In case you missed it, the internet gambling and online poker industries took center stage on the CNBC program “Closing Bell” last week. Joining the show were Andrew Parmentire of Height Analytics and David Katz, Gaming Analyst for Oppenheimer. Both appeared as part of a four-minute segment discussing the future of the internet gambling industry in the United States with the backdrop of the 2009 Global Gaming Expo in Las Vegas, which has attracted some of the world’s heavy hitters.Parmentire told CNBC host Melissa Francis, “Water always finds a crack and if people want to gamble, there are ways to gamble. I think the odds are high that gaming will be legalized in the United States.” Three years ago, the Unlawful Internet Gambling Enforcement Act (UIGEA) was attached to an unrelated port security measure at the 11th hour at the urging of outgoing Senate Majority Leader Bill Frist (R-TN). The UIGEA drove some of the world’s leading online poker sites like PartyPoker out of the market and the SAFE Port Act was passed by unanimous consent in the Senate.
Besides Congressman Barney Frank (D-MA), others pushing for legalized and regulated internet gambling in the United States include Harrah’s, the casino megalith that owns the rights to the annual World Series of Poker (WSOP). Permentire explained, “Harrah’s has shown that they have an online strategy, Congress and states are in desperate need for money, and $50 billion can offset a lot of social programs that Democrats are pushing these days.” The Las Vegas casino company established Harrah’s Interactive Entertainment, based in Montreal, to lead its online efforts and tapped Mitch Garber, former CEO of Party Gaming, to head up the new organization.Katz was also optimistic about the future of internet gambling in the United States, telling CNBC viewers, “What I can tell you is that the casino companies out there other than Harrah’s are really not all that concerned about whether internet gambling becomes legal in this country. My personal view is that it’s an eventuality. The timing and scale of that is hard to say.” Frank introduced HR 2267 in May, which establishes a full licensing and regulatory framework for the internet gambling industry in the United States. The measure received its 63rd co-sponsor earlier this week and has become a bipartisan rallying point for proponents of licensed online gaming.
Finally, Permentire discussed the physical limitations of brick-and-mortar gaming establishments, which will likely mean an increased focus towards expanding online in the future: “If you go to the Bellagio (poker tournament room pictured at right), they have a couple of hundred seats to sit in, so there’s a physical constraint. If you look at the number of states out there that are considering legalizing gaming, they’re going down every year. There’s a finite opportunity for the brick-and-mortar guys to expand in the United States and at some point, they have to start thinking globally.” Harrah’s recently partnered with 888, a publicly traded company in London that runs Pacific Poker, to help manage its online holdings.On PocketFives.com, a thread in Poker Discussion sprung up nearly immediately following the segment. Longtime community member Ken isuck123 Goldin was one of those who chimed in, saying, “Was a very positive spot by non politicians. Said bill was passed in a shady last minute way and attached to a port bill and snuck by. Said this would raise revenues and people are going to find a way to gamble anyway.” Posters then weighed in on the pros and cons of regulation, with rocksolid124 offering the following analysis: “Get it passed on a national level, and then work on individual states imo.”
The financial services industry in the United States has until December 1st to fall into line with the regulations of the UIGEA.
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