- US Online Poker
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The Massachusetts Gaming Commission hosted a day-long forum on Internet gambling at the Boston Convention and Exhibition Center on Tuesday, March 11. The forum consisted of five panel discussions, with noted speakers representing virtually every corner of the iGaming industry as well as regulators from all over North America.
Below are the highlights from the fourth panel at the forum.
Panel number 4 was the most interesting of the day from my point of view, as it looked at the areas around the US and North America where online gambling has been or is in the process of being legalized.
Throughout the discussion the panelists described the measures that were preemptively put into effect, the unforeseen issues and problems (including geolocation and banking) that have arisen, and how they have adapted since launch.
Panel number 4 consisted of:
The Nevada Gaming Control Board representative, Jim Barbee, touched on a number of issues during his oral presentation. Barbee talked about the current climate in Nevada, with Ultimate Poker, WSOP.com, and newly-launched Real Gaming, and the process the state underwent from writing the law to implementing the regulations.
Barbee went on to lay out what the coming months will likely hold, saying 888 (which operates the WSOP.com online poker site) should get final approval later this month.
Once final approval is given, they will be able to launch online poker sites for some of the other entities they have partnered with, such as TI and Wynn, although Wynn has pulled back on its iGaming plans recently.
Barbee did not have any revenue numbers (those are expected to be released soon now that Real Gaming is live), but he did tell the MGC that accounts created are in line with early projections.
Barbee also proved he is well-versed in the poker and online poker world, describing how PokerScout.com has terrific metrics for traffic, and briefly mentioning a 2012 study of what Barbee called 10 years of PokerStars data.
One of the highlights of Rebecca Goldsmith’s presentation was her description of how banking issues are not only affecting players, but almost shut down the Delaware iGaming industry before it launched!
According to Goldsmith, one month before launch the bank they had settled on to handle all player deposits and withdrawals pulled out, refusing to process Delaware casino transactions, and in some cases closing down bank accounts belonging to the casinos.
Just a month before they were set to go live, none of the Delaware online poker sites could even open a bank account to deposit player funds into!
Goldsmith said one bank eventually stepped up and everything is running smoothly now.
The next part of Goldsmith’s presentation covered how online gambling transactions are coded and why there is such a high failure rate. Goldsmith posited that banking issues stem from the 2006 UIGEA passage, a thought echoed by many other panelists throughout the day.
Delaware is meeting regularly with Visa and MasterCard, Goldsmith said, to educate the companies about the current laws in place and to urge them to switch the way these transactions are coded, from 7995 (online gambling transactions) to the more friendly 9954 transaction, or some new code altogther.
Goldsmith also stated that they were meeting with the bank association to educate and do outreach, but the “process will take time.”
Weiss was at the forum representing the most talked about and watched state in online gambling, New Jersey, and he gave perhaps the most interesting presentation as well.
Weiss stated that New Jersey was performing similar types of banking outreach as Delaware, and asserted that New Jersey is hopeful it can get a new coding for legal online gambling transactions in the next couple of months.
Weiss stated the vast majority of deposits are coming from ACH and credit cards, highlighting the need to solve this ongoing problem.
Weiss pointed out that there are a low level of chargebacks in NJ – way below that of online retailers – which should help alleviate concerns by credit card companies.
One of the more interesting numbers thrown out during the entire forum was Weiss’s proclamation that New Jersey is now running at a 78% approval rate for MasterCard and 44% for Visa. Although the Visa acceptance seems low, Weiss said it started at just 10% in November.
The second part of Weiss’s presentation covered geolocation, in which the Chief of the DGE’s Techology Bureau said that the “DGE wanted MORE than reasonable assurance geolocation worked.”
This goes a step beyond what Lindsey Kininmouth of GeoComply said was required by law during the previous panel.
He was dismissive of geolocation’s impact, saying it was not a big issue and that “there are just some people that are not going to be able to gamble.”
Weiss went on to basically say that if you don’t have the right equipment, like a good wifi signal that can provide regulators with a positive geolocation, you’re basically SOL.
Eric Weiss says the NJ DGE did not relax its requirements on geolocation, and the articles that appeared the morning of the forum quoting 888 CEO Brian Mattingley were simply “not true.”
George Sweny’s presentation focused on the differences between Ontario’s regulations and those currently in place in the US, which require the OLG to be far more hands on than anything we have in the US.
While Sweny’s presentation was fascinating, as the OLG has a long history of regulating gambling in the province, and he provided a lot of solid numbers that could be transposed to US markets, I won’t go into much detail as it doesn’t necessarily apply to the US models in place.
You can view his slideshow presentation if you’re interested.
In what could be one of the head-scratching comments of the day, the NGCB’s Jim Barbee relayed an anecdotal account saying one NGCB staff member just recently asked what player liquidity meant – a somewhat scary illustration that regulators aren’t entirely aware of one of the most important terms in online poker.
According to Rebecca Goldsmith, Delaware sets up education for players whose cards are declined so they are not discouraged and lost forever. If a player’s card is rejected, Delaware walks the player through alternative forms of payment.
Eric Weiss of the NJ DGE stated that casino games account for 70% of gross gaming revenue in NJ.
NJ standardized all of the data it collects for Internet gambling, unlike brick and mortar casinos where each casino uses different data storage and requires regulators to be proficient in multiple forms of coding and storage.
The biggest takeaway from this panel is that the regulators really have their crap together, and they set up a pretty good system before going live with online gambling.
That being said, this is a far more complex task than I think anyone realized at the outset, and the industry and regulators are going to have to be very fluid to make improvements, such as they are doing with banking.