In my last article for Gambling Insider I wrote: ‘The poker market is again dominated by private companies run by poker players and by a worrying number of black-market operators.’ In this article, I’m going to dig into that second statement regarding the black market.
Before Black Friday, the USA accounted for over half of the entire online poker market by revenue. Today, legal online poker is allowed in just eight states, only five of which share liquidity with each other. But online poker is booming in all fifty states, as long as you’re willing to take a chance on a black-market poker app.
The US poker black market falls into two categories. The first are traditional sites that openly flout the law – accepting US players via underhand payment processing techniques and especially cryptocurrency. It’s essentially the continuation of the pre-Black Friday market, only more sinister.
The second is a trend that emerged first in Asia, and later spread to Latin America, Europe and the US – the poker app that masquerades as a social gaming platform. In this style of app, players compete for a virtual currency such as gold or diamonds, usually in private games organised by clubs. You’ll find these games openly advertised in the Apple and Google app stores, because ostensibly they don’t facilitate real gambling. But the reality is, virtual currencies are just a facade, and the apps’ creators have created extensive tools and networks to enable the conversion of these currencies to real money.
In the US this black market is far bigger than the market in the eight regulated states, however you measure it. I’ve heard through connections in the industry that some of the poker apps have more cash game players than PokerStars.
This is an enormous failure of gambling regulation and enforcement. I’m in favour of regulation, but I find it hard to defend the position the US states find themselves in - having created a scenario where nobody is likely to flourish, both because of oppressive regulation and a lack of enforcement against the black market. No tax revenues are being collected, no economic growth is being created and no players are being protected.
To those of us who were involved in the poker industry before Black Friday in 2011, it’s an insult. Back then, the leaders of PokerStars and Full Tilt made genuine efforts to engage with US lawmakers and promoted the growth and development of the game in the US. If it had been available at the time, both sites would have jumped on the regulation train at the first opportunity. But, the hammer was brought down nonetheless.
Today’s black market is cynical. It is not lobbying for better regulation or to grow the game. It is here to squeeze money from online poker as quickly as possible and then get away with the loot. In terms of its contribution to our great game, today’s black market is barely better than a bot farm.
If those involved in US regulation are not embarrassed, they should be.
Poker regulation in other countries is often no better. In Portugal, the first regulations were famously drafted by the country’s government body for tourism. Among many other hilarious gaffes, the regulations insisted that the user interface must always display a dealer shoe (a device never used in poker). In Germany, the regulations seemed designed to put German players at a competitive disadvantage, placing nonsensical limits on games, stakes and tables played, ensuring that the entire population loses money. In several regulated countries, you can accidentally hit a ‘panic button’ that will immediately log you out, guaranteeing you lose the tournament you’re currently playing in with absolutely no recourse.
The UK, which casino and sports betting companies seem to be terrified of, has treated online poker players well. Operators must tell players how they’re protecting player funds, there are exemptions for things like autoplay (arguably harmful to the player in casino, arguably beneficial to the player in poker) and the regulator listens to players via consultations.
I can’t believe I’m writing this, but well done to the Gambling Commission. You’re a model for positive poker regulation. If only somebody would listen.
