California Closed Door Poker Policy Could Stifle Industry

September 11th, 2014 | by Jason Reynolds

If California shuts its doors to poker player compacts with other states, it could stunt its growth, experts warn.Â Image: Panoramio.com)

Online poker in California is being hailed as the next big development in the iGaming world, but could the state’s hardball tactics hamper its chances of success? Over the past five years, California legislators have been working on an online poker bill that would finally breathe life into the Golden State’s virtual industry.

However, many industry insiders are now claiming that its rigid player sharing policy could become problematic.

Golden State May Lose its Luster

At present, the Golden State’s iGaming scene is expected to go live in 2015 and, once it does, many believe it could generate a slew of new money-making opportunities for players and operators. Being the most populated state in the US (it has approximately 38 million residents at the last count), California undoubtedly has an edge over the rest of the US when it comes to player liquidity.

But the state’s desire to prohibit player pool sharing could turn this golden dream into a fool’s gold nightmare. In fact, many pundits feel this stance could potentially ruin not only the state’s iGaming economy, but negatively impact on America’s overall poker profitability.

The Pain in Spain

Citing ring-fenced countries in Europe as an example, many experts have concluded that California could suffer financially if it decides to “go it alone.” For example, Spain, a country with a similar population to California, has experienced a series of revenue declines since breaking away from the rest of the poker world in 2012. According to market reports, 2014’s winter peak was 13 percent lower than in previous years and the country’s summer traffic has dropped 20 percent over the last two years.

Of course, it could be argued that poker is much more of a tradition in the US than Spain, and that the average Californian is wealthier than the average Spaniard; nonetheless, the process of segregation remains a similar factor. However, in the lead-up to regulation, this fact doesn’t seem to be much of an issue for those behind the state’s iGaming policies. In fact, while the likes of Nevada and New Jersey are actively pushing for intrastate gambling pacts, California appears to be taking a hard-line stance over the issue

Closed, But Not Locked

Although the door appears to be shut for now, California’s Gambling Control Commissioner, Richard Scheutz, has stated that it’s not necessarily locked. During a recent interview with Marco Valerio, Scheutz said he is “open to the idea” of cross-border liquidity, but it’s a “seller’s market” and, as such, any deals would have to be on California’s terms.

The situation in California is far from clear-cut and any speculation is somewhat futile until the state passes an online poker bill. However, as the iGaming industry in the US continues to grow, it will certainly be interesting to see how issues like this influence and shape the market.