NCLGS Presents Model iGaming Legislation
The National Council of Legislators from Gaming States (NCLGS) presented model legislation for iGaming to be used as a framework for state’s contemplating the legalization of the new form of gaming.
The model legislation, which will be open for public comment through Tuesday, Dec. 31, establishes legislative and regulatory standards for implementing iGaming at the state levels.
“In crafting this document, we fully realize that each state has a unique gaming sector with disparate interests and concerns. Nevertheless, we believe the regulatory framework set forth herein may be a useful tool for consideration as states embrace the vast potential of internet gaming.”
Best Practices for Legalization
The 26-page framework was presented to the public by the NCLGS earlier this week. Much of the framework is similar to online sports betting legalization, as all states should ensure they have a working gaming regulatory authority to implement iGaming, to license operators, and enforce regulatory requirements.
Legalized iGaming, according to the NCLGS, is also an effective and efficient way to protect the public from the dangers of participating in illegal internet wagering channels operating throughout the country.
NCLGS noted that it will be up to each state to decide on an appropriate iGaming tax rate that best fits their market, but suggested an iGaming tax rate between 15% and 25% to allow for maximum revenues and competitively with other gaming jurisdictions.
Also included in the model draft:
- Maximize the ability of diverse suppliers, including minorities, veterans, women and minority, women and veteran-owned businesses to participate in the iGaming industry
- Gaming regulators must be vigilant in enforcement regulatory requirements, such as patron identified, anti-money laundering, and Know Your Customer (KYC) controls and procedures
- Operators must provide highest standards of customer care and promote responsible gaming practices
Compliments Other Forms of Gaming
The legislature wrote in the draft model that legalized iGaming is in the best interest of the states if it compliments other forms of gaming, and does not adversely impact existing licensed casinos and racino facilities.
It’s become commonplace for states considering iGaming legalization to commission studies to find the impact iGaming may have on these types of existing facilities. Just recently, the Wyoming Gaming Commission commissioned a study from Spectrum Gaming Group to evaluate the state’s current gaming market, the potential impact of legalized iGaming, and how a gaming expansion could effect the current markets in the state.
The study evaluated iGaming’s impact on West Virginia’s extensive “distributed gaming industry,” which includes brick-and-mortar casinos, video lottery games, and both in-person and online sports betting in the state.
It found “there has been little to no erosion in the gaming market for casino gaming or VLT games across the state” after iGaming legalization.
Prohibition on Sweepstakes Gaming
The NCLGS also suggested a complete prohibition on sweepstakes gaming, suggesting hefty fines for entities found in violation of the prohibition. The NCLGS defined sweepstakes gaming as the following:
“Any game, contest, or promotion, in which a prize is awarded based on chance, that is available on the internet and accessible on a mobile phone, computer terminal, or similar access device, that utilizes a dual-currency system of payment allowing the player to exchange the currency for any prize or award or cash or cash equivalents, and simulates casino-style gaming, including but not limited to, slot machines, video poker, and table games, lottery games, and sports wagering.”
If found violating this prohibition, the NCLGS suggest a fine of not less than $10,000 or no more than $100,000 for each violation and subject to potential loss of gaming license.
Robert Linnehan
Covering regulatory developments in online gambling. Editing/writing/creating a newsletter for readers across all formats.
