Since Black Friday, many poker players have been eagerly waiting for the return of liquidity sharing and the growth of the US market.
However, one thing has become clear -- online poker is not a priority for most state governments or lawmakers, despite the entertainment and revenue it provides.
The good news is that there are ways to change this. As someone who has worked on online poker legislation in multiple states, I would like to share my thoughts on how to move things forward from a practical point of view.
What is the Best Way to Legalize Online Poker?
There is no simple answer to this question as every state is different and requires an individual approach. Some states will be more receptive than others, while some types of arguments may work better depending on whom you are trying to convince.
In my experience, the process can be split into several steps:
- Introducing online poker into the conversation
- Getting license applicants/potential operators interested in applying for a license
- Convincing government officials (either legislators or administrators) to support your cause
- Passing all necessary bills and regulations (this can take several sessions if you are working with legislators)
- Selecting an operator or operators and issuing licenses
- Monitoring and developing the market
These steps do not necessarily need to happen in this order, and many of them can be done simultaneously. Let me give you an example – when we were working on the bill in Illinois a few years ago, the main sponsor of the bill, Michael Zalewski, was already having meetings and discussing the issue with government officials before even introducing it.
I want to focus on step two and touch upon step three since these are the ones that will vary from state to state. Let’s look at a couple of possible approaches and evaluate their pros and cons.
Leveraging Sports Betting
»Delaware, New Jersey, and Pennsylvania were able to legalize online poker and i-gaming due to sports betting.“
This argument may work best, especially considering the recent repeal of PASPA. Delaware, New Jersey, and Pennsylvania were able to legalize online poker and i-gaming due to sports betting. In fact, in New Jersey and Pennsylvania, i-gaming (including products other than poker) is outpacing sports betting and poker combined.
- BetRivers Online Casino Review - Slots, Games & BonusesThe idea here is that sports betting has generated a significant amount of interest recently due to the Supreme Court’s decision to strike down PASPA, as well as the upcoming 2026 World Cup, which will be held in the United States, Mexico, and Canada.
Some states, such as California, Mississippi, and New York, have already taken advantage of this by adding language to their sports betting bills that would also legalize online poker and casino games. This language would essentially update their existing intrastate internet gaming laws to include sports wagering.
While California is perhaps the most coveted market, it is one of the hardest to legalize anything in due to its complex political landscape. The missing piece of the puzzle there could very well be convincing Voters to Empower Californians in Charter School Governance (an organization that blocks gambling initiatives every jury), and I am not even going to speculate on how difficult that might be.
Mississippi and New York, however, have shown that it can be done. Both states added this language to their sports betting bills last minute without any real opposition. Of course, getting an amendment added to a bill is much easier said than done, but the reward could potentially be worth the risk.
Related:
PROS:
- Operators are already applying for sports betting licenses, so getting an additional fee for poker licenses seems reasonable for them.
- Language related to i-gaming usually survives the regulatory process (it has in NJ, PA, and MS).
- Players in those states will have access to liquidity sharing between states and a larger player pool, which should result in better software and more game variations and stakes.
CONS:
- It only applies to states that are seriously considering sports betting and plan to introduce intrastate betting.
- Even if the language passes, there is still a long road ahead before actual regulations and licensing take place.
- Not all state legislatures meet annually, meaning this opportunity is missed. For instance, Mississippi does not typically meet in odd numbered years, so the next chance for i-gaming will be after 2023.
Highlight Tax Revenue & Job Creation
This is arguably the oldest trick in the book but may be underappreciated in regard to online poker specifically. Some European countries, such as France and Belgium, have successfully used tax revenue arguments to legalize and regulate online poker in the past few years.
It’s important to note that offshore operators generate revenue from US poker players, and a significant portion of that money leaves the country. By legalizing online poker, the state government could capture some of those tax dollars instead.
Additionally, job creation is another major selling point. PokerStars alone had over 200 employees in the US before Black Friday, and other operators would likely open US offices as well. These jobs can range from customer service representatives to software developers.
Related:
PROS:
- This argument can be applied to any state, regardless of their current position on gambling expansion.
- Captured tax dollars and job creation are beneficial for state budgets and local communities respectively.
- Other states have had success using this argument in the past.
CONS:
- Some anti-gambling groups might still argue that this will lead to more gamblers and, thus, more problems.
- It might be difficult to estimate accurate tax rates since offshore and unregulated sites offer higher bonuses and rakeback. However, regulated operators often compete based on the quality of their product rather than bonuses. For example, PokerStars offered $600 in bonus during its first week back in the US, whereas, nowadays, it offers more moderate $30 in free play.
- You need to find an operator willing to invest a significant amount of money and time into securing a license and launch operations in the state. As of now, PokerStars is the most likely candidate for doing so.
Liquidity Sharing & Revival of Poker in the US
The benefits of liquidity sharing between state networks were evident almost immediately after PokerStars MI went live in March 2019. Michigan then passed legislation legalizing online poker and gaming, and the state is expected to go live with online poker and gaming sometime in 2021. Once it goes live, its player pool will be connected to Michigan, making it an instant contender for the largest network in the US.
The revival of the New Jersey network with the launch of partypoker NJ and the Borgata also helped the overall health of the remaining US player pools through liquidity sharing with Nevada and Delaware.
New Michigan Online Casinos to Try in 2023 – And The Best Welcome BonusesHaving a bigger network results in more revenue for the operator, which in turn creates more revenue for the state via taxes. There are also more games and variation in stakes, which leads to happier players and possibly attracting new players into the ecosystem.
This argument can be made stronger by mentioning the potential impact on the WSOP and the Main Event. In 2020, due to COVID, WSOP had to cancel its planned plans to host the event in Las Vegas and opted for a completely online series for the first time in history.
This allowed players from many previously unreached states to participate, resulting in record-breaking numbers, including over 100,000 entrances in the Main Event -- a 75% increase from the previous year. If online poker is legalized in more states and they connect their liquidity, we might see an entirely new group of participants joining the poker economy, especially if WSOP decides to keep part of the bracelet events online.
Related:
PROS:
- Increased revenue, increased player satisfaction, and an improved poker economy as a whole.
- Can be linked to tax revenue and job creation, as operators are more likely to invest in a state if there is a possibility of connecting to other states.
- Potentially bringing new participants into the poker industry, which could further boost revenues and tax collections.
CONS:
- This may not be compelling enough on its own; you will likely need to use it in conjunction with one or more of the other arguments.
- There is always the risk of cannibalization: players from State A moving to State B because the player pool is larger.
- The main drawback is the lack of a licensed poker operator actively pushing this agenda. While many companies have expressed interest in entering the US, none have spent serious resources trying to get regulation across the line.
Popularity of Poker
This argument is not directly related to online poker, but it is something to consider in case you are starting from scratch. According to Google Trends data, search volume for ‘poker’ in the US reached its peak in May 2003 and again in June 2006, around the time of the Unlawful Internet Gambling Enforcement Act (UIGEA) signing and the beginning of Black Friday, respectively.
Despite the decline in popularity over the last decade and a half, there are signs that people are still interested in poker. The aforementioned 2020 WSOP Main Event is a prime example, along with the ongoing success of the Poker Masters and the newly created Galfond Challenge.
caesars casino mobile appWhile it may be challenging to quantify the size of the potential player base, it is undeniable that poker remains a popular pastime for many Americans.
Related reading:
PROS:
- This argument can be used in any state since people can access land-based casinos or card rooms, and poker streaming has made it easy to follow high-stakes tournaments.
- When compared to other arguments, this one has the least barriers to entry – you don’t need to secure an operating agreement, calculate tax rates, etc.
CONS:
- This doesn’t address the specific issues surrounding online poker regulation.
- Popularity does not guarantee success, and there are many factors that contribute to someone becoming a successful poker player.
- Anti-gambling organizations may still oppose this argument, as poker can be considered a gamble.
Which Approach Is Best for Legalizing Online Poker?
All four arguments have their advantages and disadvantages, and each state will require a tailored approach. Some government officials may be more interested in tax revenue, while others may be more concerned about job creation or the overall popularity of poker. It’s essential to understand your audience and craft your message accordingly.
For example, if you’re speaking with a senator whose constituents include many retirees, you might emphasize the job creation aspect and how it could benefit their community. On the other hand, if you’re talking to a governor who is focused on balancing the budget, you might highlight the potential tax revenue.
As someone who has worked on both sides of the table, let me tell you that lawmakers are often more receptive to hearing about policy issues when they can see the benefits for their constituents. That’s why it’s crucial to have stakeholders (such as tribal casinos, existing brick-and-mortar cardrooms, and operators) ready to testify about how regulated online poker would improve the state.
So, what’s the bottom line? Well, there’s no easy answer. Still, if you want to legalize online poker in your state, you need to be prepared to put in the work. That means building coalitions, educating policymakers, and being persistent. It won’t happen overnight, but with dedication and perseverance, we can make progress towards a brighter future for online poker in the US.
About the Author
Alekady Vasylyev
Alekady Vasylyev is an analyst at SharkScope, where he specializes in US gambling laws and regulations. Prior to joining SharkScope, Alekady worked for PokerStars as a Government Relations Manager for Asia Pacific where he was involved in developing and implementing strategies to ensure compliance with local regulations. He holds a Master's degree in Law from Saint Petersburg State University in Russia. Alekady is also an accomplished poker player with live tournament earnings exceeding $150,000.
