Lawmakers are missing the mark by not proposing legislation that would legalize online poker in Maryland.
Legislators are taking their time considering proposals that would allow for online sports betting in Maryland. But why not poker?
Maryland’s brick-and-mortar poker industry is one of the healthiest on the East Coast. The state’s four poker rooms generated $3.6 million in gross gaming revenue last month.
However, it could be an even larger figure if regulators would allow for an online counterpart to continue the game’s growth in Maryland.
We need to look at NV and NJ for comparison
Nearly half of all states have legal online sports betting markets. Additionally, several more, Maryland included, are seriously considering expanding their retail market into the online realm.
However, unlike sports betting, only seven states legalized online poker with just six launching a market.
Furthermore, many of those states don’t have an extensive history with live poker, either. For example, Pennsylvania, which legalized online poker in 2017 and launched it two years later, has only been spreading live poker since 2010.
Therefore, given the youth of most of the online betting markets, we don’t have a ton of data to go off. But the data we can analyze points to an increase in revenue for Maryland’s operators and government coffers through legal online poker.
It makes the most sense to look at the trends in New Jersey and Nevada. After all, they are two of the largest gambling markets in the U.S. and have the longest track records on both sides of poker operations.
Both states were spreading poker games well before the 2003 poker boom. And they were two of the first jurisdictions to bring back online poker following the federal government’s crackdown on the unregulated market in 2011.
Evolution of online poker
Before we dive into the actual numbers, it’s important to look at the timeline of the poker bubble in the mid-2000s.
- Pre-2003: Online poker sites begin popping up with moderate popularity
- May 2003: Chris Moneymaker satellites into the World Series of Poker Main Event from a $69 PokerStars tournament, wins it for $2.5 million
- Post-2003: Online poker rooms explode in popularity, live poker tournaments see massive increases in attendance
- July 2006: WSOP ME draws the largest field ever with 8,773
- April 2011: Feds seize assets of three largest offshore online poker rooms
There was a stark change in market sentiment in the years following the federal government’s 2011 actions. It was arguably the moment that popped the relative bubble poker was operating inside of.
In April 2010, you couldn’t walk down the street without running into someone claiming to be a poker pro. By May 2011, the demand dropped off a cliff.
Most people in America didn’t live within driving distance of a casino to continue playing regularly. The very successful players, on the other hand, left the country to continue playing.
Turnout for the $10,000 World Series of Poker main event is the easiest metric to gauge poker’s popularity. It hit a peak in 2006 with an 8,773-entry field and fell to 6,352 entries in 2013.
Aside from a live-online hybrid main event in 2020 with a poor turnout because of the pandemic, 2013’s turnout marked the lowest turnout since 2006.
No reason to think MD wouldn’t follow NV and NJ trends
The Silver State passed online poker legislation in 2013 and the Garden State followed suit later that same year.
Initially, there were two online poker rooms serving the Nevada market. But after Ultimate Poker fell short of expectations and ceased operations in 2014, only WSOP.com remained.
As a result, tracking the online poker revenue became difficult. Nevada regulators don’t require operators to make financial information publicly available.
If they separated online poker revenue from brick-and-mortar earnings, it would be a de-facto financial statement for Caesars’ online poker site. Instead, Nevada lumps both online and brick-and-mortar revenue together.
In January 2008, with plenty of unregulated online poker in the U.S., and near the height of the poker boom, Nevada poker rooms raked $12.8 million. In January 2015, a few years after the online poker launch, but after a large decrease in poker’s popularity, Nevada poker rooms generated $9.7 million worth of revenue.
Fast forward to December 2021, where the most recent data is available. Nevada poker rooms have eclipsed the 2008 numbers and reported $13.9 million in revenue.
There was a similar trend in New Jersey. But since the regulators separate online and retail revenue, it gives a clearer picture of what is going on.
In January 2015, the live poker market raked in $2.3 million. Seven years later, the numbers were nearly identical with Atlantic City’s poker rooms taking in $2.6 million.
However, in New Jersey, the online industry became larger than the retail market, but without cannibalizing the casino’s poker rooms at all. In August 2020, online poker rooms reported north of $3 million worth of revenue.
In short, online poker only helped grow two already established markets. There’s no reason to believe the same wouldn’t happen in Maryland.
Online and brick-and-mortar rooms have two separate customer bases
When governments began regulating online poker on a state-by-state basis, there was some skepticism. Some operators believed that they would be destroying their already existing casino product with their online casinos in Maryland.
The trend in the section above proves that theory couldn’t be further from the truth. After all, Nevada’s poker industry is bigger now than it was during the heights of poker’s popularity.
It shows that the online player and the live player are simply two separate player pools. And casino companies will need to compete for their online business. The same way they already battle for players to sit in their brick-and-mortar rooms.
Furthermore, if you need some anecdotal evidence, I’m here to give it to you. Just from my own time spent in the poker world, the online and live realm only have serious overlap at certain points on the calendar.
If you were to sit in a low-stakes poker game in Atlantic City, it’s unlikely more than one or two of them play even sparingly on the virtual felt.
As this idea becomes a more widely accepted fact, operators will try to attract online players to the live casino.
For example, just a couple of years into its operation, Caesars allowed all its players on WSOP.com to link their online poker account to their Caesars Total Rewards profile. Thus, online players earn tier credits to achieve real-world casino status and benefits.
Take COVID into account and the potential demand for an online poker option goes up even more. There is still a large chunk of the population that is looking to mitigate the risk of catching the virus.
And let’s face it. There’s virtually no risk of COVID while playing online.
Maryland online poker is a win-win for operators and regulators
MD online poker would be beneficial for all involved.
It brings added revenue for businesses, which translates to more tax revenue for the state. Additionally, Maryland-based poker players have more choices on where and what to play.
It’s been proven through multiple states’ implementation that online and mobile sports betting only enhances the market. Similarly, online poker serves as a complement to the overall industry, and it’s time there was legislation reflecting it.
