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Why Are Legislators Ignoring Regulated Online Poker?

Posted on by John Lathram

US Online Poker RegulationRecently in the United States, a significant number of states have passed legislation to regulate and tax sports betting and Daily Fantasy Sports. Despite this willingness to legislate in favor of games of luck, there is a lack of momentum towards games of skill. So, why are legislators ignoring regulated online poker?

Five years ago, the regulation of online poker in Nevada, New Jersey and Delaware was supposed to create a state-by-state domino effect that would eventually result in most online poker players in US having access to regulated poker sites. To date, only Pennsylvania has joined the original trio of states, and regulators in the Keystone State are hardly busting a gut to get the cards on the virtual felt.

Elsewhere, a mixture of politics (New York), conflicting interests (California), and constitutional issues (Michigan) has prevented some states passing online poker legislation, while others (Connecticut, Massachusetts, New Hampshire, etc.) have flirted with the idea and then abandoned it – at least temporarily. However, in other areas of gambling in the United States there has been a seismic shift.

A Seismic Shift, But Not In the Right Direction

In March 2016, Virginia became the first state to regulate Daily Fantasy Sports – opening the door for a further seventeen states to enact similar legislation. Proposals are currently on the table in four other states, while a number of jurisdictions have stated they have no plans to introduce legislation, as Daily Fantasy Sports was given a carve-out in UIEGA and is (in their opinion) legal under federal law.

The rush to regulate Daily Fantasy Sports is nothing compared to the rush to regulate sports betting since the Supreme Court ruled PASPA to be unconstitutional. Eight states have (or already had) passed legislation to regulate sports betting, and twelve more states have bills on the table to consider when legislators return from their summer recesses. That´s potentially twenty states with regulated sports betting by the end of the year!

Where Have All the Objectors Gone?

Naturally there will be states that will fail to pass legislation due to politics, conflicting interests and constitutional issues (some have questions relating to sport betting regulation on this year´s ballot paper), but what is noticeable in the seismic shift towards regulation is that few people are raising the objections to Daily Fantasy Sports and sports betting that were used to thwart online poker legislation.

Concerns about underage gambling, gambling addiction, the cannibalization of other gambling revenues, money laundering, and “click a mouse, lose your house” are mostly absent in current discussions – even though (thanks to modern technology) the same concerns are equally applicable regardless of whether the gambling activity is conducted online or at a brick-and-mortar establishment.

So, What´s Holding Up Regulated Online Poker?

Ignorance mostly. A lot of people – not just legislators – interpret events such as the Wire Act, UIGEA and Black Friday incorrectly. Evidence of this appears on every online poker forum, and the confusion over what is right and what is wrong is heightened by some in the poker media deliberately using the terms “legal/illegal” (rather than “regulated/unregulated”) to promote their own affiliate interests.

The consequence is that opportunities to integrate online poker legislation into Daily Fantasy Sports and sports legislation are being passed by. This is not necessarily the fault of legislators. There are still some in the commercial and tribal casino industry that believe regulated online poker would hurt their bottom line – even though unregulated poker exists and the evidence in regulated states proves otherwise.

What needs to be done for regulated online poker to flourish is that legislators need to get educated. Then they need to pass legislation with reasonable licensing fees and taxes so that regulated poker sites can remain competitive against unregulated poker sites. That´s a big ask, and nobody seems willing to take on the task of educating those that matter (whatever happened to the new PPA anyway?).

Until somebody steps up to the plate, legislators will continue to ignore regulated online poker, and players will continue to play at unregulated poker sites.

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