For two years in a row, we’ve failed to have a single state regulate online gambling or online poker. Will a state pass an iGaming bill in 2016? The optimists say we could see three or four states go online. The pessimists say that online gambling will be in decline in 2016. The realists are watching the Presidential Debates and praying against a Trump-Clinton battle for the White House.
Lawmakers encounter problems when regulating online gambling and next year will present its own set of challenges. Below are five problems that U.S. online gambling expansion will have in 2016.
Election Year Politics
2016 is an election year and this is going to stymie online gambling growth in the United States in two ways. First, you’re going to have lawmakers that are going to want to shy away from issues that could negatively impact their chances for reelection. Online gambling expansion still has enough of a stigma attached to it where it will scare some lawmakers and they will ignore the issue rather than risk it being used against them.
Live Casino Expansion
Three states expected to regulate online poker at some point in the future will continue to sit on the sidelines as they wait for live casino expansion. New York and Massachusetts have given approval for casino expansion but it will be at least 2018 before we see any of those properties open. Interest in iGaming expansion isn’t very high in either state presently and I don’t feel it will happen until the new properties start opening.
Illinois lawmakers have stated in the past that online gambling will not expand until live casino expansion has been resolved. They try every year, but the issue remains unresolved. Based on what I’ve read from the last couple of attempts, I don’t believe they will get any closer in 2016 than they did in previous years.
Daily Fantasy Sports
Daily Fantasy Sport has become the latest “gambling crisis” in the United States. Over a dozen states are considering legislation to regulate DFS while some states, most recently Massachusetts, are declaring that DFS sites are illegal gambling.
The majority of focus regarding online gambling regulation has shifted towards DFS and odds are that will continue into 2016 with only a few exceptions. With DFS garnering the majority of the attention from lawmakers, online poker and other forms of gambling will either become overlooked or they will be “grouped in” with DFS.
It is hard for me to see any states other than Pennsylvania and California seriously looking at iGaming expansion as long as DFS remains the hot topic of the day.
Lame Duck Gambling Ban
Hear that old man crying out “I’m not dead yet?” That’s Sheldon Adelson with his latest version of an online gambling ban in hand. We have a prime Lame Duck session coming up in 2016 and that’s another chance for Adelson and company to try to sneak through either a gambling ban or RAWA-Lite.
How will this slow down online gambling expansion? The threat of RAWA caused some lawmakers to pause over the last couple of years to see what would happen. If word comes out next year that a similar measure could be floated during the Lame Duck, they’ll probably react the same way.
Everyone is Waiting on California and Pennsylvania
How many times have we heard the line “we’re taking a wait and see approach to online gambling?” What I believe this really means is “We’re waiting until iGaming proves profitable enough to join.” Essentially, these lawmakers are waiting until larger states start joining the market.
We can argue at length regarding how close that California and Pennsylvania are to regulating online poker, but I believe that several states are waiting for one or both states to go online before they stick their toes in the water.
There are multiple reasons for this. First, we get to see just how profitable iGaming will be with in a significant market. New Jersey has experienced awesome gains in casino games but online poker has been slipping in the last year. Can the major markets pull in revenue anywhere close to reasonable estimate? We’ll find out once both those states go online.
Next, the interstate online network really isn’t viable in its present state. New Jersey hasn’t joined and I don’t see them joining anytime soon. Bring California and Pennsylvania online, have them join the network (or form their own) and then you have another bargaining chip for lawmakers wanting to regulate in other states.
California and Pennsylvania are the “Jesus nails” for some states. Pull them out of the unregulated market and watch other states tumble in behind them.