US Online Poker: Why Isn’t the Industry Thriving?

In the United States, online poker gaming used to be a thriving industry. Travel back to the early 2000s and online poker was booming. The big boom was due partially to the World Series of Poker win by Chris Moneymaker, an average Joe who managed to take down the WSOP Main Event win in 2003. Moneymaker had earned his seat in the event by taking part in an online qualifier and soon everyone was hitting the virtual felt to enjoy the game.

Fast forward to April of 2011 and the poker industry in the United States was demolished as Black Friday took place. Several online poker sites, including PokerStars, Full Tilt Poker and Absolute Poker, faced charges for operating in the United States when they were not supposed to. The Unlawful Internet Gambling Enforcement Act was passed in 2006 and did not allow for unregulated online poker gaming to take place. When Black Friday took place, the online poker industry of the US became virtually nonexistent, at least in the licensed and regulated variety.

Fast forward just a few months and the 1961 Wire Act was reinterpreted by the Department of Justice and would allow for online gaming to take place. States had the ability to establish legislation and regulations on their own as to if they would be providing iPoker. In 2013, Delaware, New Jersey and Nevada all ended up deciding to begin offering online poker gaming.

But since that time, no other states have passed legislation. Delaware has struggled with both online poker and casino gaming, barely earning five figures each month during the very beginning. Of course the population is small in the state so they soon struck a deal with Nevada to share player liquidity for online poker gaming. However, this did not have as big of an impact as expected and revenues did not begin to pour in.

New Jersey is so far to the top dog when it comes to online poker earnings. The state has done quite well, even licensing PokerStars to offer gaming in the state. PokerStars is now back in the US after being involved in the disaster that was Black Friday. But even PokerStars has not been able to build a solid poker industry in the state as was expected.

So what’s the problem? It seems that there is simply not enough traffic to support a solid online poker industry in the United States. Poker is a peer to peer game. Players will take part in tournaments or cash gaming but there has to be a large amount of traffic for players to want to log online. A tournament is not very interesting with only a few dozen players or cash gaming is never fun when the competition is basically nonexistent.

Take a look at casino gaming online in the US. The numbers are booming! Both New Jersey and Delaware see the bulk of their online gaming revenues come from casino games. Players can easily log on and enjoy blackjack or slots without the need for steady traffic. The same cannot be said for online poker. There is a need for solid traffic and the numbers just aren’t there.

For the US to be truly successful in the online poker industry, there will need to be more states in action and more multi-state compacts. Essentially, a federal option to allow online poker across the board would be ideal but most likely not in the cards. Other states are showing interest so we could eventually see the online poker industry pick up. Pennsylvania, New York and now even California are strong contenders to pass legislation, possibly even this year. Only time will tell if the online poker industry will be able to pick up steam and become a solid industry in the US.