Why Domestic Online Poker Lags Behind Other USA Gambling Markets

angry poker player

In the United States, there are just four major categories of regulated gambling outside the various state and interstate lotteries:

  • Casino gambling
  • Sports betting
  • Poker
  • Horse betting

In the online space, betting on horses has always been the most domestically available gambling market, as over 40 states allow the pastime.

The Interstate Horse Racing Act (1978) laid the groundwork for Internet-based horse racing betting, and US residents have had access to domestic online racebooks, OTBs, and simulcast venues for years.

Of the more restricted gambling markets, sports wagering has been embraced most fervently of late, with over 20 states having legalized the activity since the 2018 PASPA overturn.

While US residents can legally bet sports online no matter where they live by using legitimate offshore sportsbooks, it’s estimated that most Americans will have local alternatives within the next five years.

Roughly 20 to 25 states are projected to legalize domestic sports wagering within their next few congressional sessions, bringing the national total to near total saturation.

Meanwhile, online casino games are available in just five states, and fewer than five additional states are even considering iGaming legalization as of 2021.

And that comparative slowness makes sense.

Most analysts view iGaming as the ultimate goal, particularly since real-money online slots and electronic blackjack and roulette games are hugely popular and profitable – far more so than sports betting.

But because of various hurdles, iGaming has been a harder sell in the relevant statehouses.

It doesn’t help that online casino games are also viewed as direct competitors of state-run lotteries, whereas it’s been borne out by years of data that other markets – i.e. sports betting and horse betting – have no negative impact on lottery profitability.

Further, those states without legal brick-and-mortar casino gambling – or those states that have given exclusive gambling rights to various Indian tribes – have an even harder time trying to lay the groundwork to move such games online.

The general consensus is that states must have retail casino venues operational before they can offer online casino options.

This isn’t the case with sports gambling, as exemplified by states like Tennessee, where the lack of brick-and-mortar establishments hasn’t hindered sports betting legalization.

The reason this dichotomy exists is simply that the “language” of gambling is generally considered different for sports betting than it is for casino gaming.

Casino gaming is well-defined federally and on a state-by-state basis, while sports betting is in many cases not even viewed as traditional gambling at all.

It is thus easier for a state without any sort of gambling to legalize sports betting than it is for that same state to legalize casino gambling.

In many cases, the former requires simple legislative passage or non-legislative regulatory amendments, while the latter almost always requires a voter referendum and changes to individual state constitutions.

However, despite all this, iGaming actually isn’t the rarest domestic online gambling market.

That designation, surprisingly, belongs to online poker.

To date, only six states have legalized online poker, and it’s active domestically in just four of them: Delaware, Nevada, New Jersey, and Pennsylvania.

(West Virginia legalized online poker in 2019, but it has yet to launch. Similarly, Michigan legalized online poker in 2020, though those products are still decidedly off the table.)

Further, most states – even those that are looking to legalize casino gambling online – specifically don’t include online poker in their proposals.

Comparatively many states have introduced legislation that seeks to legalize domestic sports betting and iGaming simultaneously, but very few states have made online poker a part of the package.

(In a bizarre bucking of this trend, it should be noted that Kentucky HB 241 proposes to legalize online sports betting and online poker, but not online casino gambling. This is the only exception we’ve yet come across to what’s proving the industrial rule.)

Interestingly, the reason this is true – the reason why poker seems to be the red-headed stepchild of the online gambling industry in America – is not one of prudish, “think-of-the-children” dismissal.

Poker is, for all intents and purposes – and by most empirical standards – the most skill-based of all gambling pastimes. Whether you win or lose largely depends on your talent.

In many circles, the game isn’t even considered to be “gambling” in the philosophical sense. Luck plays a part, but only a small part.

The true reason why online poker is such a nonstarter is that it’s the most technologically advanced form of gambling from an operator standpoint.

Online poker requires multiplayer access, which means that significant software and monitoring solutions are necessary.

The infrastructure that Internet-based poker requires – compared to the infrastructure needed for all other forms of online gambling – is astronomically more complex and expensive.

The house stands to make very little money, and whatever rake it claims from standard daily tournaments, cash table games, and Sit ‘N’ Gos would mostly be wiped out by server maintenance costs.

For many operators, that makes poker a non-starter.

Worst of all, online poker doesn’t even have the effect of encouraging players to try other markets. Online poker players almost exclusively stick with online poker.

They don’t bet sports, and they certainly don’t play slots.

One day, this won’t be the case, but right now, it’s why you can only find robust online poker options at legal international poker rooms.

And that, too, makes sense.

The software used by these companies is proprietary and has been refined for literal decades, while domestic vendors are starting mostly from scratch. For offshore providers, online poker technology is mature.

Of course, that’s also the good news: You don’t have to wait for your state to legalize online poker in order to legally play online poker for real money.

All you need is a free account at any reputable international gambling site.

In other words, if you want to play poker online, you can go all in, even if your state of residence is all out.