On Wednesday, the Washington State Gambling Commission tweeted that it has been receiving questions about free online casino and poker sites, such as PokerStars, denying access to state residents.
What prompted PokerStars to stop offering play money poker?
A recent ruling by Ninth Circuit of U.S. Court of Appeals stated that social casino games are illegal under the State of Washington’s existing gambling laws.
It began back in 2015 after a woman lost over $1,000 in virtual chips. She sued Churchill Downs, the then-parent company of Big Fish Casino over the loss.
Under Washington law, gambling is “risking something of value upon the outcome of a contest of chance.”
It all boils down to what constitutes value. Value, according to the law, includes anything that can be exchanged for money or the “the extension of a service, entertainment, or a privilege of playing a game or scheme without charge.”
The appeals court reversed the decision of the lower court ruling that virtual chips are not a thing of value.
Big Fish Casino prohibited the sale of virtual chips for money, but it did require players to use virtual chips to play their games. That means virtual chips have a value because players cannot play without them.
With virtual chips now defined as having value, it stands to reason, play money casino and poker games are in violation of Washington States gambling laws.
PokerStars responds to blocking play money games
USPoker requested comment from PokerStars on the matter this week and received the following statement from a company spokesperson:
“On Thursday, March 29, 2018, the U.S. 9th Circuit Court of Appeals ruled that, under Washington State law, free-to-play games violate state gambling regulations. As a result, The Stars Group is immediately taking actions to block play related to social gaming from Washington State. We are reviewing the rulings and ensuring that our activities are in line with state regulations. We are hopeful the law will be clarified and that when it is, we will be able to reinstate all Washington players at their current status.”
The statement falls in line with the jurisdiction review policy on the PokerStars website.
“Our management team regularly reviews our operations along with independent 3rd party professionals to assess the business risks and opportunities for our brands on a market-by-market basis.”
PokerStars taking precautions
PokerStars blocking access to its play money site in Washington is smart. It tells the U.S. gaming market that it isn’t leaving anything to chance.
Back in 2013, Nevada became the first state to regulate and legalize online poker. The bill included bad actor language in its legislation.
A bad actor is any company that allowed U.S. citizens to play poker on its site after the passage of the Unlawful Internet Gambling Enforcement Act in 2006.
Labeled a bad actor, PokerStars was not allowed to enter the market in Nevada when it launched.
It was 2011 when the Department of Justice shut down U.S. online gaming sites. Since that time, PokerStars has been diligent in its dealing in the U.S. gaming market.
Currently, Pennsylvania is preparing for online gaming, and PokerStars intends to be “among the first operators to launch.”
PokerStars operates in New Jersey under the Resorts AC gaming license. Mohegan Sun manages Resorts and owns Mohegan Sun at Pocono Downs in Pennsylvania.
A partnership between any Pennsylvania casino and PokerStars is only speculation at this time. And it’s likely New Jersey and Pennsylvania is just the beginning for PokerStars.
It is reasonable to think PokerStars has an eye on expanding in the U.S. beyond New Jersey and Pennsylvania. Especially as the debate around online gaming legislation continues in several states.