2016 Poker Year In Review: Online Poker Stalled While Live Poker BoomsOnline Poker Expansion Still Stalled But New Casinos and New Poker Rooms Continue To Open |
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The year 2016 came and went with no additional states legalizing online poker, but a handful of Las Vegas-style casinos with dozens of poker tables between them entered the market. Currently there are about 5,800 poker tables spread between more than 500 poker rooms nationwide. Casino revenue continued to improve, as well as poker tournament attendance, as the game continues to see a small expansion across the land based casino landscape.
As we close the book on 2016, it marks the third year in a row that regulated online casino play was limited to just Nevada, New Jersey, and Delaware. Thanks to the election of Donald Trump, a billionaire Republican, there’s been renewed fear that fellow billionaire Republican Sheldon Adelson will get his long-sought online casino ban.
The years ahead will be crucial for online casino legalization in America, an industry that could reach $4 billion by 2020 if there’s no prohibition enacted. Adelson claims that online casinos hurt the brick-and-mortar industry, valued at $70 billion a year if you combine the commercial and tribal markets.
Arguably, the worst news for poker players in 2016 was that another year passed without California, the largest tribal gaming market in America, legalizing online poker. Lawmakers there have looked at doing so for the past 10 years, with no success. Progress was made in 2016 in the form of getting the horse racing industry in the state to sign off on the legislation, thanks to lawmakers offering the industry up to $60 million a year from online poker revenues in exchange for not being involved in the space.
However, the state’s powerful tribal gaming industry, which generates nearly $8 billion a year in economic output, couldn’t come to a consensus on whether or not a company like PokerStars should be allowed to do business in the Golden State.
PokerStars, which has about 70 percent of the worldwide online poker market, has partnered with several California card rooms and also some tribal casinos for potential online poker. Other tribes have argued that PokerStars was able to gain an unfair market advantage while operating in a legal gray area in the past in California. The so-called suitability debate will continue in 2017.
Pennsylvania was on the verge of legalizing online casinos in 2016, as the House passed a bill in the summer. Online gambling was part of a larger gambling reform package designed to bolster a $3-billion-a-year gambling market located within a region with a wave of new casino construction. However, Keystone State Senators proved unwilling to expand gambling. It’s worth noting that Adelson owns one of the largest casinos in Pennsylvania.
What was especially striking about Pennsylvania in 2016 was that the State Supreme Court ruled in September that a local casino tax was unconstitutional because it affected the state’s 12 casinos disproportionately. Despite the threat of communities losing millions of dollars in the local share tax on casinos, Senate lawmakers still declined to approve a gambling reform bill that included online gaming. A legislative fix to the tax issue was also put on hold until next year.
Throughout 2016, Michigan appeared to have a real chance to legalize online casino gambling, but December came with no additional progress on the legislation. A Senate committee approved the measure in June, but months of inaction followed.
Michigan’s attorney general was one of 10 across the country who signed a letter to President-elect Donald Trump urging him to get behind the Adelson-backed plan to “restore” America’s 1961 Wire Act (RAWA), which would ban online gaming for real money nationwide. Michigan has looked at online casino games for the past three years. The state decided to go with the online lottery first, kicking off those games in 2014.
Michigan’s commercial gambling market is worth $1.4 billion annually, while the tribal casinos in the state win $1.5 billion from gamblers each year. The online casino plan in Michigan would allow both commercial and tribal casinos to offer their games on the web.
In October, Massachusetts begin a study of online casinos with the intent for it to produce legislation sometime in 2017. The Special Commission on Online Gaming, Fantasy Sports Gaming and Daily Fantasy Sports was created by legislation signed by the governor earlier in 2016.
New York appeared poised to be the first state to legalize online poker since 2013 when the Senate passed a bill in the summer. However, the Assembly never voted on the bill, despite State Senator John Bonacic, sponsor of the bill, saying that “all of the gaming interests” in New York want online poker.
The problem is that new Las Vegas-style casinos are still being built in the Empire State. The New York Gaming Association said at a 2015 online poker hearing that the state should wait until the new brick-and-mortars are open before allowing online casino gaming.
As for the states with industries already, Delaware and New Jersey both saw gains in internet gaming revenue in 2016. New Jersey was up more than 30 percent this year, compared to the nearly $150 million won in 2015. Delaware’s year was more modest, but it did follow a year-over-year decline that was witnessed in 2015.
Nevada, which only allows internet gaming in the form of player-to-player poker, doesn’t release revenue data on its online poker market. However, the Silver State’s overall poker market (which includes revenue from the web) has been basically unchanged in 2016 compared to 2015. Nevada casinos average about $10 million from live and online poker each month.
Brick-and-Mortar Casino Construction Continues In 2016
There are now casinos in 40 U.S. states, leading many jurisdictions to bolster their respective gambling industries to keep tax dollars from flowing into the coffers of other states. The Northeast region is home to the most concentrated expansion of casino gambling in America. There are already dozens of casinos and racinos in the Northeast, with many more in the pipeline.
New York found that its residents spend $1 billion a year at out-of-state casinos, so several years ago lawmakers there approved a plan for new properties. All the properties are for upstate communities, part of a state plan to boost struggling local economies. A total of $1.4 billion was invested into the new casinos. The first of four opened in December when the existing Tioga Downs racetrack in the town of Nichols was converted into a robust gambling facility. It has 12 poker tables. Next up is the $500 million Rivers Casino and Resort in Schenectady, which is slated to open in February with 16 poker tables.
The $1.4 billion MGM National Harbor began taking wagers in early December, giving the state of Maryland a sixth casino. The casino’s 39-table poker room has already proven one of the busiest in the nation. Maryland’s billion-dollar gambling market will get a big boost from a Las Vegas-style casino right outside the nation’s capital. Maryland’s first casino opened in 2010, and it has quickly joined the top-15 commercial gambling markets in the nation.
The New Jersey casino gambling industry was defined this year by what didn’t happen. Voters in November rejected a plan to allow casinos in north Jersey, which would have ended Atlantic City’s decades-long casino monopoly at a time when it desperately needs to keep it. The Trump Taj Mahal closed in October, leaving Atlantic City with just seven casinos. A few years ago, the seaside gambling town had 12. Gaming win in Atlantic City reached a high of $5.2 billion in 2006, only to be cut in half over the past decade. The good news is that the freefall has stopped, with gaming revenue holding steady in 2016.
Massachusetts saw two of its upcoming casinos—the $2.1 billion Wynn Boston Harbor and the $950 million MGM Springfield—move ahead with their respective projects after experiencing setbacks and delays. The former is slated to open in mid-2019, while the latter is scheduled to take wagers in September 2018. Wynn Boston Harbor will have a 90-table poker room, which will be one of the largest in the country. The Bay State’s third Las Vegas-style casino approved by lawmakers is in limbo because of a legal battle between property owners in Taunton and the Mashpee Wampanoag tribe who want to open a $1 billion casino.
In a referendum, Massachusetts voters rejected a second slots-only casino. The state already has one from Penn National Gaming. In another Nov. 8 ballot question, Rhode Island voters approved a new casino in order to compete with other states.
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