If you followed online gambling news yesterday afternoon or my countless tweets on the subject, you already know that New Jersey Governor Chris Christie vetoed the bill that would have regulated intrastate online gambling in the Garden State. You might not know why, though.

At first, the reasons were vague, with Christie only citing that he had “legal and constitutional concerns.” Soon things started to become clearer, though. Joe Brennan, chairman of online gambling lobby iMEGA, gave his take on the situation. “My understanding is the governor is concerned about hotels or bars setting up Internet cafes,” he said. “He’s concerned that some places may put together eight computers and set up a de facto back-room gambling hall that wouldn’t be monitored or regulated.” Brennan, who supports the legislation, said that the concerns are legitimate.

Now we have a little more information. According to local media outlets in New Jersey, Governor Christie said that the bill would not have prevented restaurants, hotel lobbies and cafes outside of Atlantic City from advertising for online gambling. That could have potentially led to the existence of commercial gambling to expand beyond the resort town of Atlantic City, which would violate state law. Back in 1976, New Jersey voters approved a referendum that restricted commercial gambling to the city of Atlantic City. Therefore, according to Christie, voters would have to approve of any legislation that would expand commercial gambling beyond that.

Therein lies the biggest problem of all – what I previously called the only legitimate reason to reject online gambling in the state: New Jersey residents would likely not approve such an expansion. A recent poll by Fairleigh Dickinson University found that 67% of registered voters in the Garden State oppose regulated online gambling.

There is another issue that Christie had with the gambling legislation. The bill would have used revenue from online gambling to subsidize horse racing. That policy is in conflict with one of Christie’s goals for the state, which is to make horse racing a self-sustaining industry that does not require subsidies.

Raymond Lesniak, the senator who proposed the legislation, disagrees with Christie, saying that “he’s making up an issue that doesn’t exist.” Still he is confident that the bill will become law. Because Christie issued a conditional veto, lawmakers can now revise the bill according to Christie’s suggestions and resubmit it to his desk. Lesniak is confident that he will be able to rework the bill into one that Christie will sign. “I know we’re going to be able to get it done,” he said.

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Add Iowa to the list of states that have a chance to be the first to regulate intrastate online gambling. Though New Jersey certainly has a head start, if the bill is vetoed or conditionally vetoed before the end of tomorrow, another state could still beat them. Yesterday a subcommittee in the Iowa state Senate approved a bill that would legalize and regulate online poker at an intrastate level.

The next step for the bill is for it to pass the Senate State Government Committee, which is expected to vote on it today. The bill must clear that committee by the end of the day on Friday in order for it to remain eligible in the current legislative session.

If the bill becomes law, it would establish a regulatory framework that would allow Iowa residents to play online poker at home. However, in order to play they would have to set up special accounts at land-based casinos in the state. The brick and mortar casinos already located in the state would set up online poker rooms where registered players who live in Iowa and are at least 21 can play. In order to access the online poker websites, players would have to go to a brick and mortar casino in Iowa, set up a special account, deposit cash, agree to maximum bet limits and limits on the length of play, and then would be given a password for the website. The players can then go home and play online poker at the website at their convenience.

Of course, it’s not terribly convenient when you need to go to a land casino to make a deposit. One of the reasons for that requirement is to deal with problem gambling. If you have to make deposits in cash, you can’t gamble on debt.

Senator Jeff Danielson, Chairman of the Senate State Government Committee, expects the measure to pass today. Danielson says that the bill is about “consumer protection,” since an estimated 150,000 Iowans are already playing poker online. He says that “technology has gotten ahead of our policy on gaming laws. We think it’s time to modernize Iowa’s laws relative to this aspect of gaming.”

It seems that lately there or has been is legislation in every U.S. state to legalize or expand gambling in one way or another. Some of the bills have succeeded and others have failed. Still, only two of the 50 states in America do not have some form of legal gambling. Those two are Utah and Hawaii.

There have been a lot of attempts to legalize some type of gambling in the Aloha State lately, but so far each of them has failed. In fact, there have been 17 gambling bills introduced in Hawaii at different times. In the most recent bill, the state House defeated a proposal to build a single casino in Waikiki. The bill would have granted a license to one casino in the tourist district of Waikiki, with the casino taxed at a 15% rate. However, the measure was easily defeated 28-19, with four of the 51 representatives not present for the vote.

Some people question whether gambling will ever be legalized in Hawaii and many question whether it should. In an interesting editorial in the Honolulu Star Advisor, David McClain said that gambling should not be allowed in Hawaii, but not for religious reasons or reasons related to crime or problem gambling. McClain, who is a professor at the University of Hawaii-Manoa, says that gambling should stay away from Hawaii simply because it is allowed in 48 other states, which would set Hawaii apart.

McClain argues that Hawaii is different from any other state. Its appeal is in its exotic island location. He says that “destinations go to great lengths to differentiate themselves in the global marketplace, to offer something unique.” He says that Hawaii has been more successful at that than most destinations and the state has created “a brand image of a safe, stunningly beautiful, remarkably welcoming and culturally singular place.”

Adding casinos would detract from that cultural atmosphere, not to mention that, as McClain puts it, gambling in Hawaii would be “an indoor sport in the greatest outdoor location on earth.” McClain thinks that any casinos in the state would take away from the paradise that the state currently has. I’m not sure I agree, and certainly allowing online gambling and a lottery wouldn’t do that, but it’s an interesting point to consider.

Georgia is the latest U.S. state to introduce legislation that would expand or legalize gambling. Representative Ron Stephens (R-Savannah) has introduced legislation that would legalize casino-style gambling and allow casinos in tourist destinations such as Savannah, Lake Lanier, Hutchinson Island and Jekyll Island.

Currently, there are no casinos in Dixie, but Stephens plans to change that by introducing a constitutional amendment. His amendment would create “Special Entertainment Zones” in an effort to bring in more tourism dollars. Hutchinson Island is home to the Georgia International Trade Center, where countless yachts and cruise ships pass through. Stephens’s plan would not allow gambling in the waterways until the ships are at least three miles offshore, to avoid land casinos and cruise ships competing for gamblers.

The state constitution as it currently stands recognizes a single Special Entertainment Zone near the Underground Atlanta area, which is also in close proximity to the Georgia Dome (where the Falcons play). Stephens wants to have a casino built in that area, near the dome, to add casino gambling to the list of attractions in an area already populated by tourists. In recent years, there have also been proposals to add video gambling terminals to Underground Atlanta itself.

A separate bill in the House, proposed by Representative Harry Geisinger (R-Roswell) would expand legalized gambling. That constitutional amendment has not yet been voted on by the House Regulated Industries Committee. Both bills, if passed, stand a better chance of getting by new governor Nathan Deal than they did with the previous governor, the anti-gambling Sonny Perdue.

In November, Republicans swept through Congress in a historic thrashing with the promise of righting the wrongs, getting government out of the way, and getting America back on track to being successful and productive. The Republicans that won seats in the House and Senate did so by promising to cut down on government regulation and spending that is strangling businesses and stifling financial growth. Now it’s time to live up to that bill.

Republicans have already gone to work at repealing Obama’s health care law. A repeal bill passed the House but isn’t expected to pass the Senate. Darrell Issa, the new Chairman of the House Committee on Oversight and Government Reform, has asked businesses to submit their opinions on what laws and regulations are hindering business and job growth.

As you might expect, someone in the gambling industry was quick to bring up the Unlawful Internet Gambling Enforcement Act (UIGEA). The Safe and Secure Gambling Initiative sent a letter to Issa stating that UIGEA has done nothing to reduce online gambling in the United States, while it has placed an unfair burden on the financial industry. According to Michael Waxman, Executive Director of the Safe and Secure Gambling Initiative, UIGEA has resulted in a loss of tens of thousands of U.S. jobs. Replacing UIGEA with a regulatory framework for online gambling would help the financial institutions, create jobs and prompt economic growth.

The idea that creating regulation would create jobs is usually ludicrous and an idea that Issa would laugh off. In this case, though, it would be replacing one form of regulation (UIGEA) with a different one (some federal gaming control board). UIGEA is undoubtedly hurting the financial industry, and considering that they’re already in bad shape and that Obama’s financial reform law will make things worse, they can use all the help they can get. Let’s hope Issa listens to Waxman’s letter. Chairman Issa has not yet given an opinion on the repeal of UIGEA.

As many of you know, some in the state of Florida are trying to regulate online poker. Florida seems to be fighting with New Jersey and California to be the first U.S. state to regulate online gambling. New Jersey has a head start, since they already passed the legislation and are only awaiting the signature of Governor Chris Christie.

The online poker legislation, introduced by state representative Joseph Abruzzo, would allow existing pari-mutuel facilities to offer online poker. Because those facilities are already licensed and regulated by the government, they are already considered safe and trustworthy and already have experience offering gambling to Florida residents. The legislation would offer intrastate online poker to Florida residents only. With the activity confined to the state, it is not subject to federal regulations or taxation.

Last year, attempts to regulate online gambling at the federal level failed in both the House and Senate. While that was in many ways bad news for online poker players, it could be good for states that pass their own regulation. If online poker was regulated at a federal level, the federal government would get the tax money and, in the case of Harry Reid’s legislation, casinos located in Vegas would benefit. Florida’s government and businesses would lose out. By regulating online poker at the state level, Florida would get to keep the tax money and the pari-mutuels, who are struggling for business, would make money.

The downside is that an online poker market in Florida is much smaller than a national market. Some question whether an intrastate market can compete with large overseas companies like Poker Stars and Full Tilt Poker. The Florida poker rooms could compensate by offering lower stakes games, but that could potentially reduce the revenue. Due to all of the uncertainty, including not knowing how many Floridians would ditch poker rooms they already use in favor of intrastate poker rooms, it’s impossible to tell how much tax money the market would generate for Florida. Since nothing like this has been done before, the first states to do it will be guinea pigs for the rest of the nation.

Earlier this week, it was reported that Cyprus’s plans to ban online gambling have been delayed. Because they are part of the European Union, their bill has to be approved by the EU before it can become a law. Cyprus sent the bill to the EU back in September, believing that there was plenty of time to get feedback from the EU and then pass the bill by the end of the year. Not it is clear that it won’t happen in 2010.

Originally, the EU intended to respond to the Cypriot request by December 14. Then that day came and went. The EU now says that the deadline to make a decision on the bill has been pushed back until March 14. When announcing the pushed back deadline, the EU stated that it was in part due to input received from Malta.

As you are probably aware, Malta is one of the biggest online gambling hubs in the world. They are home to a number of Maltese-licensed casinos. If Cyprus makes it illegal for Cypriot citizens to gamble online, Malta stands to lose some business. For that reason, some in the Cyprus government are blaming Mata.

According to Ionas Nicolaou, Vice President of the Democratic Rally (DISY), Malta and the United Kingdom are trying to sabotage their efforts to ban online gambling for their own self-interest. My opinion: Maybe you shouldn’t have joined the European Union if you didn’t want other countries meddling in your business and interfering in your government for their own gain.

Nicolaou said that “the interventions and comments by Malta and the United Kingdom were made purposely as online gambling is licensed in both countries and they receive huge amounts of money for those licenses.”

In the Cypriot draft bill, the country would ban online poker and all online casino games. Online sports betting, however, would remain legal and the a new government agency would be created to give out licenses to those who wished to operate in the market.

In a recent meeting between the 16 Länder ministers in Germany, it became clear that there is no consensus for online gambling. Of the ministers in attendance, there were three major opinions regarding gambling. Currently, games of chance are banned in Germany, but that ban – the State Gambling Treaty – will expire in January 2012 if not renewed.

Germany is made up of 16 federated states, called Bundesland or Länder for short. Each Länder is governed by a Ministerpräsident (Minister-President), and a parliament that is made up of the Landtag and the Senate. Though their system of government is more complicated than I need to go into for this blog, the important part is that each Länder has a degree of sovereignty, where they can decide their own gambling laws. Certain laws, however, cover each state at a nationwide level. Currently each Länder is bound to the laws they agreed to as part of the State Gambling Treaty.

In the meeting between the Länder ministers, they agreed to maintain a monopoly on lotteries. However, they could not come to an agreement about whether they should allow private operators to compete in Germany’s online sports betting market. Currently there is a monopoly that does not have any legal competition.

Without a consensus on online sports betting, it seems likely that instead of reaching another agreement for a new State Gambling Treaty, the market will be regulated by each individual state. A group of Länder governed by Social Democrats wants to keep the existing sports betting monopoly intact. Meanwhile, a group of five Christian Democrat-governed Länder want to open up the industry to private operators.

The state of Schleswig-Holstein wants to issue licenses to private companies for casino games, online poker and online sports betting now so those companies can have websites up and running when the State Gambling Treaty ends.

Without a new treaty being signed between states, Germany will become a more confusing place for online gambling. I guess that’s good news, though, since it will give me more to write about and more cool Deutsch words to learn.

There has been a lot of talk in the online gambling industry lately about the U.S. Congress passing gambling legislation during the lame duck session. To be honest, I’ve never paid much attention to it because I thought there was no way it would happen.

Congress usually doesn’t pass anything major or anything controversial during the lame duck session. In addition, there are much bigger concerns for Congress right now, such as avoiding a January tax hike and funding the government. Yes, that’s right. Congress has not yet gotten around to passing a bill providing funding to the government. Without a stopgap funding bill, there would be no appropriations for the government – not that that’s important! With unemployment at almost 10% and underemployment at almost 18%, there are much bigger things for Congress to do by the end of the session than worry about online gambling.

I should have known, though, that this Congress doesn’t care about what is important; they have their own priorities (that’s why so many lost their jobs). So instead of worrying about keeping taxes at their current level (or better yet, lowering them), they are more concerned with passing an amnesty bill for illegal immigrants, repealing Don’t Ask Don’t Tell, passing a weak START treaty and more. So it shouldn’t come as a surprise if they consider online gambling a priority, too.

I’m now paying attention to this scenario because it’s now being reported by legitimate sources. Yesterday, Bloomberg reported that Democrat Senators are being accused of a secretive deal attempting to pass online gambling legislation in the lame duck session. Three Republicans in the U.S. House are calling the process “closed-door” and “undemocratic.”

Those representatives are Spencer Bachus (who will be chairman of the Financial Services Committee), Dave Camp (who will be chairman of the Ways and Means Committee) and Lamar Smith (who will be chairman of the Judiciary Committee). All three committees would oversee online gambling legislation if conducted through a normal open Congress.

The three representatives believe that some Democrats plan to attach online gambling legislation to “must-pass” legislation, such as tax cuts, and have asked Senate Majority Leader Harry Reid to abandon the secretive deals and conduct business out in the open.

In the letter they said that creating a new industry and “imposing an unprecedented new tax regime on such activity requires careful deliberation, not back-room deals.” They have a right to be angry, and this Democrat-controlled Congress has been one of the worst at history in terms of crooked back-room deals. Still, to be fair, UIGEA was passed as a sneaky add-on to a bill in 2006.

Many in the gambling industry applaud this move to pass online gambling legislation as an add-on, but is it a good idea? I want online gambling legalized in the United States, but can the Democrats who have ruined every industry they have gotten their hands on be trusted to regulate the industry in an efficient way? (The answer is no). Can they be trusted to tax the gambling industry in a fair and appropriate rate? (The answer is no).

I am 100% opposed to the tactic of conducting secretive back-room deals to push legislation through, but I support legalizing online gambling. Does the ends justify the means? To me, the answer is no, especially when I don’t trust the Democrats to regulate the industry in a way that allows the industry to thrive. However, passing gambling legislation would not be a priority for the next Congress and if they were to pass it at all, it would probably be a while. Maybe we should hope that the legislation passes now and that wise fiscal conservatives can amend the law later to make it more sensible. What do you think?

As much as the casino industry is struggling in Atlantic City, those businesses could use all the help they can get. Profits have been down, in part because of the Great Recession and in part because of the competition from casinos in nearby states – such as the new table games in Pennsylvania.

Two Democratic State Senators Jim Whelan and Raymond Lesniak have proposed a bill that would provide a $25 million tax break to the Atlantic City casinos. The tax break is regarding freebies at the casino. The casinos are taxed for all transactions, including coupons for free games and other free promotions given to the players. Those freebies, though they bring no money into the casino, are still recorded as revenue and taxed at an 8% rate. Back in 2008, the New Jersey legislature worked out a deal that applied that 8% tax to only the first $90 million worth of freebies, and after that, those free promotions were tax exempt.

That tax exemption passed in 2008 has accounted for an additional $7.2 million for the casinos each year. The new bill currently in the state Senate would expand the tax exemption, which could result in a tax break of up to $25 million. The increase in profits could help some casinos avoid layoffs as they see more revenue.

When Republican Chris Christie became governor of New Jersey last year, he made saving the casino industry in Atlantic City a priority. As one of the largest industries in the state, helping their businesses to remain profitable would be a benefit to the residents of New Jersey. Not everyone is happy about this new bill, though. In order to pay for the tax breaks, the money would be taken from the Pharmaceutical Assistance to the Aged and Disabled, a program that helps the elderly and disabled afford prescription drugs and other medical expenses. Leave it to Democrats to screw up something good like tax breaks.