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Excitement for Pennsylvania’s poker fans with the launch of PokerStars on Monday – just don’t expect it to be like the good old days. (Image: PokerStars)
On April 15, 2011, PokerStars was forced to beat a hasty retreat from the US, then its biggest market, after the US Department of Justice (DOJ) seized its .com internet address and unsealed indictments against its founder, Isai Scheinberg, and director of payments, Paul Tate, for violating the Unlawful Internet Gambling Enforcement Act (UIGEA).
The day is remembered gloomily by US poker players as “Black Friday.”
PokerStars claimed that online poker was exempt from UIGEA and the Wire Act. The DOJ had failed to fully clarify the matter when its opinion had been sought in 2005.
But a $731 million settlement with US authorities, as well as a change of ownership, helped PokerStars shake off its pariah status, and it re-entered the US via the New Jersey market in the fall of 2015.
Now, just over two years after lawmakers in Harrisburg passed a law legalizing online poker, sports betting, and casino gaming, PokerStars is back in Pennsylvania, in partnership with Mount Airy Manaslot88 Casino, albeit in a soft launch testing phase.
Although details are thin on the ground, this phase is likely to last a few days and will feature real-money play within restricted hours, and possibly with a cap on the number of players participating.
Once fully live, don’t expect an immediate return to the old, pre-2011 days. The market will be ring-fenced, which means players in Pennsylvania will not be able to link up with others in New Jersey.
Wire Act Impact
Online poker’s re-emergence in the United States in regulated form has largely been disappointing, lacking the necessary player liquidity to produce enticing tournament prize pools and a variety of variations and stakes to cater for all tastes.
While New Jersey, Nevada, and Delaware have entered into interstate compacts that allow them to share player pools, Pennsylvania won’t be party to that – at least not yet.
Pennsylvania regulators were drawing up their rules around the time the Trump administration reversed a 2011 DOJ opinion that the Wire Act only prohibited interstate sports betting, and not online poker or casino gaming.
The Obama-era decision paved the way for individual states to regulate online gaming, and its reversal would — at its very loosest interpretation — at least prohibit interstate online poker compacts.
The new DOJ opinion on the Wire Act has been challenged successfully in the courts. On June 3, 2019, US District Court Judge Paul Barbadoro ruled that the Wire Act’s prohibitions are “limited to sports gambling” — although the DOJ has an appeal pending.
Pennsylvania’s regulators opted to err on the side of caution, although that will likely change if the DOJ is ultimately defeated.
Nevertheless, Pennsylvania has a population that is roughly the same size as Nevada, New Jersey, and Delaware combined, which means the market is likely to get off to a better start than those states did back when they launched in 2013.
But if interstate pool-sharing receives the go-ahead in the courts, the addition of Pennsylvania into the mix will give the US online poker sector a huge shot in the arm.