While tax revenue that goes to the state treasury isn’t exactly the primary concern of most American poker players, there’s no denying the fact that it’s likely to determine the future legislation. Unfortunately, the revenue from online casino games and poker simply failed to reach the expectations of most experts and politicians, particularly in New Jersey. The reasons for this underwhelming debut may be attributed to several factors, but most experts agree that technical and regulatory difficulties are what’s still keeping the entire industry down.
For example, legalizing online gambling in New Jersey required all the involved parties to develop ways of verifying the identity and location of each user – and since the system proved to be rather ineffective, many potential customers simply didn’t bother with playing on the regulated poker sites. To make a long story short, while the New Jersey’s state treasurer estimated the legal gambling profits to reach $1.2 billion over the first year with about $180 million going to the state, the sad reality is that those numbers had to be revised to $34 million in tax revenue by June 30. The disparity is simply enormous, which might undermine the efforts to launch regulated online gambling in states like California or Pennsylvania.
Geo-location Problems Plague U.S. Regulated Poker Rooms
As briefly touched on above, verifying whether the players were remaining within the borders of the state or not proved to be surprisingly troublesome, with hundreds of potential customers realizing they can’t access the regulated poker sites due to geo-location problems. In New Jersey, the regulators simply decided to use Wifi plugins to determine the location of each player. However, since the method was pretty much untested at the time, the results proved to be extremely disappointing, as poker enthusiasts trying to connect to one of the sites from Atlantic City were told they weren’t even in the New Jersey area.
The authorities and the poker sites decided to solve this problem by distributing special Wifi adaptors to the players who were experiencing geo-location issues. Those adaptors enable you to strengthen the Wifi signal coming from your computer, which in turn allows the system to recognize that you’re actually qualified to join the action on the intrastate network. Unfortunately, the damage has already been done as many players have already decided that the entire endeavor simply wasn’t worth the hassle with so many amazing offshore sites accessible at a few clicks of your mouse.
Low Credit-Card Acceptance Rates
If the low tax revenues and serious geo-location problems weren’t enough, many players have also reported serious credit card acceptance issues. Upon closer scrutiny, it became fairly obvious that credit card acceptance rates were comparable to or even lower than in the case of offshore poker sites, which is quite ridiculous if you consider the fact that the entire point of launching regulated intrastate online poker was to provide the players with a safer and more convenient alternative. According to New Jersey Division of Gaming Enforcement Deputy Attorney General Mary Jo Flaherty, the approval rate of MasterCard transaction was barely 73%, while VISA accepted about 44% of attempted payments.
Visa accepted only 44% of transaction to regulated online and mobile poker rooms in the United States
Offshore Poker Sites Continue To Attract More Players
Another reason why regulated poker simply failed to take off in New Jersey and Nevada is the increased activity of offshore poker sites like Carbon Poker (Read our review) and BetCoin (Read our review) when it comes to new promotions and exciting bonuses. To put it simply, regulated poker rooms aren’t profitable enough to compete with the major international networks. The traffic on intrastate networks tends to be rather low and players who frequent those sites don’t have access to the global player pool, which means less people to compete against in ring games, Sit & Go’s that take forever to launch and poker tournaments with extremely disappointing payout structure.
If that wasn’t enough, offshore poker sites tend to be more convenient to use, particularly when it comes to playing on the go. Most of those sites offer browser-based apps, which don’t have to be installed on your device and which are pretty much guaranteed to work on any type of smartphone or tablet, not just iOS or Android. Furthermore, offshore poker sites simply don’t have to deal with issues like geo-location or tax revenues. In fact, they pay their taxes elsewhere, which means that they’d be able to afford better promotions even if the player pools and traffic were comparable.
What the U.S. authorities need to do to make regulated gambling a success?
All things considered, launching new regulated online poker sites and fighting for more liberal gambling laws may be a good thing, but there’s simply no denying the fact that offshore poker sites have more to offer to US-based customers right now, even in states like New Jersey or Nevada. Offshore networks allow you to take advantage of superior promotions, better mobile apps and higher traffic while simultaneously requiring less effort to join the action, which allows them to attract customers from all over the country instead of select few states.
- States like New Jersey need to work closely with credit card companies to ensure that their citizens can easily make deposit and withdrawals at both online and mobile casinos.
- If regulated online and mobile poker sites are required to pay too much tax, they will not be able to compete with the off-shore poker sites when it comes to attracting new players through sign-up promotions and bonuses.
- A solution to the geo-location problems that is preventing legitimate players from signing up needs to be found quickly or these players will take their business elsewhere.
Even if you don't live in progressive gambling states like Nevada or New Jersey, you can still play real money poker on your iPhone, Samsung Galaxy (Android), Blackberry or Nokia Lumia (Windows Phone) at any of these U.S. mobile poker sites.