How Lottery Could Lead The Way To Online Poker
Online Poker Report

Lottery Could Hold The Ticket To Regulated Online Gambling If RAWA Passes

US online gambling lottery carveout
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The Sheldon Adelson-inspired Restoration of America’s Wire Act, introduced in the House of Representatives by Jason Chaffetz (R-UT), would deal a severe blow to the fight for online poker regulation in the US if it were to be enacted.

Just how severe depends largely upon the final language itself, as there are expected to be several ‘carve outs’ before it could pass. But could an anticipated exemption for state lotteries leave a large door open for hopeful online poker players?

Delaware was the first state to enact online gaming, and by approaching it through their state lottery, it would seem that their online gaming could survive RAWA with a lottery exemption.

Whether this was brilliance or just dumb luck, it does present a model for a post-RAWA America, one that could force the entire industry to rethink its approach to the US market.

Existing template is too complicated

With the current approach the industry is following, international providers must enter into partnerships with local interests in every market they would like to enter. This is a complex approach that in all likelihood will not extend beyond a handful of large market states.

There will come a point where the cost/benefit ratio won’t be there, and players in those remaining states could be left high and dry.

RAWA, even with a lottery carve out, would likely mean the end of online gaming in New Jersey and Nevada, unless there is a ‘grandfather clause’ that allows these states to keep what they have intact.

It would surely stop California and Pennsylvania dead in their tracks, and prevent others from even bringing up legislation that revolves around commercial gaming.

Without other states to share liquidity, the long term viability of online poker becomes questionable.

Could lottery provide a path for poker?

However, were the industry to approach the US market from the lottery angle, they might be able to enter the majority of states with just a single partner. I am referring to the Multi-State Lottery Association.

For many states, online poker through the lottery makes the most sense.

For starters, the amount of revenue share going to the states is likely to be far higher than a 10-15% tax rate. For states with no commercial gaming, lottery may the only chance players have to get legal online poker.

And with Powerball and MegaMillions being played in 44 states plus Washington D.C., Puerto Rico, and the US Virgin Islands, it is conceivable that online poker would spread across those markets in a very short time. I would think the industry would salivate at the opportunity to open so many markets at once, and to be able to do so with just a single partner.

There are bound to be skeptics of this approach, and there are certainly some pitfalls to be avoided. As one who believes in free markets, I wouldn’t want to see an exclusive provider chosen, especially if that choice was based solely on revenue.

But I see no reason why MUSL couldn’t offer games on multiple platforms, so that we could have some competition among providers and assure quality products for the players.

Don’t get me wrong, I don’t support RAWA in any form. What I am saying is that with a lottery carve out, there is still room for online poker.

And even without RAWA, the multi-state lottery approach offers avenues that could speed the spread of legal and regulated online poker to markets that are otherwise likely to be left out of the mix.

Oh, and then there is the irony of online poker’s arch nemesis’ efforts actually leading to the rapid expansion of online poker in the US.

Yeah, I like that.

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Curtis Woodard
- Curtis is a recreational poker player from Seattle, WA who advocates for state ipoker legislation. He is the founder of the Washington Internet Poker Initiative and sponsor of Initiatives 582 and 583. Catch him on Twitter at @curtinsea and @ipokerwa (WIPI).