WASHINGTON — The District of Columbia is becoming the first U.S. jurisdiction to allow Internet gambling, trying to raise millions of dollars from the habits of online poker buffs and acting ahead of traditional gambling meccas like New Jersey and Nevada.
Permitting the online games was part of the 2011 budget and a 30-day period for Congress to object expired last week, said D.C. Council member Michael A. Brown, who authored the provision. The gaming would be operated by Intralot, a Greece-based company, and would be available only to gamblers making bets within the borders of the district.
Officials were not sure when the gaming would be up and running, though D.C. lottery officials said they were in talks with their vendor and expect to know more within weeks. Though other states have contemplated legalizing online poker, experts said the district would be the first jurisdiction in the country to do it.
The move to legalize the games comes despite a 2006 federal law effectively banned Internet gambling. The law prohibited banks and credit card companies from processing payments to gambling websites in states where such transactions would violate the law of the state.
But gambling experts say the law created gray areas that open the door for an expansion into the multibillion-dollar industry.
“There was really no clear law that said we could not do this,” Brown said Wednesday.
D.C. hopes to tap those millions to help offset budget cuts and help social services programs, Brown said. Conservative estimates from D.C.’s chief financial officer indicate the district could bring in around $13 million to $14 million through fiscal year 2014, according to his office.
The gambling green light is no doubt good news to poker players, but D.C. would be authorized to offer other games of both skill and chance. It would be up to lottery officials to come up with regulations and decide which games to permit.
“Anytime you’re cutting budgets and you want to save some programs, you’re looking for different pieces from different pots and you hope that you get to the number that restores those budget shortfalls and that’s what we’re trying to do with this,” Brown said.
Jeff Ifrah, a lawyer who represents online poker companies, said he was dubious about any revenue estimates since they naturally assume that online poker players will migrate from their favorite site to a new one endorsed by a state.
“Players are really loyal in this industry,” Ifrah said. “You really have to ask yourself what is the incentive a player is going to have to leave a trusted site with global competition to play in a site that’s untested and kind of unknown and doesn’t offer you the same level of play.”