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Online gambling: What's the rush?

Online Media Industry

It's unwise that the General Assembly will be considering the expansion of Maryland's gambling program to a sixth casino before its five existing slots parlors is up and running. But the idea of legalizing Internet gambling at the same time — with little opportunity for public debate or due diligence by legislators, and no precedent from other states — is downright reckless. Internet gambling may be the future of the industry, but that future is not yet upon us, and there are too many unanswered questions — legal, logistical and social — for the state to make a headlong rush to legalize it.

The idea first surfaced in a serious way this week in a memo from Maryland Live developer David Cordish about the conditions under which he could drop his opposition to the proposed sixth casino inPrince George's County. It was picked up and given heft by House SpeakerMichael E. Buscha few days later, and it was not immediately quashed by Gov.Martin O'Malley. Given that the House of Delegates is the choke point for any gambling bill, Mr. Busch has significant sway over the precise nature of the legislation that the General Assembly will take up in its special session next week. If Maryland passes a law allowing its casinos to offer online games, it would be only the second state to do so, after Delaware, which enacted its Internet gambling legislation a few weeks ago.

There's a reason other states have not moved forward with Internet gambling: It's not entirely clear that it's legal. Delaware enacted its program based on a newU.S. Department of Justiceinterpretation of the 1961 Wire Act, though it is uncertain that the opinion related to anything other than online lotteries. Furthermore, it could well be overturned by Congress, where efforts to legalize Internet poker could supersede state laws, or by a subsequent president.

Even putting that issue aside, the shift from confining gambling to a handful of licensed casinos to making it available on every computer, tablet and smart phone in the state presents a host of questions. How would state officials ensure that gamblers are of age and are actually in the state? How would they handle problem gamblers? What should the tax rates be for online gambling?

Delaware Lottery Director Vernon Kirk said in an interview that after conversations with vendors who would produce the software for online gambling, he believes it is possible to create a reliable system for ensuring gamblers are 21 and in Delaware, but the state has not yet developed a method for doing so, and it certainly hasn't tested one. He said the state hopes to get online lottery sales started by early 2013, but online slots and table games will take longer. He said he has some ideas for placing limits on players' accounts in an effort to combat problem gambling, but they have not been settled. The tax rates haven't been finalized yet either, but he said the intent is to have them mirror those of brick-and-mortar casinos. In Delaware, that means 29.4 percent for table games and 43.5 percent for slots, a far cry from the 10 percent tax rate Mr. Cordish suggested.

Mr. Busch floated the idea of Internet wagering in the context of various proposals to keep Maryland's gambling program competitive with other states. But when we talk about that issue, we typically mean we want to keep Maryland gamblers' dollars in state and to attract other states' gamblers here. That's why we're having a debate about tax rates, locations and the kinds of games we offer — it makes a difference in gamblers' decisions about whether to travel to a casino here or elsewhere. But Internet gambling is different. How many people are going to cross state lines to fire up their laptops and bet online?

Internet gambling wouldn't drive economic development in the way adding a new casino or table games would. It would produce no construction jobs and few jobs for people to run it. It wouldn't draw tourists to the state. What it would do is empty more money out of Marylanders' pockets, and unless we get it right, the primary effect could be the enrichment of casino owners.

This is one race in which Maryland does not need to be among the first. The Prince George's casino issue has come to a head because proponents want to get it on the ballot this fall. But it's not at all clear that allowing Internet versions of forms of gambling that are already legal in Maryland would require a voter referendum. In fact, the state lottery is expected to begin online ticket sales early next year, no referendum required. Internet gambling is something Maryland's legislature needs to talk about, but it absolutely shouldn't be on the agenda for next week's special session.

Copyright © 2014, The Baltimore Sun
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