The state of Pennsylvania is closer than ever to regulating online poker. HB 649 passed out of committee two weeks ago and last week it was read on the PA House floor. It will soon receive the first of what we hope are two successful votes before going to the Governor for his signature.
Many believe that PA will regulate online gambling at some point by early 2016, and if this happens, it will apply pressure to other states considering online gambling expansion. California was long expected to be the next state to regulate iPoker but dissention between stakeholders has delayed that process.
With the passage of iGaming in PA, we believe that the pressure will be greater than ever and below are three things we believe will happen in California once PA regulates online poker.
An Interstate Network Suddenly Seems Viable
Even before games launch in PA, the interstate network suddenly becomes a viable option for any state looking to enter the regulated market. One provider, WSOP.com, is already setup to operate on an interstate network. Pennsylvania and New Jersey could join Nevada and Delaware or they could form their own standalone interstate network.
Another possible option, provided PokerStars expands to PA, is a PokerStars interstate network. As WSOP.com is able to share player pools between 888 backends, PokerStars will be able to do the same between PokerStars NJ and PokerStars PA.
The interstate network in its present form in no more than a novelty. Few take it seriously. However, throw PA and NJ into the mix and suddenly you have a viable network that other states are going to want to join to increase liquidity.
PokerStars Likely Expands to PA – Pressures Change on View in California
As hinted earlier, we believe that PokerStars could expand into PA once online poker is regulated. The present form of legislation does not include a bad actor clause and there have been few objections to PokerStars entering PA.
After the extensive investigation conducted by New Jersey, it is likely that PA will rely heavily on those findings or use those findings to conduct their own investigation into Amaya. It will not take as long but produce the same type of results. NJ set the template for accepting PokerStars into the folds and PA will probably follow that template.
Once this happens, pressure starts to build on California to accept PokerStars. In addition to the lobbying efforts by Amaya, the Pechanga will have to explain why PokerStars is bad for California and not for PA and NJ. After PokerStars launches, we will get a better idea of the type of revenue they will generate, further pressuring California.
Horse Racing Industry May Offer to Compromise – If PokerStars is Allowed
Last year, the horse racing industry was offered a pair of compromises from the Pechanga Coalition but they turned them down. We believe that the Pechanga will try again in 2016 either with a new compromise or perhaps a revamped version of the ones already offered.
PokerStars will launch in NJ in 2016 and should PA regulate online gambling, it could launch there by the end of the year. When the horse racing industry sees the revenue that PokerStars brings in, they may want to reconsider the offers of the Pechanga.
Of course, there will be a catch. This time around, the horse racing industry would only accept a compromise if the Pechanga allows PokerStars to come into the fold. While the Pechanga have resisted this possibility in the past, this type of compromise would resolve both major issues blocking California regulation.