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States in a Race for Online Poker

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States in a Race for Online Poker

It seems like it is just a matter of time at this point. While poker players continue to watch the news, begging for online poker regulation, the states are in a race to control the online poker market. There are two basic questions at hand in regards to online poker regulation. Will the federal government pass online poker regulation before the states? And if not, which state or states will be the first to have online gaming up and running and therefore gain position in regulating online poker?

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As for the first question, the answers will vary depending on the day. Recently there have been times when those in the know would wager that federal regulation was very near. They would argue that the US government had motivation and means to control online gaming regulation and that US legislators wanted to be certain that it was in their hands rather than in the states’. However, up to this point, there has been little actual movement toward having any new laws passed.

Most who follow the progress would now say that state-by-state regulation seems much more likely, with the best possible outcome being an open network consisting of multiple states (and possibly other countries). The network would operate much like state lotteries do now. Large state lotteries, such as Mega Millions, operate across many states. This brings in more money for each cooperating state since prize pools get very large, very quick. An interstate network would allow players from multiple states to be pooled together, creating larger player bases and more liquidity for the network. This would again bring in more money for each of the states involved.

So which state stands to take the lead in state run online poker? Two of the most logical answers would be New Jersey and Nevada. Both states have legalized land-based gambling and experience regulating poker and every other casino game. However, legislation in New Jersey has been discussed but has not yet passed.

Nevada, on the other hand, has jumped on the opportunity to lead the US online poker market and is the only state that has passed online gaming regulation (Washington, D.C. had actually passed online poker regulation but it was later repealed). Residents and visitors of Nevada will possibly be able to play online poker as early as the fourth quarter of 2012. Players will only be able to access the sites while within the state, though tourists will be able to play even if they are not Nevada residents. Nevada does seem to favor an open market with competition among the different online casinos and eventually a player pool that includes other states and other countries.

There are several other states where there have been online poker or online gambling bills introduced or announced for introduction. These states include Massachusetts, Delaware, California, Florida, Illinois and New York.

Illinois is another interesting state in the race, as the lawmaker who introduced the bill there, Senate President John Cullerton, emphasized the importance of being involved early. He also expressed the thought that Illinois could become a hub for online poker regulation. However, the legislation is much less player-friendly than the Nevada version. It is more of a protectionist law, designed to maximize revenues and keep regulation within the state rather than through the federal government.

The next logical question for players in states that are considering online poker regulation would be, “Is this a good thing.” The answer remains to be seen, but seems to depend on the state, as would be expected. Many states are looking for online gambling regulation simply as a means of revenue. While it is clear that regulation will lead to revenue, some states, such as Nevada, realize that open player pools and competition will ultimately be good for poker. Other states want to ring-fence their players so that they can only play and compete with players within the state. This could potentially lead to high rakes (fees) and virtually unbeatable games, especially at lower stakes where most of the players will be.

Federal legislation, on the other hand, would be more uniform. It is hard to say at this point if this would be better, but it does seem that federal legislators are at least considering input from groups such as the Poker Players’ Alliance when creating their bills. Which parts of the input they choose to ignore will be determined.

So it seems that the fastest way to regulated online poker, at least in some states, will be through state-by-state legislation. Many hope, however, that upon seeing states begin to pass bills to regulate online poker, the federal lawmakers will get things moving and pass a nationwide bill instead. Be sure to check back for further information and updates on state and federal online poker regulation.

Bob

Hailing from Wisconsin but arriving in Las Vegas in 1995, I'm better known at various US online poker rooms under the pen name "OreoBob" and "SoyFlush". I'm an avid poker player and editor-at-large who has contributed as a freelance writer for diverse national and international iGaming publications since 2004.

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