OPPAGA Reports on Florida's Online Poker Options

Given that UIGEA permits individual states to regulate online poker, the Florida Legislature's Office of Program Policy Analysis and Government Accountability (OPPAGA) published a report this week presenting three options available to Florida State lawmakers in order to protect consumers from unlawful internet poker: regulate it, prohibit it, or carry on with the status quo pending federal legislation.

STATUS QUO- The OPPAGA noted that maintaining the status quo in Florida, where online poker is neither specifically prohibited nor regulated, could result in cost savings for the state as the Federal government would bear the cost of licensing and regulation. It warns however that until the Federal government takes action, this approach will do little to provide additional consumer protection, which is contrary to the state's objectives.

PROHIBITION- The report also notes that a prohibition option may serve to reduce the number of Florida residents participating in online gambling and increase awareness of the problems associated with the activity, thereby reducing the cost to the state for the treatment of problem gamblers. However, the report warns of increased costs to the state if it were to actively enforce the prohibition.

It also suggests that the state's enforcement of the prohibition could face a number of challenges, specifically its ability to identify and take action against internet gamblers in their own home and the First Amendment issues surrounding the blocking of Florida residents’ access to illegal gaming sites.

REGULATION- In their report, the OPPAGA comments that regulating internet poker could not only could offer greater consumer protections, but it could also increase state revenues and retain those revenues within the state, as opposed to the federal licensing system under which the states would only receive a portion of revenues.

In fact, American Poker Ventures (APV), the Florida sister organization of lobby group Poker Voters of America, earlier this month presented OPPAGA with a report showing that legalizing online poker could earn the cash-strapped US state more than $90m in tax revenue a year. According to the projections, which were prepared by UK gambling data business H2 and are based on total gross online poker rake of $226m in the first year of legalization, $331m in Year 2 and $457m in Year 3, Florida's government could expect a 20% cut worth $45m, $66m and $91m respectively.

The OPPAGA report says that regulation could pose a number of problems with regard to compatibility with federal law, the state's relationship with the Seminole Tribe and increasing societal problems associated with problem gambling.

The state regulation approach was also found to impose a new cost burden on the state with regard to licensing operators, ensuring compliance with state law and monitoring for illegal sites falsely presenting themselves as being state approved.

The OPPAGA report will now be submitted to the Florida Senate where the issue of internet poker is expected to be debated early next year.

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