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Online Poker Regulation in the US: Q1 2018 Review

Posted on by John Lathram

US Online Poker RegulationThe first three months of 2018 have thrown up few surprises with regard to online poker regulation in the US. However, looking forward, there could be some significant changes on the landscape – particularly if the Supreme Court makes a positive ruling in the PASPA sports betting case.

Three months ago, I concluded my review of 2017 by writing 2018 could be a very significant year for online poker regulation in the US; and, although it could still be a very significant year, there has been little forward momentum towards delivering on the optimistic forecast.

The stalemate has been led by gambling regulators in Pennsylvania; who, although getting the green light last October, have been slow in developing online gambling regulations. The latest coming out of the Keystone State is that platform providers can start applying for licenses in June. Consequently, regulated online poker in Pennsylvania is not expected to launch until the end of the year.

Déjà Vu in New York – No Action Expected until June

New YorkFor the third successive year, a bill to regulate online poker in New York has been passed by the Senate´s Racing, Gaming and Wagering Committee. For the third successive year, revenues from regulated online poker have been included in the state budget (and subsequently scratched). For the third successive year, proponents of regulated online poker are not raising their hopes.

The issue in New York is that the regulated gambling market is already saturated. This has resulted in the state´s recently-legalized brick-and-mortar casinos failing to meet their projected revenues by up 44%, and raised concerns that a further expansion of gambling will further harm the fledgling casino industry. There are also constitutional issues to overcome with regard to an expansion of gambling as well.

The Chairman of the Assembly´s Racing, Gaming and Wagering Committee – Gary Pretlow – has (for the third successive year) insisted he is confident of an online poker bill becoming law. But, as often happens in New York, Pretlow admits there will unlikely be any movement towards passing a bill until the end of the legislative session in June.

Update, two events occured last week which negatively impact regulated gambling in New York.

Michigan Legislators Wake Up to Ballot Requirements

MichiganIn the past few days, rumors have surfaced of an amended online gambling bill doing the rounds in Michigan. According to Tim Hernandez at PokerRealMoney.com, the draft bill aims to address the divide between tribal and commercial casinos – one of the reasons for previous proposals failing (the draft bill has not yet been published, so I am unable to comment).

It is also being reported the draft bill acknowledges that any measures to regulate online gambling in Michigan will have to be approved in a statewide ballot. As I suggested last December, the necessity of a statewide budget may scupper the chances for regulation if the fiscal consequences of cannibalizing the state lottery are made known to the general public.

Of course, there is still time to change the distribution of funds generated by regulated online gambling, as there is to change the unbalanced competition between the state lottery and proposed casino games. However, whether these issues can be addressed in time for inclusion on this year´s ballot may depend on how much tribal and commercial casinos are willing to compromise.

Connecticut Takes the Slow Lane, California Parks the Bus

ConnecticutTwo states that will not be contributing towards the momentum of regulated online gambling are Connecticut and California. Last week I wrote about a flurry of activity in Connecticut that was being interpreted by some observers as progress towards regulated online gambling. However, as the consequences of taking the state lottery online are not due to be discussed until 2023, the implication is that any progress towards the regulation of online gambling in Connecticut will be very, very cautious.

By comparison, the state of California has taken the most cautious route to regulating online poker by not introducing a bill at all. Assemblyman Reggie Jones-Sawyer believes there is a better chance of online poker being tagged onto a sports betting bill then trying to resolve the differences between stakeholders. Naturally, being California, it is not as simple as that. The likelihood is the same level of bickering will continue whatever expansion of gambling the state considers.

Elsewhere, five states have already passed legislation allowing them to license sports betting (not necessarily online), while ten other states have legislation pending awaiting the verdict of the Supreme Court in Christie v. NCAA. This case challenges the legality of the Professional and Amateur Sports protection Act of 1992 and, if the verdict goes in favor of Christie, it will result in a repeal of the Act – allowing states to authorize sports betting by law.

Supreme Court Verdict Could Ignite Online Gambling Legislation

Assuming the Supreme Court finds in favor of Christie, I anticipate many more states will look at the opportunities to generate revenues by regulating (and taxing) online sports betting. This in turn should lead to a general expansion of gambling – including online poker. No doubt there will be objections from anti-gambling campaigners – indeed a version of RAWA is rumored to circulating in Washington – but the need for revenues will likely overcome them.

With the Supreme Court´s decision anticipated in the next couple of weeks, my next regulatory review could make very interesting reading indeed. Will online poker in Pennsylvania be any closer to launching? Will New York fail to pass legislation for the third successive year? Will legislators in Michigan get their act together in time for a proposed expansion of gambling making it onto the ballot paper? We may have to wait another three months to find out!

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