Online Poker Law Looks Doubtful – Does Online Poker Have a Future?

Senate Majority Leader Harry Reid of Nev. gestures during a news conference on Capitol Hill in Washington Wednesday, Dec. 8, 2010

Maybe not.

Democrat Senate Majority leader Harry Reid’s attempt at political payback to Harrah’s and MGM looks like it has failed and gaming pundits are not optimistic.

The odds of federal approval for online poker are fading with Republicans due to take over the House of Representatives, an analyst said Thursday.

Gaming equipment suppliers like International Game Technology, WMS Industries Inc. and Bally Technologies Inc. could react negatively to a scuttled bill, though casino operator MGM Resorts International would have more room to maneuver, wrote Ryan Worst of Brean Murray, Carret & Co.

Las Vegas’ MGM may be able to enhance its business through other avenues, such as campaigns to improve Las Vegas revenue and visitation.

Senator Harry Reid said Wednesday that his attempt to hook the online poker bill to the tax cut extension bill is unlikely to work. And he thinks Republican domination of the House next year will hurt the bill’s chances further.

The online poker legislation Reid has been pushing would allow poker games over the Internet but limit initial licenses to casinos and racetrack operators that have been in business at least five years. The online gambling industry generates an estimated $5 billion a year for offshore operators. A slice of that revenue would be been a boon for U.S. casinos that have been hammered by the economic downturn.

Indian Tribes in California will attempt their own bill for California residents but for now the prospects of online poker do not look good. But, will the gray area of offshore poker sites blossom with legal challenges to the UIGEA?

How will increased federal scrutiny by the Department of Justice/Treasury of offshore poker sites hurt the industry? How about House Congressional hearings subpoenaing sponsored poker pros with possible ownership interests in the sites?

Or will Poker Stars, Ultimate Bet and Full Tilt Poker simply fade away and be relics to poker’s past?