched last month in the state House of Representatives which proposes making online casino and poker gaming available in the state with precautions to ensure location and player safety (see previous reports).
However, the bill has failed to gain real traction, and veteran state politician Tina Pickett doubts that it will make progress before the current legislative session ends.
Pickett, a Republican, says that state lawmakers want to help the state's 12 land casinos, but want to see how legalised online gambling in New Jersey works before seriously considering such options.
Related News Tags: Land Casinos, New Jersey