Legal Online Poker, Once All The Rage, Flirts With Irrelevance

Written By Steve Friess on February 7, 2023 - Last Updated on March 23, 2023
PlayUSA State of Play poker chips

It is quarter to noon on a frigid, stormy Sunday in Ann Arbor, Michigan, and there’s a grand total of 202 players logged into BetMGM’s poker site.

The site offers 16 possible Sit-n-Go single-table tournament options at all times, but right now just one lonely soul is registered for any of them, a six-player $2 game. No proper multi-table tournaments are running right now; the largest collection of folks to be found anywhere – 25 – are playing cash games with blinds of 5 and 10 cents.

You can almost hear the whistles of your laptop’s fan as digital tumbleweeds roll on by.

PokerStars is marginally better – a whopping 598 folks looking for action over there, although most sit-and-go tables there are empty, too, and the cash crowd, again, is concentrated on the kind of stakes you play with your granny at Christmas. And considering that PokerStars now encompasses both Michigan and New Jersey thanks to a multistate compact, that number’s not so great, either.

WSOP, Michigan’s third legal poker operator, doesn’t seem to provide a real-time ticker on how many players logged in, but it can’t be too many because about an hour from now, they’ll only be able to scrape together 350 entries for a free roll. In other words, they can hardly even pay people to play.

Read more from the State of Play column:

What happened to the great promise of legal online poker?

Raise your hand if you remember back in the Aughts when playing Hold ‘Em and Omaha online was embraced as the very essence of freedom. When hordes of impressionable kids watched Chris Moneymaker win the World Series of Poker and blew their college tuition on the same offshore sites that made millionaires and celebrities out of schlubs? When the gambling community insisted that whatever laws made it illegal to bet on the Internet ought not to apply to poker because it’s special among casino endeavors as a “game of skill” rather than of chance?

Now? Poker remains a popular pastime or profession, to be sure. The 2022 World Series of Poker Main Event in Las Vegas drew 8,663 entrants at $10,000 a pop, the second-biggest field in the tournament’s 53-year history. But it’s certainly not at the white-hot center of popular culture or public awareness like it was when watching it on TV was all the rage.

What’s more intriguing is that efforts to expand legalization have largely stalled – and the urgency to add to the six states that have legalized has altogether vanished. Top of the agenda these days is legalizing sports betting, with advocates often recycling the argument that it’s a skill-based pursuit.

Nolan Dalla, the former WSOP media director and co-author of poker legend Stu Unger’s autobiography, has some theories. After Black Friday – the day in 2011 when the federal government shut down four of the biggest online sites that were operating in the U.S. – many casual players found new hobbies.

“Online poker’s current struggles and future challenges have been the culmination of a perfect anti-storm of devastating events,” Dalla says. “The federal government shutdown was a massive blow to many once-thriving online poker sites. It significantly altered the recreational habits of hundreds of thousands of poker players.  As years passed and online poker was slow to achieve legalization and regulation, experienced players who had been accustomed to the bacchanal of options during the poker boom gravitated towards other gambling options, most notably sports betting. Unrealistically high expectations that online poker would return again to its golden age have been impossible to meet.”

OK, but the operators could at least put a little elbow grease into it. Even the multistate compacts, a no-brainer that should largely be an administrative matter rather than anything that requires legislative approval in the states where online poker is legal, have been slow to launch. It took two years for Michigan to pair up with New Jersey, creating a universe with a population of 20 million – and only one operator, PokerStars, was ready to launch quickly. The most populous state to legalize, Pennsylvania, has yet to add its 13 million residents to the potential pool. The other three states – Delaware, Nevada and West Virginia – are all too sparsely populated to make a dent in the much-needed critical mass required to afford players regular action.

Does online poker have a future?

Precious little marketing muscle is going into drawing attention to online poker where it’s legal. Michigan, for instance, is home to several very successful pros, and only one – 2009 WSOP Main Event winner Joe Cada – has been featured in advertising or promotions. Cada says he did some radio ads around the time WSOP launched its Michigan site in March 2022, a year after BetMGM and PokerStars, but “lately, it’s a little bit slower.”

“I told WSOP I’m always available anytime they need me,” he says. “But it’s tough to say with these big companies and their marketing strategies.”

That’s fair. The story of online gambling of all sorts is that it’s a lot more expensive and harder than expected to make a profit between sky-high tax rates and the high cost of acquiring and retaining players through promotions for sports betting. A significantly larger percentage of the population are sports fans interested in betting on games than poker players, and the profit from online poker is so modest as to be hardly worth the effort. (BetMGM, for instance, made a paltry $642,000 of its $49.2 million casino revenue from poker in May 2022.)

But that’s still a bit of a self-fulfilling prophecy. Players aren’t showing up because there aren’t enough players to play with. Gambling firms aren’t doing much to market to draw players or working to legalize to expand the market. Players aren’t showing up. Rinse and repeat.

Thus, despite all the benefits of legalization – confidence in the game’s fairness, ease of moving money on and off sites without exorbitant fees – Dalla says pros are still playing on the off-shore sites where they can make more money faster.

“I don’t believe online poker’s struggles are the fault of bad marketing or misplaced targeting,” Dalla says. “Two indisputable facts are that winning at poker takes hard work and many people don’t want to put in the time to get better.  A recreational bettor with $100 to gamble is probably going to make a sports bet instead and possibly double his money in a few hours.  We have become a society of instant gratification.”

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Steve Friess

Steve Friess is the national gambling industry correspondent for PlayUSA and its related local sites. He is also a contributing writer for Newsweek. A Long Island native who earned a journalism degree at Northwestern University, Friess worked at newspapers in Rockford, Illinois, Las Vegas, and South Florida before launching a freelance career in Beijing, China, where he served as chief China correspondent for USA Today. After his return to the U.S. in 2003, he settled in Las Vegas, where he covered the gambling industry and the American Southwest regularly for The New York Times, Playboy, The New Republic, Time, Portfolio, BusinessWeek, Newsweek, New York magazine, and many others. During that time, he created and co-hosted two successful and groundbreaking podcasts, the celebrity-interview show The Strip and the animal affairs program The Petcast. In 2011-12, Friess was a Knight-Wallace Fellow for at the University of Michigan. That was followed by a stint as a senior writer covering the intersection of technology and politics at Politico in Washington, D.C., In 2013, he returned permanently to Ann Arbor, where he now lives with his husband, son, daughter and three Pomeranians. He tweets at @SteveFriess and can be reached at [email protected]

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