Two Way Hard Three | Las Vegas Casino & Design Blog

There's been a lot of talk about potential casinos in Florida and just yesterday, news of a new poker partnership between Vegas operators and online enterprises.

Jeff gives his thoughts on these two possible futures in the latest Simpson on Vegas.

Enjoy.

There's a lot being written about new gambling jurisdictions, real world and virtual, and I'm going to take a look at how things are shaking out for two: Online poker legalization and the possibility of resort casinos in Florida.

American online poker took a big hit in 2006 when federal lawmakers passed the UIGEA, a law that eventually made it much more difficult for online poker sites and players to move money into and out of the sites. Some of the biggest sites, like PartyPoker, withdrew from the U.S.-facing market at the time but a few others, like PokerStars, Full Tilt and Ultimate Bet, capitalized on their competitors' withdrawal and continued to accept money and play from the U.S.

But this year, on April 15 -- Black Friday -- a federal crackdown on those three biggest U.S.-facing sites came close to destroying the American online poker market. PokerStars has retreated from the market but at least it returned American players' deposited funds. Full Tilt has not returned players' money and may never do so. There are a few other poker sites that have ramped up operations to try and capitalize on the American online market vacuum but none appear to have developed the critical mass the pre-Black Friday operators enjoyed. Players report substantial obstacles in getting their money on and off the sites and are understandably worried about the security of their online bankrolls.

Online poker advocates have a simple-minded belief that federal lawmakers care about players' freedom to play poker. With only a few exceptions, they are mistaken. The only way online poker will be legalized in the near future is money.

First, government almost always wants and needs more money and taxing online poker can raise a lot of it. Second, there is undeniably a lot of money to be made by prospective online poker operators, who will use whatever influence they have to get a legalization bill passed and signed. Third, closely regulating online poker can also be sold as a way to keep terrorists or drug dealers from using online gambling sites as a way to launder money.

But those reasons for government action to legalize online poker aren't strong enough to overcome congressional indifference and polarized politics. The only way online poker will get a federal stamp of approval in this session of Congress is if Senate Majority Leader Harry Reid, acting at the behest of Caesars Entertainment, MGM Resorts and other big Nevada casino operators hoping to score big, can finagle its addition to some kind of super-important bill that already enjoys bipartisan support. Maybe Reid has that kind of trick up his sleeve but I doubt it. I guarantee that no online poker bill will pass in regular order, with up or down votes based only on the bill's merit. I think there is less than a one out of 10 chance that Congress passes and the president signs an online poker bill this year or next. Maybe only one out of 50.

On the subject of Internet poker, I wanted to note a ridiculous headline in Sunday's Review-Journal, topping Howard Stutz' Inside Gaming column. "Trump's muscle may push Net poker," said the headline on the column, which made no such conclusion. Whatever legislative or lobbying muscle Trump has isn't much, and his support might be more of a hindrance than help to the online poker cause. I know Trump has fooled some folks in our "reality" TV-obsessed culture that his is a voice of substance, a voice that matters. But those in the gaming universe should know better -- he's a blowhard and a failure. Quit giving him ink.

I'd next like to discuss a very appealing domestic casino jurisdiction: Florida. As the Florida Legislature considers a bill that would legalize three destination casinos in South Florida I want to note how perilous it is to predict the corrupt politics of the "Sunshine" State. The proposed bill would tax the resort casinos at a rate (10 percent) substantially below the 35 percent rate paid by the state's existing racinos. The new rate will be very appealing to prospective resort developers but will anger racino owners. The bill also takes away the Seminole tribe's monopoly on most table games and would almost certainly, if enacted, end the tribe's substantial compact payments to the state. The bill also only allows casinos in Miami-Dade and Broward counties, with no casinos in Tampa Bay or the rest of the Gulf Coast or in Orlando.

The conservative northern part of the state has always opposed casinos and I will be surprised if that opposition changes in this legislative session. Other parts of the state may want a chance at a casino but more casinos may spur stronger opposition from cultural and religious opponents. The issue's politics are murky at best; there will be millions in lobbyist dollars swimming around Tallahassee and I don't pretend to understand what the logical end game will be. The one thing I do believe is that Florida will be a great place for destination casinos. I think the beach is a better casino resort venue than urban Miami or Fort Lauderdale, so hopefully if a version of the bill is passed Miami Beach or some other beach city will be allowed to host at least one of the casinos.

A few big players in the casino world have already expressed their interest. Genting, which operates one of two Singapore casinos, the Aqueduct racino in New York and its giant home-base casino in Malaysia (Genting Highlands), has a multi-billion plan to build a giant casino in the city of Miami on the current site of the Miami Herald newspaper and neighboring parcels. Las Vegas-based Las Vegas Sands and Wynn Resorts have also expressed interest and are undoubtedly already lobbying up a Category 5-sized storm in Florida. Despite cash shortages and possible difficulty raising billions to build I'd be surprised if MGM Resorts and Caesars Entertainment aren't also angling for a Sunshine State opportunity.

A few thoughts:

One, the opportunity is great. Many millions of Americans and Latin Americans already travel to Florida and destination casino resorts would be a substantial additional attraction.

Two, if Florida gets multi-billion dollar casino resorts -- and particularly if they have a low 10 percent tax rate and are owned by operators who know how to attract big gamblers -- the market will be a net negative for the Las Vegas tourism and casino business. It won't kill Las Vegas but Florida will steal some share of the city's current market.

Three, the politics are about to get incredibly ugly. Restricting the number of possible licenses instead of simply requiring a minimum investment creates a bribery bonanza, with almost irresistable incentive for prospective operators to further corrupt already dirty lawmakers.

Four, the opposition should not be underestimated. Religious groups, particularly in the middle of the peninsula and in the Panhandle, are strong and will vigorously oppose casino expansion. Other gambling entities won't like the competition and the rest of the state has a reflexive aversion to Greater Miami. And, maybe most significantly, lawmakers who don't really care one way or the other may not want to tangle with powerful Disney, which strongly opposes casinos.

I don't know which side will prevail, but I do have one bit of advice for those interested in the issue: Buckle up, because the Florida casino-bill ride is going to be a wild one.

-- Jeff Simpson, November 2011