The proverbial floodgates have opened for online poker

Posted by Steve Ruddock on Mar 08, 2013 Posted in Poker News | 1 Comment »

online pokerWhen Nevada passed online poker legislation I posited that the launch of the first real-money online poker room in the United States would open the flood gates, and in January predicted that at least a dozen states would see the potential revenue in online gaming and pass their own bills. Well, apparently we didn’t need to wait for online poker to be launched in Nevada –which is taking far longer than anticipated—with Delaware and New Jersey already passing their own legislation, and states from Massachusetts to Illinois, to Iowa, to Mississippi, to California all exploring their own online poker bills.

While I didn’t exactly go out on a limb with my prediction it appears that my prediction is right on track. We are only in early March and we already have three states in the legalized online gaming column with serious pushes being put on in Massachusetts, Iowa, California, and most recently Illinois. Adding to the allure of legalizing and regulating online poker was the companion bill passed last month in Nevada that gave Governor Brian Sandoval the capability to form inter-state compacts and pool players –in much the same way Powerball and other inter-state lotteries operate.

A Player’s Perspective on Legal Online Poker in the US

So what does this mean for you the player? The good news is that you may have access to legal and regulated online poker games in the very near future –provided you live in a fairly socially tolerant state. The bad news is that you may be at the mercy of state-run online poker, which will likely mean high fees and taxation being imposed on the poker rooms, which translates to higher rake and fewer promotions for you the player.

Additionally, states have been adding “Bad Actor” clauses to their legislation which could shutout some of the top online poker providers in the world from competing for licenses. Without brands like PokerStars or Full Tilt Poker to push other sites, forcing them to keep up or be left behind, players may find the software and features below the standards of Stars and FTP.

An Industry Perspective on Legal Online Poker in the US

So what happens to the current crop of online poker rooms operating in the US? The Lock Poker’s, Carbon Poker’s, and America’s Cardroom’s of the world will be in direct competition with licensed online poker rooms, and in states without legislation it will likely be business as usual for these sites. States will find it incredibly hard to shutdown or prosecute these offshore sites, so it appears that without a federal bill legal online poker rooms will be competing with offshore poker rooms, which could lead to some very interesting promotions and marketing campaigns by both sides.

Licensed rooms will likely have the edge in marketing and cashier transactions, but with licensing fees and taxation they will almost certainly have higher rakes and fewer promotions to offer.

One Response to “The proverbial floodgates have opened for online poker”

  1. I tend to think most of the fears of a licensed market will either not come to fruition or, if they do, will be short lived as the market makes adjustments. And we will see advantages that we don’t have now.

    I think the tax/rake argument is a valid one. But if rake is too high, participation will be too low, and adjustments will have to be made to sustain viability. The Republican in me wants to invoke the “Laffer Curve” here and suggest the balance between rate and revenue will have to be worked out over time. And where there is a competitive market, lower rake will be about the best way to lure players to your site.

    I don’t necessarily agree with those who believe that without Pokerstars we will only have sites with inferior software. While Pokerstars is the industry leader, their software is hardly cutting edge when compared to other interactive gaming programs. It’s my belief that once ipoker is out in the ‘legal’ realm, game designers will revolutionize the poker GUI to even greater levels than we see now. ‘Bells and whistles’ being another way to lure players to one site over another.

    And perhaps, just maybe, licensed sites required to have their RNG audited regularly may finally put an end to the ‘rigged’ argument once and for all 😉

    Licensed sites will not have a problem with UIGEA, so transactions should be smooth and easy. That should be primary of the concerns of your average player. This also likely spells doom for sites like Lock, to and from which processing takes months.

    I expect a couple of stumbles into the new world of internet poker, but I see a rainbow out there, it’s just going to take a little time to get there.

    Just two cents from a microdonk’s perspective

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