The Death of Poker Globalization
THE WEEKLY SHUFFLE, 2014-09-21, by JTringerIt was 1995 when the first online casino was launched. Even in the infancy of the World Wide Web, it was clear that there was a demand for online gaming. Sites began to sprung up in the years to follow, culminating in most rooms offering a simplistic online poker platform.
And then it happened. At the 2003 World Series of Poker, a complete nobody by the name of Chris Moneymaker managed to take down the Main Event and win $2.5 million. He credited his online practice as the reason he was prepared for the tournament. While Moneymaker never reached those heights again, his victory was the beginning of a poker boom that took the industry to new heights. Hundreds of thousands of players across the world signed up on major sites like Party Poker and PokerStars, looking to become the next Chris Moneymaker.
Poker was truly a global game. You could sit in a game and see players from Russia, Australia, Egypt, Canada, America and all kinds of different countries. One of the biggest draws of online poker was being able to play against someone thousands of miles away from you. But look in a tournament lobby today and see where players are located, all within the same region; what went wrong?
Ever since in the explosion of online poker, especially in the U.S., opponents of gambling have been looking for a way to shut it down or profit off of it. In the unregulated market, this was impossible, which was why there were many pieces of legislation that were introduced. Most were dismissed, but after persistent pushing, the first major piece was passed in 2006, the Unlawful Internet Gambling Enforcement Act (UIGEA).
The effects were felt immediately by the poker community, as giants Party Poker and 888 Poker completely withdrew from the U.S. online poker market. This left remaining titans like Pokerstars and Full Tilt to strengthen their position and becoming the leading sites. Players were still able to play as normal, so while there was a site change for many players, online poker was business as usual.
Unfortunately, this was just the beginning. Many of the regulations in UIGEA were not enforced right away, and major events after the act was passed took years to come to fruition.
Black Friday: The Beginning of the End
While there was other legislation being pushed in the U.S., most notably by Harry Reid, the event that really changed the world of online poker forever was Black Friday.
In April 2011, indictments against all the leading U.S. poker rooms were unsealed. This was followed by fund seizure that left player balances in limbo. Most foreign players were able to withdraw their money after many months, while U.S. players had to wait about 3 years.
The result of Black Friday was the complete withdrawal of legitimate poker sites from the U.S. and a growing distrust in online poker. At many points during the saga, it looked like player funds might never have been released.
Meanwhile...Across the Globe
While it's easy to paint certain American politicians and lobbyists as the villains behind banning/restricting online poker, they were far from the only one. Many countries in Europe pursued and passed their own forms of regulation during a similar time period, just none were as mishandled as Black Friday.
While we can't look at every country, there are a few countries that beat the rest to regulation.
France, along with other European countries like Belgium, Germany and more have introduced various poker legalization and regulation. France began regulating and taxing online poker in 2009, which still allowed sites like PokerStars to remain in that market. However, this segregated the European player pool and led to higher rake as well.
In the U.S.
Proponents of online poker in the United States have begun rebuilding, but this is a slow process. Most of the progress is being made on a state-by-state basis. In one form or another, online poker is now legal in Nevada, New Jersey and Delaware. However, it is far from what it used to, in both terms of player diversity and player pool size. Sites also have to comply to regulations which can make it difficult to remain solvent without raising fees and rake. For example, online sites in New Jersey must partner with a land-based casino in order to get an operating license, which typically involves significant licensing fees.
In time it is expected for states to work together to expand player pools, but the days of tens of thousands of players entering a single tournament online on a regular basis are gone.
The Current Consequences
Most of these countries now limit residents to playing other residents of the country, truly ending the era of global poker. While the globalization aspect of playing online poker wasn't the only draw, it was certainly a feature that will be missed by many.
There is much to come regarding the law and online poker across the world, keep your ears open, you never know what is coming next.
The Weekly Shuffle is our Sunday column with our observations and commentary on the poker world. Have an idea for an article? Leave a suggestion on the feedback page.
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