Public Supports Online Poker if Regulated

 Hartley Henderson
American Gaming Survey Indicates Strong Support for Regulated Online Poker

By Hartley Henderson – Exclusive to OSGA
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In December an emerging marketing research company that focuses on creating surveys for U.S. online gambling US Gaming Survey (www.usgamingsurvey.com), conducted a survey in conjunction with the Poker Player’s Alliance to research and analyze what Americans truly think about the prospect of regulated online poker. The survey had over 8,000 respondents representing all 50 U.S. states as well as Puerto Rico. About 10% of the respondents were women and the general demographic were 30 to 60 year olds with incomes over $50,000 per year. Only current and former poker players were asked to fill out the survey that focused on 6 main queries:

– Would Americans give up their current offshore sites to play with a regulated U.S. poker company?

– Do most respondents consider poker a game of skill?

– Are Americans prepared to pay taxes to Uncle Sam on their poker winnings?

– Would Americans change their land based casino play if online poker was regulated and available?

– Did Black Friday have any effect on their poker playing habits?

– Would online poker change the lottery playing habits of online poker players?

The last question was quite compelling. Many states rely on lottery revenue to fill the general coffers and support various state initiatives. No doubt many states are worried that if they legalized online poker it would cannibalize lottery sales which would be of no benefit to state revenue. So the survey attempted to find out if indeed poker players also played the lottery and if so, would regulated online poker cut into their lottery play.

The survey results related to lotteries were quite compelling. 45% of respondents said that they don’t play the lottery but of the poker players that do, the vast majority spend less than $10 a week on tickets.  Clearly they don’t see the lottery as a money making tool or source of recreation, but rather a shot to hit it rich with a small investment. Poker on the other hand is seen to them as a recreational activity as well as a way to make money. Consequently, over 75% of respondents said that regulated poker would have no effect on their lottery play and 22% said they would actually increase their lottery play. Most importantly however, only 74 respondents (less than 1%) indicated that they would decrease their lottery play if regulated state poker was introduced. That has to be music to the ears of state poker activists.  The sample is statistically significant and proves that online poker would be a supplementary form of revenue to the states and not a replacement of lottery income And if the lottery were to involve some form of sports betting or poker (such as was the case in Oregon or Delaware) there is quite a good chance sales of the lottery would increase substantially with poker players as well.

The question of whether Black Friday had any effect on American poker playing habits also yielded interesting results. 41% of respondents to the survey said they had stopped playing online poker due to Black Friday and only 5% said they have stopped for other reasons. 54% of respondents are still playing poker offshore despite the events of Black Friday. Perhaps the most compelling statistic in those figures is the last one. PokerStars, Full Tilt Poker and Cereus accounted for over 80% of poker play in the United States prior to Black Friday yet Americans were able to find other poker sites to fill the void once those sites either closed or cut off American clients. Sites like Bodog, Cake Poker and Merge Poker have picked up the slack. In fact Merge poker has grown by over 500% in members according to pokerscout.com. Without coming out and saying it directly the insinuation from those statistics is obvious. Many Americans enjoy online poker and the government can’t put the genie back into the bottle. If the government closes one operation there will be another to take its place. And as was seen from the new bitcoin poker rooms and sportsbooks being set up (discussed in a previous article) many gambling sites are looking at other methods of payment which would be untraceable by the U.S. government. It’s no wonder so many pundits compare the U.S. governments’ attempt to ban online gambling with the failed prohibition efforts of the 1930s to ban alcohol. Alcohol was still being consumed, just underground. And poker is still being played online just at different websites. And as powerful as the DoJ likes to think it is, it’s impossible to shut down everyone.

At the same time, the statistic that 40% of online poker players have stopped playing because of Black Friday has to be encouraging to states as well. That stat effectively tells the government that 40% of Americans have tried and enjoyed online poker but are currently sitting on the sidelines because they don’t trust the poker sites that are currently operating offshore. That equated to about 3,200 people in the survey but likely represents hundreds of thousands of Americans in total. Those Americans are anxious to play poker online and are just waiting for an outlet where they can make deposits and withdrawals more easily and more importantly are looking for an outlet they can trust. So it’s not surprising that almost 90% of respondents to the survey said they would gladly move their play to regulated state run poker sites if given the opportunity. That accounts for both those who have stopped playing due to Black Friday as well as those who still play but at a different offshore poker network. In fact only 7% of respondents said they would stay with their offshore poker site if online poker was legalized in the United States.

What was also noteworthy from the responses to the survey is that Americans are prepared to pay taxes on gambling winnings from regulated poker sites (something they may not currently doing playing offshore) and are indifferent to who runs the poker rooms if legalized stateside. There was some belief in the industry that many poker players would only play if the poker room was operated by a current poker network like Party Poker or PokerStars, but the responses showed that over 70% of respondents really don’t care who runs the poker room so long as they are offered the best experience for their money. Only 20% preferred that the poker rooms be run by a current casino or online poker site and only 8% preferred that the site be run by the state. So the states have the flexibility to create a model that works best for them and the poker players will gladly accept that model provided it doesn’t hinder the players’ poker experience.

On the question of skill, the responses were almost unanimous that poker is a game of skill. It’s this differentiation between poker and other casino games which has convinced many politicians to look at regulating poker. One of the foundations of democracy is that if someone can benefit as a result of their skills it should not be discouraged. Thus if poker is truly a game of skill, it’s not the government’s place to control it. That notion is a benchmark in other countries as well. In fact, the question of whether something is predominantly skill or luck is paramount to deciding whether an activity is legal under the UKs’ gambling act. The act, introduced in 2005 was tested by a private poker club in Britain (Gutshot Poker) which claimed that they were not bound by the gambling act because poker is a game of skill. The courts heard the arguments in a landmark case, and despite much legal disagreement the courts ultimately ruled that in their view poker was predominantly based on luck because of the randomness of the shuffle. But two American courts also ruled on whether poker is a game of skill or luck and in each instance the American courts ruled that poker is a game of skill. The overriding reasoning the courts felt this way was that they agreed that good players always beat bad players in the long run and this could only happen if skill was paramount. Consequently, had those U.S. courts ruled on Gutshot poker using England’s criteria, the Gutshot Poker Club would have been allowed to stay open.

One last interesting piece of information from the survey was that respondents spent relatively little on poker. Many of the U.S. politicians who are opposed to legalized gambling of any sort have tried to insinuate that online gamblers (including poker players) are degenerates who are betting the house and children’s education fund playing online poker. But the numbers from the survey prove that’s just not true. Only 10% of respondents said they stake over $250 a week playing online poker while well over 70% say they stake less than $100. And since it refers to stake, the net amount lost (provided they win some games as well) is far less. That is a relatively small investment and probably not as much as people spend on other forms of entertainment like movies or dinner out. It also backs up a Harvard University study conducted a few years back which showed that online gamblers including poker players spend far less than their land based counterparts. And for the most part online players spend less than the price of 2 cups of coffee a day.

In conclusion, the well constructed and thorough survey initiated by US Gaming Survey generated some very meaningful results that clearly indicate that American poker players want regulated poker in the U.S. They are not gambling degenerates glued to their computers 24/7 and simply want a safe place to play that would benefit both themselves and the state. It seems that many states are moving towards that inevitable step of introducing online poker and if they have any detractors they simply need to point to the results of this survey as indication that poker will not lead to the deterioration of the morals of the state or the cannibalization of lottery sales. In the end it’s a win/win for all Americans.

Contact Hartley via email at Hartley[at]osga[dot]com.

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