A few days after New Year’s, the US Department of Justice (DoJ) issued a new directive that has shaken the online gaming world and was enough to spread chills through the spines of many senators and online gaming operators that have hoped for a federal regulation over the next few years. The country’s Justice Ministry is currently challenging – and trying to amend – a decision from 2011 that some States used as grounds to re-launch online poker and casino, within their geographical boundaries, after a 6 year absence that started with the introduction of the UIGEA law in 2006.
Some people fear that the Trump administration, which is openly linked to the interests of some land based casinos (let’s not forget that President Trump built his empire on the operation of casino resorts in both Atlantic City and Las Vegas), wants to make amends with some of his friends and of course benefit his own rights from operating land based casinos. These resorts have been hit by the fact that some states already allow players to play online poker and casino at the same time that Pennsylvania, another state which is considerably bigger than those that regulated gaming so far (Nevada, Delaware and New Jersey) is ready to open up in 2019. And there are more that plan to prepare a regulatory framework for the reopening of online poker and casino by early 2020.
What happened in 2011 with online casinos?
It all started in 2011 when some states of America interpreted a federal court ruling in a way of creative ambiguity. More specifically, in a decision of the federal court – which assessed the 2006 UIGEA ban that banned all transactions from US banking institutions to online casinos and poker companies – a paragraph’s exact meaning was left open to different interpretations. Using this as grounds for dispute, some states’ governments and their local parliaments decided to re-allow online poker and casino. Their rationale was based on the fact that the ruling’s wording essentially prohibited only transactions referring to sports betting books that financial institutions could not process in the future.
As of 2011, therefore, some states felt they could legitimately offer casino and poker games, which of course did not happen overnight. Thus, one year after this decision, in Delaware, Nevada and New Jersey, local parliaments were able to create new licensed regimes, with express procedures that surprised everyone by its speed. As a result, by late 2012, online operators were ready to offer again their services to players who lived in the borders of these states, almost 6 years after the original lock out of 2006. And by 2019, another big state, Pennsylvania, regulated and operates a gambling market for these two games, while New York senators have expressed their intentions to imitate the aforementioned 4 states. Indeed, the recent bet365 deal with a New York casino and betting company reveals that New York gaming regulation might be closer than some people think.
What does the decision of early 2019 say and what does it actually mean?
The interpretative order of the federal court, which was issued a few days ago, will try to enforce the opinion that the original message of 2011 was misinterpreted. And the re-opening of online poker and casino has not been compliant. The ambiguous view then – based on the unclera grammar and syntax of the text – allowed an interpretation that only transactions targeting sports betting companies are outlawed. And that poker and casino are not subject to the same limitations.
In reality, according to most industry stakeholders, the new clarification is an effort to cancel the interpretative provisions of the 2011 law and hinting that states that have launched online games – and have allowed the entry of operators from other countries – have done so illegally. This would be a huge hit for online gaming giants such as UK’s GVC (which runs the very popular poker room partypoker and party casino in New Jersey), UK’s betfair which has also left its mark on the market and 888 that has joined a New Jersey casino and is also live since 2013. And of course, bet365, which recently announced its collaboration with a gambling leader from New York to launch an online betting product in partnership with the Americans room by early 2020.
What will happen in the future with online poker and casino in the US?
No one knows exactly what’s going to happen in the next few months. Some market insiders rushed to express their concerns on whether the Government forced such a decision to favour and serve specific interests that were keen to return to the pre-2011 situation. Others argue that it might be too late and that no interpretative provision can bring things to the situation that was enforced between 2006 and 2011, when online gaming was seen an enemy of the state. Licensedtoplay.co.uk will monitor the situation closely and provide regular updates on the matter. What happens at the other side of the Atlantic ocean is no irrelevant to the online casino scene in Europe. Let’s not forget that most groups that operate casinos in US at the moment are partly or wholly owned by UK companies.