US Online Poker Anticipates a Year of Better Progress on Regulation

Another year went by with no US states legalizing online gambling within their borders. However, this does not mean that the topic was not discussed here and there in 2016. Significant progress was made in several states, other states discussed the matter broadly but could not come to an accord, and there were also several places in US where lobbyists presented legislators with impactful studies and reports to be considered and possibly used for the introduction of pro-iGaming legislative measures.

In other words, 2016 was an eventful year for US online poker, although not in the manner many wished for. On New Year’s Day, here is an overview of what happened, what did not happen, and what, in our opinion, will happen in terms of online poker legalization and regulation in the US.

California

Lobbyists have been trying to bring online poker to California for years now. However, heavy arguments between local tribes and other related parties, including interested gambling operators, have made the idea of the state legalizing online poker hard to materialize.

In 2016, efforts continued and for a brief while it seemed that major progress could be made. California’s online poker bill – AB 2863 – passed the state Committee on Appropriations in late July, thus reaching the full Assembly floor for the very first time. However, the measure died in the Legislature a month later to mark another year of no moving forward or rather of progress being intercepted just as it started gaining momentum.

California has traditionally been perceived as one of the states with highly profitable card rooms, so it is believed that online poker will quickly become a player-favorite activity, once legalized. However, potential popularity with customers has not been and is not enough for legislators to speed up the process of legalization.

Issues, and deeply-rooted ones, have been preventing the measure from moving any further in the Legislature. For instance, groups of California tribes have been arguing whether PokerStars should be allowed to return to the local market when and if legalized. According to opponents, the world’s largest poker room should not be allowed to operate in the state, or if allowed, should be sanctioned for violating the Unlawful Internet Gambling Enforcement Act 2006 in the years preceding April 15, 2011.

Under a proposed “bad actor” language, PokerStars and other online poker brands that continued providing real-money options to US residents post-UIGEA should pay a $60-million fine in order to be able to apply for a license in California and should wait for 10 years after the market’s regulation. Another coalition of local tribes, supported by PokerStars itself, have been arguing staunchly against such a measure.

What should be done is a tricky question with many possible answers. However, tribes and other interested parties adopting a compromise-ready attitude towards the matter could be a good start for setting the future of California’s online poker industry.

Pennsylvania

At a certain point, it seemed that Pennsylvania might have had a legalized online poker industry by the end of 2016. However, state players will have to wait for a little longer before being able to play real-money poker on desktop and mobile.

Last June, the House of Representatives voted in favor of a bill that provided for gambling expansion within the state’s borders, including the regulation and legalization of online gambling. For months, no progress was made until the measure was brought back to the table as a potential savior of Pennsylvania’s diminishing budget.

On the very last day before adjourning for an Election Day break, state House Representatives passed HB 1887, a proposed legislation that included a solution to a local casino tax issue as well as provisions for the legalization and regulation of the state’s online gambling industry. It was then up to the Senate to determine whether the bill should be voted on before the end of the 2016 legislative session. And the Senate did not consider the proposal.

Given this, Pennsylvania legislators who sponsor the bill will have to start from scratch in 2017. However, it seems that HB 1887 has gained considerable support that may help it move further in the Legislature and eventually get signed into law.

New York

Last year, an online poker bill gained momentum in New York just as quickly as it died in the Legislature. Sponsored by Senator John Bonacic, the measure made it all the way to the state Senate, marking an unprecedented progress for an iGaming proposal in New York. The bill was not only considered by Senate members, but was also passed by a significant margin. A total of 53 lawmakers cast a positive vote and only 5 appeared to be against the proposal.

Although the measure gained support in the Senate, things were slightly different in the Assembly. Assemblyman Gary Pretlow, the bill’s sponsor in the Assembly, could not convince fellow members that online poker should be given further consideration during the 2016 legislative session. The bill died last June but industry insiders now believe that 2017 could be the year when it would resurface and would possibly be passed into law, thus making New York the fourth state with legal online gambling operations.

Here it is also important to note that three Upstate commercial casinos are set to open in February and March. It is believed that if the businesses prove to be profitable ones and show demand for gambling options, this could further improve online poker’s chances in the state.

US Online Poker on Federal Level

Nationwide, the end of 2016 was marked by growing concerns that a federal iGaming ban may be tacked to a larger legislative piece and passed by the Congress. These concerns, however, turned out to be ungrounded as no such ban was considered by legislators in the closing days of 2016.

This does not mean that 2017 will not see any action against online gambling on federal level. A letter signed by ten state Attorneys General was sent to the Congress in the final days of last year, calling for the reintroduction of a nationwide iGaming ban. This has been the third consecutive year that such a letter was produced, and was not given much consideration.

Another important thing to take into account is the fact that the newly elected US President, Donald Trump, may eventually support a bill that provides for online gambling prohibition. It has become known that Las Vegas casino tycoon Sheldon Adelson, a long-time iGaming opponent, has backed financially Mr. Trump’s presidential campaign, which may not bode well for the US online gambling industry’s future. Of course, these are only reflections on a too broad of a topic.

Outlook for 2017

Apart from the usual suspects – California and Pennsylvania – several more states expressed interest in considering the legalization of online poker in 2016 and we believe that their efforts in that direction will continue in 2017. Michigan, Massachusetts, and New York were some such states. And as mentioned above, New York, in particular, has every chance to legalize the fourth US online poker market, if a bill gains just a little bit more support there.

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