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World Regulatory Briefing Day 1: The Critical Takeaways

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The World Regulatory Briefing kicked off in Philadelphia on Tuesday, October 22. This marks the first time the event takes place in the United States, and with its primary theme being interstate iGaming compacts this year, the American East Coast seems like a fitting location.

Marco Valerio captured the highlights of Day 1 of the WRB for OnlinePokerReport.

Burnett sees “a success so far” in Nevada

A.G. Burnett, the current Chairman of the Nevada Gaming Control Board was the first to speak during the introductory panel, which also included East Coast gaming lobbyist Joe Brennan Jr.

Burnett began with a prideful account of how Nevada has inaugurated legal U.S. online gaming in the last few months, first with the launch of Ultimate Poker and later WSOP.com.

“It’s too early to call it 100% a success,” Burnett said, “but in my opinion, it has been a success so far.”

Some issues hindering NV growth

“There have been no major issues or scandals. Some of our only problems have included the buffer zone between state lines being too big, making it impossible for a few people close to the Cali border to be verified to play.”

Despite being problematic, Burnett described this issue as a kind of positive, claiming it was proof that geolocation technology was working.

He further acknowledged that the willingness of some banks to transact player deposits and cashouts, along with the participation of some mobile carriers to verify in-state location, continued to be issues that needed resolving, but he was positive about resolution.

Burnett believes the term “interstate compact” to describe iGaming player pool sharing across states is inappropriate. He much prefers the term “liquidity agreement.”

Will players cross state borders to gamble online?

The panel continued to be quizzed about intrastate iGaming. Joe Brennan Jr. tackled the subject of “digital immigrants” – players from neighboring states who, just like those who commute to out-of-state casinos, might do the same to gamble online elsewhere.

Would it be possible for a non-gaming establishment, like a coffee shop for example, to market itself as a place players could come to and play online?

Probably not officially, says Brennan – the regulations in New Jersey explicitly forbid it – but players could still assemble informally.

Where the states stand on iGaming regulation

Over the next couple of sessions, emissaries from various states were asked whether they feel their legislatures are currently looking at online gaming legislation.

Pennsylvania

Bill Ryan, Chairman of the Pennsylvania Gaming Control Board, said he did not believe iGaming legislation had a lot of momentum in his state right now, despite a piece of legislation or two having recently been floated.

Florida

State Representative Jim Waldman of Florida took a more temperate view. He was confident about his state’s population size – about 19 million people – a sufficient “critical mass.” An online gambling bill is already in the works in his legislature, he said, although it applies mainly to the lottery.

No matter what, though, anything that happens with gaming in Florida for the foreseeable future has to go through the powerful Seminole tribe, with which the state of Florida has an exclusive gaming compact – although that compact is up for renegotiation in 2015. Waldman later hinted that a definitive expiration of the compact might potentially tip iGaming progress in a more favorable direction.

Massachusetts

While his state is not currently engaged in online gaming legislation, Executive Director James McHugh of the newly formed Massachusetts Gaming Commission said he personally believes the advent of online gaming, in his state and elsewhere, is fairly inevitable, given how the Internet has shaped or is reshaping virtually every industry.

California

A decidedly self-interested view came from California Gambling Commissioner Richard Schuetz. Due to its large population, California, which would only legislate online poker, would not need to compact with any other state in order to sustain its liquidity.

Schuetz’s suggestion that a California poker market can do just fine on its own was later challenged by Executive Director John Pappas of the Poker Players Alliance. During a session focusing specifically on online poker liquidity, Pappas was asked by moderator Jeff Ifrah why liquidity is important. “Choice,” Pappas explained. “Players want to play the games they want to play, at the stakes they want to play, at the times they want to play.” It was thus important to spread online poker liquidity across multiple time zones.

Mark Lipparelli, former Chairman of the Nevada Gaming Control Board and now independent gaming consultant, said that it was time for states to stop boasting that they were each going to become the new hub of Internet gaming in America, as frankly this was becoming ridiculous. He pointed out how difficult it will be to broker compacts if every jurisdiction continues to be so self-centered. Compacts – or liquidity agreements – by necessity demand compromise.

How big does the player pool for an online poker room need to be?

How large of an active player pool, Ifrah asked, are U.S. players accustomed to at any one time? Pappas threw out the number 20,000. This sparked debate, in the room and on Twitter. Did an online poker room really need to be that large in order to sustain itself?

Panelist Luisa Woods, Internet marketing director for the Tropicana in Atlantic City, pointed out that, although user experience and revenue generation both required a large player pool, they did not need to meet the same numerical requirements.

In terms of revenue, panelist, attorney and online poker operator David Gzesh believed that $1.5 million a month gross rake would be enough for the average online poker room to get by. He noted that only a few months since launch, Ultimate Poker in Nevada was already roughly halfway there.

Gzesh was generally more optimistic about Nevada’s prospects, but he still stressed the importance of allowing full online casino, New Jersey style, along with poker. That way, he maintains, the online poker outfit can remain strong without having to worry as much about revenue.

Online poker matters beyond bottom line for operators

In conclusion, the panel, primarily Gzesh, encouraged the audience to take online poker seriously if they were going to commit to iGaming, even if online poker was not going to yield easy profits right away.

Online poker is an especially sticky game, he said, and its uses lie beyond mere revenue generation. A good online poker product can connect the brand to its players in ways other casino games can’t. The marketing opportunities and the convergence for land-based poker rooms are also to be taken into account.

The World Regulatory Briefing is organized by Clarion Events. This year’s conference began on October 22nd and concludes on October 23rd.

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Marco Valerio
- Marco is a contributor to OnlinePokerReport. You can read more of his writing - and catch his epic interviews with a who's who of poker - at a variety of iGaming publications, including TwoPlusTwo, GlobalGamingBusiness and Agentmarco.com.