When ruminating over what US online poker needs next, the conversation quickly leads to the discussion of what new markets could be added soon.
A handful of states have legal online poker but no operators. Then, some states have recently enacted sports betting and are considering trying online casino gaming.
While there are supporters of expanded igaming in many state legislatures, there seem to be just as many (if not more) opponents to the idea. But as acceptance of sports betting grows, the expectation is that more states will want to allow online casino gaming — which is a much bigger moneymaker for operators and states alike.
In this third installment of the series (see part one and part two), we look at what states could be next in offering online poker.
- What It Is: More states legalizing online poker.
- Why It Matters: More states mean bigger prize pools in tournaments, more competition, and an improved product with a wider variety of games.
- Who Benefits: Everyone — players, operators and regulators. States with legal online poker can count on additional tax revenue.
- Who Has Done It Thus Far: Online poker is legal and available to players in five states: Delaware, Michigan, Nevada, New Jersey, and Pennsylvania.
- Who Hasn’t: Although poker is legal in Connecticut, Rhode Island, and West Virginia, there are no operators. Poker is not currently legal in the remaining 42 states.
- Why They Haven’t Done It Yet: Online casino gaming will likely need to be legalized first.
- Likelihood of It Happening in 2024: One state — 4/5. Two states — 2.5/5. Three or more — 1/5.
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What Needs to Happen?
For more states with legal online poker, there will likely need to be more states with online casinos first. And that’s why there aren’t more states with online poker — either state residents, elected officials, or both are averse to expanded igaming.
The reasons for the aversion vary. Some states like New Hampshire are concerned that online poker could impact charitable gaming.
Kentucky and New York don’t have much in common, but one thing that’s true in Paducah and Poughkeepsie is that online sports betting is newly legal (the Empire State launched in January 2022, the Bluegrass State followed suit last month).
Although online sports betting is live and legal in 25 states and the District of Columbia, it’s not seen as the vertical that is the necessary precursor to online poker — that distinction belongs to online casinos. Online sports betting is perhaps better thought of as the vertical that turns the knob to open the door to igaming, and that online casino is the one to push the door open for online poker to walk through later.
Several states that have had online sports betting for years are considering expanding into online casino gaming. Lawmakers in some states could decide to include online poker in legislation to expand igaming. Some examples of states in this category include Illinois, Indiana, Maryland, Massachusetts, New York, and Ohio.
But there are also states like Kansas and Kentucky. Both have recently enacted online sports betting and are socially conservative. The idea of expanding igaming further has been seen as a bridge too far in such localities, and attitudes about gambling could take some time to change — if they do so at all.
Recall that Kentucky tried to enact online sports betting for many years but those efforts all failed because the bills put forth also legalized online poker (online casino was skipped).
Should sports betting prove a worthy gamble, attitudes about online casinos and poker rooms could soften. But if states see sports betting creating problems in their jurisdictions, expect lawmakers to tap the brakes.
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Why Is it Important?
US online poker needs more states to offer the game to thrive. Currently, four states with legal online poker — Delaware, Michigan, Nevada, and New Jersey — have pooled their players together to form “shared liquidity,” which allows for a broader offering of online poker games and also creates bigger tournament prize pools.
More states with legal online poker also mean more excitement, which will draw in more players and support the game. Increased play leads to additional tax benefits for the states and increased revenue for operators, leading to further investment in online poker.
The four states are signatories of the Multi-State Internet Gaming Agreement (MSIGA), a multi-jurisdictional gaming compact for online poker and some online casino games.
Not all operators in the four states share liquidity, and it shows. PokerStars combined its Michigan and New Jersey online poker player pools on January 1 and has been leading in the online poker vertical in the Garden State ever since.
Pennsylvania is not a member of MSIGA, so the operators there are not able to utilize shared liquidity. Until it joins the compact, the Keystone State won’t reach its true potential for revenue and excitement in online poker.
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Why Hasn’t It Happened Yet?
Online poker is legal and available in five states — Delaware, Michigan, Nevada, New Jersey, and Pennsylvania. It could expand to three more states but hasn’t yet for various reasons.
For starters, there are the two states where online poker is technically legal, but there are no operators — Connecticut and West Virginia.
Connecticut launched online casino gaming and sports betting in September 2021. Online poker was also legalized, but there’s a problem. Actually, two problems.
First, the two tribal casinos authorized to launch online casino gaming and sports betting picked two operators that don’t have an online poker platform. Second, the state made shared liquidity illegal. Without rectifying those two situations, Connecticut won’t offer online poker.
West Virginia has a different issue. The state’s regulator is actually interested in joining MSIGA, but won’t ask to join the compact unless one of its nine online casino operators makes that request. So far, no operator has made that ask.
Another state with a unique set of challenges is Rhode Island. The state will launch online casino gaming in April 2024, after the governor signed a bill legalizing online casino gaming this past June. But Bally’s, another operator without an online poker platform, will hold a monopoly on online casino gaming when it launches.
Rhode Island lawmakers also changed what constitutes an “online table game.” They removed verbiage from the bill that would have allowed random number generation (RNG) in table games and inserted the words “where such games are conducted by one or more live persons” for table games play.
The changes effectively mean RNGs are only allowed for slots, and all table games must be live dealer. There currently isn’t a product that supports live dealer peer-to-peer online poker.
And there’s one issue that bedevils all three — Connecticut (3.6 million), Rhode Island (1.1 million), and West Virginia (1.8 million) are all small states in terms of population. That means there won’t be very big tournament prizes or excitement until each state joins MSIGA.
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When Will it Happen?
In states where lawmakers tried to pass igaming legislation in 2023 but were unsuccessful, a new effort will likely be put forward again in 2024.
Failure doesn’t appear to have tamped down enthusiasm, either. Consider that immediately after pro-igaming expansion efforts fell short in Indiana in February and in New York in March, supporters vowed to try again in 2024. A key lawmaker in New York told pokerfuse in late October that he plans to introduce legislation to legalize online casino gaming and poker in December.
Lawmakers in Maryland, Massachusetts, and Ohio, three states that recently launched online sports betting, have also expressed interest in expanding into online casino gaming. That interest has been fueled by the success so far of sports betting.
