Online gambling dominance race pits NJ, NV

Published on NewsOK Modified: February 27, 2013 at 5:03 pm •  Published: February 27, 2013
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New Jersey's law allows for interstate compacts with other states where Internet gambling is legal. Currently, that only includes Nevada and Delaware. But as other states pass their own Internet gambling laws, competition could quickly increase. They could quickly look to states like New Jersey or Nevada that already have established systems as "the guts" of their own online operations, Rebuck and Brennan said.

For instance, California, which has been considering its own online gambling law, would be a natural fit for an alliance with Nevada. California's huge population would help online gambling based in Nevada, Brennan said. Conversely, he said he expects New Jersey to eventually seek an alliance with Illinois if that state adopts online gambling. That's because two companies, Caesars Entertainment and Boyd Gaming, which together own 5 of Atlantic City's 12 casinos, also have a sizeable presence in Illinois, providing for cross-play and marketing opportunities.

Fitch Ratings, in a report issued Wednesday, said it expects a successful introduction of online gambling in the first three states to foster a quick expansion to other states. The Massachusetts legislature recently introduced two online gambling bills, authorizing the sale of lottery tickets over the Internet, and the ability to grant Internet gambling licenses.

"The potential agreements to pool players between states as contemplated by the Nevada bill can likely be attributed to similar practices in the lottery industry, such as Powerball," the agency wrote.

Casino companies are already racing to line up partners for online gambling. Rebuck said all of Atlantic City's casinos have either started the search process, or are deeply involved in it already. One of them, The Atlantic Club Casino Hotel, is being bought by The Rational Group, a British firm that owns PokerStars, the world's largest poker web site. Nevada casinos have been doing likewise.

"Many of the Nevada gaming leaders are also in Atlantic City," said Steve Norton, an Indiana casino analyst who was vice president of Resorts Atlantic City when it became the first casino to open outside Nevada in 1978. "Caesars and Borgata/MGM already have deals with 888 Holdings and bwin.party."

Both those companies showed strong stock market gains after New Jersey enacted its Internet gambling law on Tuesday. Caesars and Boyd Gaming also saw their share prices rise on the news.

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Wayne Parry can be reached at http://twitter.com/WayneParryAC