Online Gambling in the District: Coming to an IP Address Near You?

New regulations for online gambling, discussed in detail at a Committee on Finance and Revenue Roundtable Wednesday morning, are projected to generate an additional $2.2 M of revenue next year.

According to the city lotterys' yearly financial reports, annual gaming revenues dropped consistently, from $256.8 thousand in 2007 to $252.7 in 2008 to $245.4 in 2009.

“People have been playing the last several years, unregulated, no 1-800 number to call” said DC councilmember Michael Brown about the DC lottery.

Brown believes that D.C. needs to change its lottery system, and that regulated online gaming, or I-Gaming, is “the next generation of state lotteries.”

He has been pushing I-Gaming since last December, when he inserted the “intrastate gaming provision” into a budget act.  Congress did not object to the provision after 30 days, and so online gaming, or I-Gaming, became a law in DC.

In late 2009, the city commissioned Intralot, a Greece-based international gaming firm, to build and provide the gaming software.

“There is an appetite for gaming, and we must increase local options,” Brown said.

Though Brown claims I-Gaming increases options, it also carries restrictions.

I-Gamers are only permitted to deposit – by debit only, no credit – $250 per week for play. This means that players may lose no more than $13,000 per year, and that DC, which receives half of the loss, can acquire at most $6,500 from an individual.

Other restrictions require users to access the internet only from certified IP address within DC, to be at least 19 years old, and to forgo usage between 4 a.m. and 10 a.m. – a mandatory “cooling off period” when the site shuts down, explained DC lottery executive director Buddy Roogow.

Councilmember Jack Evans (Ward 2-D), who voiced concern over “what will protect individuals from losing their money”, considers these restrictions important forms of “consumer protection.” Evans requested a report on the exact locations in the District that would offer I-Gaming access. He argued that schools, libraries and recreation centers should be blocked from I-Gaming, regardless of whether users in those locations meet the 19-year age requirement.

When Evans asked about whether I-Gaming would have an especially deleterious effect on low-income individuals with a propensity to gamble, DC Chief Financial Officer Natwar Gandhi said “these concerns are with the lottery in general and we crossed that bridge long ago,” explaining that people often make risky choices such as drinking and smoking tobacco, and must maintain a degree of personal responsibility.

According to the schedule, DC lottery will host free test-runs of black jack and victory at Sea at end of June. Starting September 8, players will gamble with actual cash in additional games such as poker, bingo and Texas hold’em.

There is a possibility, though, that I-Gaming may launch later than planned, as officials made it clear that they would delay the September 8 date if necessary.  

If implemented according to schedule, DC would be the first district in the country to launch such a site, though according to Roogow, other states such as Nevada, Illinois, New York and Minnesota, are considering similar projects.