Last week, an online gambling bill appeared in the New York Senate.
SB 8412 doesn’t mention online poker by name, but it does have language referring to player-versus-player tournaments. This probably implies that lawmakers consider poker to fall under the same umbrella as other casino games. Other states that have legalized iGaming are split on whether they consider online poker a separate type of product. To date, however, there’s no state that has made online casinos legal without regulated online poker coming along for the ride.
It’s very early days for New York’s online gambling expansion effort. Where things stand right now is that the bill has been referred to the Senate Committee on Racing, Gaming and Wagering. That was the first action taken and nothing else has happened since.
The state has only just gone live with online sports betting. The record-setting revenue of that new market is probably providing some of the impetus to take things a step further by adding casino and poker. At the same time, it’s likely to lead to some heel-dragging by lawmakers who want to see the impact on the state before committing to the next stage of gambling expansion.
Naturally, players within the state are crossing their fingers for legal online poker in NY. However, those already enjoying regulated online poker in other states would also benefit. In particular, the addition of the Empire State to the US interstate poker compact would be a huge win.
BetMGM, PokerStars still waiting to establish networks
As it stands, multi-state liquidity exists in the US but only to the benefit of one operator.
Nevada and Delaware began sharing traffic in 2015. New Jersey joined them in 2018, at a time when no other states had yet launched online poker.
However, WSOP is the only poker operator serving Nevada. Its technology partner, 888, is the only company authorized to offer online gambling at all in Delaware. Their shared All-American Poker Network remains to this day the only example of interstate poker in the US.
PokerStars and BetMGM are eager to do so as well. However, PokerStars is barred from Nevada due to its activities in the US prior to Black Friday. The state’s small population and lack of online casinos have so far made it a low priority for BetMGM to launch there.
Michigan online poker sites will probably become the next ones to join the compact, sometime this year. Pennsylvania, West Virginia and Connecticut are all question marks, and the latter two are small in any case. New York, on the other hand, would be a huge prize for any multistate network.
Ring-fencing around the world
Ring-fenced poker markets, as they’re often called, are not unique to the US. In addition to the states we’ve mentioned, the following places offer online poker, but keep their players cut off from the rest of the world:
- Georgia (the country, not the state)
- Ontario, Canada (pending launch)
Of these, India clearly has the largest population, but is a small market because poker is a very niche product there.
France, Spain and Portugal formed a traffic-sharing network in 2018. It functions along similar lines to the Nevada-Delaware-New Jersey compact, but much larger. Naturally, players in that market also have access to more than just one brand.
Italy originally intended to join the network as well. However, its chaotic political culture derailed those efforts, and to this day it remains a standalone market.
How big can the US liquidity pool get?
In terms of revenue and traffic, the European network of France, Spain and Portugal is by far the largest ring-fenced player pool in the world. These countries’ combined populations amount to 125 million, or about 38% of the entire US population.
According to PokerScout – using data from GameIntel – operators in that market have combined average cash game traffic in excess of 3000 players. For comparison, PokerStars’ and GGPoker’s international sites each have an average over 5000, but all legal US sites put together (across all states) average less than 1400.
The three states currently sharing liquidity have a combined population of just over 12 million. Michigan, once it joins the pool, will bring it up to around 22 million.
Pennsylvania is dragging its heels, but could increase the pool further, to nearly 36 million. At that point, the market would still be less than one-third the size of the European network in terms of population. However, increased traffic due to better tournament guarantees and game selection might make it closer to half the size in terms of players and revenue.
Additional launches could double it
The US market would be looking pretty good then, even if just those states already up and running managed to get together to share traffic.
In principle, West Virginia and Connecticut to add to this. Online poker is legal in those states, they’re just too small to attract any operators without sharing traffic. Unfortunately, their regulators are in no hurry to negotiate compacts for a currently nonexistent product, so they have a bit of a chicken-and-egg situation going. That could change if interstate poker started to prove itself more lucrative.
That brings us back to New York. With a population tickling 20 million, it’s bigger than Michigan and New Jersey combined. There is also Illinois, another big prize with a population of nearly 13 million, if it ever makes any progress with its Internet Gaming Act.
As it turns out, all these hypothetical states have a combined population roughly equal to the currently active states. In other words, their addition would double the size of our theoretical, fully merged market. The total then would be 73.4 million people, more than Italy and getting up towards 60% the size of France, Spain and Portugal combined.
Keep in mind, though, that just the active states already produce almost half as much traffic as the European network. Double the population, and the two could be neck-and-neck. In other words, the best case scenario could have a merged US market in close competition with the European one for the title of highest traffic – and revenue – outside the global dot-com pool.
What a change that would be from the current situation.