It was not very long ago that the notion of legal online gaming in the United States was the stuff of legend. But in 2018, it is not just a reality, it is spreading across the United States in many forms.
With momentum growing, states with legal online gambling could be the norm and not the exception in the not too distant future.
The present gaming landscape in the Usa
Up to now, four states have legalized online casino or online poker.
Nevada (poker-only)DelawareNew JerseyPennsylvania
Six states have authorized online lottery.
Online sports betting is in the works in at least two states.
Setting aside the”is it gaming” debate, daily fantasy sports was legalized in no less than 19 states.
Furthermore, all manner of gaming laws is on the table in a countless number of nations.
Here’s how we got to this point.
Black Friday puts an end to the status quo
Without doubt, 2011 was the most tumultuous years in US online gaming history.
On April 15, the Department of Justice seized the domains of the prominent US-facing internet poker operators and indicted key executives. That ended the long-running game of cat and mouse both sides had been engaged in since the passing of UIGEA in 2006.
The DOJ action removed all uncertainty, operating an internet poker site wasn’t allowed in the United States and wouldn’t longer be tolerated.
The seizures also sent the house of cards tumbling down at Absolute Poker, Ultimate Bet and Full Tilt Poker.
Full Tilt was not able to cover the $150 million in participant accounts, with Total and UB owing their customers tens of millions more.
Just PokerStars emerged relatively unscathed, and so were it the settlement it reached with the US, online poker players will probably have never seen their Full Tilt, AP and UB cash again — cash that’s taken years to reunite.
Following the momentous (dubbed Black Friday within the poker community) online poker, once widely available in the US, was virtually nonexistent.
For proponents of legal online gaming, the grief brought on by Black Friday turned out to be relatively short-lived.
Thanks to some 2009 online lottery query produced by New York and Illinois, their prayers were about to be answered.
2011 OLC Opinion: The spark that started the fire
In September 2011, New York and Illinois received their answer from the Department of Justice Office of Legal Counsel. The opinion issued by Assistant Attorney General Virginia Seitz decided that the 1961 Wire Act only applied to sports betting, and states were free to legalize online lottery, and by extension other kinds of online gambling within their borders.
“Given that the Wire Act doesn’t reach interstate transmissions of wire communications that do not relate to a”sporting event or competition,” and that the state-run lotteries suggested by New York and Illinois do not involve sporting events or contests, we conclude that the Wire Act doesn’t prohibit the lotteries described in these proposals. In light of the conclusion, we need not consider how to reconcile the Wire Act with UIGEA, since the Wire Act doesn’t apply in this circumstance. Accordingly, we express no view about the proper interpretation or scope of UIGEA.”
As opposed to going down in the history books as the year online gaming died in the usa, 2011 lit the runway to legalization.
First mover states came from the gate at a full sprint
Several states jumped at the opportunity presented by the OLC opinion, and by 2014 online poker, casino and lottery had gained a foothold in the US.
Alas, the frenetic speed quickly subsided.
Overblown earnings estimates, some early technical problems and enthusiastic opposition were contributing factors.
After three years without a legislative victory, online gaming was at a standstill. Until DFS forced legislatures into actions.
DFS helps normalize online wagering
In 2015 daily fantasy sports became a mainstream product. DFS advertisements were everywhere, so the mini-scandal in the autumn of 2015 all but forced legislatures into actions.
DFS laws breezed through legislatures that are normally resistant to gaming expansions. Less than three years after the scandal, no less than 18 states have legalized DFS.
The bad news was DFS pushed online gaming bills to the backburner. The good news is the proliferation of legal DFS has had a profound effect on the perception of internet gambling.
No more spoken of as a hypothetical scenario, states can now point naysayers to present examples of an online lottery, an internet casino and DFS. Placing wagers online is occurring across the nation.
As outgoing American Gaming Association CEO Geoff Freeman stated in a recent interview,”DFS certainly helps to normalize all kinds of gaming — they can say it is not gambling all they like, but I think most people would lump it into that class.”
Sports betting is the new flavor of the month
Online gaming may have lost yet another year as state legislatures attention was drawn to sports betting, the new shiny object that fell in their lap. But like DFS, sports betting will further normalize all kinds of gambling.
Including online gambling.
Make no mistake about it, multiple states will be offering online sports betting in 2018 and 2019. And every additional state that offers mobile sports betting is yet another state tearing down the myth that online gambling is similar to putting a casino in everybody’s pocket.
Online gambling expansion is not likely to really pick up until 2019, when the second wave of states consider legalizing sports betting.
With 2018 legislative acts are coming to an end, and with a mid-term election in November, I wouldn’t expect more than a few stragglers to push a sports betting or gaming bill throughout the finish line.
When legislatures reconvene in 2019, expect a flurry of activity.
Over the course of 2019-2020. Some states will use sports gambling , especially online sports betting, as a foundation for an extensive gaming expansion package.
The second wave will be less rushed than the states that rushed into legislation in 2018. There’s no logical reason to legalize online sports betting and not online casino, especially where there is crossover among stakeholders.States searching for earnings will have a comprehensive package of products to pack together — sports, casino, poker, lottery and DFS.States will begin to covet the earnings generated in other states.