offer online poker gambling. His predictions come on the heals of a recent opinion letter by the U.S. Department of Justice in response to inquiries by the New York and Illinois Lottery corporations regarding the seemingly contradictory elements of the 1961 Interstate Wire Act and the Unlawful Internet Gaming Enforcement Act (UIGEA) of 2006 regarding ‘cross-border’ gambling.

Rose feels that the individual states will lead the Internet Gambling movement in the U.S. just as they did with implementation of lotteries and the formation of multi-state lottery agreements. This is something I’ve been preaching for years in my consultation with commercial and tribal gaming clients as well as entrepreneurs in the online space. This is exactly what happened in Canada back in 2009 when the province of British Columbia decided to enter the online gambling market.

Rose argues that although anti-lottery laws existed at one time the states figured out a way around them essentially rendering them obsolete. The same is predicted for the Professional and Amateur Sports Protection Act (PAPSA) a ridiculous law designed to protect certain states rights to offer sports betting over others (namely Nevada). New Jersey, a state seeking to regulate online sports betting, is expected to challenge PAPSA on the basis of the 10^th amendment. NJ Governor Christie has endorsed the initiative.

Some of the key takeaways from Rose’s latest interpretation of the DOJ’s stance are the following:

1. Iowa, California and New Jersey will likely offer online gaming services in 2012 and Iowa could offer this as soon as April

2. Online Poker will not be operated by the lotteries in most cases but instead authorized through state legislatures (exception “DC” and some others)

3. If a state allows a new form of gaming such as Internet Poker, Native American tribes could make a case to be able to offer the same services under IGRA and approval by the NIGC

4. Highly unlikely that the DOJ’s opinion will be reversed because it is legally accurate and the DOJ rarely ever reverses an opinion

5. There will not be a “Federal” law legalizing Internet Gambling this year

Off-shore Internet Gaming operators will only be allowed to enter U.S. markets if state governments allow it (a potential political football) and as long as they never accepted sports wagers

In states that legalize online gambling players should be able to use credit cards (I’m not so sure about this one)

Rose made it apparent that the federal regulatory movement is motivated by the major online gambling operators as they do not want to contend with individual state governments to gain market access.

In effect this is a blow to the big online operators because now they must now lobby at the state level across many states and compete with tribal and commercial brick and mortar casinos political power. If big online operators want to enter the U.S. market they will be vulnerable to various state prosecutorial actions for past and present deeds.

What all this means for Indian tribes is that their Class II gaming business will soon be encroached upon by state lotteries offering Class II games online. This is a huge development for Indian Country because Class II gaming is the only gaming that tribes can offer that does not require a tribal state-compact.