- Associated Press - Tuesday, May 24, 2011

ATLANTIC CITY, N.J. (AP) - Internet gambling is the future of the casino industry, whether it’s approved at the federal or state level, a panel of online and brick-and-mortar casino executives said Tuesday.

And a New Jersey lawmaker predicted there will be a ballot question next year asking his state’s residents whether to amend the state Constitution to allow Internet gambling.

Speaking at the East Coast Gaming Congress, executives from two online betting organizations and Caesars Entertainment said the Internet provides the gambling industry its best opportunity for growth. But the prospect of a federal law permitting it appears dim in light of recent federal raids on online gambling sites.

“You’re not going to stop the Internet,” said Jan Jones, senior vice president of government relations for Caesars Entertainment. “You can regulate it, you can put in protections, but it’s going to exist.”

Melanie Brenner, president of the U.S. Online Gaming Association, said more than 10 million people currently play online poker.

“That’s what they look forward to,” she said. “This is the path to growth for (the casino) industry.”

Panel members estimated the potential annual revenue from legalized Internet gambling in the U.S. at nearly $80 billion.

Richard Bronson, chairman of U.S. Digital Gaming, predicts individual states will approve online gambling soon. He said the recent raids by federal prosecutors on online poker websites makes it unlikely the federal government will approve Internet gambling, leaving states an opportunity to do it on a piecemeal basis.

“I believe strongly there will not be a national online gambling bill passed in the U.S.,” he said. “I’ve yet to find one governor, one legislator, one lottery director that tells me otherwise. They want this to be a state issue.”

New Jersey was on the verge of becoming the first state in the nation to approve Internet gambling within its state borders. But Gov. Chris Christie vetoed a bill that would have permitted it, voicing concern about its legality. Christie suggested if New jersey legislators are serious about allowing Internet gambling, they should put a proposed Constitutional amendment before the voters and let them decide.

That’s exactly what state Assemblyman John Burzichelli, a south Jersey Democrat, said the legislature plans to do.

“Next year there’s probably going to be a question on the ballot to allow Internet gambling,” he said. “Whether or not New Jersey voters amend the Constitution is up in the air. We came close, and we’re going to do it again. We’re going to take another run at it.”

New Jersey law requires that all casino gambling in the state take place in Atlantic City. The bill Christie vetoed would have had the Atlantic City casinos maintain the servers, thus technically making the transactions happen in Atlantic City. Christie didn’t buy that argument, and also worried about bars and restaurants setting up “Internet cafes” that would be fronts for illegal gambling.

In April, federal authorities busted the three largest online poker websites in the United States on charges of bank fraud and illegal gambling against 11 people, accusing them of manipulating banks to process billions of dollars in illegal revenue. Prosecutors in Manhattan said they’ve issued restraining orders against more than 75 bank accounts in 14 countries used by the poker companies, interrupting the illegal flow of billions of dollars.

The companies, all based overseas, are PokerStars, Full Tilt Poker and Absolute Poker. The indictment seeks $3 billion in money laundering penalties and forfeiture from the defendants.

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