This year marks the 10th anniversary of online gaming being legalized in the United States after Delaware launched in 2013, followed by New Jersey and Nevada in the same year.
American online gaming has also brought the return of online poker as well. Besides these states, other states that offer online gambling (not including sports betting) include Michigan, Pennsylvania, West Virginia, and Connecticut.
Card player I recently spoke with John Pappas, an iGaming consultant and former CEO of the Poker Players Alliance, about where online poker is headed and the importance of the game to the industry.
CP: What are some key moments in the past 10 years that stand out to you in the US licensed online gaming industry?
A: Obviously, the decisive moment was the launch in New Jersey. I think there were a lot of people who weren’t convinced that it could be done in a proper way and New Jersey proved those doubters wrong.
Companies like GeoComply and the operators have done everything right from a trust standpoint to ensure there is a regulated market from the beginning – one that will not violate federal law. Everyone’s eyes were on New Jersey to see: “Are these guys going to get it wrong and is this going to stop online gaming in its tracks?”
But then over the years, there were a number of significant milestones, such as when New Jersey began showing its first month-over-month revenue increases – increased state tax revenues as well as increases in operator revenues. It hasn’t really gone down since then. Going back to 2016-2017 where the market really started to take hold, I think a lot had to do with the improvement in the ability of payment processors to accept funds and the comfort level of banks in dealing with online gaming operators.
The third element I would like to highlight is [the overturning of] Baspa This has helped boost the industry nationwide and has certainly added to New Jersey’s growth over the past several years.
And so the last important thing to note is how iGaming, not only in New Jersey but in Pennsylvania and other jurisdictions, was a lifeline for the states and the gaming industry during the early days of Coronavirus disease The pandemic, where casinos were either closed entirely, or had very limited capacity requirements, was actually reducing the resources states relied on to generate gaming revenue. iGaming has truly been a lifeboat that has helped keep that revenue coming into the state and keeping the industry going.
CP: How have attitudes among states and legislators changed in the past decade?
A: They soften. It’s difficult for people to be able to poke holes in it from a consumer protection standpoint. I suspect [the industry] He did a very good job there.
I think one of the biggest challenges we face is overcoming concerns about things like cannibalization or the impact on other gaming-related sectors. There is no evidence to suggest that they do, but this is still a common theme we hear from other stakeholders and even from legislators.
CP: What are your thoughts on where online poker is headed, and why is it lagging somewhat behind sports betting?
A: I think it’s not because there’s a lack of consumer interest. It is not as profitable for the operator as sports betting or an online casino game, due to its peer-to-peer skill-based nature. Profit margins are very small. Therefore, there is not much motivation for operators to invest in just poker, especially when it has to be done on a country-by-country basis and with limited liquidity.
The ironic thing is, if it wasn’t for poker and poker players, I don’t know if the law would be enforced in New Jersey. Because that was really the primary vote of voters in New Jersey when they passed the law, and even in Pennsylvania and Michigan when they passed the law as well. He was the voice of poker players reaching out to lawmakers saying, “We need to have the ability to play this game in a safe and regulated way.”
CP: Where do you see the industry in another 10 years?
A: I think we will see significant growth over the next 10 years. If you asked me to make a prediction for the next couple of years, I would say that there will probably only be one or two states that legalize online gaming. But over the next 10 years, I think we will more than double the number of states we have today.
More and more Americans are turning to the Internet for all forms of entertainment, and gaming is no different. This will continue to grow, and it is no longer possible to ignore the fact that we have a huge, unregulated market for online gaming today. The states will say, “Why do we allow a site based in Costa Rica to reap all the benefits for our residents, but the actual casino that we licensed here in the state has to remain on the sidelines?”
So, I think countries will quickly realize that this is an industry that cannot be ignored from a revenue perspective, but also from a consumer protection perspective.
* Photography – John Pappas
