West Virginia became the latest state to legalize online poker and casino games late last week.
Following passage by the state House and Senate, HB2934 was allowed to become law on March 29 after Governor Jim Justice elected not to sign or veto the bill.
Online gaming in West Virginia will fall under the authority of the West Virginia Lottery Commission who will be responsible for administering regulations, licensing and the collection of taxes and fees.
Officially the law will take effect on June 7, 2019, 90 days after it completed passage through the legislature. And while it is possible that online gambling will be up and running in West Virginia before the end of the year, the time required to approve regulations, issue licenses and perform testing will likely mean that the market launch will be pushed into 2020.
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Despite Its Legal Status Online Poker in West Virginia is Not Certain
Just because online poker is now legal in West Virginia does not mean that the virtual games will be available to those within the state anytime soon due the potential market conditions.
Online poker is a game that depends heavily on a large pool of available players to participate in games. The way that such “liquidity” (as it is referred to in the industry) is achieved in jurisdictions with low population is by allowing operators to pool their players in that jurisdiction with their players in other jurisdictions that have similar regulations.
With a population of only 1.8 million people, West Virginia would struggle to support a single online poker room, let alone provide consumers with a variety of choices that would also benefit consumers by producing a competitive environment.
In the US, the All American Poker Network (AAPN) is the only multistate online poker network in operation, but online poker companies operating in New Jersey (the only state with multiple online poker networks) are hoping to be able to connect their New Jersey players with players in other states that will be opening their online poker markets in the future. Pennsylvania is expected to come online this summer and now West Virginia appears to be next. Michigan is also looking good for legalization this year and a 2020 market launch.
But currently the US Department of Justice views the pooling of online poker by operators across state lines as being in violation of The Interstate Wire Act of 1961 and has given operators until June 14, 2019 to become compliant with the new interpretation.
The latest opinion by the Office of Legal Counsel for the DOJ (which was just released to the public in January of this year) is currently in the process of being challenged in the courts.
However, the adverse opinion of the DOJ has already begun to impact online poker in the US. Not only is the viability of the AAPN in question, but the Pennsylvania Gaming Control Board has indicated that the delay in launching its online gambling market was at least partially due to the revised opinion of the Wire Act.
Additional pressure on online poker could come before the matter of the new DOJ opinion is settled law if financial institutions decide to stop processing transactions related to online gambling.