From the moment the UIGEA cast its shadow over the United States back in 2006, the wheels had, albeit slowly, been set in motion towards the dawn of a new age of legal, regulated online poker in the country. As most fans who follow the poker scene already know, three states (Nevada, New Jersey, and Delaware) have legalized online poker, and anyone is free to play at any of the many licensed online poker sites so long as you’re within the borders of any of those states. Though this is certainly progress from not having any legal online poker in the U.S. whatsoever, we’re nowhere near approaching its heyday, which occurred before Black Friday, when PokerStars ruled the proverbial roost.
There’s a general feeling amongst all fans of the game of wanting the new, legal online poker industry to succeed in the United States. Moreover, poker media outlets have been reporting practically every tidbit of new information released as relates to U.S. online poker, obviously doing their best to drum up buzz and notoriety “for the cause.” With that said, a distinction ought to be made between wishful thinking and the current reality of U.S. online poker.
Misleading Projections Have Led to Disappointment
As earnings reports for online poker operators in all three states continue being published, there seems to exist a certain sense of disappointment, if not among the operators themselves then certainly among online poker advocates as well as the legislators in the aforementioned three states. This is because revenues – and thus tax revenues – have been way lower than initial projections. Unfortunately, however, those initial estimates had all been plagued not just by optimism, but by the existence of an alternate reality in which the online poker player pool was significantly larger.
When trying to project how much money would be generated by legal online poker in Nevada, New Jersey, and Delaware, it made sense, on the one hand, to “look to the past” and cite figures from when citizens of those states were playing in the unregulated, unlicensed days of the game. What many of the projected revenue figures seemed to have failed to take into account, however, was that the figures of the past were generated, in part, due to highly increased liquidity. Players in Nevada, New Jersey, and Delaware used to be able to fire up their online poker software and find oodles of players from all around the world to play against 24 hours a day, seven days a week. Currently, only Nevada and Delaware share player pool liquidity, while NJ online poker still has yet to join forces with the other two states. Naturally, this leads to a scenario where there are far fewer game options – both in terms of how many tables are running, as well as what times of day these games are running – for everyone. Thus, far fewer players are active in those three states than in the past.
The Only Real Potential Game-Changer is Increased Liquidity
Having enough players is the lifeblood of online poker. In live poker, if you’ve only got four or five people standing around, no matter how beautiful and well-serviced a poker room is there simply isn’t much good action to be had. The same holds true for online poker. While it may finally be legalized and regulated in a few states, there have to be enough players available to enable good action. So long as states cannot cooperate with one another and allow their player pools to be shared, the games will be “bad” for the players and operator revenues (and tax revenues) will mirror this.
Online poker’s proponents are always on the lookout for additional U.S. states to join in the fray and legalize the game, with California and its 38 million+ residents being the “big prize.” But if the Golden State doesn’t partner up with the Silver State, the Garden State, and the First State, the benefits will be limited to Sacramento and Californians.
Realistically, then, for online poker to once again thrive in the United States and reach its full potential, it’s not just that more states must legalize it, but they’ve got to agree to cooperate and share player pools. Should that happen – and it might, but it’ll take a lot of goodwill among political leaders – perhaps sights could then be set further afield towards international borders such that the magic of what online poker used to be like can be recaptured once again.
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