There are two things that I have learned about time: it is undefeated when it comes to a human’s lifespan and opinions and it continually marches forward. Ten years ago, the poker world was tossed into turmoil by what became known as “Black Friday,” or the shutdown of the most powerful poker rooms on the internet by the U. S. Department of Justice. So, what has changed about the world of online poker over the past decade? As I said at the start, time continues to march forward in complete indifference to the wont of people’s desires.
“Black Friday” Started Innocently…
The morning of April 15 started innocently enough. On the East Coast, people went about their business until about 10AM that morning. Then the first inklings of problems began to show up. Some people tried to link up to PokerStars and they were greeted with this message:
For those that went to Full Tilt Poker or the CEREUS Network rooms UB.com or Absolute Poker, the same screen welcomed them. What had happened? The Department of Justice had unsealed 11 indictments against the leadership of the four poker rooms for a variety of bank fraud and gambling violations. As a ramification of those indictments, the websites of the rooms – which were registered in the U. S. – were seized by the federal government and all monies from players on the site were in limbo.
Things would only get worse from that point. PokerStars, who had the foresight to segregate their players’ money away from the company funds, was able to negotiate with the DoJ to be able to open their site and allow U. S. players to retrieve their bankrolls from the site. They then withdrew from the U. S. market and continued, albeit damaged by the loss of U. S. action, to provide services to the rest of the world.
Players on Full Tilt Poker, UB.com and Absolute Poker weren’t so lucky; in fact, for Full Tilt players, the news would be catastrophic. Over the next few months, it became known that Full Tilt had not segregated the business money from the players’ funds and, in fact, were paying the members of Team Full Tilt sizeable monthly stipends for their work. By September, the site was officially shut down when the Alderney Gambling Control Commission revoked the operation license for the site. Meanwhile, UB.com and Absolute completely shut down without returning anything to the players.
That fateful Friday night, I was a part of a roundtable discussion on a poker radio station about what had happened. One of the biggest questions from listeners was “how long will the sites be shut down?” Everyone thought that it would just be a momentary issue, that the sites would be open for business quickly. I hated to shoot down the listeners thoughts. The charges were serious, I told them, and the sites were not coming back any time soon. I said that it would be at least a decade before we would have any semblance of online poker in the U. S. again.
I was being possibly a bit flippant that night but, as it turned out, I was partially right…
What Has Happened?
The reason I say I was partially right is that we have never come close to having the U. S. poker community rejoin on a regulated international site. While PokerStars has been able to continue as the biggest online poker site in the industry – and other sites that formerly served the U. S. like partypoker and 888Poker remain in the game – U. S. players have been shut out from those operations. Instead, they have been relegated to a myriad of “state by state” regulations that doesn’t provide any semblance of the way it was pre-“Black Friday” or unregulated sites that can disappear in a heartbeat.
In the U. S., the federal government has come closer to banning online poker than it ever has to enacting any regulations regarding its regulation and operation. In December 2011, there was a ruling by the Office of Legal Counsel that completely changed the game. In that ruling, it was firmly stated that the Wire Act of 1961 was only applicable to sports betting. In essence, it opened the decision to the individual states as to whether they wanted to allow online gambling or not.
Three immediately did. Nevada, Delaware and New Jersey came online with their individual online gaming platforms (Nevada was online poker only) by the end of 2013, but they were all only available for their individual citizens. A few more states have opened for online gaming since 2013 but, other than WSOP.com’s linking between the “original three,” there has been nothing close to a nationwide system of online poker, nor the number of sites that there used to be.
“But wait,” you’re certain to hear from someone in the peanut gallery. “Isn’t (insert unregulated room here) a place players can play internationally?” Sure, it is…it is also another way for an online poker room to take off with a great deal of money (Lock Poker, anyone?).
To date, only six states – Nevada, New Jersey, Delaware, Pennsylvania, Michigan and West Virginia – have legalized online poker. Two have outlawed ANY online gaming (Hawaii and Utah) and Washington state has made it a felony to play online poker. The rest exist in a “poker purgatory” where there are no laws for or against the activity. In fact, more states have licensed online gaming, daily fantasy sports, and sports betting than have opened for online poker.
What Does the Future Look Like?
Considering it has been 10 years since “Black Friday,” the one thing that we can probably count on is that there will be no FEDERAL legislation regarding the subject of online gaming. After the OLC decision of 2011, a couple of defeats in the appellate court on appeals of that decision, and the U. S. Supreme Court decision on sports betting from 2018 (the PASPA decision), Congress does not have the appetite to take on the subject – besides, the way Congress operates, they have trouble coming to agreement that “day” ends in “y.”
Thus, it is up to the individual states. They are going to continue to come out in a Water Torture fashion, a drip-drip-drip of states passing laws for sports betting, maybe DFS, but full-out online gaming and poker are going to lag. Why? Everyone bets on sports and DFS has somehow become another method to show your prowess and knowledge of the game. They have become acceptable. There is still a stigma to gambling in a casino and, unfortunately, poker, that will continue to keep it from being pushed through.
“Black Friday” nearly destroyed the U. S. online poker industry. It has survived in a massively shrunken form and it does not appear that this will change anytime soon. Will it be another decade before we inch forward again with the online game?