Federally Regulate Online Poker

Tens of millions of Americans play online poker, with the industry raking in millions in revenue despite only being legal in four states: New Jersey, Delaware, Nevada, and Pennsylvania. Since regulating online gaming in 2013, New Jersey alone has taken in about $250 million in taxes, about 10% of which come from online poker.

The potential size of a federally regulated US online poker market is significant, with reports estimating $2.2 billion just in the first year.

Not only would federal licensing, regulation, and taxation of online poker make sense from a revenue perspective, but it would ensure a more secure environment to play in, limit the influence of offshore unregulated platforms, and make it easier to combat money laundering. 

The online poker laws today make offshore sites the only option for many American players. Since foreign companies and sites cannot be regulated or monitored, these players are more vulnerable to exploitation and greater financial risk.

The current state-by-state rules are variable and push many players to these potentially unsafe offshore sites. Clarifying the rules and making it legal in all 50 states and territories would benefit American players and companies, while new tax revenues can be used to mitigate gambling addiction.

In 2016, only $73 million in state and federal funds were dedicated to gambling addiction services, despite an estimated 5.4 million Americans battling it. Twenty percent of states don’t dedicate any funds toward gambling addiction at all. It needs to be taken more seriously. We should be dedicating adequate resources towards research to analyzing the extent of the problem, treatment programs, and prevention awareness campaigns.

The pendulum has swung back and forth during the debate of online poker regulation over the past decade as archaic laws such as the Interstate Wire Act of 1961 are applied and contrasting summary judgments are passed by courts on the application of the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006. Yet, despite the bans no poker players have ever been criminally charged.

Former Senate Majority Leader Harry Reid of Nevada came close on a couple of occasions to passing legislation, and I would look to the elements in his proposed Internet Poker Act of 2010 as a starting point without concern for powerful casino lobbyists who try to thwart such efforts.

This is a no-brainer and ultimately gives Americans the freedom to choose to play poker in a casino or from the comfort of their homes. It’s already happening - US online poker sites report customers from all 50 states. History is littered with examples of the government trying to kneecap industries that will always find ways to exist, until finally coming around and realizing the benefits of regulating them. The time has come for online poker.