Jersey/Nevada nuptials?

Two states consider a joint online gambling market

U.S. Sen. Harry Reid talks about going around the state legislatures to create bi-state gambling markets.

U.S. Sen. Harry Reid talks about going around the state legislatures to create bi-state gambling markets.

Photo By Dennis Myers

Reuters last week reported that gambling executives and state casino regulators are discussing a New Jersey/Nevada internet gambling compact because they believe Nevada alone cannot sustain a large enough online market. The news service reported that its supporters want it to happen in 2014, but the Nevada Legislature does not meet again until February 2015.

The news shot through the gambling world on websites like and, and even was reported around the world (“Un partage des liquidités entre le Nevada et le New Jersey dès 2014?”; “États-Unis: la perspective d’un partage des liquidités entre Nevada et New Jersey de plus en plus sérieuse”). But very few of the reports advanced the story beyond the Reuters piece.

Nevada gambling regulators are involved but state legislators appear not to be. Asked if the Senate Judiciary Committee he chairs would handle legislation related to such a compact and whether he has been brought into the process, Clark County Sen. Tick Segerblom said, “It would and I haven’t.”

But U.S. Sen. Harry Reid suggested the two state legislatures may not be needed.

“Maybe they’ll get some federal legislation to allow them to do that before then,” Reid said.

He said he has entertained the notion of compacts for some time.

“We’ve always—we have talked for some time now about compacts. … And if we’re able to get something done—and you know, we’ve worked hard to get that done—that’s something that we would certainly consider, legislatively.”

Asked if he has been in discussions with casino executives or state regulators, he said, “Oh, with the casino executives, of course, but I haven’t talked to any of the regulators. I personally haven’t. My staff may have, but I haven’t. But I’ve talked to casino executives for years now. Not as much the casino executives as people they’ve hired to represent them.”

Three states—Delaware, New Jersey and Nevada—have made online gambling legal and Nevada was first off the mark of having it actually in business, though only those physically present in the state can play. The first legal hand of online poker was dealt on April 30.

Who’s on first?

The Reuters story suggested a rapid move to a compact, so much so that one public relations firm put out a news release headed “Online Poker Agreement Nearing Completion.”

While Reuters quoted MGM exec Jim Murren and Nevada gambling regulator Andrew Burnett as being positive on the notion of a bistate compact, New Jersey regulator David Rebuck said, “New Jersey is currently focused on working with its existing casinos to attain successful internet gaming opportunities in this state,” and that he expects “future opportunities for growth and development with other jurisdictions.”

That was interpreted by some websites that regularly cover gambling as meaning that New Jersey believes “it is not yet the right time to forge an agreement of that nature,” as Poker News Report put it.

Asked if the two states would have to consent to joining a bi-state compact, Reid said, “No, not if we pass a federal law.”

Reminded that the two state legislatures had given their consent to the bi-state Lake Tahoe governing compact, Reid said that “would be different,” but was vague on why, other than to repeat that backers of a compact “may not need that in whatever we do here, federally.”

In 1967, state legislators from California and Nevada, and California Gov. Ronald Reagan and Nevada Gov. Paul Laxalt reached an agreement on a bi-state governing compact for the Lake Tahoe Basin. It was approved by the California Legislature in July 1968 and by the Nevada Legislature in February 1969, before Congress took it up and ratified it later that year. It created the Tahoe Regional Planning Agency (TRPA).

After the Reagan/Laxalt compact failed to solve the problem of environmental degradation at the lake, state legislators from both states negotiated reforms that California Gov. Jerry Brown and Nevada Gov. Robert List took to their state legislatures for approval in 1980, after which Congress approved the changes in the compact.

Former state senator and TRPA board member Coe Swobe, who worked on creating the original bi-state Lake Tahoe compact, said action by the legislatures was always a part of the process—and so was the participation of local governments because as the state negotiators worked, they discovered local government issues that needed to be dealt with.

“An interstate compact is a compact between two states and then approved by Congress,” he said. “You couldn’t do it without the legislatures. … We started out with a partnership [between the states]. And we found that planning, zoning, traffic, local matters had to be resolved.”

He added, “It seems to me that the legislature must act if you are going to have an enforceable agreement. There are these voluntary compacts in some states, but I don’t know how well they work.” The italics represent emphasis in Swobe’s voice.

New Jersey State Sen. Raymond Lesniak, the leading proponent of online gambling in that state, was quoted by saying, “Combining our markets would be a good idea. I think we could make it work.”

At opposite ends of the state, two major markets—New York City in the northeast and Philadelphia at west central—are perched right on New Jersey’s borders.

The spread

Meanwhile, legislation moves forward in other jurisdictions to join the online gambling club. In California, the San Manuel Band of Mission Indians near San Bernadino, produced legislation late in the legislative session to legalize online poker. It is sponsored by Sen. Lou Correa, a frequent supporter of tribal gambling. Legislative leaders say it faces an uphill battle so late in the session.

In the Bahamas, the Baha Mar Casino & Hotel is agitating for legal online gambling to address an economic downturn.

Legislation to address the problems of online gambling, however, is not happening as fast as the spread of such gambling. The ease of access to online gambling presents new dangers to addicted gamblers and programs to meet the challenge are far down on legislative lists of things to do.

“The idea of being able to roll out of bed at midnight feeling like playing blackjack—and you can just click on the internet and be able to—is a little scary,” New Jersey Council on Compulsive Gambling of New Jersey assistant director Jeff Beck—himself a recovering addict—told the South Jersey Times. “The idea you can be on drugs and alcohol and not aware of what you’re doing is a little scary.”

Nevada, which did not even have a program for addicts until 2003, has cut its funding while approving new ways to gamble.