Online poker is legal and regulated in just 3 American States: Nevada, New Jersey and Delaware.
However, that number will go up to 4 in the coming months after Pennsylvania Governor Tom Wolf signed online poker into law in late 2017 – the law is expected to be ratified in spring 2019.
New York is the latest American State moving towards online poker legalisation. New York Senator Joseph Addabbo formally introduced legislation to a Senate Committee earlier this year that would legalize online poker as a skill-based game.
With British based online poker companies currently catering for the American market, what could widespread legalisation mean for the future of these companies?
The British presence in America
There are a number of large online poker companies operating in the USA, 888 poker online among them. British based companies offer their services to American poker enthusiasts who feel isolated by the draconian gambling laws in different States.
In total, there are 4 British companies that currently cater for the million plus online poker market in America.
Why do British companies dominate the American market?
State by State the laws around online gambling and online poker differ. As mentioned above, only 3 States at time of writing have legalized online poker, meaning that the majority of American States still criminalize it.
As such, it is impossible for American companies, based in the country to provide an online offering for their citizens. As British based companies are not bound by American law, they can offer their services to those with American IP addresses.
It’s not just British companies that dominate the online gambling market in America however. Canadian companies and some based in the Caribbean also market themselves directly to the American market.
What does legalisation mean to foreign companies?
Quite simply it means more competition. As soon as online poker is legalised in a State, there is a significant increase in companies soliciting online poker. As such British, Canadian and Caribbean companies lose a slice of the market share.
Industry experts have suggested that poker players will be more likely to show loyalty to companies from their own country. Meaning the shift from British based online poker suppliers to home grown American ones could be significant.
How will this affect the customer?
In the USA the effect of legalisation on the customer will ultimately be beneficial. More operating companies mean more competition, and that is good news for consumers. Companies battling it out for market share will dangle shiny bonuses and promotions to customers.
If you are based in a State that is in the process of legalising online poker keep your eyes peeled for a tsunami of online poker offers. Play it right and you could make decent profits just from signing up to sites and playing a few hands.
How will this affect the British customer?
For those players on the other side of the Atlantic, there will be less beneficial consequences from American legalisation. As British based online poker companies lose market share in the States, their revenues will suffer.
As is customary in all forms of business, these losses will be passed directly onto the customer. In contrast to the USA, the UK online poker industry will see less and less bonuses and promotions.
New American providers: A blueprint for success
Rather than viewing British based companies as an enemy, up and coming American companies can view them as an example to follow. The British gambling industry is massive – British citizens spend more per capita on gambling than any other country in the world.
Gross gambling yields in the UK peaked at almost £15 billion last year, which is impressive when you consider that there are less than 40 million adults of gambling age in the country. One third of the gross gambling yields came from the remote sector, with online poker being a major contributor to that number.
With those facts in mind it’s clear that aspiring American start-ups can learn a lot from their British counterparts. Multi-tiered marketing, excellent customer service, industry leading technology and enticing offers are all cornerstones of British online gambling success.
If these are adopted successfully by American companies then there could be no room for British companies in the land of Stars and Stripes. With a much bigger population, the gross gambling yield of the USA would be phenomenal.
(An insight into the successful marketing of online gambling companies.)
British, Canadian and Caribbean online poker companies currently have a monopoly on the American online poker market. Whilst the USA remains steadfast in its opposition to online gambling and poker, this will continue to be the case.
Foreign based companies with no obligations to the American government will continue to profit from a market that is clearly going nowhere. However slow legalisation currently is, there will undoubtedly be a time when online poker is legal throughout the majority of the USA.
When that time comes, the reach of foreign poker companies will decrease. If new American companies can mimic the success of their British counterparts then they will become the market leaders.