What Can Legal Sports Betting Do For US Online Poker?

May 15, 2018
What Can Legal Sports Betting Do For US Online Poker?

The US Supreme Court paved the way for New Jersey and other states to legalize sports betting this week. It’s a move that may not mean much for legal and regulated US online poker on the surface.

However, a deeper dive into the issue suggests legal sports betting could open up several opportunities for online poker nationwide.

This week’s US Supreme Court decision upheld a 2014 New Jersey law aimed at allowing sports betting in casinos and racetracks in the Garden State. It also struck down the Professional and Amateur Sports Protection Act (PASPA). PASPA is the law that made sports betting illegal everywhere except Nevada, and limited sports gambling in Delaware, Montana and Oregon.

In the written Supreme Court decision, Justice Samuel Alito said PASPA infringed upon state sovereignty guaranteed in the US Constitution. Essentially, Justice Alito said states should be able to make a choice when it comes to sports gambling:

“The legalization of sports gambling requires an important policy choice, but the choice is not ours to make. Congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own.”

Opening the door to sports gambling

The 6-3 vote in New Jersey’s favor actually opens the door to legalized and regulated sports gambling across the country.

New Jersey racetracks and casinos are expected to make sports betting available almost immediately. However, after the Supreme Court heard New Jersey’s arguments against PASPA in December 2017, seven other states also passed legislation making sports betting legal should the court rule in its favor.

That day is now here, and the following seven states could have some form of sports betting running within a year:

The four states that have already passed online poker legislation, including Nevada, New Jersey, Delaware, and Pennsylvania, either already have, or will soon have sports betting too.

Plus, 13 other states have been considering similar legislation and could soon follow suit, enacting sports betting legislation of their own. These states include:

  • California
  • Illinois
  • Indiana
  • Kansas
  • Kentucky
  • Maryland
  • Massachusetts
  • Minnesota
  • Michigan
  • Missouri
  • Oklahoma
  • Rhode Island
  • South Carolina

Looking at both lists shows many of the more than 20 states that have previously considered legal and regulated online poker are either ready to go with sports betting, or currently considering it.

The legal landscape for US online poker

In truth, the US Supreme Court decision paving the way for states to legalize sports betting does very little to change the legal landscape for online poker.

The road to legal and regulated online poker was paved in December 2011 when the United States Department of Justice issued a legal opinion on the Federal Wire Act. The DOJ concluded everything outside sporting events falls outside the act’s reach.

It was hailed a victory for online poker, as it clarified it is not in violation of the Wire Act. States have been legally within their rights to pass online poker legislation since then. The fact only a few have has nothing to do with the legality of it. It’s more about online poker not being the kind of issue that gets voters to the polls, or brings in substantial tax revenue.

More states have shown an interest in legal sports betting simply because of the economics of it. Legal sports betting means millions more in tax revenue than online poker ever will. As a result, the change in federal sports betting law does little for online poker. For most states, the issues are separate and distinct.

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Marrying sports betting and online poker

That said, it is entirely possible the two issues could be married together. States considering either or both could pass some kind of all-encompassing gambling expansion bill.

In fact, online poker could ride the coattails of sports betting legislation to passage in several states. Particularly in California. Operator suitability issues and the inability of stakeholders in the state to reach consensus have stood in the way of legal online poker for a decade there.

Earlier this year, California Assemblyman and online poker advocate Reggie Jones-Sawyer said he will not be introducing online poker legislation in 2018. However, Jones-Sawyer also said lawmakers in the state are closely watching the US Supreme Court for a decision on sports betting. Apparently, California had an eye on attaching online poker to sports betting legislation in the state next year, should the court strike down PASPA.

Now that this has happened, the door is certainly open.

Of course, nationwide passage of these all-encompassing gambling expansion bills is not expected anytime soon. The handling of both issues clearly differs from state to state.

However, states desperate for new revenue streams could very well go this route. Those that lack the votes to get either issue passed on its own could as well. Facts that have online poker advocates from coast to coast hopeful that online poker language will be stuffed into the next wave of sports betting laws expected to pass across the country over the next year.

Gaming stocks rally

In the meantime, many of the gaming and casino companies behind online gambling in the US are expected to be sports betting leaders as well. A fact that could bode well for the continued growth of online poker.

News of the Supreme Court’s sports betting decision sparked a rally in gaming stocks. According to Reuters, online gambling and sports-betting technology company Scientific Games‘ stock rose 11 percent. Meanwhile, stock prices of casino and racing companies including Penn National Gaming (4.7 percent), Caesars Entertainment (5.5 percent), and Churchill Downs (4.9 percent) were all up as well.

Legal sports betting clearly means increased revenues for the same companies behind online gambling and online poker. That may have no direct effect on the online poker side of things. However, bolstered revenue for the various companies behind online poker gives them increased staying power. A fact that could help online poker over the long haul.

Online poker slowly grows

Online poker returned to the US in Nevada, Delaware and New Jersey in 2013. However, its growth has been slow. Pennsylvania became the fourth state to pass online poker legislation in 2017. The first online poker rooms in that state should launch sometime in late 2018.

Nevada, Delaware and New Jersey launched the first tri-state shared liquidity games at the beginning of this month. Plus, Pennsylvania is expected to enter into that agreement sometime in the near future, growing US online poker even further. That represents true growth, albeit at a snail’s pace. Now, with no clear sign that it’s going to speed up anytime soon, the increased staying power of the companies behind online poker could prove increasingly important for the future of the game.

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