Business

The Future of Online Poker in the United States

As the final cards of 2022 are being dealt, one thing has become very clear in the iGaming industry – it’s big business. The market was worth $2.2bn in 2020 and $2.7bn in 2021 and has been forecast to grow to $7.6bn by 2028 by market research firm Blueweave Consulting. Poker, at the moment, forms a fairly small part of that.

In 2018, the Supreme Court struck down a 1992 statute that effectively banned sports wagering in the United States, leaving it up to the states themselves to decide. In 2022, 21 states gave online sportsbooks the go-ahead, with New York projected to be one of the most lucrative as fans of the Jets and Giants back their (surprisingly worthwhile backing this season) sides.

By contrast, poker is a much smaller part of the overall take, as current poker legislation means online play is only permitted in seven states – and it’s only available to play in five of those. Poker is an intrinsic part of American culture but has been associated with cowboys and outlaws as much as the glitz and glam of Vegas; lawmakers haven’t always been keen on it.

The online game has suffered much the same fate.

History

From the first hand of online poker being dealt in 1999, US poker companies underwent a boom that would put Sin City’s development from a sleepy Nevada staging post to the entertainment capital of the world to shame. In 2006, the Unlawful Internet Gambling Enforcement Act, signed into law by George W. Bush, forbade American banks or payment processors from handling any funds used in online gaming.

Now, we’re online, so sites (and players) can offshore themselves, right? Right. Until 2011, when Black Friday saw the Department of Justice issue an indictment against the largest three sites still remaining. The party was over.

The comeback

The online game wasn’t offlined for long, however. Nevada – unsurprisingly – was the first state to take matters into its own hands, legalizing digital decks in 2013. Michigan, Pennsylvania, Delaware, and New Jersey have followed, along with West Virginia and Connecticut – although currently, there are no operators in the latter two as they’re not signatories to the Multi-State Gaming Act.

With players only allowed to compete against others in the same state in WV and CT, those markets are a little small to make it worthwhile setting up the necessary infrastructure.

Improving legality

There are a handful of jurisdictions where online poker is almost a permanent fixture on the opening slate of the State session’s business. New York has a live bill that will permit online poker if passed, while Illinois have a proposed Internet Gaming Act that specifically mentions online poker. This is particularly pertinent in these two, as both states have metroplexes (NYC and Chicago) where there are no physical poker rooms, yet those provisions exist elsewhere in the respective territories.

With the recent take-up of online sports wagering in both, and the uptake in tax revenues; as a result, it’s likely legislators’ heads could be turned when societal chaos doesn’t ensue, and more money is available to make good on campaign promises.

Potential pitfalls

Payment systems are still somewhat unwieldy in the United States. While most providers will accept Visa and Mastercard, deposits back to credit cards will typically take 2-4 working days. Deposits, while instant, are also likely to be charged as cash advances, with the requisite fees and interest rates on monies deposited.

Those can be averted by depositing via bank transfer, although those can take that same 2-4 working days to process; while that might be fine if one is entering a scheduled tourney, it’s not ideal if a player just wants to play a few quick hands.

This time last year, cryptocurrency was thought to be the way of the future – and Asian providers have been keen to take it up – however, the Securities And Exchange Commission has not yet said how they want it to be regulated in America. No US poker sites currently accept it (possibly pending SEC machinations), and the recent collapse of crypto exchange FTX is unlikely to have won friends or influenced people.

We stand at something of a crossroads. American attitudes to online gaming are loosening. The pandemic period saw players moving from card rooms to computers, and revenues came in as a bolster to the industry rather than cannibalizing monies from brick-and-mortar gaming venues.

With 5G infrastructure improving all the time and Americans becoming more used to replacing their trackside flutter with one via their cellphone, it seems arbitrary that one would have to travel to a card room to back themselves. Watch this (cyber) space.

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