Three states regulated online poker in 2013, but so far 2014 has failed to live up to the same excitement that occurred during last year’s historic launches.
That has changed a bit over the last month in couple key, well-populated U.S. states. In late April a well-publicized hearing in California was seen as a positive step for regulation in the state.
Good news followed in Pennsylvania on Wednesday when a highly anticipated study was released with findings that online casino gambling would not cannibalize the state’s dozen or so land-based casinos. Both states saw material increases in their chances for regulating by the end of 2015.
As to the question of what other states are on the horizon to regulate, that is a question many industry observers are pondering on a daily basis. While many of us speculate about what the future holds for the rest of the U.S., the many moving parts make it difficult to predict precisely when the next states will regulate in the future.
Of course, speculating is a big part of what us in the poker media like to do.
PAS recently posted a handy guide that details which states are likely to follow Deleware, Nevada and New Jersey. While I can’t agree with all of the categories detailed on that chart, it is a pretty good overall guide for where things are at the moment.
Previous Regulation Will Make it Easier
Those who impatiently waited through the sluggish regulation and licensing process in New Jersey and Nevada might come to the conclusion that without any imminent legislation the industry could be at least 2 years away from seeing cards dealt in the next state. While it’s true going live with regulated online poker is a rigorous process with many hurdles, it very well could be much faster process than we saw with the first three states.
Nevada took 18 months from the signing of legislation until cards at Ultimate Poker were dealt. New Jersey only took only 9 months from the signing of their bill until their November 2013 launch. With subsequent states, there is a sense that the process would much more closely mirror New Jersey than Nevada and likely will even take less time.
Many of the same companies will be involved in each state’s market and will be very familiar with the process in these emerging markets. Relationships and trust has been established. Mistakes have been made. Software has been tested. The more states that regulate, the more efficient companies will become at launching online poker in the more stringent US regulatory environment.
So while it may be easy to fall into the trap that regulation is many years away in some jurisdictions, it may be wise not to discount the previous groundwork that has been laid.
Add state competition and an insatiable desire for tax dollars to the mix and the dominos could really start to fall at some point. And this is without even considering that the population is quickly realizing the world will not go to hell despite what anti-gambling types have told us over the last decade.
What States Are Next
Many states have legislation that that stalled or in a holding pattern, but here is where would I put my money for states regulating in the next 2-3 years.
This week’s study of online poker in PA was seen as a huge positive and cements the state’s position as one of the best bets to be next to regulate. A neighbor of New Jersey, there is already some pressure for the state to join the action from a competition angle.
The four month long study found that that the state would generate $187 million in revenue in the first year and $307 million in subsequent years, all while complimenting land-based action. These facts should ease the concerns of many Pennsylvania legislators that were on the fence.
With 28 million residents, California is the 800 pound gorilla in the room, an undeniable game changer in the United States market.
There seems to be a strong interest in regulating online poker in the state, but a strong disagreement on how to go about it. PokerStars agreement with key California gaming interests only further complicates the efforts in the state. Finding consensus amongst California’s many Indian tribes has been and will continue to be arduous process to say the least.
Another state in New Jersey’s backyard, New York’s inclusion in the regulated market may be partly a case of keeping up with the Joneses.
In late March, a bill was introduced in the New York Senate and followed up by a bill that was introduced in the Assembly last week. New York had last attempted to pass a bill in early 2013.
Unfortunately, the bill’s sponsor, Senator John Bonacic does not intend to try to push the bill this year, but says a dialogue must be started.
Iowa has made tried unsuccessfully numerous times over the last few years to regulate online poker. President and CEO of the Iowa Gaming Association Wes Ehrecke says that the issue has been shelved for the rest of 2014.
The state will be intently watching the progress in New Jersey and will likely bring up a bill during the 2015 legislative session.
There has been significant interest in online poker regulation in Massachusetts, which could accelerate as other surrounding states regulate.
Unfortunately, Stephen Crosby, who is the Gaming Commission Chairman in the state says online gambling won’t be a reality at least until the land-based industry gets off the ground, which probably wont happen until 2015.
Like Massachusetts, Illinois will likely be held up until the land-based market opens up first. That could happen soon as the state recognizes they are losing tax dollars in riverboat casinos in nearby Hammond, Indiana.
Regulation in Illinois is seen as inevitable but will almost certainly have to wait until at least 2015 before the wheels start turning.