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Is the NCLGS model legislation the catalyst U.S. igaming needs?

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The Morongo Casino Resort & Spa celebrated its 20th anniversary on Dec. 10 with fireworks, limited-edition commemorative gaming chips and celebrity appearances as it kicked off a year-long party.

“Our 20th anniversary is a significant milestone, and we’ve pulled out all the stops to celebrate with our loyal guests over the next 12 months,” said Morongo Tribal Chairman Charles Martin. “Over the past two decades, the Morongo casino has ignited an economic renaissance for our tribe and the surrounding community as we created thousands of local jobs, and billions of dollars in economic activity for the region.”

As part of the celebration, guests at the AAA-Four Diamond Morongo Casino Resort & Spa enjoyed special performances by Mark McGrath of Sugar Ray, DJ Kid Jay, and R&B artist Eevaan Tre.

While 2024 has been another dynamic year in gaming, in the U.S and across the globe, it did not deliver legalised igaming in any U.S. state.

Despite this apparent lull in stateside proceedings for the online gambling sector, in the background work was being done to oil the cogs of future regulation. A consortium of lawmakers, the National Council of Legislators from Gaming States, has created a generic framework for igaming legislation from which states can build their own regulations.

The headline content if not surprising. There are voluntary and involuntary exclusion lists, mandatory risk warnings, limitations on provision and advertising to under 21s, a wagering limit (albeit a very high one as Steve Ruddock pointed out in his newsletter this week), a regulatory body, a recommended tax rate of between 15%-25% of gross gaming revenue, and an all-out ban on sweepstakes.

The legislation is broadly based on that of states that have already legalised igaming, such as New Jersey, but the template is meant to be adapted according to the needs of the individual state using it.

The model legislation also highlights clearly that it is NOT “intended to regulate any aspect of tribal gaming, which is governed exclusively by the Indian Gaming Regulatory Act and individual state compacts.”

Over the next four days the NCLGS is convening its members, among other gaming stakeholders, at its winter meeting at Caesars in New Orleans.

While sweepstakes will likely dominate the networking chat, the application of the model legislation and which areas may need alteration will also be a hot topic.

The draft document is open for feedback from the industry and other stakeholders until 31 December. After that it will be amended and shared with lawmakers, no doubt leading to further amendments.

The 26-page model legislation, which has been under development for much of this year, may just be the catalyst needed to move the dial in U.S. igaming next year, although some commentators would argue that identifying a model legislation is not the main factor holding igaming back.

Way back in March, Jill R. Dorson wrote about the challenges in iGaming Business. She cited Light & Wonder global head of government affairs and legislative counsel Howard Glaser as being sceptical on the hiatus in igaming regulation being a legislative issue.

“It’s really a question of the market dynamics and, increasingly, if you are a land-based casino not named MGM or Caesars, you may think you won’t see a lot of upside to online gambling because of a belief that you cannot compete,” he said.

“Then you have the domination of DraftKings and FanDuel with 80% of market share (in both digital sports betting and casino). So, if you are a mid-sized or regional player, you have to ask yourself ‘What is my role or am I going to be left out?’”

He went on to argue that a lack of unity among the land-based casinos, including the tribal operators, was holding things up. “If they decide they want to have a uniform product, they would have instant power,” he told Dorsen.

So, is this universal template for legislation a way to bring the industry together on the issue?

While the NCLGS says it “does not promote or oppose gaming but is primarily concerned with the proper regulation of the industry”, the opening gambit of the model legislation also states that its objective is to create a framework “that will foster public confidence and trust in the integrity of the regulatory process and the fairness of internet gaming operations”.

Moreover, speaking to the AP, West Virginia Democratic state delegate and NCLGS president Shawn Fluharty said: “Many states have been discussing this, but were having a hard time getting it across the finish line. We’re trying to put together some best practices for them.”

Clearly the NCLGS believes that a lack of clarity around legislative best practice has been a factor in igaming not getting off the ground in the U.S to the extent that sports betting has.

Despite the pace at which sports betting legislation has steamed through the U.S., just seven states have legalised igaming thus far: Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island and West Virginia.

Igaming has been an altogether more difficult proposition, perhaps for the reasons Glaser highlighted in March, but there are also concerns about cannibalisation, growing public disapproval for the fast-paced proliferation of gambling at all, and there are also other jurisdictions occupying the minds of gaming leaders.

All this said, the model legislation promotes a basis for consensus on how igaming should be regulated in the U.S. and gets the issue back on the agenda and up for debate. Perhaps most importantly, it gives lawmakers – who are largely unfamiliar with the industry – a starting point from which to understand it. That is a lynchpin in not just to enacting regulation but enacting good regulation.

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