Online Poker in the United States Where We Are Now
How Poker First Became Popular
The game of poker was being played in the U.S. long before computers, iPads, and smart phones were ever invented, in fact long before anyone reading this article was even born. That is not to say that poker was always legal. The game’s colorful history includes the completely unregulated versions that were a common occurrence on the riverboats on the Mississippi waterways back in the 18th century and in the notorious saloons of the Wild West in the 19th century.
In 1909, the State of Nevada, in an attempt to restore law and order, actually banned poker completely. But, of course, the ban didn’t stop illegal gambling, including poker, from continuing in backrooms, just like it did a century earlier. The situation remained that way until 1931, when gambling in Nevada finally became fully legal.
The first legal U.S. casino outside Nevada (Resorts in Atlantic City, New Jersey) did not open until 1978. Casinos can now be found in almost every state.
Initially, stud poker reigned supreme, but today the most popular form of poker by far is Texas Hold ‘Em. The widespread appeal can be largely attributed to its being the featured game at the World Series of Poker (WSOP) held annually in Las Vegas since 1970. With the message being conveyed that anyone from any walk of life could win staggering sums of money playing this game, millions of new players could hardly wait to try their luck.
The History of Online Poker
In contrast to poker played legally in casinos or illegally elsewhere offline, the rapid growth of online poker is a relatively recent phenomenon. Online gambling wasn’t even an option until the mid 1990’s, and yet by 2004, the U.S. was leading the world in the number of online players. By 2006, Americans had over 2,000 online gambling sites at their disposal. Fueling the fire was the fact that Chris Moneymaker, the 2003 WSOP Champion and Greg Raymer, the WSOP 2004 Champion, were both amateur players who had qualified online.
Then, on 10/13/06 President Bush signed into law the Unlawful Internet Gambling Enforcement Act of 2006, banning American financial institutions from processing most kinds of transactions with online gambling operators. The new law caused major sites like Partygaming and 888.com to cease taking action from U.S. players, and the online gambling industry took a huge hit.
On the other hand, even with the anti-online gambling law in effect, the legality of online poker for players in the U.S. remained unclear. Each state had its own set of laws which may or may not have had any reference to online poker.
However, neither the UIGEA of 2006 nor any other federal law forbade U.S. citizens as a group from engaging in online gambling. In addition, the ambiguity of the UIGEA of 2006 as far as the operators were concerned with regard to whether the law was even intended to apply to poker gave rise to the argument that poker was a game of skill and therefore exempt.
In 2009, the U.S. Department of Justice seized nearly $35 million in online poker account money. Then, on 4/15/11, in what appeared to be the final nail in the internet gambling coffin, the U.S. Department of Justice shut down the three largest offshore sites catering to U.S. players.
This left diehard online poker players in this country with three options: give up online play, relocate to a country where online poker was clearly legal, or play anyway here at whatever site they could get through, illegally and at their own risk. Meanwhile, Senator Majority Leader Harry Reid attempted to introduce new federal legislation to legalize online poker, but without success.
Actually, the mourning over the loss of online poker in this country proved premature. In late 2011, the Court of Appeals ruled that the forerunner of the 2006 law, the Federal Wire Act of 1961, applied only to sports betting. Accordingly, there are still some legal options as several online poker sites continue to accept American players.
In addition, the U.S. Department of Justice clarified its own position that the legality or illegality of online gambling otherwise should be a state issue, not a federal one.
With individual states given the green light to enact their own laws, three states-Nevada, Delaware, and New Jersey-wasted no time in doing just that, with more expected to follow.
Online Gambling in Nevada
In February, 2013, Nevada became the first state to legalize online gambling, limited to poker only, though. As of this writing, two state licensed online casinos are operational there:UltimatePoker.com and WSOP.com.
The first to open for real money online poker play was UltimatePoker.com,on 4/30/13. While play is restricted to Nevada residents only, age 21 and up, the site has several attractive features going for it. In addition to its association with the Ultimate Fighting Championship (UFC), it is a partner of the Station Casinos, giving players, along with other incentives, the convenience of depositing and cashing out at any of the 16 Station Casino properties.
On 9/19/13, Caesars Interactive Entertainment launched its WSOP web platform, WSOP.com, in partnership with 888 Holdings, to become the State’s second fully licensed online poker room for real money wagering. One advantage of WSOP.com over its sole competitor is superior software. Another is a wider range of games (i.e., seven card stud, which is not available on UltimatePoker.com). A third is that visitors to Nevada and not just residents can access the site. A fourth advantageous feature is the transfer of Total Rewards card tier status. An important disadvantage is the lack of a casino cage banking option; deposits are limited to electronic checks and MasterCard and Visa and withdrawals to electronic and paper checks.
WSOP, even though starting out later than UltimatePoker, has overtaken and surpassed it in traffic. The coming year is expected to show big growth for regulated online poker in Nevada not only for the two existing sites, but as more open up. The State has already given out more than a dozen licenses. In addition, some big names in the poker world have signed endorsement deals with Nevada license holders, which will undoubtedly lead to increased interest and activity.
Online Gambling in Delaware
Delaware, the first state to ratify the Constitution, became the second state, after Nevada, to offer state run online poker to its residents, but the first state to adopt full scale online gambling. As of 11/8/13, Delaware residents, age 21 and up, can play poker, roulette, blackjack, and slots, as well as the State Lottery, online. But in order to play, they must also be physically in Delaware at the time and they must be registered with one of the three licensed online casinos. The three websites, all partnering with 888 Holdings and all linked to Delaware racetracks, are Dover Downs, Delaware Park, and Harrington Raceway and Casino. Each is under the jurisdiction of the Delaware State Lottery. Software capable of tracking a computer’s IP address has been implemented to insure compliance.
The Delaware operators are specifically targeting young adults in their 30’s with discretionary income who regularly use such devices as iPads and smart phones. These are people who probably would be more inclined to bet online than to travel to a racetrack and casino in person, but the racetracks are offering special incentives such as free play and comped meals to get them to do both.
Both banking and playing options are limited. Deposit options are limited to bank transfer or credit cards, and withdrawals to bank transfer or check. Available games include no limit hold ‘em , 2-4 pot limit Omaha, and $1-100 sit n’gos. Multi-table tournaments will be added in the future. Players can see their opponents in real-time through a webcam.
Delaware, despite taking out a much bigger percentage of the revenue for taxes (29.4% for table games) than either Nevada (6.75%) or New Jersey (15%), has modest expectations, possibly $5 million in added revenue this year. Ultimately, the State is hoping to have an agreement with other states to pool revenues and players, but such an arrangement may be years down the road.
Online Gambling in Atlantic City, New Jersey
New Jersey is the third and final state to legalize online gambling thus far. The focus of attention is all on Atlantic City, though, since besides being a popular seaside resort, it is an internationally renowned gambling destination with 12 casinos. However, the gambling industry has been hit hard there by both the recession and Hurricane Sandy. Atlantic City is now looking to online gaming as a way to recover declining revenue. Governor Christie signed the online gambling legislation for New Jersey into law on 2/26/13. Since then, Atlantic City has been in the continual national spotlight in a full speed ahead race with the clock for the casinos to gear up for the scheduled opening.
Like the Delaware sites, not just poker, but a full complement of casino games will be offered. However, both the variety of games and playing stakes should encompass a much greater range than the very meager Delaware racino offerings. Unlike in Delaware, not just residents of New Jersey, but visitors to the State, too, will have access. Following a 5 day “soft opening” starting 11/21/13, for a select group of invited players, the confirmed official launch date is set for 11/26/13, 9 a.m. While 10 of the 12 Atlantic City casinos have at least taken preliminary steps to obtaining licensing, as of this writing, only five are fully ready to go with both a license and an online gambling permit. The five casinos are as follows:
- Borgata (the first Atlantic City casino to be licensed) and partner: bwin.party
- Golden Nugget and partner: Bally Technologies
- Trump Taj Mahal and partner: Ultimate Gaming
- Trump Plaza and partner: Betfair
- Tropicana and partner: Gamesys, Ltd.
The four Caesars Entertainment properties-Caesars, Bally’s, Showboat, and Harrahs, which like the Nevada-based Caesars Entertainment properties, are teaming up with 888 Holdings (and also Amaya) to offer online poker on the website www.wsop.com, do not have a license as yet, although that could change any day. Meanwhile, they have received “transitional waivers” indicating that they have completed the application process and have passed preliminary investigations. So they can temporarily open while waiting for a formal license.
That leaves three remaining casinos unlikely to have online gambling up and running anytime soon: Resorts, the Atlantic Club, and Revel. Legal problems surrounding the licensing of Resorts’ partner, Poker Stars, are what is holding up Resorts. The other two casinos are in dire financial straits and have not even submitted an application.
But before even the casinos that have seemingly met all of the requirements for online gambling, can officially open their websites for business, they must first complete the 5 day mandatory soft play period to the satisfaction of the New Jersey Division of Gaming Enforcement. Assuming everything goes smoothly, and the 11/26 launch is successful, too, the writer will provide a comprehensive report to follow up on this article. Meanwhile, the casino operators seem optimistic and several of them already have aggressive marketing campaigns underway to try to get a jump on the competition.
Government officials are optimistic as well. Online gambling in New Jersey is expected to generate $180 million or more in new revenue to the State in its first year.
Summary and Conclusion
Only time will tell whether the historic launch of online poker and other casino games in Nevada, Delaware, and New Jersey is the success that both state officials and those in the online gaming industry hope it will be.
Meanwhile, if you live in any other state in the U.S. and wish to play poker online, the state you live in will dictate your likely future options. Some of the states that seem likely prospects for legal online poker in the not too distant future are California, Illinois, Iowa, Mississippi, and Texas. Pennsylvania, previously thought to be a leading contender, now is less so due to a shift of interest in offering small stakes games of chance in bars and social clubs.
While it might be premature to say that some states will never pass a law permitting online poker, consider it a longshot at best in Alabama, Arkansas, Alaska, Georgia, Kansas, Kentucky, Montana, Nebraska, Oklahoma, Oregon, South Carolina, Tennessee, and Utah.