With Barney Frank’s Internet Gambling Regulation, Consumer Protection, and Enforcement Act finally passing in the House Financial Services Committee this week, dreams of fully legal and regulated online poker have been revived in the poker community. Sure, there are some people who would prefer the status quo (and these people are mistaken, but that’s a whole other discussion), but most look at the 41-22 vote, despite the bill’s flaws, as a very positive step in the right direction. There is a long way to go in the legislative process, but if we eventually do see the United States market open up for legal online poker, what will things look like? What follows is my little brainstorm on what we might be able to expect and not expect from a potential Poker Boom II.
Fish Population
Most people expect that if the flood gates open to the U.S., millions upon millions of American fish will flood the poker waterways. We will return to the Golden Age of poker, circa 2004-2005, when it seemed like everyone was terrible at the game and profits could flow in for solid players as easily as water comes out of the tap.
I don’t really see this happening. To an extent, yes, but not as much as some like to fantasize. Naturally, if poker becomes completely legal in the U.S., there will be a significant initial injection of casual players who were afraid to play when it was “illegal.” They will also be encouraged to play since getting money to and from the sites will be easier. So, yes, games will likely become softer, at least for a while. But we won’t see pre-UIGEA fish levels. Why? Mainly because even the fish are more skilled today than they were six or seven years ago. Keep in mind that before the poker renaissance, Fixed-Limit Hold’em was much more popular than No-Limit Hold’em. Much of the poker population was new to No-Limit, so as No-Limit became the game of choice, the average skill level was fairly low. Obviously, there will be plenty of new and poor poker players in Poker Boom II, but on average, the skill level of the population will be higher than it was back in the day because of all of the educational tools we now have at our disposal.
Poker Room Competition
I have no doubt that, unless the costs are insanely prohibitive, that all of the poker rooms and networks that have stayed out of the U.S. market will jump right back in should poker become 100 percent legal. And I think we all know that the U.S.-based brick and mortar gambling firms will be the first in line for licenses. There is some question right now as to whether the big players like PokerStars and Full Tilt will be allowed to stay in the game, but my guess is that they will be major players one way or another. So, there should be a lot of competition, at least in the early going.
I predict, though (and I have no evidence to support this), that some of the smaller existing rooms/networks and, maybe even some of the bigger ones, will join up with the land-based American casino giants. It might just be a partnership, with the online poker room providing its technology and customers and the American company providing the U.S.-base of operations, “respected” name, and fast-track to a license. It could also be in the form of an American firm buying one of the online rooms as a quick way to get up and running.
In the long run, therefore, competition may narrow a bit (understanding that other new poker rooms will likely sprout up, too). And that’s not a bad thing. Competition is great. It is a catalyst for creativity, innovation, and progress, and gives customers choices. But in all honesty, I don’t know if I want too much competition in online poker, as it has the potential to split up the player base. One nice thing about online poker is that we can play on more than one site simultaneously, but with players so beholden to rakeback nowadays, it seems that more people stick to just one or two rooms so they can build up rakeback and rewards, rather than playing at whichever rooms have the best games or promos at any given time. I’d rather have a handful of large rooms competing hard against each other than scads of smaller rooms trying to eke out an existence.
Bonuses
Remember when the likes of Party Poker and the Prima (now Microgaming) rooms routinely offered sweet deposit and reload bonuses several years ago? Those easy-to-earn, high value bonuses were my ticket to a growing bankroll. I do think that when the U.S. market opens up and the poker rooms roll in, there will be a lot of big bonuses offered as they all try to fight for our funds, but the days of the half-hour, $200 bonus are over. The poker rooms wised up a while back, realizing that they could offer high dollar amount bonuses and attract customers, but make them fairly difficult to earn, especially for low stakes players. I don’t think this will change. We might see some player-friendly bonuses early on, but I don’t think they will last.
Rake
One of the biggest fears poker players have about legalized and regulated internet poker is the taxes that will be imposed on the poker rooms will be passed through to the players in the form of higher rake. I don’t believe this will happen, and if it does, it will be very minor. I admittedly don’t have any numbers in front of me to back this up, but it makes sense to me that the poker rooms will save enough money from the reduced expenses of funds processing to make up for the potentially higher costs from taxes. Right now, online poker money processing is messy; poker rooms have to constantly look for new processors to skirt U.S. regulations and these processors likely aren’t as cheap as they once were. The poker rooms would probably be more than willing to pay a gaming tax if it meant slashing payment processing costs.