Formally licensed U.S. online poker faces a number of critical challenges and obstacles in 2019.
The once dominant American peer-to-peer gaming vertical known as U.S. online poker has transitioned from a legitimate PC-multiplayer force to virtual “life support” in just a few short years.
Following is a look at FIVE CHALLENGES that U.S. online poker faces in 2019 and beyond.
U.S. Online Poker Challenge #1: DOJ Wire Act Re-interpretation
In January of this year, the U.S. Department of Justice Office of Legal Counsel (USDOJ-OLC) publicly reversed its 2011 stance on the Wire Act, which until that point had provided clarity for states to formally legalize online poker and other internet gambling verticals.
The new opinion seemingly broadens the scope of the USDOJ’s potential prosecution, encompassing all forms of cross-state online gambling. The new opinion prompted poker lobbyist Rich Muny to advise American online poker players of the uncertain future that awaits regulated, statewide U.S. online poker if the new opinion is not overturned, clarified, or otherwise rescinded.
Regulators won't simply ignore the DoJ. And, banks won't process transactions they feel are unlawful under the Wire Act, even if they meet the letter of UIGEA….
— Rich Muny (@RichMuny) January 19, 2019
The New Hampshire Lottery Commission has filed suit against the DOJ, the case is currently being argued, and a favorable ruling could prove beneficial to internet poker in the United States. However, Las Vegas Sands CEO Sheldon Adelson‘s efforts to hinder formally licensed online poker and other iGaming services endure.
Of course, I think some sort of organized campaign of players writing to lawmakers in affected states encouraging such action would be a good thing, but poker media and some players seem more interested in hoping everything will just turn out fine.
— Rich Muny (@RichMuny) January 19, 2019
Without some form of clarification, all signs point to regulated, statewide U.S. online poker moving away from interstate “shared liquidity” player pools at some point during the 2020 calendar year. This would confine online poker to within each state’s borders, effectively ending cross-state “shared liquidity” games that currently exist between New Jersey, Nevada, and Delaware. Pennsylvania is expected to launch its online poker games soon, but has already declared itself as a sole-state market.
U.S. Online Poker Challenge #2: Geolocation and Ring-Fencing
Regulated U.S. iGaming service provider GeoComply testified before Michigan lawmakers recently, informing representatives from the Great Lakes State about geolocation technology, and why a blanket ban on Virtual Private Networks (VPNs) would be necessary to thwart malicious users attempting to access licensed games illegally.
Although prohibiting access to unauthorized players is an important consideration statewide, ring-fencing of online gambling products could one day be further restricted to counties or municipalities.
Louisiana is a prime example of how one parish might receive voter approval to offer regulated U.S. online poker in the future, while a neighboring parish might be prohibited from doing the same. In such an instance, customers may simply dismiss a service that is contained within only a few square miles, restricts freedom of movement for mobile device users to such a small space, and offers only a table or two (if that) of real money poker action.
Good feedback. The real design issue is ring fencing to begin, IMO. Almost everyone (maybe not GeoComply though) wants it to go away
— Adam Small (@AdamLoebSmall) April 2, 2019
Concerns have also been raised that outright bans on VPNs might be overreaching, and further dissuade online gamblers from giving the regulated market a try over offshore sites.
U.S. Online Poker Challenge #3: Increased Regulatory & Lobbyist Costs
From 2007 to 2011, the Poker Players Alliance enjoyed a seven-figure lobbyist budget, ample support from the world’s largest poker site, and a donation-driven fan base heavily comprised of steamed U.S. online poker players following the 2006 passage of UIGEA.
VIDEO: Barry Greenstein Donated $500,000 to Support Online Poker (1:07:49-1:08:49)
Eight years later, the newly-branded Poker Alliance has increased its outreach beyond social media, forums, and template emails — but no longer solicits poker player proceeds after an unsuccessful fund-raising effort last year.
And now that the group has officially entered into the sports betting lobbying space, some fear it may indeed be too late for regulated online poker games to thrive anywhere in the United States without unprecedented deal-making on behalf of lawmakers, stakeholders, and social interests.
On top of that, the poker/gambling lobbyist “game” has evolved over the last decade as a result of statewide initiatives and voter referendum mandates. Stakeholders paid $384,000 to collect 96,170 signatures leading up to last year’s Arkansas casino petition getting approved.
All-encompassing lobbyist efforts related to online gambling in larger states such as Florida reached tens of millions in the case of Florida Amendment 3. Emergency personnel along with civic groups in expansion states such as Pennsylvania have quickly adapted too, and learned how to lobby for their own share of the gambling revenue pie.
U.S. Online Poker Challenge #4: Gaming/Entertainment Value
Online poker simply doesn’t dominate the peer-to-peer internet gaming market as it once did in the early 2000s — before video game console makers had piggy-backed off of faster connection speeds and fully rolled-out services such as XBOX LIVE and PlayStation Plus to bring PC-quality multiplayer gaming to the masses; before mobile apps became an excuse for uninspired developers to churn-out gutted clones of popular games (filled to the brim with micro-transactions) that target unsuspecting consumers into paying premium prices for inferior products.
The title of “peer-to-peer gaming king” now clearly belongs to FORTNITE. Record-breaking streamer Tyler “Ninja” Blevins attracted 667,000 concurrent live stream viewers for his Ninja Vegas ’18 event held at the Luxor’s eSports Arena, and multi-player video games (capable of marketing to a combined global player pool) fill a void that young gamers without a powerful PC and DSL connection simply didn’t have 15-20 years ago.
Regulators have also begun to crack down on influencers and misleading marketing practices often utilized by less-reputable sites to attract these younger players.
U.S. Online Poker Challenge #5: For-Profit Dream Unattainable
As Barry Greenstein explained in his 2018 conversation with Poker Life Podcast host Joey Ingram, regulations have become extremely costly for operators, who may no longer have any choice but to acquire licenses in ring-fenced markets at an initial net-loss, in hopes of recovering that investment at some point in the future.
Poker player skill levels and training resources have vastly improved over time. The rake fees associated with real money competitive online poker have also significantly increased, which has made the for-profit poker dream nearly unattainable for all but a very, very slim percentile of the overall player base.
The days of winning millions of dollars as a poker pro have all but come to an end, and the game is no longer marketed as a means to “make a living” as it once was — at least not by most licensed poker operators or media sites. The intelligence that poker pros themselves have shared alludes to the lack of profit-making opportunities from actual poker play (both online and live), which has led to the rise of a new generation of poker broadcast talent and savvy self-marketers.
U.S. online poker would have a much more promising future if “shared liquidity” markets were to be given a “green light” to exist within America, but that future may rely exclusively on what the courts decide.
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