Last month, we inaugurated a new Ask the Poker Experts series with an article asking “Am I Being Too Paranoid About Online Poker?” The question, posed by one of our readers, was responded to by a panel of five experts in the field of online poker with diverse backgrounds as players, cybersecurity experts, and working for well-known operators. This month, the question actually comes from me, as I imagine it’s a question numerous Cardplayer Lifestyle readers have been asking themselves over the past week or so.
To provide answers to my question, I’ve rounded up a fresh panel of experts who have graciously agreed to give of their time to participate. In alphabetical order, then, I wish to express my sincere thanks to David Huber, Preston Oade, Steve Ruddock, Adam Small, and Mac VerStandig, whose answers appear below. As each of the panelists have slightly different qualifications and experience, their answers provide a rather comprehensive assessment.
Without further ado, my question:
QUESTION: What Does Legal U.S. Sports Betting Mean for Online Poker?
It seems like the whole poker world is abuzz over the new Supreme Court ruling re: sports betting, and there’s universal consensus that this is “good for the gambling industry and good for poker.” However, there also seems to be an incredible amount of confusion with regard to what it means practically speaking as far as “the return of regulated online poker to the U.S.” is concerned. I keep hearing people talking about the Wire Act, the UIGEA (Unlawful Internet Gambling Enforcement Act), and PASPA (Professional and Amateur Sports Protection Act, passed in 1992), but I’m just not sure what information is or isn’t relevant to the discussion. Frankly, I’ve never placed a sports bet in my life. What I care about is poker and online poker. Does this new ruling mean Americans (beyond those located in the four states where it’s expressly legal; Nevada, New Jersey, Delaware, and Pennsylvania) can soon legally play regulated online poker in the U.S. again?
No, the reversal of PASPA prohibitions on sports betting does not mean that Americans outside of those four states will soon be able to play licensed online poker as a result. I believe American poker players are viewing the SCOTUS decision as positive news because:
- Online poker may receive a boost now that sports betting has a shot at being legalized in their jurisdiction.
- A “gambling” vertical has gained political attention on both a nationwide and statewide level.
- Proposed statewide online poker bills may be piggy-backed onto sports betting legislation, which might increase the chances of both activities being licensed and regulated in a particular state.
- The current U.S. tri-state “shared player pool” online poker market could benefit even further if more states pass laws to formally legalize iGaming.
- Positive “legislative” momentum has been hard to come by for Americans since Black Friday, and it’s somewhat of a positive when restrictions are removed for any gambling activity. But even with the road paved for statewide, regulated sports betting, the path to legalized online poker remains extremely challenging in most U.S. states in my opinion.
This is because each jurisdiction has unique gaming interests, social leanings towards gambling, and existing statewide laws that could complicate the process of getting an actual online poker bill approved, plus it would likely take at least one year for any state to launch real-money online poker games upon passing such a law.
Then of course there are the stakeholders… online poker operators, tribal gaming interests, land-based commercial casinos, professional sports leagues, bookmakers, iLottery, the horse racing industry, rival play-money platforms, the Entertainment Software Association (which is currently lobbying on behalf of video game micro-transactions in a number of states), along with a massive increase in eSports betting among the 21-25 age demographic. Getting all (or even some) of these interests to agree on a regulatory framework for statewide iGaming legislation has been nearly impossible up to this point, and I’m not so sure that the recent Supreme Court decision will have an earth-shattering effect on the gridlock we’ve seen from these parties so far.
- No federal law makes it illegal for individual players to play poker on offshore sites. The dreaded UIGEA, which the feds used on “Black Friday” to shut down Poker Stars, Full Tilt and Ultimate Bet doesn’t even mention the word “poker.”
- The UIGEA goes after the money and the offshore sites, not the players. It regulates credit card deposits, not poker. That’s why most current online poker sites want players to make deposits with Bitcoin.
- Although the Wire Act doesn’t mention the work “poker,” the U.S. Department of Justice (DOJ) used to interpret it that way, even though the courts rejected it. The DOJ finally gave up, however, in December 2011, with a ruling that the Wire Act applies only to “sports betting.” See “What the DOJ’s Reversal on the Wire Act Really Means.”
- Like the Wire Act, PASPA doesn’t have anything to do with poker. Except for a few states like Nevada that were “grandfathered” in, PASPA effectively outlawed sports betting nationwide.
The federal courts ruled over a decade ago that poker is not “sports betting.” That’s why the recent Supreme Court decision overturning PASPA has no legal effect on online poker.
It may, however, change the political climate on gambling, which can only benefit online poker. It may also result in more players opening accounts on offshore poker sites, as they may finally understand that no federal law makes it illegal.
K. Preston Oade is the author of “The Art and Science of Poker Tournament Selection.” Playing mostly online, he has been rated by OPR in the top 1.2% worldwide, with published live tournament wins of almost $200,000. A retired lawyer, he has successfully argued cases before the U.S. Supreme Court. He can be reached at [email protected].
The ruling is great news for sports bettors and the gaming industry writ large, but it’s unlikely to tip the scales in any meaningful way when it comes to online poker.
In fact, in some states it could prove to be detrimental. States that are currently contemplating online poker/casino could very well push it to the backburner now that they have the shiny object that is sports betting to consider.
Now, that isn’t to say it won’t help in specific states. There are opportunities for sports betting and online poker to converge into a single piece of legislation; provided the right environment exists.
For a state to couple sports and poker one or more of the following must be present:
- History: The state was already considering online poker.
- Likeness: Online sports betting is on the table.
- Cohesion: The same stakeholders would operate online poker and sports betting.
- Necessity: The state is desperate for revenue.
- Math: The legislature lacks the votes to pass either measure independently.
To answer your original question, it might speed up the process in some locales and slow it down in others, but at the end of the day, the striking down of PASPA is probably a net neutral for online poker.
StevevRuddock is a senior analyst covering the casino and gaming industry for OnlinePokerReport.com and PlayNJ.com. His focus is the intersection of land-based and online gaming in the U.S.
The short answer is no. The PASPA ruling did not change the legal status of online poker in any U.S. state.
Individual states have had the ability to legalize online poker since late 2011, when the U.S. Department of Justice released an opinion that the Wire Act did not apply to forms of gambling that are not related to sporting events. This law had previously been cited to justify claims online poker was illegal under federal law.
Since then, just four states have passed laws to license and regulate online poker. New Jersey, Nevada, and Delaware all did it fairly quickly, each passing a law around a year after the DOJ opinion was released. Pennsylvania finally became the fourth state last October.
Sports betting, on the other hand, had been for the most part blocked everywhere outside of Nevada until the May SCOTUS ruling. Now that PASPA is off the books, individual states can begin to license and regulate sports betting, just as they’re doing with online poker.
The opening for sports betting likely does grease the wheels for gambling expansion legislation in many states around the country. And if a state pursues a similar path to Pennsylvania, which provided frameworks for online poker, online casinos, and sports betting all in the same bill, then poker might get to piggyback into that state via sports betting legislation. Based on what we’ve seen so far, it seems unlikely this will be the case in most states.
Overall, I’d call the SCOTUS decision good news for the gambling industry as a whole, and good news for companies like The Stars Group, 888, and GVC. It could be good news for poker, too. It’s also part of a general trend of positive industry news that began to ramp up in Fall of 2017. Pennsylvania’s expansion and New Jersey’s agreement to pool poker players with Delaware and Nevada were both also part of this trend as well.
When you look at overall industry currents, things look quite a bit better for online poker in the U.S. than they did a year ago. But no new states are legal as a result of the fall of PASPA. That’s something state legislatures are going to have to take care of themselves.
Adam Small has been a prominent iGaming industry professional for more than 13 years, having co-founded pocketfives.com, NJOnlineGambling.com and PennBets.com.
The rumors of online poker’s salvation are greatly exaggerated. While the Supreme Court has undoubtedly done more for sports betting in one opinion than Jimmy the Greek did in a lifetime, there is precisely nothing about its monumental holding in Murphy v. NCAA that will advance the legal cause of online poker.
Before Murphy, “PASPA” actually prohibited states from legalizing sports betting. But both before and after Murphy, there has been no federal law that prohibits states from allowing online poker.
In actuality, states were as free the day before Murphy to let PokerStars bounce amidst their communications towers as they were the day after. The UIGEA does not prohibit states from legalizing poker; it simply provides enhanced enforcement measures to reinforce any existing state laws that already prohibit online poker. And the Wire Act – Bobby Kennedy’s absurdly overbroad effort to curb mob activity in the 1960s – has been repeatedly interpreted as not having anything to do with poker since Texas hold ‘em is not a sport (no matter how many hours of programming it may occupy on ESPN opposite a fresh showing of the national cornhole championships on The Ocho).
Importantly, while Murphy has the net effect of freeing up states to legalize sports betting if they so choose (and it seems many are eager to make that choice for tax reasons), the decision itself has nothing to do with gambling. The Founding Fathers did not vest in Americans an inalienable right to take the Knicks with the points, nor has Congress ever so much as seriously contemplated a law which would create a national bookmaking regime.
Rather, the Supreme Court has simply said the federal government went too far with PASPA because the law was not an exercise of nationwide governance (as Congress is permitted to do) but, rather, a cranky prohibition on states exercising their sovereign powers. The whole holding is, in essence, a massive double negative: Congress cannot not allow states to exercise their legislative power in areas of law where there is no controlling federal law.
Legally, Murphy may be the greatest win for states’ rights advocates in a generation, going as far back as 1995 when the Supreme Court checked Congress’ pervasive powers in a case called U.S. v. Lopez. But nowhere therein may be found any insinuation of a proliferation of gambling freedom; that sports wagering was the topic du jour of this landmark federalism case is mere coincidence.
Maurice “Mac” VerStandig is the managing partner of the VerStandig Law Firm, LLC, and focuses his practice on representing poker players, advantage gamblers, and other industry professionals in all manner of legal situations. He can be reached at 301-444-4600 or [email protected].
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