A recent federal appeals court’s decision against a Trump Administration-era opinion on the Wire Act will almost certainly lead to exponential growth in online poker in the US. That’s according to 888 Holdings Yaniv Sherman, who talked with Casino.org after the ruling.
Currently, only Delaware, Nevada, and New Jersey participate in the Multi-State Internet Gaming Association. That allows sites, such as WSOP.com, to operate in those states to have players play against each other. That connectivity allowed the World Series of Poker to hold the first two days of its COVID-forced hybrid-format Main Event in both New Jersey and Nevada last month.
There’s interest among other states in joining the group. Michigan Gov. Gretchen Whitmer (D) signed a shared liquidity gaming bill into law a couple of weeks ago. Pennsylvania’s expanded gaming legislation passed in 2017 would allow the state to enter the multi-state compact. However, Pennsylvania and other states have been hesitant to join. That’s due in large part to the Wire Act opinion the Department of Justice posted for review in 2018.
Before then, the 1961 law had been accepted as having a narrow application for using communications devices to transmit sports betting information across state lines. Trump’s Department of Justice sought to expand the scope of the law to apply to other forms of gaming. However, that led to the successful lawsuit filed by the New Hampshire Lottery Corp.
As President Biden was sworn into office on the day of the First Circuit Court of Appeals decision, it seems unlikely that an appeal to the Supreme Court will take place, as the new president was cool to the idea of an expanded Wire Act scope.
Sherman, who serves as a senior vice president for 888 and head of its US division, noted that online poker in New Jersey generated about $38 million in revenue for licensees. In neighboring Pennsylvania, where, for now, players can only compete against others in the state, poker sites made $36 million.
Combined, New Jersey, Nevada, and Delaware have a population of slightly less than 13 million. That’s roughly the same size as Pennsylvania. Add in Michigan’s 10 million residents, and Sherman said the pool of players becomes quite sizeable.
And while the expansion of gaming may have a cannibalizing effect to some extent as other states approve sports betting and consider iGaming, Sherman said that won’t happen with online poker.
With poker, it’s a net positive for everybody because it continues to grow,” Sherman told Casino.org. “If you have those (five) states, it could be well north of $200-$250 million in the short term.”
“And if you’re looking at the 2025 joint projections that we’ve seen from Morgan Stanley and other reputable analysts and banks, you’re talking about the gaming market being worth anywhere between $10 to $12 billion in 2025. Then I would argue that poker out of that should be well-positioned for about a 10 percent share,” he continued.
With the favorable Wire Act ruling, Sherman hopes it will lead to more progress on the iGaming front. It may lead to West Virginia, another state with iGaming, to become part of the multi-state network. Elsewhere, nine operators in Michigan launched their casino apps this past weekend, and other states — like Indiana — have filed bills to allow online poker and casino gaming.
“With more liquidity and more states, we can offer an amazing customer experience across the nation,” he said. “We’re very excited about this. I mean, it’s been something we’ve been waiting for for a very long time.”
While 888 operates its own online gaming websites, it also serves as a back-end provider platform provider as well.
The day before the Wire Act ruling, 888 and Caesars Interactive Entertainment announced a multi-year extension of their business-to-business partnership. The deal means 888 will continue to provide the platform for Caesars’ WSOP.com poker room.
With the extension in place, Caesars is looking to expand its online iGaming and poker network into other states.
In addition, 888 plans to roll out its “Poker 8” platform in the US because of the deal. Sherman said the new platform will offer benefits across the board for players of all skill levels. That includes more mobile functionality to allow players to play more games on their phone or iPad and multitask easier while playing.
“We added a portrait mode, which was important for players, because we realized that they wanted to be able to play with just one hand,” he said.
The new platform also includes responsible gaming enhancements to ensure players are playing within their means.
Sherman noted 888 officially launched in Europe in November and said players liked using the new platform.