Assessing The State Of U.S. Online Poker On The Fourth Anniversary Of Black Friday

April 15, 2015
Assessing The State Of U.S. Online Poker On The Fourth Anniversary Of Black Friday

Today is the fourth anniversary of Black Friday. That was the day – April 15, 2011 – that PokerStars, Full Tilt, and Absolute Poker were indicted by the U.S. Justice Department.

PokerStars and Full Tilt left the U.S. market within 24 hours of the news. Absolute Poker allowed its existing American players to stay on the site.

Black Friday exposed financial fraud at Absolute Poker and Full Tilt Poker that eventually put the sites out of business. The two sites were short a combined $200 million. This could never happen in today’s regulated online poker states, where sites are held to the same standards as brick-and-mortar casinos.

Those were not the only legal actions against unlicensed sites during that time frame. In May 2011, Blue Monday occurred. This action brought indictments against the network now known as Winning Poker, as well as related sportsbooks.

Calvin Ayre and Bodog are also under indictment.  The difference between these incidents and Black Friday is that Winning Poker and Bodog decided to ignore the indictments and stay in the U.S. market.

Black Friday needed to happen to open regulation

PokerStars and Full Tilt were the top two poker sites in the world before Black Friday. This gave players access to thousands of tables at any given time.

No intrastate site or small interstate network could compete with that type of volume. No sensible company would invest to try and enter that type of market. Meanwhile, underfunded sites like Full Tilt and Absolute Poker would have continued accepting deposits from unsuspecting players.

While there have been some issues with regulation, the fact remains that it protects player funds.

Ultimate Gaming failure put player protections to work

Player protection is the main goal of legal online poker.

A company has already failed in the regulated market. Ultimate Gaming’s sites left New Jersey and Nevada in 2014 after failing to gain a profitable market share. Gaming regulations required the company to hold player funds separate from its operating accounts.

Ultimate Gaming also had to follow strict guidelines on how to shutter its business in an orderly fashion.

All players got paid by Ultimate Poker. Players that did not manually request a withdrawal received a check in the mail within weeks of the closure.

Offshore online poker sites continue to succeed

The U.S. online poker market is still active. Bodog and its sister site Bovada average an estimate 1,800 players, according to Pokerscout.com. The site peaks at over 3,000 players.

That makes it the third largest site in the world. That is quite an accomplishment considering virtually all of its players are in the U.S.

Chico, Winning, and Merge Gaming combine to average nearly 1,500 players. This leaves a healthy market for players willing to risk depositing funds at unlicensed, offshore sites.

Licensed sites operating in Delaware, Nevada and New Jersey average about 475 players and peak around 1,150, according to Pokerscout.com. There are three viable regulated poker networks.

WSOP.com in Nevada also hosts players in Delaware. WSOP.com and Borgata/Party operate in New Jersey.

Real Gaming operates in Nevada. Its traffic is negligible. The site is dark most hours of the day and often peaks at just one table. Real Gaming is just as safe and reliable as the major sites in regulated markets.

Trouble at two offshore sites

While most offshore sites are paying players in a timely manner, there are two troubled sites in operation. Lock Poker is a complete scam that has stolen over $10 million from players. It has not paid a withdrawal request in over one year.

There appears to be trouble at Carbon Poker and its sister sites. Some players have been waiting more than two months for a withdrawal.

The sites blame high volume related to the Super Bowl, an event that concluded more than two months ago. These players have paid an upfront fee as high as $75 to get their cashout, even though the payments are not being processed on time.

There is nothing these players can do but wait and hope since there are no protections available at offshore sites.

Spread of regulation stalled

New Jersey was the last state to go live. That was in November 2013.

Since that time, no states have legalized and regulated online poker. Only two states – Pennsylvania and California – have had any serious discussion on the topic. Meanwhile, online gaming opponents are pushing the Restoration of America’s Wire Act in Congress.

That bill would make online poker and casino games illegal, even rolling back existing action in regulated states.

Player activism nearly nonexistent

Players are sitting on the sidelines waiting for legal online poker to come to their states. Meanwhile, their voices are not being heard in Congress or in state legislatures.

California Assemblyman Mike Gatto stated recently that only “four or five” of the tens of thousands of emails he received last year pertain to online poker. This does not motivate lawmakers to push a bill if the potential customers are not speaking up on the topic while it is under consideration.

Players must be heard. Gambling is already a touchy topic in state legislatures and at the federal level. Staying silent ensures that nothing will happen on the regulation front.

Contact your representatives

Our sister site Californiaonlinepoker.com makes it easy for players in California to contact state legislators using their AllinCA page. California residents can simply provide your name, email and ZIP code and we will find your representatives. You can contact them through social media with one click or call their offices.

One of the reasons regulated online poker has stalled is because of the lack of a voice exhibited by players. It is time to change that. If a few more states go online, it will terminate the federal efforts to ban the game. It will also motivate future states to come online as the revenue grows in existing ones.

(Updated: April 17)

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