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Kentucky Among States to Examine Online Poker in 2023

Written by: Jennifer Newell
Black Friday happened on April 15, 2011. Almost all online poker disappeared from the American market as the United States cracked down on igaming companies based offshore. The federal government was completely disinterested in considering legalized online poker in America. It quickly became clear that each individual state would need…
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Black Friday happened on April 15, 2011. Almost all online poker disappeared from the American market as the United States cracked down on igaming companies based offshore.

The federal government was completely disinterested in considering legalized online poker in America. It quickly became clear that each individual state would need to decide for itself if it wanted to legalize and regulate the game. They could do it for poker online, adding other online casino games if they wanted.

This is what happened:

  • June 2012: Delaware legalized online poker and other igaming.
  • February 2013: Nevada legalized online poker only.
  • April 2013: Ultimate Gaming was the first to launch in the Nevada market, followed by WSOP in September 2013 and Real Gaming in February 2014. The only site remaining open today for online poker in Nevada is WSOP.
  • October 2013: New Jersey legalized online poker and casinos in the state.
  • November 2013: The first and only online poker site launched with three skins on the 888poker platform for WSOP.
  • November 2013: Ultimate Poker, 888/WSOP, Betfair, and partypoker/Borgata were the first online poker sites to launch in New Jersey. Betfair and Ultimate both closed before the end of 2014.
  • February 2014: Delaware and Nevada signed an interstate poker agreement.
  • March 2015: The combined Delaware/Nevada player pool launched.
  • March 2016: PokerStars launched in New Jersey.
  • October 2017: New Jersey signed interstate online poker agreement to share player pools.
  • October 2017: Pennsylvania legalized online poker and casinos.
  • May 2018: WSOP launches combined poker site as the only operator qualified to do so.
  • March 2019: West Virginia legalized online poker and igaming. No poker sites have ever applied for licenses or announced plans to partner with casinos to do so.
  • November 2019: PokerStars launches online poker in Pennsylvania.
  • January 2021: PokerStars is the first to launch online poker in Michigan. BetMGM/partypoker followed in March with WSOP joining one week later.
  • May 2021: Connecticut legalized online poker and igaming. No poker sites have ever applied for licenses or announced intentions to launch in the state.
  • May 2022: Michigan signs the Multi-State Internet Gaming Agreement (MSIGA) with Delaware, Nevada, and New Jersey.
  • January 2023: PokerStars launched its multi-state online poker by combining New Jersey and Michigan sites.

Over nearly a dozen years, only seven states of 50 have legalized online poker, and only five garner revenue from licensed sites. It may seem like a lot of bullet points listed above, but it’s not a lot of progress over so much time.

Each year, there are states that have the potential to join the ranks of the state-regulated online poker market. This year, there are several hopefuls.

Kentucky: Oh, the Irony

Before 2018, no one had Kentucky on their watch lists for igaming. And the person who put it on those lists was even more unexpected.

As far back as 2008, Kentucky had shown itself to be, in fact, an enemy of igaming. Governor Steve Beshear ordered 141 online gambling domains seized in 2008, and the courts supported that decision. Years later, a Kentucky court then ruled that PokerStars had made approximately $870M in rake from losing players just in Kentucky between 2008 and 2011. Though PokerStars won its appeal, the Kentucky Supreme Court finally took the case and ruled for the Commonwealth of Kentucky in December of 2020. PokerStars owed Kentucky $870M plus interest, making the grand total about $1.3B.

Nearly one year later, PokerStars’ owner Flutter Entertainment settled with Kentucky for a total of $300M. Since Kentucky had already seized $100M in bond money from PokerStars, the company just owed $200M.

All of that started with the order from Governor Steve Beshear, whose son actually took over that same office years later.

First, though, Andy Beshear won the job of Kentucky Attorney General. And in 2018, it was AG Beshear who asked lawmakers to expand gambling options in the state of Kentucky to include sports betting, fantasy sports, and…wait for it…online poker.

Kentucky: New Year, New Sponsor

While Beshear was a Democrat, gambling had no political party. So, it was Republican State Representative Adam Koenig who took the suggestion from Governor Beshear and introduced a bill in February 2019 to legalize sports betting, DFS, and online poker. He also tried a bill to establish casinos and make horse tracks into racinos, but that bill didn’t advance.

It was the sports betting and poker bill that found a bipartisan list of more than a dozen sponsors and started to make headway through a House committee.

That 2019 bill died, as did the ones in 2020 and 2021. Along the way, Beshear had won the governorship on a platform that included expanding gambling in Kentucky. Even so, Koenig’s efforts did not gain much traction.

That changed in 2022, when Koenig worked with Democratic State Senator David Yates. They introduced companion bills in both houses of the legislature. There was movement on that House bill, which took on quite a lot of amendments but passed to head to the Senate. The bill then died in a Senate committee. Kentucky Senate Majority Leader Damon Thayer had said that there were too many amendments and too much resistance, but he saw potential for such a bill to pass in 2023.

It’s now 2023.

Koenig is no longer in the legislature, as he lost his Republican primary in 2022. But Representative Derrick Graham took over and introduced HB106 on January 5, 2023. With Representatives Cherlynn Stevenson and Rachel Roberts as cosponsors, the bill sits in the House Committee on Committees Committee. (I am not kidding.)

Indiana: Much Anticipation

While this state, too, had not been on the radar of many igaming analysts for many years, Indiana is now at or near the top of the list. It appears likely to legalize igaming in 2023.

There was a strong effort in 2022. A group of Republican State Senators – Jon Ford, Chris Garten, and Ronald Grooms – introduced a bill on one side of the legislature. State Representatives Doug Gutwein and Ethan Manning took charge of a House bill to correspond with the other.

Gutwein and Manning needed to ensure that the bill moved out of the Public Policy Committee before the end of January, but there wasn’t enough support for the move.

Senator Ford was determined to see a better outcome in 2023. Luckily for him, the Casino Association of Indiana and iDEA Growth commissioned a study that he could use. The iGaming in Indiana: Highlighting the Opportunity report showed that igaming could generate $420M in first-year revenue, which could mean $75M in state taxes. Within just a few years, the projected annual revenue number increased to $611M, which would result in $108M in tax payments to Indiana.

As the deadline for legislation introduction looms in the second week of January 2023, there are only two bills in the lineup so far. A Senate bill helps define “private low stakes” card games like poker as a defense against certain crimes. And a House bill about “various gaming issues” explains how to set up and appoint members of the gaming commission and addresses casino licensing and revenue matters.

Any day now, Ford could introduce a new Senate bill to continue the work from 2022.

New York: Again, Huh?

It has been a roller coaster for online poker and igaming supporters in New York for more than seven years. And the same lawmakers that had been putting those issues on the back burner for everything else – mostly to work on sports betting – are telling online poker supporters to strap in for another ride.

The journey for New York online poker began in 2016, with State Senator John Bonacic leading the charge on one side of the legislature and Assemblyman J. Gary Pretlow on the other side. While Bonacic pressed his bills forward each year, Pretlow stood in his own way with everything from doubts of online gaming safety to a bad actor clause to prohibit PokerStars from operating in New York.

In 2018, it appeared that Assemblyman Clyde Vanel took the reins from Pretlow and wanted to champion a bill. He did and secured nearly 50 cosponsors along the way. Bonacic was moving his Senate bill through the Finance Committee, but Vanel failed to find the momentum that he looked for so intently.

As Bonacic retired in 2020, New York State Senator Joe Addabbo gave it a go with his online poker bill, hoping to classify poker as a game of skill and, thereby, exclude it from gambling prohibitions on the books. Pretlow stepped in to handle the Assembly side, but neither bill passed. The overall goal had been sportsbetting for so long that online poker continued to be sidelined because of it.

With sportsbetting done and online casino revenue just waiting to be claimed, New York lawmakers could do it this year. It all depends on Addabbo, who told the National Council of Legislators from Gaming States (NCLGS) in late 2022 that that he will introduce a bill this year.

According to Addabbo, there is approximately $428M in tax revenue waiting in the wings from legal igaming.

Other Possibilities

There are always other states that could pop into the igaming discussion out of nowhere. There are also some states that have legalized land-based casinos and even sportsbooks, so adding online casinos and online poker would only expand their gaming and subsequent revenue.

Illinois has kicked the igaming ball around in the past. A few State Representatives introduced a bill in 2021 called the Internet Gaming Act, and it did travel through several committees, but it failed to meet a deadline for a third reading and died. With a plethora of casinos in the state, some of them lobbying for online gaming, this state is always in play…or at least watching from the sidelines. Someone just needs to get them in the game, pull them off the bench.

North Dakota State Representative Jim Kasper is a longtime poker fan. He follows the game and loves to play. As far back as 2005, he pushed for his state to legalize online poker. That 2005 bill even passed the House of Representatives, but the Senate voted it down almost unanimously. Kasper tried it again in 2021 and found several cosponsors for the bipartisan bill, one that would declare poker a game of skill and permit online poker if the voters approved the measure. That bill passed several Judiciary Committee hearings and did pass the House, but it failed in the Senate and died there. Kasper could try again this year.

Ohio has been mentioned in years past for online poker. California has debated it for well over a decade but failed to settle differences between commercial card room operators and Native American casino owners.

Anyone who wants online poker in their state can take it upon themselves to contact their members of Congress to bring up the subject. With a proper explanation of geolocation, responsible gambling measures, and revenue potential, any reasonable lawmaker should give it some thought.

 

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