State-By-State Internet Gaming Expansion GamblingCompliance NIGA Legislative Summit| 07 February 2012 GamblingCompliance

U.S. Office 1250 Connecticut Avenue NW Suite 200 Washington, D.C T: F: U.K. Office Suite 704, Capitol Tower 91 Waterloo Road London SE1 8RT T: +44 (0) F: +44 (0) GamblingCompliance About us: GamblingCompliance provides government officials and gaming industry professionals with independent and timely regulatory, legal and policy analysis – in one, fully-customizable online subscription service.  Comprehensive analysis of regulatory change and public policy discussions  Monitoring Internet gaming legislation  Off-reservation gaming and ‘Carcieri’  Congressional hearings and conference reports  Global market statistics via GamblingData

GamblingCompliance U.S. Internet Gambling Legislative Map | 2012 Internet gambling legislation expected or pending Internet gambling legislation approved Source: GamblingCompliance Research GamblingCompliance

Internet Gambling Timeline | 2012 California Connecticut Florida Hawaii Iowa Massachusetts New Jersey Session Begins Session Ends LegislationPokerCasino Lottery 4 January31 AugustPending 8 February9 May Unknown 10 January 9 March Unlikely 18 January Late AprilPending 9 January17 AprilExpected 4 January31 JulyExpected 10 JanuaryNoneExpected Session Begins Session Ends LegislationPokerCasino Lottery 17 January14 DecemberPending 23 JanuaryDecember Unknown Federal House Senate Source: GamblingCompliance Research GamblingCompliance

Nevada  Nevada Interactive Gaming Act passed 2001  Licensing regulations adopted Dec  Games restricted to intrastate, online poker; operator licenses for major casinos only  Technology suppliers can apply for Nevada interactive gaming service provider licenses

GamblingCompliance California  Two bills – SB 40 (intrastate poker only), and SB 45 (poker plus) – pending but set to expire  Third bill slated for this month with support from California Senate President  Question marks: poker vs. other games, no. of licenses, license eligibility, regulatory speed-to- market, ‘taxes’ and license fees  Tribal issues: Class III exclusivity, regulation, sovereign immunity

GamblingCompliance Iowa  Introduction of an Internet poker bill is imminent  Dec study by Iowa Racing & Gaming Commission found i-poker could be effectively regulated and state could raise modest annual tax revenues of $3-13m if legalized  Under 2011 bill (SF 458), one platform would be licensed to operate poker on behalf of existing Iowa casinos and racetracks  No specific language addressed Iowa’s 3 Native American tribes operating casinos under IGRA

GamblingCompliance New Jersey  Bill S.490 to allow intrastate Internet gaming vetoed March 2011 by Gov. Chris Christie  Christie now working with bill sponsor Sen. Raymond Lesniak on new measure to provide for regulation by NJ Division of Gaming Enforcement  Licenses for Atlantic City casinos only; poker plus casino games  Question mark over need for state-wide referendum to amend New Jersey Constitution

GamblingCompliance Hawaii  HB 2422 and SB 2980 introduced in Jan  Bills would create state-owned gaming corporation to offer Internet poker, casino and lottery games on intrastate basis  Includes possibility for interstate compacts  Hawaii one of two states with no legalized gaming

GamblingCompliance Other states  Discussions in Connecticut over Internet poker/casino/lottery with tribal participation  Possible poker bill from Rep. Winslow in Massachusetts  Florida taking a back seat; Seminole Compact  Some preliminary discussion in Illinois

GamblingCompliance Internet Lottery Map | February 2012 Internet ticket sales expected to go live in CY 2012 Advance Internet subscription sales currently live Source: GamblingCompliance Research GamblingCompliance

State lotteries  Sept DoJ memo gave green light for Internet lottery plans in Illinois and New York  Illinois (2009 Internet lottery law) and Maryland looking to launch online ticket sales this year  Other states watching, inc. Massachusetts  District of Columbia expanded lottery law set to be repealed

GamblingCompliance Conclusions  DoJ Wire Act memo addressed important legal hurdle to allow states to proceed with regulation  Some momentum behind Internet gambling among states and state lotteries in 2012  California and Connecticut seem key to watch for how state government regulation might treat Native American gaming  Existing, in-state gaming interests (casinos, lotteries and tribes) and poker being favored in proposals

U.S. Office 1250 Connecticut Avenue NW Suite 200 Washington, D.C T: F: U.K. Office Suite 704, Capitol Tower 91 Waterloo Road London SE1 8RT T: +44 (0) F: +44 (0) Contact Information James Kilsby Americas Editor T: E: GamblingCompliance | GamblingCompliance