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2014 may not have produced any movement on the legislative front, but it was a year of iGaming conference and hearing proliferation. From a forum in Massachusetts, to hearings in Pennsylvania, to hearings and conferences in California, iGaming was finally being discussed out in the open. Building on the success of 2014, the first major iGaming conference of 2015 has already been announced, the iGaming Legislative Symposium (IGLS), and it will take place in what is widely considered to be the linchpin state when it comes to online gaming expansion in the U.S., California. This is the second annual IGLS conference. IGLS 2014: Recap As California’s online poker train hurtled toward what looked to be passage in the state legislature this year (before the inevitable derailment), a number of hearings and conferences were held to discuss all things California and online poker. One of those conferences, the iGaming Legislative Symposium was a huge success, and attracted the biggest names in online gaming in California and across the globe. IGLS 2014 saw lawmakers, analysts, tribal leaders, and pundits come together and discuss the major issues in California. Even though many issues weren’t hashed out, and California eventually shelved online poker in 2014, IGLS 2014 was a productive conference, and hopefully IGLS 2015 will push the envelope even farther. For a look back at the highlights from the inaugural IGLS you can take a look at John Brennan’s excellent column for NorthJersey.com which is essentially a sample of OnlinePokerReport.com’s Chris Grove‘s live tweets (Chris being the best live tweeter in the business). Or you can watch this short YouTube highlights clip: While these conferences might not reach the eyes and ears of the general public, but they do allow industry experts the opportunity to debate one another and more importantly, to present valuable information to lawmakers, who for the most part only possess a cursory understanding of the industry. IGLS 2015: What to expect IGLS 2014 was successful enough that the organizers, Pechanga.net and Spectrum Gaming Group, have decided to bring it back in 2015, at the Sheraton Grand in Sacramento, California will once again play host to the iGaming world on February 26, 2015. IGLS 2015 will be a one-day conference featuring two keynote addresses and six separate panel discussions:
Opening Keynote Address
Panel 1: 2014: The Year in Review
Panel 2: The Future of iGaming in California
Panel 3: Critical Issues for a Successful iGaming Rollout
Panel 4: Is iGaming More Addictive Than Land-based Gaming?
Luncheon Keynote Address
Panel 5: iGaming Regulation in California
Panel 6: Legislative Initiatives All of the panels will be highly informative, but perhaps the most interesting panel will be the discussion on addiction, as this will mark the first time (to my knowledge) this topic will be explored at such a conference. Addressing this key issue (which we now have ample research to fall back on) will be an important part of assuaging any lingering fears from legislators, and help preemptively debunk the likely attacks from Sheldon Adelson and the Coalition to Stop Internet Gambling. This panel will likely also address the many ways online gaming can identify problem gamblers and assist in treatment. Another must-see discussion will be Panel 6: Legislative Initiatives. This panel could provide the most fireworks depending on who the speakers are, as it will almost certainly delve into the highly contentious issues of racetracks, Bad Actor clauses, and the criteria for licensing in the state, which will affect smaller tribes and smaller card rooms. California still has a number of issues to work out, and hopefully some of them can be resolved (or at least addressed) at IGLS 2015. Keynote speakers and speakers for the individual panels have yet to be announced. Previous Post Next Post California|online poker legalization|online poker regulation About Steve Ruddock Steve Ruddock is a longtime member of the online gambling industry. He covers the regulated US online casino and poker industries for variety of publications, including OnlinePokerReport.com, PlayNJ.com, USPoker.com, and USA Today.

The new battle cry for online poker legalization has become “2015 is the Year.” While it is easy to get caught up in the optimism brought forth by the perceived progress made in 2014, one has to keep in mind that an online bill in 2015 is not a slam-dunk. Even if legalized, there is little reason to believe that Californians will be able to play online before 2016. 1. Get a Bill Passed The first step is getting a bill passed, and a new bill is still being drafted. While the next attempt to legalize the game is expected to address key issues overlooked by other drafts, there will be objections to the bill and negotiations in the future. Let’s assume that Rep. Jones-Sawyer gets a bill drafted by the first part of 2015. How long will negotiations last to get to a bill worth submitting to the legislature for a vote? A safe estimate would be between three and five months. Leaning towards the later end of that estimate, we could expect a bill to be submitted to a vote sometime in May. Using a conservative estimate, let’s assume it takes a month to go through legislature and to receive the Governor’s signature. We are looking at June 2015 at the passage of online poker legislation in California. Hooray for legalization! Right? Not so fast. 2. Drawing Up Regulations Passing an online poker bill is just the first step in bringing poker online in the state. Once a bill is drafted, regulators will still need to go through the process of drafting online poker regulations for the state. Looking back at AB 2291, regulators would have 270 days from the bills passage to adopt regulation. While it is unlikely it will take them a full nine months to adopt regulations, even taking half that time would result in regulations being approved sometime in October or November. We have a bill and we have regulations. Shuffle up and deal! Right? Nope, not yet. 3. Licensing and General Testing Once regulations are in place, we get to go through the process of finding out which online providers will apply for licenses. Looking back at both Nevada and New Jersey, we know this is a process that can take months or even years depending on how slowly that California chooses to proceed. I don’t see California rushing license applications through the pipeline, but I don’t see them taking over a year to get a site launched. Rather, I see this process taking somewhere between four and six months depending on how many different entities decide to enter the market. We already know who a few players of the likely players will be. Amaya, Caesars, 888 Poker, PartyPoker and Ultimate Gaming will all likely apply for and receive licenses. However, there will be dozens of other primary and secondary providers that will need to be vetted by regulators and this is not a quick process. Let’s assume this process takes six months tops. We are looking at May 2016 for this process to complete. Finally, we are in the home stretch where companies begin to setup and test the sites. Some sites will naturally be able to get online faster due to their experience in the industry, while those choosing to use an in-house solution may take more time. Once licensing is completed, don’t be surprised to see the first sites start to go online within 90 days. Using the above estimates, this would put the first sites online around August or September 2016. Timelines Could Change Depending on Laws and Regulations The above estimates are based almost exclusively on what we’ve seen in other states. Changes in these timelines could occur based on the language of the upcoming bill or online poker regulations adopted after a bill’s passage. Even if timelines are shortened, there is little reason to believe that California will rush things through to force games online in 2015. If the state were to adopt a coordinated launch such as what happened in New Jersey, odds are it would be around the first of 2016. Lawmakers have expressed a desire to take things slow in regards to legalizing online poker, so there is little reason to believe they will take a different approach in its launch. Signs point to a bill being passed next year, but Californians will need to be patient because they will not be able to shuffle up and deal until at least 2016. Previous Post Next Post California|online poker|online poker legalization|online poker regulation About James Guill Originally a semi-professional player, James transitioned to the media side in 2008. Since then he has made a name for himself reporting for some of the top names in the industry. When not covering the poker world, James travels around central Virginia hunting for antique treasure.

When news first broke that PokerStars had abruptly terminated the contract of at least one high-profile affiliate, the affiliate industry went on high alert, and as is often the case, the rumors and speculation spun out of control before all the facts were in. The move created a sudden fear that all affiliates were now on tenuous footing with the new PokerStars, and that the company was trimming its expenditures, and this was just a sign of things to come. This fear proved to be misplaced, as did the blowback PokerStars received for cutting these affiliates – which is something that has happened numerous times over the years; this just happened to be the first time an affected affiliate became a vocal dissenter. PokerStars PR man, Michael Josem said cutting ties with certain affiliates who are not performing is something that occurs periodically in his 2+2 post on the matter: “PokerStars has agreements with thousands of third-party websites (‘affiliates’) to market our services to new players and encourage them to play at PokerStars. PokerStars routinely reviews its agreements with these affiliates to ensure that they are productive for the company. Earlier this week, PokerStars ended the agreements with a very small number of affiliates who were not recruiting many new players, and who were doing little active promotion of our services.” While I do feel for the affiliates who were affected, they should also realize they have some culpability in the matter, and as you’ll soon see, PokerStars cutting loose this dead weight is something the industry should be excited about. The false guarantee of lifetime rakeback I’ve signed up for rakeback deals at many sites over the years and have always been promised “lifetime” rakeback, but I knew this was far from a guarantee, and I was well aware of the terms and conditions that could nullify the contract. The relationship between site and affiliate is no different. If an affiliate is not living up to their end of the agreement, and is still receiving payments due to one, two, or even one hundred players they brought to the site many months or years ago, why wouldn’t PokerStars terminate these contracts? They have been breached and PokerStars has every right to cut ties. Furthermore, the contracts are very clear. Here is why you should have little sympathy for these affiliates, as part of the agreement the affiliate agreed to do the following: 5.2. The Affiliate agrees to place the Link(s) or Marketing Codes on its Website(s), to ensure that the Link(s) is properly formatted at all times and that it shall not create any link from its Website(s) to the Site(s) other than the Link(s) without the prior written consent of Rational. 5.3. The Affiliate shall only be permitted to place banners forming part of the Link(s) on their Website(s) by linking to the banner server made available by Rational for this purpose and by no other means without the prior approval of Rational. 5.4. The Affiliate agrees to use its best efforts to market and promote the Site(s), in a manner consistent with good business ethics and in good faith towards Rational. 5.5. The Affiliate undertakes, if the form of Commission that it receives from Rational is based on Revenue Share pursuant to Clause 4.1 above, to generate a minimum of 1 (one) Qualified PS Poker Player for each PS Site which it markets pursuant to this Agreement (for Revenue Share generated from the PS Sites) and 1 (one) Qualified FTP Player for each FTP Site which it markets pursuant to this Agreement (for Revenue Share generated from the FTP Sites) per 90 days. The termination clauses are just as specific, particularly the following two (bolded) line items: 8.3. In the event of the occurrence of any of the following: (i) a breach by the Affiliate of any clause of this Agreement; or (ii) in the reasonable opinion of Rational, you have acted in a manner that undermines the nature of this Agreement; or (iii) the Affiliate’s User Account is closed by the Operator for any reason whatsoever. Rational retains full authority (without prejudice to its other rights or remedies under this Agreement, any other agreement, at law or otherwise) to (i) terminate this Agreement immediately and/or (ii) indefinitely withhold from the Affiliate any Commission accrued to the Affiliate’s benefit directly as a result of the breach. 8.4. We may terminate this Agreement at any time on 7 days’ written notice. Any affiliate who thought they could simply sign up a few high volume players and then receive a monthly rakeback stipend until their golden years (maybe will it and pass it on to the kids) was delusional. If you were not performing to the standards set forth in the agreement you signed with PokerStars why would you be surprised when they terminate the agreement? EDIT: The next section is only loosely related to the current situation between PokerStars and inactive affiliates, and are the author’s opinions on the current online poker affiliate model. The following views are not meant to reflect on the recent affiliates PokerStars cut ties with. Why bad affiliates have hurt the poker world So why is this a good thing for poker? For years, many (not all, but many) affiliates have essentially turned all of their marketing efforts toward players the sites don’t want, instead of finding the new players that they were tasked to do under the original intent of the affiliate / site agreement. They found a loophole where they were technically doing what they were tasked, but not in the manner or with the desired outcome that was originally agreed upon. Yes, they were bringing in new players, but these were not the players they were tasked with finding, and in some cases they were current players who were simply bouncing from affiliate to affiliate. If I was tasked with finding new customers for my local Starbucks I could find coffee drinkers by walking into the Starbucks the next town over, but what poker affiliates were tasked to do by a poker room is find the coffee drinkers who didn’t know they were coffee drinkers yet, and send them to Starbucks. Read my take on the different online poker affiliate models here: Affiliates and the US poker industry: What model is the right fit? Quite frankly, some of these affiliates have screwed themselves by doing everything to maximize personal gain without considering how this appears to and affects the sites they are essentially working for. With few exceptions these types of affiliates have failed at bringing in legitimate new players, as they always reach for the low hanging fruit, and in some cases take the apples straight out of another person’s bag. Shady behavior has done even more damage In addition to the affiliates that were simply not performing, and the affiliates who let greed guide their marketing efforts, there are also affiliates that were more than willing to poach players from other affiliates with secret rakeback deals, or convince a current player at a site to reregister in order to get rakeback. Don’t get me wrong, there are plenty of good affiliates, with a good business plan in place, but there are a lot of rotten apples in the barrel too. All in all, the poker community should be happy to see affiliates who are cutting corners, violating their contracts, and/or outright cheating disappear from the space. The good affiliates (who bring in the right type of players for the poker ecology) will have no trouble replacing them. Author’s note: This is not meant as a judgment on the specific affiliates that were dropped recently. I am not aware of the reasons these affiliates breeched their contract. Previous Post Next Post pokerstars About Steve Ruddock Steve Ruddock is a longtime member of the online gambling industry. He covers the regulated US online casino and poker industries for variety of publications, including OnlinePokerReport.com, PlayNJ.com, USPoker.com, and USA Today.

As first reported by Chris Grove via his daily newsletter OPR Quick Take, the Santa Ysabel tribe is putting its real-money online poker plans on temporary hiatus. In the interim, PrivateTable.com will supposedly launch as an Internet bingo parlor. This, as per sources close to the tribe. The Santa Ysabel first made headlines back in mid-July, when it announced via press release that it would be “exerting its sovereign right under the Indian Gaming Regulatory Act to regulate and conduct Class II gaming from the tribe’s reservation.” Interestingly enough, Class II gaming spans both poker and bingo, although based on tweets from Private Table is was assumed that SY Interactive was committed to launching just an online poker site. Hidden Agendas And Delays Shortly after SY’s announcement, members of the poker media (myself and colleague Steve Ruddock included), cried foul, citing that the tribe’s intention to launch real-money online poker was nothing but an elaborate hoax designed to satisfy the interests of California’s smaller tribes. Those interests? Namely a form of revenue sharing similar to the stipend they already receive from larger tribes, only this time with regards to online gambling. Short version: They wanted money. Given Santa Ysabel’s shaky financial history and current dealings with the former regulators of online poker, namely Absolute Poker and Ultimate Bet, not to mention its association with a payment processor no one has ever heard of (FinPay) there was something off about this whole ordeal. Additionally, of course, the questionable legal grounds on which it stands, the situation seemed plausible that the threat of what essentially amounts to a pre-Black Friday online poker site would nudge California legislators to consider small tribes in the next iteration of its iGaming bill. And up until today, we’ve had no reason to believe that PrivateTable.com was nothing more than that – a thinly veiled threat. Time and time again, the launch of real-money poker on PrivateTable.com was delayed. And with each delay was an appended promise, citing that real-money cash games and/or tournaments would be operational in X amount of days, with X typically equaling seven or less. Yes, in just the span of one season, the Santa Ysabel became online gambling’s own boy who cried wolf. It was laughable. But with its announcement that bingo will launch before poker, suddenly it becomes plausible that the tribe may actually follow through on its promise to offer online gambling. And that’s a problem. SY Interactive Poker Vs. Bingo: Both Unregulated, But One More Realistic By comparison to poker, bingo is an exceedingly simple game. Everyone gets a board, numbers are called randomly and whoever is the biggest luckbox wins a prize. It’s really that simple. So simple that even a small tribe desperately in need of money following the closure of its casino could do it. Perhaps my naivete regarding the technical processes involved with launching an online bingo site are on full display here, but in my estimation it’s a substantially more plausible goal than putting together something that even resembles a second rate poker product. The problem is, the fallout of an unregulated gaming site, bingo or otherwise, making its way onto US soil will be devastating. Why? Because:
It would be exempt from the safeguards and regulations put into place in states where gambling is regulated.
It would promote other tribes to launch their own operations, be it a standalone bingo product, poker, or an all inclusive virtual casino.
It would permit “bad actors” from reentering the US without the need for approval.
It would provide fodder for anti-online gambling advocates, of which there are many. So yes, now that the Santa Ysabel have adapted a more conservative (i.e. realistic) online gaming strategy, I am a bit concerned. Let’s hope its just part two of their fairy tale. Previous Post Next Post online poker|santa ysabel About Robert DellaFave Robert DellaFave writes for a variety of online gaming sites and is also working on programming a poker simulation creative enough to beat the best. Follow Robert on Twitter @DivergentGames and on Google+

We’re just a few months away from the start of a new legislative session in California, and Assemblyman Reginald Jones-Sawyer has already indicated that one of the first things he will do is introduce a new online poker bill when the legislature reconvenes this December. 2015 will mark the seventh consecutive year California has attempted to pass an online poker bill, and while some progress has been made, there are still a number of obstacles standing in California’s way. Most notably: 1. Racetrack involvement
2. Bad Actor clauses
3. Licensing restrictions Racetracks This could very well be the thorniest unresolved issue that is holding up online poker legislation in California. While racetracks and the racing industry are on the decline in California and across the country, the racing industry still holds quite a bit of sway in Sacramento thanks to its close alignment with organized labor. If an online poker bill is going to make it out of the legislature in 2015 it will have to deal with this problem in some way, shape or form. The potential solutions are:
Open up the licensing process to racetracks in a manner that appeases them.
Continue on without the support of the racing industry and hope a bill gets passed anyway.
Offer the racing industry some type of stipend out of the tax money generated from online poker. The issue with opening up the licensing process is it also allows smaller card rooms and smaller tribes to apply as well, and could create a situation where there are simply too many cooks in the kitchen, with too many choices for consumers, and too many bad cooks disparaging the industry. Option #2 isn’t much better. Without the support of racing and labor the chances that a bill passes through the legislature are greatly diminished. The two groups control a significant bloc of voters and still have a lot of clout with plenty of politicians. The logical answer would seem to be to allow for some type of monetary allotment for race tracks, but I still think some tribes and card rooms will try to cut the racing industry out before putting them on the dole. Bad Actors This is the issue everyone likes to point as the largest hurdle to clear, but with PokerStars (the reason for the Bad Actor clause and the only company vehemently fighting against it) seemingly about to be licensed in New Jersey this is becoming less and less of an issue. Depending on what happens to New Jersey’s online poker industry when PokerStars enters the market could determine how hard the opposition fights to keep them out. If Stars comes in like gangbusters I’d expect a brutal fight in California. If they come in strong, but not dominating the opposition might bend a little. The problem is, it doesn’t seem like a bill can be passed without allowing PokerStars to apply for a license, as their coalition is not only resolute, but is one of the most politically powerful, with the Morongo Band of Mission Indians, The Bicycle Casino, the Commerce Casino, and Hawaiian Gardens Casino. While certain tribes would love to see PokerStars sitting on the sideline for a couple of years, it just doesn’t seem like a feasible solution if they want to offer online poker themselves. Fortunately, because of the sale to Amaya Gaming there is an out. PokerStars could still be allowed to apply for a license and Bad Actor language could still be included in the bill. What would need to go are the overarching parts of the Bad Actor clause, most notably the Tainted Asset aspect. One potential solution I could envision would be to include a provision that disallows PokerStars’ player database from being used. This might be enough to mollify the opposition, and is a concession I could see PokerStars agreeing to*. *I have since been informed that disallowing PokerStars database could be viewed as an unconstitutional taking and is not something on the table. Licensing After the 13 tribe coalition lined up against PokerStars and their California partners, and introduced their vision for an online poker bill in a letter to the state legislature, everyone was talking about their doubling down on Bad Actor language. However, lost in the shuffle were other important parts of that bill; parts important enough that they led to a second letter being penned by yet another coalition (that’s three if you’re counting) and delivered to the state house in Sacramento. This second letter, written by a coalition of 25 “smaller” card rooms in the state, called on the legislature to make the licensing process as inclusive as possible, and in doing see turn the potential online poker market into one where only the “haves” can play. As noted above, the major players in California are trying to keep competition from getting out of control, and have done so by making the licensing fee hefty (somewhere between $5 million and $10 million up front) and by setting strict parameters that would need to be met by any potential applicant. These preclusions are designed to keep the smaller card rooms and smaller tribes out of the online poker industry. The smaller tribes will almost certainly be appeased by some type of revenue sharing deal, such as the one that is currently in place between the large gaming tribes and non-gaming and small gaming tribes for land-based casino revenue. Card rooms are a different matter. Even by combining their political capital, the 25 smaller card rooms that signed off on the July letter simply don’t have the political muscle possessed by the tribes and/or racetracks. If anyone is going to get left out of the bill it’s likely to be the smaller card rooms in the state, although some have suggested allowing these smaller card rooms to launch online poker sites under one of the larger operator’s license – similar to a “skin” of an online poker network in the global market. The license holder could then take a cut of the skin’s revenue and perhaps everyone would be happy – wishful thinking for sure. Author’s note: This article was updated on 9/28 to reflect new information regarding PokerStars database. Previous Post Next Post California|pokerstars About Steve Ruddock Steve Ruddock is a longtime member of the online gambling industry. He covers the regulated US online casino and poker industries for variety of publications, including OnlinePokerReport.com, PlayNJ.com, USPoker.com, and USA Today.

Many of the so-called online poker “legal experts” are beginning to claim that 2015 is “the year” that California will legalize the game. Haven’t we heard this before? Wasn’t that the claim in 2014? While I’m not going to claim that online poker is a lock for California in 2015, the prospects look better than they did at the start of 2014. The stumbling block holding things up continues to be PokerStars. This time around, we have a new wrinkle. Amaya Gaming Group Inc has purchased the company and wants to operate the site. While progress is being made, nothing is concrete and this could still drag on months or even years. With that said, today we present some scenarios that could lead to the bill finally being passed and PokerStars being allowed into California. Revise the Law to a Five-Year Penalty Across the Board The bad actor clause as it stands in California will prohibit PokerStars from ever entering the legalized marketplace. Regardless of what you think about the company or their role in Black Friday, a lifetime ban is excessive. Instead, it may be time to revise the bad actor law to provide a straight five-year penalty to any company that violated the UIGEA. This could also apply to companies like Amaya that purchased assets of companies that violated the UIGEA. A five-year penalty keeps out UIGEA violators out until at least 2020, assuming that a law is passed in 2015. This is more than enough time for tribes and state card rooms to establish themselves. Eliminate Bad Actor and Give Poker a Two-Year Flat Penalty New Jersey does not have a bad actor clause in their online gambling laws, but they do consider each applicant on merit. This is what led to PokerStar’s problems in the Garden State. Rather than an arbitrary bad actor clause, axe the clause and let regulators evaluate each site based on their past. California could take the approach of New Jersey and prevent the company from entering the state for the first two years of legalized online poker. Technically, New Jersey put PokerStar’s licensing application “on-hold,” but it still accomplished the same purpose. In the case of California, this would be an outright penalty for past discretions and a way to nullify the sites perceived “competitive advantage.” Much like revising the bad actor clause, this would give tribes and card rooms time to get a foothold without the dominant prescience of PokerStars. Revenue Sharing System With Tribes Another option that all parties could consider is a revenue sharing system akin to that of Major League Baseball. There are two primary components to the MLB system. First, 31 percent of local revenues are put into a fund and those funds are evenly distributed among teams at the end of the season. Next, teams with excessively high payrolls are hit with a luxury tax. When a team surpasses a pre-set limit, they pay into this fund. The lower payroll teams are then paid this tax. I’m not saying that every site should pay 31% of their revenue into a sharing fund, but a smaller percentage could be considered. For example, each online site could put 10% of their internet win into a revenue sharing fund. To see how this works, let’s assume that the first year there are nine tribal sites operational along with PokerStars. First year’s revenues come in at a modest $100 million of which PokerStars collects $80 million. The nine tribes contribute $2 million to the fund or roughly $222,222 per site. PokerStars contributes $8 million to the fund. At the end of the year, each site gets $1 million. While PokerStars technically loses $7 million this way, they still finished up $73 million on the year while Tribes gain $777,778 each. An alternative option would be to impose a luxury tax on PokerStars. If PokerStars market share exceeds a certain percentage, say 70%, they pay a percentage of their win as a luxury tax. That money would be distributed to the tribes. Using my prior example, PokerStars would have an 80% market share in California. Imposing a 10% luxury tax on the site would send $888,888 to the other sites in the state. A 20% luxury tax would send $1.7 million to each operating tribal site. Using a revenue sharing system could be a way of making PokerStars pay for the privilege of operating in the state post-UIGEA. They would still be dominant operator, but the sting would be a bit less for tribes. What About OnGame? With all of the focus put on the PokerStars brand, it seems that most have forgotten that Amaya owns another poker network that could be modified for the U.S. market. The company purchased the Ongame Network from bwin.Party in 2012, a move that most thought was a precursor to a reentry into the U.S. market. If PokerStars continues to be a hindrance, why not make a compromise where Amaya enters California with OnGame? They already own the rights to the site that would be a perfect choice to resurrect for the California marketplace, PokerRoom.com. Some of you may remember that PokerRoom reopened in 2012 and closed its doors for the second time in 2013. The site was a trailblazer for online poker in the early days of the game and could be revived for a new chapter in the American market. Let Amaya enter with the OnGame brand and evaluate them for two years. After that time, allow PokerStars to come into the market. Previous Post Next Post California|online poker|pokerstars About James Guill Originally a semi-professional player, James transitioned to the media side in 2008. Since then he has made a name for himself reporting for some of the top names in the industry. When not covering the poker world, James travels around central Virginia hunting for antique treasure.

In a recent analysis report Morgan Stanley severely slashed their previous future market estimates for online gambling in the United States. This is the second downward revision by the firm, the first coming in March of this year. The firm’s analysts cut projected earnings across the board, starting with 2017 where their projections were cut from $3.5 billion all the way down to $1.3 billion. They also dropped their estimates for the U.S. market in 2020, revising it from $8 billion to $5 billion – the firm’s initial 2020 estimate prior to the March revision was $9.3 billion. Morgan Stanley also lowered their full U.S. market value (all 50 states) from $13.3 billion to $10.7 billion based on the current data available from Nevada, Delaware and New Jersey. The report did offer up some reasons for optimism as well, as the analysts indicated they expect 12-20 states to have legal online gambling by 2020 (based on their bullish and bearish forecasts), and anticipate California and potentially Pennsylvania passing an online poker bill in 2015. Future U.S. growth seems overstated By far the most interesting prognostication is the notion that perhaps 20 states will have online gambling by 2020. Unfortunately, the report didn’t go into much detail on where that number comes from. I’m not sure if they were simply trying to stick to a theme of 20’s here (20 states by 2020), considering that even if the U.S. undergoes a domino effect of sorts following the passage of an online poker bill in California, or perhaps a state like Pennsylvania, it’s hard to envision 20 states with online gambling by 2020 –which as scary as this sounds, is just over five years away. According to Morgan Stanley’s bearish forecast, California will pass an online poker bill in 2015 (and go live in 2016), followed by Pennsylvania, Illinois, and New York in 2018. That would make a total of seven states with online gambling by 2018 when you add in Nevada, Delaware, and New Jersey. In the bullish forecast both California and Pennsylvania pass online poker bills in 2015 – strangely, Pennsylvania seems far more likely to pass a comprehensive online gambling bill and not an online poker bill as Morgan Stanley prognosticates. Using the bearish and bullish forecasts, the next logical question is, who are the other five to 13 states that will join them in the following two years to make the market worth $5 billion? Colorado, Iowa, Massachusetts, Mississippi, West Virginia, Maryland, Hawaii, and Washington are all believed to be potential contenders, or have at least explored the idea of passing an online gambling bill (some are far more likely than others), but this still leaves us up to five states shy of reaching 20. This is of course assuming that all eight of these potential contenders mentioned above will pass online gambling legislation in the next five years as well. Certainly some other contenders could spring into being, but I would call Morgan Stanley’s bearish estimate of 12 states bullish, and wouldn’t be surprised if just a half dozen states had online gambling by 2020. And I’m not the only one. As Chris Grove reported at onlinepokerreport.com, Deutsche Bank’s Andrew Zarnett and Eilers Research (who have proven to be among the most accurate prognosticators of the U.S. iGaming markets) both have produced their own estimates of around $2 billion by 2020 for U.S. iGaming. This seems to be a more prudent projection, and indicates far fewer than 20 U.S. online gambling markets. Working against Morgan Stanley’s credibility on this front is their previous estimates, where they were over five-times the Eilers and Deutsche Bank estimates of $2 billion just six-months ago, and are still more than double the other two estimates despite two downward revisions. PokerStars NJ impact also addressed In addition to the changes in their future projections, Morgan Stanley also highlighted the fact that PokerStars impact could be more pronounced than first thought. According to the report, PokerStars entry into the New Jersey Market could be a complete game-changer, considering their arrival in the Italian market saw year-over-year growth of 62% for the market. Of course the Italian market isn’t the most apt comparison considering the country only allowed for online poker tournaments during this period of time, and is far larger than the New Jersey by a factor of almost seven. Another consideration was that poker was just starting to take off in Italy in 2008, so that growth may have occurred with or without PokerStars. Furthermore, PokerStars didn’t have to deal with a three-year blackout period in Italy, as the Italian online poker market went from gray market to legal and PokerStars was there throughout, launching PokerStars.it in 2008. Still, it’s an interesting way to look at the power behind the PokerStars brand and the potential impact on the New Jersey market. You can see Morgan Stanley’s complete breakdown of PokerStars impact on page 13 of the report. Previous Post Next Post pokerstars About Steve Ruddock Steve Ruddock is a longtime member of the online gambling industry. He covers the regulated US online casino and poker industries for variety of publications, including OnlinePokerReport.com, PlayNJ.com, USPoker.com, and USA Today.

The Santa Ysabel tribe is continuing to make overtures to the poker community that they are planning to launch a real-money online poker room ahead of any legislation by the state. However, many people are skeptical that this will come to pass and consider the announcements posturing by the tribe; a means to some other end. The tribe could quell some of this dissent by answering the quartet of questions I have listed below. Question #1: What’s the difference? For lack of a better description, the Santa Ysabel poker site will be an offshore site (such as Lock Poker, Carbon Poker, or Americas Cardroom) that is headquartered in California. Like an offshore site, there will be no oversight by California or any other regulatory body in the U.S. They are using the same type of payment processing company to handle transactions, the same type of overseas regulatory body and server hosting, and the even the same software as some offshore sites. The logical question is, why would a Californian choose to play at PrivateTable.com when they could play against a larger pool of players at one of the other offshore sites mentioned above? Americas Cardroom and Black Chip Poker are even using the exact same software. Question #2: Is this legal? You can say it is until you’re blue in the face but there are several lingering issues over the legality of this endeavor, and there is little question in anyone’s mind that the site will be served with a lawsuit the second they try to launch. Firstly, let’s just assume it’s legal under Class II gaming laws from the Indian Gaming Regulatory Act (IGRA), and that online bets occur at the server. There is still a serious issue as the Santa Ysabel servers are going to be located in Canada on the Kahnawake reservation. I recently asked Martin Owens Jr. a gaming law expert who is consulting for the Santa Ysabel tribe this very question: “Does the server not being on Santa Ysabel tribal lands matter? If the Kahnawake tribe hosts the servers wouldn’t this violate Class II gaming (assuming online poker is Class II gaming) under IGRA as the betting is taking place off-reservation?” His response was far from reassuring: “that is something that I have discussed at length with my clients. Both they and I are confident that our course of action is within the law.” Moving on, whether or not poker is Class II gaming in California is indisputable, but there is still debate if online poker is. Martin Shapiro has made this argument many times, and nobody (on either side) has been able to make an overly compelling case. Furthermore, is it legal for FinPay to process these online poker payments? This seems like another loose end that nobody is really discussing. Question #3: What is causing the delays? “This is no bluff.” That’s the constant refrain from the Santa Ysabel tribe, but so far it looks like a bluff, it smells like a bluff, and it has behaved like a bluff. So in between tweets about Rummy laws in India and the origins of the word of “poker” the PrivateTable.com Twitter account has offered little in the way of an explanation as to why this isn’t a bluff. If it’s not a bluff, why have there been multiple delays when all the pieces look to be in place? The Kahnawake tribe (your regulatory body) is old hat with online poker sites. The delays cannot be regulatory in nature. The tribe is saying they have experienced “bumps along the road” in regards to performance and don’t want to launch and then have to fix these issues (read as: software issues), but this simply doesn’t make much sense considering the software they are using is already in use at several other online poker rooms offering real money and there isn’t a regulatory body calling for changes. Question #4: Show me the money? The Santa Ysabel tribe tried to file for bankruptcy when they closed their brick & mortar casino earlier this year, but were denied bankruptcy protection and are therefore still sitting on millions of dollars of debt. So my last question is: Where did the tribe come up with the funding to lease the software from IG Soft, to hire and retain the payment processor FinPay, and to get licensed by the Kahanwake tribe in Canada? Where is the money to retain Owens and other experts coming from? The money to market and promote Private Table? Furthermore, who is going to pay to fight the inevitable legal battles the tribe will be confronted when they launch? Why these questions need to be answered If the Santa Ysabel tribe can satisfactorily answer these questions then we can have a conversation about the implications of their launching in California and what it means for U.S. online gaming moving forward –a conversation I would love to have. But until these questions are answered it’s hard to read their pronouncements as anything but a bluff, with the tribe’s real motivations being unclear. Previous Post Next Post santa ysabel About Steve Ruddock Steve Ruddock is a longtime member of the online gambling industry. He covers the regulated US online casino and poker industries for variety of publications, including OnlinePokerReport.com, PlayNJ.com, USPoker.com, and USA Today.

Throughout the course of 2014 the Bad Actor debate slowly took over the online poker headlines in California, and when it looked like the state would be waiting yet another year to pass an online poker bill, many were quick to point the blame at PokerStars and their allies, or the coalition that lined up against them depending on their purview. It’s certainly an interesting and important topic, but truth be told, the Bad Actor debate merely masked the underlying problems in California. Long before PokerStars and Bad Actors flooded discussion of California online poker, the state was given several chances, dating back to 2009, to pass an online poker bill and they completely whiffed. Pinning California’s inability to pass an online poker bill on PokerStars or Bad Actor language is akin to blaming a 30-point blowout loss on the benchwarmers you inserted in the fourth quarter. The best indicator that PokerStars had little to do with the failure to pass an online poker bill in California can be seen in the lack of blame being thrown at the company’s feet now that the bills are officially scrapped. In the lead up everyone was squawking about who would get the blame, PokerStars and company or the coalition lined up against them, if a bill wasn’t passed this year, but we were all duped. Neither of these groups has received much blame because the failure wasn’t directly attributable to PokerStars or Bad Actors. If PokerStars was the reason online poker failed to pass in California you would expect plenty of people (especially from the opposition side) to start pointing fingers at PokerStars involvement. Instead, what we heard was there simply wasn’t enough time, and that California needs to get it right. No mention of PokerStars, only passing references to Bad Actor clauses, and no mention of the two coalitions that formed with PokerStars, the Morongos, the Bicycle Casino, the Commerce Casino, and Hawaiian Gardens on one side and 13 other tribes led by the Pechangas, the Agua Caliente, Pala, and others. When the bills were shelved it was as if the most contentious point over the past three months never existed. PokerStars’ Director of Group Strategy and Business Development, Guy Templer, spoke to EGR Magazine (paywall) offering up his view on what happened in California: Templer’s statement seems innocuous enough, that there were too many unresolved issues already on the table, and adding PokerStars to the mix didn’t tip the scales in one direction or another. Reading between the lines it may even say more. Templer’s comments could be an indication (conjecture alert) that certain interests in the state are not on board with online poker (even though some may publicly say they are) and are doing everything they can to create wedge issues to drive the pro-online poker factions apart. The longstanding hurdles The real problem in California has to do with the state’s size. As I’ve written in the past, California has the size and population of a country, which has led to not one or two gaming power players, but a dozen powerful interests, all looking to negotiate the best deal for themselves, and all with different goals and aims to satisfy. The declining racetrack industry in California wants to be part of the process, but the tribes and cardrooms want to cut them out (why court more competition?) and deny them the ability to apply for online poker licenses. The tracks themselves have some political clout (nowhere near some of the large tribes or even cardrooms) and they are being supported by labor unions, which makes racetracks a very thorny issue to deal with. There is also the not so small matter of how to incorporate small tribes and small cardrooms. Will a new revenue sharing agreement be put in place between the tribes? will tribes and or cardrooms be allowed to operate as skins? Will they be cut out completely? On top of all these other complex issues, you can then add in Bad Actor clauses and PokerStars. Previous Post Next Post pokerstars About Steve Ruddock Steve Ruddock is a longtime member of the online gambling industry. He covers the regulated US online casino and poker industries for variety of publications, including OnlinePokerReport.com, PlayNJ.com, USPoker.com, and USA Today.

After their latest “launch date” has once again come and gone, can we all finally agree that the Iipay Nation of Santa Ysabel tribe has no intention of actually launching an online poker site in California? At this point the Santa Ysabel tribe is basically George Costanza telling his in-laws he has a house in the Hamptons when they know full well he doesn’t: With a number of delays and false promises the Santa Ysabel tribe has effectively driven us all out to the Hamptons, unwilling to accept the fact that their bluff has been called. “Let’s get nuts!” might as well be plastered across their online poker room’s homepage. All of their insistence that this was not a bluff (perhaps aimed directly at me as I used this same terminology in a column at Bluff Magazine, or more likely it’s aimed at another vocal critic, Martin Shapiro) has so far proven to be nothing more than hubris. Now let me be clear: Could the Santa Ysabel tribe launch an online poker site as they claim to be working towards? Sure, nothing is impossible. That being said, the Tribe has lost what little credibility they had with me after their latest “delay.” Delay after delay after delay At some point the Tribe has to be looked upon as the online operator who cried wolf. Whatever their current intentions are, it’s hard to forget the past six weeks or so. I won’t say I called it, but in my Bluff column from July 15, I stated the following [bold added]: So how right was I about this? Not only did they delay the first launch date (July 14) to “sometime next week,” but that timeline came and went as well. Then around August 15th the Tribe told Card Player Magazine that they would be launching between August 26th and August 28th. Following their “non-launch” on the 28th, John Mehaffey of CaliforniaOnlinePoker.com asked their live chat support if they planned on “launching for real-money today.” Here is the response he received: The next day PokerUpdate.com’s Charles Rettmuller asked a similar question but got an altogether different response: That’s three deadlines come and gone, with no firm launch date in place, for anyone counting. It makes it hard to take anything they say seriously. Wasn’t hard to see from the get go As soon as the Santa Ysabel tribe showed up in July with their promises of a real-money online poker site (despite the small problem that California had not passed online poker legislation) many people felt something was amiss. And not just with the music-stopping “out of nowhere” declaration that they were launching an online poker site. The licensing body and sever host, the Kahnawake Tribe in Canada, have a dubious background as the former regulators of Absolute Poker and Ultimate Bet. The payment processor, FinPay, has strong ties to a previous payment processing company that went bankrupt and doesn’t have a way to sign up for an account. The Santa Ysabel Tribe also had a few warts, considering bankruptcy would have been a good outcome in view of the Tribe’s own track record with gambling ventures. There were flies everywhere. Yet despite all of this, and despite the Tribe’s insistence it had the sovereign right (under the Indian Gaming Regulatory Act) to offer online poker even though the matter is far from settled in any court of law, many people looked upon this venture as legitimate. People have pointed to the PrivateTable.com Google ads, or the tribe’s lawyers telling us they have the legal authority to launch, or their active Twiter account (with all of 147 followers, many of them iGaming journalists) as reasons to be optimistic and take them seriously. It might be worse if they DID launch Even more worrisome in my view, was the notion that this would somehow be a step forward for online poker in the United States. While I understand the desire to have legal online poker come back to the United States, doing so in this “workaround” way to legislation and regulation (as has been done in three states) is simply not the answer. If Private Table does launch, and they prevail when the inevitable injunctions are filed, we will be right back at square one with online poker in this country. All of the safeguards and regulations that have been put in place in Nevada, Delaware, and New Jersey would be useless, as every tribe in the country would suddenly be leasing their name to online poker sites across the globe to come setup shop on their reservation and none of these operators would be restricted by these strict regulations and tax burdens. It would essentially lead to completely unregulated online poker with good and bad operators (unless you consider licensing bodies like the Kahnawake’s solid regulators) and states would see $0 from it. How much political support do you think a Sheldon Adelson-led ban on online gambling would get if that were the case? Previous Post Next Post private table|santa ysabel About Steve Ruddock Steve Ruddock is a longtime member of the online gambling industry. He covers the regulated US online casino and poker industries for variety of publications, including OnlinePokerReport.com, PlayNJ.com, USPoker.com, and USA Today.