California iPoker 2016 – RIP. Yet another year passes without regulated online poker in the largest market in the country. With the exception of one state, the poker nation looks forward to 2017 and wonders whether the regulated market will expand.
Of course, 2016 isn’t quite over and one state remains in play. Let’s take a quick look at the chances of iPoker regulation in Pennsylvania in 2016 as well as what to expect in California and other key states next year.
Pennsylvania – Regulation’s Only Hope in 2016
Pennsylvania is not out of the mix yet for 2016. State lawmakers will return soon to complete work on HB 2150. The bill has passed the PA House and is now in Senate committee in what is expected to be an eventual push to passage.
Revenue from online gambling has been earmarked in the state budget, so many feel that it’s a virtual done deal. Rep. John Payne even told Online Poker Report that he believes that the bill will pass.
The question now changes from will the bill pass to when. The fall legislative session doesn’t adjourn until November. However, even if they are unable to get across the finish line by then, it could be revisited in early 2017.
Related: Does Pennsylvania Have Legalized Online Poker Yet?
Based on the lack of significant opposition to the bill, it is hard to see Pennsylvania not getting this done this fall. By the end of 2016, Pennsylvania will become the fourth U.S. state to regulate online poker.
California – The Ball is in PokerStars’ Court
The two big issues stalling iPoker regulation in California at the beginning of 2016 were the same as they have been for years. This time around it seemed like there was legitimately light at the end of the tunnel for iPoker – or that’s how many tried to spin things.
Assemblyman Adam Grey crafted AB 2863 as the latest attempt to regulate online poker in the state and quickly resolved one of two of the big issues stalling the process in the past. He managed to negotiate an agreement that provided the horse racing industry a massive subsidy in exchange for their agreement to not enter the iPoker market.
When this happened, some naively assumed that the bad actor issue would be resolved in short order. After all, PokerStars has received a license in New Jersey so how could California lawmakers and tribes stand in the way of progress. Right? Then David Baazov was charged with insider trading and the tribes started doing their “I told you so dance” and the bad actor issue exploded once again.
Assemblyman Gray did his best to try and negotiate an agreement to bring tribes on board but the most recent change of the suitability language was unacceptable to PokerStars. It called for a five-year ban for bad actors (effectively PokerStars) with no chance to buy their way out like in the old version of the language.
PokerStars and the PPA immediately opposed the new suitability language, as did a couple of Indian nations due to language behind the ban. Suddenly, PokerStars and to a lesser extent the PPA are being viewed as the villains and as those potentially blocking online poker. David Huber of Upswing Poker wrote a great piece on this basically telling PokerStars to get out of the way and let online poker become regulated.
All along I have believed that PokerStars will have to accept some type of “punishment” in order to let online poker move forward and it appears that lawmakers and tribes are beginning to align in that vein. The question is whether PokerStars is willing to budge or are they going to take a similar position as the tribes in “we want online poker our way or you don’t get it at all.”
Ultimately, PokerStars will be allowed into the state and will become a strong force in the California iPoker industry. Perhaps there is still a new middle ground that will give the tribes and lawmakers their pound of flesh but is still acceptable to PokerStars.
Will this happen in 2017? I made a prop bet with Jennifer Newell at the beginning of 2016 saying that California wouldn’t regulate this year. At this point, my gut says we won’t see regulated iPoker in the Golden State until 2018 but otherwise I think it is a coin-flip.
New York and Michigan – Can They Beat California to the Table
New York and Michigan were the other two states to make significant headway towards iGaming regulation in 2016. The Empire State exceeded expectations when they managed to get S5302 passed in the state senate by a vote of 53-5 in June.
Of course, the bill moved no further but this was still a major development for a state that many, including myself, saw as years away from regulating online poker. They now are a strong candidate for passage in 2017 or 2018.
A lot of what happens next year will hinge on Pennsylvania and whether they get to the finish line. If Pennsylvania gets there, they will join both New Jersey and Delaware as neighboring states with online gambling.
New York will almost be forced to move forward with online gambling as a way to stay competitive with other states. Furthermore, an expected partnership by PokerStars NJ and PokerStars PA could sweeten the pot as NY could become part of a three-state mega-network.
Michigan began the march towards iGaming regulation in 2016 but a bill failed to move to a vote on the Senate floor after passing committee. The state already has online lottery games and MGM Resorts is a strong supporter of iGaming. As such, I believe that we will see Michigan revisit the issue next year.
I’m going to put Michigan passage at about 40% at present because they are still so early in their journey. Should both PA and NY get regulated by late Spring 2017, Michigan may decide to hop on the bandwagon and push a bill through. I’m still saying 2018 for Michigan.
As far as New York, I see them as 60% to pass in 2017 and to become the fifth state to regulate. This may seem optimistic, but I think the legislature will react quickly in order to stay competitive with other Northeastern states.
Which Other States Will Start to Explore iPoker in 2017?
Next year could be an active one as we could see several states either revisit regulation or craft new bills. Some of the states we could hear form include West Virginia, Mississippi, Washington State, Massachusetts and maybe Illinois or Iowa. I wouldn’t be surprised to at least hear some rumblings begin in states like Maryland or Florida.
Out of the states listed, I see West Virginia or Massachusetts making a noticeable push. We might get lucky and see Mississippi actually get a bill out of committee but chances are they will file a bill in mid-January with it dead a week later.
Will we see any of these states pass iPoker? I’m placing long odds on this one. These states have about a 20% at best chance to pass a bill but any discussion or advancement in the cause of regulation should be welcomed and supported.