This week we focus on the new law in Pennsylvania.
Dustin: So PA legalized online poker and casino games recently. That’s pretty darn exciting, right?
We’ve all been around the online poker industry for forever. And Black Friday in 2011 was a gut punch for pretty much everyone. If you had told the 2011 versions of us that four states had passed online gambling/poker laws, would we be excited, surprised, disappointed?
Steve: If you told me on April 15, 2011 that within two years three states would legalize online poker/gambling I would have called you crazy. Laws legalizing online gaming may have been fleeting from 2013 to 2016, but significant progress was made in a number of states, culminating with Pennsylvania joining New Jersey, Nevada, and Delaware this year.
Dustin: I would not have told you that, so glad that I do not fall in the “crazy” basket.
Steve: It’s frustrating when we compare online gaming to daily fantasy sports, but all things considered, four states with legal online gaming, and six others with legal online lottery in six years is a pretty impressive feat. Recreational marijuana advocates would be ecstatic with that type of timeline.
Dustin: We’ve got the weed here in Oregon, still waiting on the rest.
Steve: Everything you say and your fascination with humans that look like sloths makes sense now.
But how long do you think you’ll have to wait, and what will make Oregon an online gaming candidate?
Dustin: Oregon’s pretty different. We have tribal casinos, and the lottery runs everything else (VLTs in bars around the state, for instance). So who would even run online gambling, or who wants to, I have no idea.
But, Oregon in a micro-sense, illustrates the issues with trying to pass an online gambling law, and why it’s definitely impressive that we’re up to four states. It might seem disappointing to an outside observer or a poker player, but getting four laws in six years is almost a miracle in my mind
Steve: To me, the key driver going forward is going to be the need for money. Whether that’s a state like Pennsylvania looking for money to deal with budget deficits, or a state like New Jersey looking to bolster it’s existing terrestrial gaming outlets and by extension boost the state’s cut.
Chris: If you told me that we’d only have four states by the end of 2017, I would be pretty disappointed. That’s the definition of a turgid pace, and what’s worse is I believe it was primarily caused by self-inflicted wounds within the industry.
If more of the industry had been on the same page from the word go, I think we’d be a lot closer to 10 states than four.
Dustin: Welcome to the chat. I can’t argue with any of that. Hopefully we see more cooperation within the industry moving forward. DraftKings and FanDuel have shown what a coordinated lobbying effort with lots of money behind it can accomplish for daily fantasy sports.
Chris: To Steve’s point, there was plenty of need on the part of multiple states for budget help during that span, and online gambling could have — and should have — been a viable option for states looking to fill that gap.
But the industry never told a good or consistent story on that front, and infighting made it easy for opponents and politicians to play divided agendas among supporters off against each other.
Steve: After following this the past several years I think turgid pace is simply “the pace” things get done in statehouses. Particularly when it comes to vices.
Chris: And Steve, I think the DFS example — and the building momentum behind sports betting legislation — acts as a pretty solid counter to your argument that the pace *must* be slow
I would bet the house on a double-digit number of states passing sports betting bills in a post-PASPA world within four years, let alone six.
Steve: I don’t think it must be slow, I think it’s usually slow
Chris: So what’s different about sports betting versus online gambling? Is it the online component?
Steve: It circles back to your complaint, everyone in DFS and sports betting is on the same page on wanting it legalized.
With online poker/casino you have people against online, people uninterested in it for financial reasons, and people who want it.
Dustin: In some ways, yes. Although casinos aren’t always coming together at the state level for sports betting bills that we’re seeing. If they did for online gambling, we’d have seen a different script. The sports betting/DFS message has unquestionably been better/different.
Steve: Looking back to when Nevada, New Jersey, and Delaware legalized online poker there was more uniformity among stakeholders and the American Gaming Association’s position was in favor of legalization.
There are a lot of facets to it, but a lot of the wind left the sails of the legal online gaming movement when they switched to a non-position that occurred soon after Sheldon Adelson began his campaign against online gambling. When you’re dealing with gaming you’re going to have lawmakers opposing it no matter what, so you can’t afford to lose others because of their loyalties to corporations in their district.
That’s why I’m relatively impressed with the progress we’ve seen. Sure it’s been slow, but after getting an up close and personal look at state level politics over the past few years, I’m not at all surprised we’re at four states and not ten.
Dustin: Well, the past is the past. And now we have PA. The question we hear from everyone, is “When can we play?” What’s our best guess with the information that’s out there, past experience, etc. Pick a date for an over/under.
Steve: July 1, 2018
Dustin: FIREWORKS AND ONLINE POKER I LOVE IT
Steve: Every day beyond that the state loses revenue already earmarked for the 2018/2019 fiscal year budget
Chris: I’ll take the over, but I think it’s a good line
Dustin: I agree with Steve’s logic, but I’ll take the over, too. We have varying reports on what PA regulators are going to do. And they have lots of other stuff to implement because of the new law.
It just seems like they have a lot on their plate and getting any/all of it to market will be difficult.
Dustin: How many PA online poker rooms will there be? And how many of the state’s 12 (soon to be 13) casinos be involved? Since we’re on over-unders, let’s do that again (in honor of PA also legalizing sports betting — online and in casinos — should federal law change.)
Chris: I’d say three unique networks in PA for online poker. You could make a case for four.
I also wonder if Rush Street will launch an NJ online poker site if they launch in PA.
Chris: Could make a fringe case for six. Pala Poker comes in and maybe MGM gets fed up with GVC and goes its own way.
Steve: If you recall, GAN’s statement about being partnered with Parx explicitly mentioned online poker
Chris: I think if Rush launches poker in PA they definitely come into NJ.
Dustin: Can six survive long-term? Assuming PA compacts with NJ/NV/DE?
Steve: I don’t think they see the early states as a revenue stream. It’s a stepping stone to something larger and positioning for future states.
Chris: That many can survive long-term if no one operator decides to really bleed money in the market
If you look at NJ, it’s been a fairly rational market for the last year or so
Dustin: So we’re officially at the tipping point where you have to run online poker if you want to have a future beyond the market that exists currently? Or we were already there?
Chris: I think that’s fair. Although it’s not really as if you can’t go into the markets in reverse order. I could see an operator starting in New York and then working their way back through PA, NJ, NV / DE.
Steve: It doesn’t make it impossible, but it definitely makes it harder
Dustin: I think that wraps it up. Hopefully next time we do this we’re talking about Michigan legalizing online poker, but I won’t hold my breath.