This article is an inevitable one. As a new year begins, it is necessary to look at the online poker industry in the US – specifically, the state-regulated market – and the larger igaming market.
Black Friday drove global poker sites out of the US more than 10 years ago. Since then, the new segregated US market had been fragmented and small, slow to grow, and unsupported by other online verticals. (Looking at you, online sports betting.) Online poker required interstate liquidity to be profitable, and there have been no new members of the multi-state online poker agreement since Nevada, New Jersey, and Delaware banded together in late 2017.
Any progress that could have been made was stunted by the lack of a representative body standing up for online poker. In the last few years, the new US market had had no advocacy on the legislative level. The Poker Players Alliance (PPA) fell apart without members willing to pay dues and with the poker community being very critical of the PPA taking donations from poker operators. And when Poker Central – now PokerGO – bought the PPA, the advocacy organization disintegrated in full. There was and still is no lobbying group to specifically represent online poker in the United States.
The only organization working for igaming in the US is iDEA Growth, the iDevelopment and Economic Association that monitors growth in the US via online interactive entertainment businesses. It is a non-profit organization that does “represent the legislative and regulatory interests of national and international businesses with online interactive entertainment platforms operating or considering operating in the United States.” This does include online poker, though that is not its focus.
However, iDEA Growth has the potential to make a big difference in igaming in the US market in general. Online poker will benefit from that.
https://twitter.com/iDEA_Growth/status/1479128576033275905?s=20
Of course, each year could be the one that brings significant change. State governments could gather on their own to sign the multi-state agreement and enable poker sites to link across state lines. More states could authorize state-regulated online poker alongside online casino games and sports betting.
It will simply need to happen somewhat organically, with online poker operators or affiliates informing lawmakers and pushing proper legislation.
What Happened in 2021?
Obviously, the past two years have been filled with other legislative priorities for states, as the pandemic ravaged budgets and resources. However, some states looked at ones like Michigan and Pennsylvania, Nevada and New Jersey, and Delaware, and they noted that those states posted gambling revenue even when all of their land-based establishments closed due to pandemic-mandated lockdowns.
https://twitter.com/iDEA_Growth/status/1481353646830989315?s=20
According to the American Gaming Association (AGA), thirty states plus Washington DC operated state-regulated sports betting going into 2022. Three other states had legalized it but not yet launched operations. Six more states had already filed legislation in 2022 by January 11. Interestingly, there is no similar information pertaining to online casino games or online poker. The AGA does not advocate for those games. In 2021, numerous states launched sports betting operations, mostly in retail form but quite a few via mobile apps and some online as well.
If anyone fought for regulated online poker like they did for sports betting, it would’ve been an amazing year for the game. Instead, Connecticut was the only state to legalize igaming. Even so, the two Native American tribes in Connecticut immediately went to work to find sports betting partners and online casino operators. Online poker was left out of the action, though, because there wouldn’t be enough players to make it worthwhile. And without that aforementioned thriving multi-state market, Connecticut put online poker on the back burner for now.
Illinois was a possibility in 2021 for legalizing igaming but focused on sports betting instead. Kentucky took another shot at online poker but failed to make headway. North Dakota wandered into the online poker space but couldn’t drum up enough legislative support to push it forward.
The biggest and best news for the future of online gaming in general in the United States happened in the summer of 2021. The US Department of Justice confirmed that it would not appeal the Wire Act case to the US Supreme Court. States fighting for the right to overturn a Trump-era reversion of the Wire Act won in the Circuit Court and then received affirmation of the verdict in the US Court of Appeals in January 2021. The Justice Department – on behalf of the US government – finally revealed in June that it would not pursue the cause any further. This allowed the 2011 interpretation of the Wire Act to remain precedent.
The uncertainty around that mishmash of memos and Wire Act interpretations was over. The Wire Act pertained only to sports betting, not online lotteries or other forms of online gambling.
https://twitter.com/jifrah/status/1407287693063696392?s=20
Connecticut and West Virginia
Both of these states have legalized state-regulated online poker. Neither one has licensed any online poker operators, though. West Virginia legalized its games in 2019 but has yet to partner with any operators or work to launch online poker. This is for the same reason as mentioned earlier for Connecticut.
The only way that West Virginia and Connecticut will launch online poker sites is if they are included in the interstate poker agreement.
This is up to the governors of each state, including Michigan and Pennsylvania, two more states that have yet to sign on to that agreement.
Watching Kentucky in 2022
Kentucky has been on the “watch” list for several years. It started in 2018 when then-Attorney General and now-Governor Andy Beshear urged the legislature to legalize online poker, fantasy sports, and sports wagering at race tracks. He believed that potential revenue was a solution to a state pension deficit without raising taxes.
State Representative Adam Koenig introduced several bills since then, but none have made it through the state legislature. The most recent one was HB.241, introduced January 9, 2021. He had 17 cosponsors on the bill with him, all requesting a change to Kentucky’s gaming laws.
He won his latest term by an overwhelming margin in 2020 and serves through 2022. As he is still the Chair of the Licensing, Occupations, and Administrative Regulations Committee, he is in a great position to give another bill a try.
Watching Illinois in 2022
One state that seems to consistently expand gambling options is Illinois. Sports betting was the latest form of expansion. Lawmakers have considered bills nearly every year for the last five years. The most recent were in 2021 with the Internet Gaming Act. State Senator Cristina Castro introduced her version as SB.2069, and Representatives Robert Rita and Jonathan Carroll put HB.3142 up in the House.
Both bills remain live. And all three of those sponsors won their 2020 elections and will serve at least through 2022. Considering a relatively consistent need for additional revenue for Illinois and the already successful sports betting business, this year might be the right time to add igaming to the state’s expanding gambling industry.
https://twitter.com/OxideLounge/status/1466101668605566978?s=20
Watching Indiana in 2022
Ever since 2019, when Indiana legalized sports betting, state lawmakers have been seeking interactive options for their gambling industry. Sports bettors can now do their wagering online, but casinos are not yet able to connect with online casino and poker operators.
Last year, Indiana State Representative introduced HB.1406 in the first part of January, though it never made it past the first reading. Its State Senate version was SB.417, introduced by Senators Jon Ford, Chris Garten, and Ronald Grooms. Both bills aimed to authorize interactive gaming by riverboat owners and operators and racetrack permit holders. It would include online poker and casino games. Neither bill moved in 2021.
This year, two new authors got in on the action. State Representatives Doug Gutwein and Ethan Manning put HB.1356 into motion. As the previous interactive gaming bill, it calls for state-licensed operations. They introduced it on January 11, and the first reading sent it to the Committee on Public Policy. According to Matthew Kredell over at PlayIndiana, Ford is waiting to see if his 2021 bill will cross over to the current year, which will need to happen by the end of January.
Kredell also wrote that Ford has been working hard to educate lawmakers on the benefits of igaming and dispelling myths. But a short session means that HB.1356 must move quickly, as the entire session will end on March 14.
Watching New York in 2022
Lawmakers in New York have been trying to pass online poker legislation since 2016. Various members of the state legislature have emerged as champions on the issue, the most recent being State Senator Joe Addabbo. He introduced a bill in early 2019 and reintroduced it in 2020. Assemblyman J. Gary Pretlow has been working on the issue for five years and did sponsor a companion bill for Addabbo’s proposal in 2020.
The bills didn’t move, though, because the focus was on sports betting, first live and then online. The online betting component only came into play this month as sites began to launch. With that completed, though, online poker could be next.
Addabo’s 2021 bill (S.01447) and Pretlow’s 2021 bill (A.01668) are both back on the table for this year. Both of them reintroduced their bills on January 5, 2022, and they both went to their respective Racing, Gaming and Wagering Committees. These bills focus on interactive poker only. Pretlow indicated to Mike Mazzeo of PlayNY that the bills will need amendments before moving forward, but there is a chance.
https://twitter.com/RLinnehanXl/status/1481654324379799553?s=20
Watching North Dakota in 2022
In 2021, longtime poker fan Jim Kasper introduced a bill to the North Dakota legislature to authorize and regulate online poker. The State Representative started trying to legalize online poker in his state since 2005 but made a new effort last year. He also proposed legal live poker in another bill. But in February and March, hearings made clear that there was enough opposition to defeat the proposals.
Kasper’s bills remain alive in 2022. However, chances of passage seem slim. Some issues with them include unclear wording and a lack of online poker understanding among lawmakers. The larger issue, though, is that lawmakers don’t appear to be open to expanding gambling in North Dakota at all. They rejected horse racing and sports betting proposals last year, along with the poker bills.
Is There Hope in 2022?
Yes.
It is easy to get discouraged by the lack of movement, the lack of understanding and representation. But there are reasons for hope.
First, there are the states mentioned above. At least one or two of them have a real chance of legalizing online poker in 2022.
Second, iDEA Growth may not focus specifically on internet poker, but it is pushing the idea of legalizing igaming, which includes poker. And best of all, former PPA Executive Director John Pappas appears to be heading up iDEA’s “legislative advocacy efforts,” according to a recent iDEA press release. Pappas commented this week on the results of an industry survey regarding online sports betting and igaming. With 58% of respondents saying that one or two states will legalize igaming this year, hope is alive.
“As more states evaluate legalization of sports betting,” Pappas said, “it’s smart public policy to also consider legalizing igaming. … States like Michigan, Pennsylvania, and New Jersey were smart. They passed sports betting and igaming together, and are protecting consumers while also benefiting from a windfall of new tax revenues. Thankfully, we are starting to see states like Illinois and Indiana come back to the table.”
With Pappas directing iDEA and promoting the inclusion of online poker with other forms of gambling expansion, progress may be closer than many anticipate.
https://twitter.com/cardplayerlife/status/1479148412880707589?s=20
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