Trends and Transitions | December 2013

12/1/2013

STATE LEGISLATURES MAGAZINE

Big Bets on Intenet Gaming

The nation’s first legal gambling website debuted in Nevada this April, and Delaware and New Jersey have just followed suit with their own online betting games.These states were first, but it’s unlikely they’ll be the last. Lawmakers in California, Hawaii, Illinois, Iowa, Massachusetts, Mississippi and Pennsylvania introduced online gaming measures this year, and more are expected to follow. Brick-and-mortar casinos are licensed in 18 states, up from six states in the early 1990s, and the increased competition has flattened revenues. Casino owners, as well as state tax offices, hope to recapture some of that lost revenue by being first to the gate with online gaming.

Americans spent $37.34 billion on casino gambling in 2012, with companies returning $8.6 billion in taxes and fees to states and local communities, according to the American Gaming Association. The three states’ projected tax revenues from online gaming vary widely, as do their tax rates. Nevada collects 6.75 percent of online gaming revenues and anticipates tax revenues around $3 million this year. New Jersey collects 15 perceDice, credit card, keyboardnt and hopes to bring in $35 million to $180 million.

Delaware, where all gambling operations are state run, collects 43.6 percent of online slots revenue and 29.4 percent of other online games. The state expects its share of online revenues the first year to be only $3.75 million, but Delaware officials plan to join other states to offer bigger jackpots and attract more players, which should increase revenues.

Nevada limits online gaming to poker, at least for now. Ultimatepoker.com, which opened its virtual doors on April 30, dealt more than 2 million hands the first month and is credited with boosting the May earnings of its parent company, Station Casinos, 11.4 percent over last year. Gamblers must be at least 21 and in Nevada to play. They can use smartphones or personal computers as long as they’ve opened and funded an account. Nevada’s regulations allow it to join others states to increase the online player pool, similar to lottery games such as Powerball or Mega Millions.

In New Jersey and Delaware, gamblers have a choice beyond poker. Websites also offer roulette, slots, blackjack and more. Several of Atlantic City’s 12 casinos have worked with international companies that run online betting enterprises in the roughly 85 countries that have legalized it—the first being the twin island Caribbean nation of Antigua and Barbuda in 1994.

Other states are taking a cautious approach. Pennsylvania, for example, has two online gaming bills, one in favor, and one opposed, both being reviewed by the Pennsylvania House’s Gaming Oversight Committee. Representative Tina Davis (D) introduced a bill to establish guidelines and regulations to attract more Internet gambling. A month later, Representative Paul Clymer (R) introduced a bill to ban online gambling, citing “the serious problems of gambling addiction and the related social problems that would occur” if Internet gambling were legalized. As many as 9 million adults and 500,000 adolescents in America have problems with gambling, costing the country $7 billion annually in crime and bankruptcy, according to the National Council on Problem Gambling.

—Jonathan Griffin

Liquor Laws Distilled

Nearly 80 years after the repeal of Prohibition, states are still actively regulating the sale and distribution of alcohol, loosening some restrictions and tightening others. Legislators introduced more than 1,500 alcohol-related bills and passed more than 375 this year, numbers similar to prior years. Common topics included home brewing, serving and selling hours, direct shipment, tastings and samplings, and underage drinking.

Home Brewing

Alabama and Mississippi this year lifted bans on home brewing—the last two states to do so. Alabama’s new law gives a green light to homemade beer, mead, cider and table wine. Mississippi, which already allowed people to make wine at home, added beer, while New Hampshire, which already allowed beer making, added wine. Alabama, Georgia, Illinois, Mississippi and Missouri enacted laws allowing home brewers to transport their creations to exhibitions, tastings and competitions.

Serving and Selling Hours

Maine now permits the sales and delivery of alcohol to start an hour earlier, at 5 a.m., on most days. The new law also exempts St. Patrick’s Day from the state’s prohibition on Sunday morning sales. When the holiday falls on a Sunday, bars can start serving at 6 a.m. Of the more than 60 proposals involving operating hours around the states, at least 15 were enacted. Kentucky now allows bars and liquor stores to sell all day on election days. Rhode Island lengthened the hours certain liquor stores can be open, and New Hampshire lengthened the hours bars can serve, from 1 a.m. to 2 a.m., seven days a week, if local ordinances allow it.

Direct Shipment

Montana has joined the 38 other states and Washington, D.C., that permit wine producers to ship directly to consumers. Montana’s shipment limit is 18 nine-liter cases of table wine annually. Although Arkansas does not allow direct shipments, winery visitors can send home one case per calendar quarter.

Samples and Tastings

Among the 23 bills enacted this year, West Virginia authorized farm wineries to sell samples and bottles during fairs and festivals on Sunday mornings. Michigan and Washington now allow wine tasting at farmers’ markets. Maryland added a requirement that winery owners who sell wine or provide samples at farmers’ markets have an agent present who is certified by an approved alcohol awareness program. Connecticut and Indiana now permit distilled spirits makers to offer tastings, and Kentucky and Oklahoma authorized breweries to do the same. Kentucky caps the sample at 16 ounces per patron per day, while Oklahoma’s law caps it at 12 ounces per day. Minnesota amended an existing statute to allow malt liquor at wine-tasting events that charge participants a fee or donation.

Underage Drinking

 Lawmakers enacted nine of the more than 100 bills introduced. Minnesota, North Carolina and Washington passed laws granting immunity from prosecution to anyone under age 21 who seeks medical help for an underage drinker. Hawaii lowered the bar for prosecutors in cases where adults are accused of providing alcohol to minors; they now must prove the adults acted “recklessly” instead of “knowingly.” A New Mexico law lessens the criminal penalty for the first offense of serving a minor in a bar if the offender completes an alcohol server training program. Under the new law, alcohol-server training permits are valid for three years instead of five.

To make it more difficult for underage drinkers to purchase alcohol, Maryland and Washington limit the use of self-scanning cash registers in alcohol transactions. Washington requires that self-checkout registers be programmed to halt the transaction until an employee of the retailer verifies the purchaser’s age. Maryland prohibits use of self-scanning cash registers in alcohol-licensed locations in Prince George’s County. Retailers who violate the ban are subject to a maximum $1,000 fine for a first offense and a maximum $2,500 fine for a second offense. If the retailer has any subsequent offenses, the retailer’s license can be suspended or revoked.

—Heather Morton

The Long Lens of the Law

To remove red light cameras, or not to remove red light cameras. That is the question facing lawmakers in Arizona, Colorado, Florida, Iowa, New Jersey and Ohio.

 In Florida, which collected $100 million in fines last year from drivers caught on camera running red lights, lawmakers are considering two bills to do away with them. Senator Jeff Brandes (R), sponsor of one of the bills, says the cameras are a backdoor tax increase and an inappropriate source of state revenue.

Should the bills succeed, Florida would join seven other states that ban the cameras.

But the cameras also have many supporters. More than 500 communities use them, in part because evidence shows they reduce dangerous side-impact collisions (although some evidence shows they increase less severe rear-end collisions). Red light running killed more than 700 people in 2011 and injured an estimated 118,000. Proponents also point to polls and referenda which indicate the public favors them.

Some states have considered legislation that would restrict or limit the revenue red light cameras generate. A measure this year in Missouri would have required cities and towns that use red light and speed enforcement cameras to give the fines to local school districts for transportation. California enacted a law last year that prohibits a government agency from taking revenue into account when considering red light camera installation.

In a 2012 AAA survey, 92 percent of drivers said it is unacceptable to go through a red light if it is possible to stop safely, but 38 percent reported doing so in the past month. With so many admitted violations, proponents argue the cameras are necessary, while others question whether it is more about increasing revenue for communities.

—Anne Teigen

Stiffest Red-Light Fines

Alabama $110

Arizona $165

California $490

Delaware $110

D.C. $150

Florida $158

Illinois $100

Maryland $100

Oregon $260

Pennsylvania $100

Washington $250

Source: Governor’s Highway Safety Association, Insurance Institute for Highway Safety

 

Say What?

300+

Languages spoken in America

21%

Households that speak a language other than English

2/3

Proportion of second-language speakers whose primary language is Spanish

7

Languages (excluding English) spoken at home by at least 1 million people: Spanish, Chinese, Tagalog, Vietnamese, French, German and Korean

9

States where more than 25 percent of population speaks a language other than English at home

7%

U.S. residents who do not speak English “at all”

10%

Public schoolchildren who speak English as a second language

44%

Californians who speak something other than English at home, the highest in the nation

Source: U.S. Census Bureau, American Community Survey, Language Use in the United States, 2011

*Margin of error is as high as +/-5,400


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