US Poker Industry Moving Forward with Interstate Compacts

Progress in America’s online poker industry is slow. Could interstate compacts be the answer?

Compared to Europe’s hugely profitable online casino industry, the American internet gambling market is a modest one. Only three states offer residents the possibility of playing poker via licensed websites, and while others are expected to legalize it too, the best thing officials can do for now is to join forces and try to make the best of the current situation.

This is exactly what the All American Poker Network (AAPN) is trying to do. In case you’ve never heard of it before, the AAPN is a joint venture between 888 Holdings and Avenue Capital Group and America’s first online poker network. Its goal is to become the first regulated interstate network in the country.

The online poker revolution

Nevada has three legal online poker sites:

• WSOP
• Ultimate Poker
• RealGaming

With two powerful groups battling it out over the delicate subject of internet gambling in the US, the online casino industry is developing slowly. For now, playing poker on the internet is only legal in Nevada, Delaware and New Jersey, but several other states are considering legalizing it.

Though some might not know it, interstate gambling compacts are nothing new. Several states across the US have already joined forces years ago, to try and increase jackpots in lotteries such as the Mega Millions and Powerball. But for online poker, it’s a first.

The AAPN can only legally operate in these three states, but the entity is not giving up, planning to pursue licenses in each American state as soon they become available. At the moment, the network operates on an intrastate basis in New Jersey. It’s coming to Nevada soon and players will have access to interstate online poker as soon as compacts are finalized.

Baby steps

Earlier this year, Nevada and Delaware had already signed a ground-breaking agreement, becoming the first two states to legalize and regulate intrastate online gambling. This initiative is meant to help the market grow, but its main advantage is that it brings players new options.

Both Nevada and Delaware have reported pretty disappointing results since the first virtual American poker rooms went live, mostly because their gaming sites are too small to attract a large number of customers. Nevada’s three websites have an average of 190 players per week and the three sites in Delaware draw less than 20.

The “Multi-State Internet Gaming Agreement” is in compliance with the Unlawful Internet Gambling Enforcement Act of 2006, which allows states to legalize internet poker and enter interstate gaming compacts with each other.

New Jersey could join soon

Online gaming consultant Mario Galea, who works for the New Jersey Division of Gaming Enforcement, believes New Jersey will also sign the Multi-State Internet Gaming Agreement before the end of this year.

“All the hard work has been done. The next step is now for New Jersey to go out there and say, ‘Hey, we have the systems in place you guys can use our systems to be able to share that information’,” he told reporters.

“New Jersey is definitely looking at that agreement and I’m pretty sure they would be happy to come into that agreement,” Galea added.

But despite the AAPN’s efforts, until American gambling laws define a clear set of regulations for the online industry virtual poker and other casino games will only remain available for a limited number of players, through a limited number of websites.

Putting things into perspective

Having more websites to choose from is not the only issue here. There are more important things to consider, such as consumer protection, player safety and a clear taxation policy. This is why the online gambling industry in US needs clear regulations.

In a recent interview, AAPN executive chairman David Licht said: “There is strong support from the industry to have a more unified position and game plan for regulation across the US, specifically, the industry’s support regarding ‘harmonization’.”

Licht added that, before anything else, industry representative have to make sure that lawmakers “are educated that online gaming can happen in a secure, responsible and prudent fashion”.