Here's to you, 2019 online gambling

A Year To Remember: Top US Online Gambling Stories Of 2019

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In case you missed it, 2019 was an absolutely enormous year for online gambling in the US.

While there may never be another single event as impactful for the industry as the 2018 Supreme Court decision striking down PASPA, it’s in 2019 that we really started to see the effects taking shape. The power of states to legalize and regulate sports betting has stimulated interest in online gambling more broadly.

Because of that, 2019 was all about the momentum.

Now as we prepare to celebrate the New Year, it’s time to look back on the one just past. Here are the seven biggest stories we covered over the past 12 months.

#7: Eldorado acquires Caesars

In June, Eldorado Resorts announced that it was purchasing Caesars Entertainment for $17.3 billion in cash and stock. The deal should become final early in 2020, and the resulting entity will be the largest gambling company in the US.

Although Eldorado is a brick-and-mortar brand, the merger has implications for Caesars’ online businesses — including its WSOP online poker sites. Most states with online gambling laws require online casinos, sportsbooks, and poker sites to have land-based partners.

Through their combined operations, Eldorado and Caesars will own 60 properties in 16 states. That means plenty of options for partnerships, and equally many opportunities to cross-sell customers between its online and land-based products.

#6: Apple creates headaches for mobile gambling

By and large, the news this year was positive for online gambling. There has, however, been one major impediment to the industry’s momentum: Apple.

Early results in the US and observation of longer-standing markets make it clear that the mobile segment is an increasingly important one for online gambling. Yet Apple, whose iOS devices hold more than a 50% share of the mobile market in the US, seems generally opposed to gambling.

It has made this clear in various ways. Its new Apple Card, for instance, cannot be used for gambling deposits. However, the decision which has most adversely affected online gambling operators is to disallow the use of HTML5 for commercial applications including real-money gambling.

Almost all sportsbooks and many of the games used by online casinos are written in HTML5 because it is comparatively easy and portable. Apple’s insistence on native iOS development for gambling apps means extra development time and costs.

Fortunately, Google has taken a more friendly stance for applications using its platform. It’s fair to expect that iOS apps will continue to lag several months behind desktop and Android products as new states go live.

#5: West Virginia legalizes online poker

West Virginia just barely managed to get the online gambling bill from Del. Jason Barrett across the finish line in March.

The House passed H 2934 in February, but the Senate made several small amendments in the proverbial 11th hour. The legislature was just adjourning as the House approved those changes and sent the bill along to Gov. Jim Justice.

Justice let his 15-day veto window expire without action, allowing the bill to become law. The governor took the same approach with the sports betting bill that hit his desk in 2018.

Since the new law contains provisions for both online casinos and poker, West Virginia was the fourth state (after New Jersey, Delaware, and Pennsylvania) to legalize a full slate of online gambling products. Nevada also regulates online poker and sports betting.

The earliest expected go-live timeframe for online casinos in WV is Summer 2020.

#4: A Christmas Miracle for Michigan

After Kentucky failed to pull together the votes needed to pass its online gambling bill, it looked as if West Virginia would be the only legislative success story this year.

Instead just earlier this month, Michigan managed to become state number five to legalize all online gambling verticals. The industry had to agree to an increased tax rate in order to secure the governor’s approval.

Michigan is for the time being the second-largest state (behind Pennsylvania) with legalized online gambling. The size of the market alone should make it an important one. After all, even the exorbitant tax rates on PA online gambling haven’t put a damper on things there.

Given how suddenly and recently the bill passed, there’s no firm timeline for the licensing process. Based on what we’ve seen elsewhere, though, it’s a stretch to imagine the first operators going live before 2021.

It’s certainly one of the things we’ll be watching most earnestly in 2020, though.

#3: Anticipation, delays, success in Pennsylvania

This summer’s Pennsylvania launch was the most hotly-anticipated event in US online gambling this year.

Unfortunately, those hoping for a New Jersey-style synchronized launch ended up disappointed. In the end, not everyone was ready to go when the starting gun sounded on July 15. In fact, only two operators went launched on day one: Hollywood and Parx.

SugarHouse joined the market three days later, but each of the three had only a handful of games available at first. They were also plagued by the aforementioned issues with Apple’s prohibition on HTML5. That meant no iOS mobile gaming to start with.

Online poker players faced even greater frustration. Despite multiple rumors of impending launch, it wasn’t until November that PokerStars PA got off the ground.

The wait was worth it, though. Even with just a single site in operation, Pennsylvania online poker traffic has been greater than all sites in all other states put together. Players are happy, and PokerStars generated almost $2 million in revenue in its debut month.

Online gambling has been a success for the state as well. Tax revenue for casino and slots has already doubled from just under $1 million in August, the first full month of operation, to over $2 million in November. More operators, including additional poker sites, should join the party in 2020.

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#2: Flutter + Stars = global gambling superpower

The deal between Eldorado and Caesars may create the largest US-focused gambling company, but an even bigger deal was announced just a few months later. Early in October, the British company Flutter announced it had reached an agreement with The Stars Group for an all-shares tie-up.

The resulting group will encompass Paddy Power, Betfair, FanDuel, PokerStars, and Sky Betting and Gaming, among other smaller brands. It will be by far the world’s largest online gambling company.

With the exception of FanDuel, most of the brands involved are predominantly focused on Europe for the time being. There has been much speculation, however, that US sports betting is one of the major motivations behind the deal. Flutter has a great deal of experience in the sports betting arena, through Paddy Power and Betfair.

Meanwhile, The Stars Group enjoys strong brand recognition thanks to PokerStars and its partnership with Fox Sports to form Fox Bet.

The deal should go through sometime in Q2 or Q3 next year. Once it does, Stars shares will be exchanged for Flutter shares. The Stars Group will largely come under Flutter executive directorship at that point, save for current CEO Rafi Ashkenazi who will become Flutter’s COO.

#1: DOJ Wire Act opinion set aside in New Hampshire

The best news of the year for online gambling in general — and poker in particular — was a June decision by US District Court Judge Paul Barbadoro. In a 60-page ruling, he rejected last year’s opinion from the Office of Legal Counsel regarding the federal Wire Act.

The Act was originally passed in 1961 to prevent the use of the the phone system to circumvent state-level prohibitions on sports betting. It now covers internet communications as well.

The Department of Justice (DOJ) had sought to extend its prohibitions to all forms of gambling, not only sports betting. Among other things, that could have put an end to the idea of interstate liquidity sharing for poker sites.

Fortunately for poker, the opinion also poses a potential problem for lotteries offering interstate jackpots. That spawned the lawsuit from the New Hampshire Lottery and Judge Barbadoro’s subsequent decision in its favor.

The ruling came just in time for summer’s World Series of Poker. Most of the online bracelet events fell after the enforcement deadline set by the DOJ. If not for the judge vacating the DOJ opinion, players from New Jersey might have been unable to participate.

More importantly, the decision means that states like Pennsylvania, West Virginia, and Michigan have the option to enter into multi-state poker compacts with other states going forward.

- Alex is a journalist from Dartmouth, Nova Scotia, Canada. Now site runner for Online Poker Report, he has been writing about poker and the online gambling industry in various capacities since 2014.
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