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September 24, 2017

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Online poker dealt a tough hand in Nevada

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Robert Craig / Wilmington News-Journal / AP

Nevada Gov. Brian Sandoval and Delaware Gov. Jack Markell sign a multistate Internet gaming agreement Tuesday, Feb. 25, 2014, in Wilmington, Del. The agreement establishes a legal framework allowing residents of the two states to play online poker against each other. The agreement also allows other states to join the agreement with the approval of existing members.

Progress report: National ban on online poker

The biggest threat to online poker in Nevada, of course, is the idea that it eventually might be banned across the United States. Backed by Las Vegas Sands Corp. CEO Sheldon Adelson, the Restoration of America’s Wire Act would make all forms of online gambling illegal, leaving no room even for existing operations in Nevada, Delaware and New Jersey. The bill has been supported by Republican presidential hopefuls Sen. Marco Rubio of Florida and Sen. Lindsey Graham of South Carolina. In the House, its main champion is Rep. Jason Chaffetz, R-Utah. So far, the bill had a hearing in the House but hasn’t gone much further than that.

Nevada’s underwhelming online gaming market likely won’t grow into a cash cow anytime soon.

Ultimate Poker, one of the state’s three licensed online poker websites, shut down last November, citing weak revenues and a limited pool of players. Now, one year after the website’s exit, the factors that motivated its closure show no signs of disappearing.

The state Gaming Control Board no longer reports how much revenue Nevada receives from online poker specifically, because without Ultimate Poker, there aren’t enough operators in the market to warrant such a study. When the state did report the data, online poker revenue crossed the $1 million mark only once, in June 2014. Total state gaming revenue that month was $906.9 million.

Online poker hasn’t been a boon for state coffers, because as Ultimate Poker found out, there simply aren’t enough players in Nevada to fill digital tables.

State officials tried to address the issue in March by allowing Nevada gamblers to play online poker with people in Delaware. But it is unlikely to move the needle much, given that the population of Delaware is less than half the population of Clark County.

What would improve the fortunes of online gaming here?

• More interstate agreements. Right now, the lone place where that’s possible is New Jersey, the only state besides Nevada and Delaware to legalize online gaming. Except unlike Nevada, New Jersey also offers legal online casino games other than poker. Additional states, notably California and Pennsylvania, are considering legalizing some form of online gaming, but none have enacted any measures yet. Should one of them overcome the political and logistical hurdles standing in their way, it could be a tremendous boost for Nevada’s market — if the newest online gambling state agrees to let its players gamble with players in Nevada.

• Legalizing games besides poker. Online casino revenue brings in far more money for New Jersey than online poker. If Nevada were to take a similar approach, the state likely would see its online gaming market take off too. But the political will does not appear to be present, either from lawmakers or from the casino industry.

• Legalizing online poker at the federal level. A Congressman from Texas has introduced legislation multiple times, including this session, but it hasn’t gotten any major traction. That’s unlikely to change as long as Nevada’s top politician in Washington, Senate Minority Leader Harry Reid, remains receptive to a ban on online gaming that has been introduced in Congress. Still, lobbying efforts and shifting political winds could change things.

• Continuing to capitalize on in-person events. WSOP.com, owned by Caesars Entertainment Corp., is the dominant online poker provider in Nevada. The website found success by tying into the live World Series of Poker tournament in Las Vegas. The Online Poker Report, which tracks the industry, wrote in July that “if the success of an online poker tournament series is measured by its ability to shatter guarantees, then the WSOP.com Online Championship in Nevada may have been the most prosperous event in U.S. regulated history.”

A previous version of this article incorrectly stated what types of online gaming Delaware offers. The state offers other forms of online gaming in addition to poker.

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