On February 25, 2014, Nevada Governor Brian Sandoval and his Delaware counterpart, Governor Jack Markell, signed the first interstate compact to allow the pooling of I-gaming patrons in the two states. The interstate compact is a potential watershed event for the expansion of interstate I-gaming in the U.S. As the battle to authorize I-gaming in the U.S. has shifted from Congress to the statehouses, many I-gaming advocates and legal commentators have floated the interstate compact concept in order to address liquidity concerns. The Nevada-Delaware compact only addresses I-poker and will allow the two states to pool I-poker players. The compact ostensibly attempts to address the liquidity issues for smaller states. That is, states with a smaller population base may not have a sufficient pool of prospective gamblers to support an interstate market.
The compact allows each state to retain the right to regulate the operators licensed in the respective jurisdictions. The compact further provides that each state would retain the revenue generated from the players located in that state, regardless of the location of the licensed operator. The compact also requires each state to join a "Multi-State Internet Gaming Association" in order to facilitate the implementation of I-gaming offerings of each member state.
The interstate compact is a significant development for advocates of regulated interstate I-gaming because it provides an initial framework for such arrangements. However, Nevada and Delaware are both states with relatively small populations. Thus, a legitimate question arises whether the two states collectively will have sufficient player liquidity to support the development of a viable I-gaming market. The compact does open the door for other states to join in the future. Whether the compact framework is attractive to other U.S. I-gaming jurisdictions, such as New Jersey, remains to be seen.
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