Thursday, May 30, 2024

Illegal Offshore Sites Provide Reasons to Regulate US Online Poker

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Illegal Offshore Sites Provide Reasons to Regulate US Online Poker
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We’ve all heard the winning argument before.

Supporters of expanded igaming in the US have many valid points they can make to skeptical lawmakers in statehouses across the country.

One point, that so-called winning argument, has always stood out above the others. That’s the one where supporters argue that igaming is happening regardless, so states should regulate it. There are two major reasons to regulate online poker in the US:

  • Increased protections for consumers
  • More revenue for the state

But 11 years after Nevada and Delaware passed legislation, only six others states have legalized real money online poker in the US — and four of those markets (including Delaware) are currently idle for a variety of reasons.

Frankly, sometimes the future of US online poker can look downright gloomy, which begs the question — Does the argument “iGaming is happening anyway, so states should regulate” still resonate with lawmakers?

Absolutely, according to John Pappas.

“It’s certainly been a winning argument on the sports betting side,” Pappas told pokerfuse in an exclusive interview last month. “I think it’s been far more visible for sports betting.”

Illegal Sites Are Out There, Looking for Players

Recent data backs that up. A survey commissioned by the AGA last year found {n:219214-aga-survey-shows-many-sports-bettors-still:more Americans could identify a legal state-regulated sportsbook and planned to continue using the legal site, rather than using an illegal online sportsbook based offshore (or a bookie).

Pappas, the former executive director of the Poker Players Alliance (PPA), said illegal offshore real money poker sites pose a similar threat today — making the winning argument a compelling one, too.

“That is certainly an argument that you have to make,” he said. “The fact that there is an illegal, unregulated market … encouraging [players] to deposit and saying that [their sites are] perfectly legal.”

Compounding the problem — internet search results return illegal offshore igaming sites to unwitting US consumers. The sites also conduct direct and affiliate marketing.

“I think lawmakers understanding that [igaming] is still happening today and that anybody with an internet connection and a credit card or cryptocurrency can play poker in their state today — they’re just doing so in a way that has no protection for the consumer and no benefit to the state — it’s a really powerful message.”

Lawmakers Look for Upside

While you would be hard-pressed to find a lawmaker who wouldn’t back increased consumer protections for players, Pappas said that alone won’t move the needle on igaming legislation. Revenue will always be part of the discussion.

“What is the upside for the state, outside of protecting consumers?” he asked. “There has to be a significant revenue reason for it. I wish all lawmakers would say, ‘Oh, we need to protect consumers and [we’ll] be damned if we make a dime off of it.’”

Supporters of expanded igaming, including for real money online poker, should continue to draw the connection for lawmakers — specifically, that more state-regulated markets translates to increased consumer protections (since illegal offshore sites don’t offer them).

There will also be less traffic to illegal sites, all while delivering more revenue to the state. A win-win-win.

“They’re not legalizing marijuana or regulating alcohol or tobacco because they think it’s a way of protecting consumers. They’re doing it because they know it’s a way to make money for their state.”

RG Still Part of Discussion

Still, responsible gaming (RG) protections in their own right support the winning argument, too. “The more we can focus on RG and responsible play, the better,” Pappas said. “Poker has a great story to tell with that.

“One of the wonderful things about poker and online poker is just the table stakes are so different in an online environment versus going to a casino. You can’t sit down at a casino table for less than $100, but I can play a $2 or $5, $10 tournament online. Those just aren’t available in the real-world setting.

“Talking about how poker certainly can be the leading edge of responsible play is probably really a good way to move about it.”

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