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Online Poker Regulation in the US: 2019 Predictions

Posted on by John Lathram

US Online Poker RegulationWhereas I usually end each quarter with a review of recent regulatory activity, this quarter I offer my predictions for online poker regulation in 2019.

Whereas 2018 was a positive year for online gambling in general, it was a very disappointing year for proponents of regulated online poker in the US. During the year, PASPA was repealed, federal agents ignored calls to revisit the Wire Act, and the cannibalization of existing gambling activities by online gambling was proven to be a myth.

However, hopes that the repeal of PASPA would lead to regulated online poker being piggybacked onto sports betting legislation failed to materialize, the rebranded Poker Alliance achieved absolutely nothing  (so nothing new there then), and the only state to pass laws to regulate online poker saw them vetoed for a less-than-convincing reason.

Regulated Online Poker Predictions for 2019

Bearing in mind that 2018 was an election year, there will likely be considerably more regulatory activity next year. In addition to the four states that passed sports betting between June and December 2018, a further twenty-one states introduced placeholder bills to be discussed in 2019. Unfortunately, few of them (at present) make any consideration for the regulation of online poker; and furthermore, what I consider to be the leading contenders each have major obstacles standing in the way:

Undoubtedly Rep. Brandt Iden will try again – and probably succeed – to get an online gambling bill through Michigan´s legislature after addressing the issues that caused this year´s effort to be vetoed. The state´s new Governor – Gretchen Whitmer – is keen to find sources of revenue to support better healthcare and education in the state, but the bill may still be opposed by anti-gambling parties who claim the proposed expansion of gambling violates the state constitution.

Efforts to regulate online poker in New York received a major setback last year when Acting Supreme Court Justice Gerald W. Connolly ruled the legislature had no authority to reclassify Daily Fantasy Sports as a game of skill to circumnavigate the state constitution that prohibits an expansion of gambling. As New York´s proposed online poker legislation uses the same reclassification argument, any legislation that passes in 2019 is also likely to be challenged in the courts.

Elsewhere, politics rather than constitutional issues could well prevent any further regulation of online poker in 2019. In Illinois, casino, racecourse, and Video Gaming Terminal operators are finding it difficult to agree on the complexities of the state´s 500-page omnibus gambling bill – so I don´t know how a newly-elected legislature will be able to get their heads around it – while in Connecticut, there is unlikely to be any further expansion of gambling until the East Windsor casino issue is resolved.

I think it is safe to say you can write off regulated online poker in California for another year (or more), as stakeholders are already bickering about control of the sports betting market before a law has even been discussed. In Massachusetts, the discussion about online gambling will move into its eighth year with the likelihood of no forward momentum while in Florida, voters chose to take the power to pass online poker legislation away from politicians and give it to the Disney Corporation.

Other Considerations to Take Into Account

In recent days, it has been suggested that a poker-only bill in Michigan may have escaped being vetoed because there would have been no conflict of interest between online poker and the lottery´s online scratch card games. Ignoring the possibility of the veto being attributable to Sheldon Adelson´s influence, I wonder if a poker-only bill may have failed anyway because of the way in which tax revenues from online poker have declined in recent years.

A compact between the regulated states failed to deliver the anticipated growth, and this could well influence how other states perceive the benefits of passing online poker legislation. Although the situation could improve when the Keystone State gets involved (despite some ludicrous restrictions about where you can play online poker), I can see many states adopting a wait-and-see approach – or, to put it another way, the same approach as most have taken for the past seven years since Black Friday.

Problem Gambling could also become a Factor

GamblingAlthough anybody who has wanted to play online poker, spin the reels at an online casino, or place a bet on the Monday night game has been able to do so in the unregulated market, there are also concerns that regulation will increase the risk of problem gambling. Some social care professionals have commented that people, who may not have gambled online previously because they perceived it was illegal, may now be tempted to bet and develop a gambling problem.

Some states are taking the potential socioeconomic cost of expanded gambling very seriously. In Connecticut, a study has been undertaken to measure the impact of taking the state lottery online and it may be the case that the state delays any further expansion of gambling until the results of the study are known (as well as waiting for the East Windsor casino case to be resolved). It is also one of the issues highlighted in Governor Snyder´s letter when he vetoed Michigan´s Lawful Internet Gaming Act.

My 2019 Predictions for Online Poker in the U.S. make Gloomy Reading

At a time when poker players everywhere will be raising a glass to welcome the New Year, there are more reasons for proponents of regulated online poker to feel their glasses are half-empty rather than half-full. In recent years there have been reasons for hope; but I feel that 2019 will be equally as disappointing for online poker regulation in the U.S. as 2018 was. Happy New Year!

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