New Nevada Law Finally Allows Interstate Compacts

Thursday witnessed a major milestone in American online gambling, when Nevada’s Republican Governor Brian Sandoval signed the bill authorizing online gambling agreements between Nevada and other states.

Spurred into quick action by recent developments in New Jersey, Nevada was not about to relinquish its gambling primacy and the investments that go with it. The matter was considered so important that Bill 114 was rushed through the Assembly and Senate as an emergency measure.

The new law makes the Silver State the first one in the US allowing interstate online gambling by giving the executive the power to seek agreements (so called “compacts”) with states where online gambling is also legal.

It is now up to the regulators to define the requirements governing these compacts.

Gov. Sandoval, himself a former Nevada Gaming Commission chairman spared no solemn words. Surrounded by senior lawmakers he declared that “this is an historic day for the great state of Nevada. Today I sign into law the framework that will usher in the next frontier of gaming.”

Underlining the main motivation behind the law and its speedy passage, he added that “this bill is critical to our state’s economy and ensures that we will continue to be the gold standard for gaming regulation.”

Business has indeed been waiting to invest in Nevada, with 20 applications pending from a range of operators, equipment and software vendors eager to get online gambling licenses.

The need to keep the state’s competitive advantage over New Jersey resulted in much joint work between Democrats and the Republican governor. After praising this bipartisan effort, Assembly Majority Leader William Horne commented briefly about Nevada’s archrival in gambling. “As to our competitor, New Jersey, they should be accustomed to following Nevada,” quipped Horne.

Nevada and New Jersey aren’t the only states pursuing some sort of legalization after the federal government made it clear in 2011 that online prohibitions apply solely to internet betting in the US.

While waiting for the American gambling laws to change on a federal level, Nevada (and soon thereafter Delaware) legalized online poker locally in 2011. The state’s small population, however, meant that operators needed some encouragement to invest in the market.

Interstate agreements could change all that. As more and more states will host legal online poker sites in the US, the positive cumulative effect of these compacts will create the player liquidity necessary to keep the games going. “It’s imperative for the success of this that we compact with other states because we don’t have a universe of players,” said industry lobbyist Pete Ernaut.