North Dakota HB1509 would license Internet poker within the state, with the hope of tapping a new revenue source. According to North Dakota House Representative Jim Kasper, the bill could bring $500 million to the state. The bill passed the North Dakota House by a vote of 49 to 43 and is now waiting action in the North Dakota Senate Judiciary Committee. In order for the bill to take effect, a concurrent measure (House Concurrent Resolution 3035) must be approved by North Dakota’s voters. So is this a promising new source of revenue or is all of this just wishful thinking?
The bill, if passed, would impose a $10 annual license fee for each player and a sliding scale of tax rates to the Internet poker sites ranging from 8% of revenues to 1/4%. Given that Internet poker is currently raking in at least $2 Billion per year, Representative Kasper’s projections seem reasonable.
If only it were legal.
A couple of years ago, legislators in Nevada got the same idea: why not license online gambling sites and then we can get some of the revenues that are now flowing to Costa Rica and the Caribbean. The Nevada legislature passed the bill and it became law. Only one problem: the US Department of Justice told Nevada that it was illegal. While the law is still on the books, Nevada has shelved the idea of hosting online gambling sites.
Back to North Dakota. Assuming that this measure becomes law (and given the close vote in the North Dakota House, this might not happen), Representative Kasper states that North Dakota will fight the US. Yeah, really. Legally, poker is a form of gambling—not a game of skill. According to Chuck Humphrey’s website on gambling law, courts have held that poker is not a game of skill. As such, the Wire Act would probably prohibit the licensing in North Dakota of an online gambling site. Mr. Humphrey has an article on his website detailing the proposed North Dakota statute and its’ likelihood of raising revenues for the state.
Frankly, this seems like a whole bunch of hot air to me. In fact, its more likely that the US Congress will pass a law banning online gambling (Senator Kyl will be introducing such a bill soon) than North Dakota ever having a licensed online Internet poker site.