Pay per Head Sportsbooks Still Have an Uphill Battle in the US

BetThere is still no word when pay per head sportsbooks will be legal in the United States, but the ball is already rolling with Nevada issuing the first two online gaming licenses to Bally Technologies, Inc. and International Game Technology (IGT).

The licenses were issued on the 21st of June, and will allow the state the opportunity to have the first online price per head poker site in the nation.

Dozens of manufacturers and casino operators have already applied to the state of Nevada for interactive gaming licenses. The approvals of Bally and IGT began the now historic process, and more are likely to be approved soon in the upcoming control board and gaming commission meetings in July.

Of course all technology and systems will have to be certified and approved before any Internet poker site can go up. The price per head site would only be allowed within the state of Nevada.

For any company seeking to apply for an online license in Nevada, they will be looking at one of the lowest licensing fees in the United States. The cost of $500,000 for an initial one-year license and $250,000 a year to renew it will certainly be a bargain compared the costs that California and Florida are considering. A tax of 6.75 would be levied against gross gaming profits in addition to the yearly fees.

Currently California is planning a $30 million license fee that will be set up as a credit against monthly taxes to be imposed on the gross gaming revenue. An application would cost from $1 million to $5 million, without even a guarantee of being accepted.

Florida and Massachusetts are still in the planning stages, but Florida is looking at a $10 million fee with a 35% tax. Each additional year would cost another $500,000.

Currently the Unlawful Internet Gambling Enforcement Act applies to online gambling operators accepting financial instruments to fund accounts for players including online casinos.  Therefore, any of these future online gambling sites will require a brick and mortar casino in order for players to fund their accounts and receive payouts.

With the enthusiasm spreading over online casinos there is little hope for pay per head sportsbooks, as a letter issued last year tried to set straight the government’s view on gambling.

The 13-page document dated Sept. 20, 2011, mentions that the proper interpretation is that the law only prohibits sports betting.

“Interstate transmissions of wire communications that do not relate to a “sporting event or contest” fall outside the reach of the Wire Act.”

“Because the proposed New York and Illinois lottery proposals do not involve wagering on sporting events or contests, the Wire Act does not prohibit them.”