Expert Says Big Money Not Likely For States With Online Gambling

 A recent Department of Justice ruling clears the way for states to operate online lotteries and gaming. And lawmakers may take up whether to permit online gambling in the upcoming legislative session.  WNPR's Lucy Nalpathanchil has more

Just last week, Governor Dannel Malloy told the Hartford Courant that gaming is an important part of the Connecticut's economy and to remain competitive the state must consider online gaming or risk losing revenue to other states.

Dr David Schwartz, Director of the University of Nevada Las Vegas Center for Gaming Research explains how states are affected by the DOJ's ruling.

"Before this there was a question on whether states would be prosecuted under the Wire Act from 1961 that forbade transmitting gambling information between state lines. The DOJ ruling says this only applies to sports betting not forms of betting like poker. So they're free to have gambling on the Internet within their state and if they reach a compact with other states, with other states that have also legalized it."

During the recession, Indian casinos, Foxwoods and Mohegan Sun have at times, seen a double digit fall in slot revenues. And now that Massachusetts will be opening four casinos, business is likely to be impacted further. This hurts the state's coffers because Connecticut gets a percentage of casino slot revenue. Turning to internet gambling like online poker might help offset that loss. But Schwartz says not by much.

"I don't think it's going to be a big number because poker is one of the lower performing games in the casino.  It doesn't make a ton of money. If you look at Nevada, where poker is legal in casinos, it makes about one percent of total gaming revenues. And  people playing online, is going to be even smaller subset of that so I don't think starting off it's going to be a huge revenue goldmine."

Schwartz says as online gaming moves forward, states should also think about setting forth a requirement that operators give information to residents about problem gambling-something Nevada has set forth in its recent approval of online poker.