eGR North America talks to Rep. Dan Winslow, of Massachusetts about the potential of regulated online gambling in the state, and how close it is to becoming reality
What prompted you to become interested in introducing online gambling legislation?
Recently, and after much debate, Massachusetts decided to stick its toe in the gambling water and legalised casino and slot gaming. Around that time in November 2011 we had a budget debate and I filed an amendment for internet poker as part of the state’s budget. The state budget debate order precludes any amendments affecting gaming. So I simply filed it to get it noticed and start conversations about internet poker as an opportunity for Massachusetts.
The amendment was ruled ‘out of order’ but it gave me the opportunity to have some very significant discussions about the issue. Soon after was the Department of Justice opinion of the 1961 Wire Act, the first positive signal by the federal government that intrastate gaming opportunities could exist in the US. My hope now is that the House will include this in an economic development bill, which would be a huge step forward. If not, I plan to file it as an amendment and that would be done some time in the next few months. The biggest barrier would have been the decision whether or not to have gaming at all.
What is the size of the potential egaming market in Massachusetts?
Massachusetts is the number one state for lottery sales. For a very small state with a population of just over six million people we make almost US$4bn of lottery revenue a year, so clearly this is a state of people that are willing to take a chance on games of chance. We have a lot of potential in terms of talent here, with a great wealth of high-tech talent in the state.So, there are significant revenue and job opportunities as well as consumer protection provisions that we aren’t taking full advantage of to the fullest extent now allowed under federal law.
Do you favour a state-by-state approach, or see opportunity to create state compacts?
I think state-by-state is the best way to do it. This is because the barriers to entry are much lower. I absolutely believe that we will see intrastate compacts, like we have seen with lotteries, because the precedent is there and it seems like a logical extension.
How soon could online poker sites be up and running in the state?
The treasurer’s internet gaming taskforce intends to have its report done by 1 December of this year. The legislative session begins anew in January 2013. I wouldn’t be surprised to see legislation considered now but ultimately it takes these things a while to go through legislative processes. Intrastate internet poker on the table in Massachusetts next year wouldn’t be a surprise.
What form would the licensing procedure take in Massachusetts?
There are two possible models. One would be regulation through the state lottery commission. The proposal that I put into play is under the Massachusetts Gaming Commission, which is the agency that overlooks casino and slots where there are currently rigorous standards for assuring integrity and in-depth background checks. Because of that I prefer to see the Gaming Commission do that role, because they will be equipped to do the exact same level of scrutiny as they currently do for casinos and slots.
The licensing costs are all subject to future discussions. For purposes of my amendment I propose three ‘Class 3’ internet licences with a minimum fee of $10m, minimum duration of ten years and a 25% gross gaming revenue tax but to have that offset from the licensing fee. So the first $10m of revenue would be tax free until you got your licensing fee back.