RAWA Online Poker Carve Out Will Not Benefit Online Poker According to PPA

Posted By James Guill on October 10, 2014

The Poker Players Alliance came under attack on Thursday after PokerNews.com reported that the long-time advocate of online poker would no longer support a “poker-only” federal online poker bill.

The article discussed the Restoration of America’s Wire Act (RAWA) and how the bill would offer a carve out for online poker. From the article, it seemed clear that the PPA would opposed this carve out despite it seemingly being what the group had been wanting for years.

The Problem With Poker-Only

For years, the PPA and other poker advocates had dedicated the majority of their focus into legalizing online poker. The buzzword of the last few years has been a “federal online poker bill” or an “online poker carve out.” Now that one of those carve outs may be on the horizon, the PPA is effectively saying no so fast.

It has become evident that online poker will not bring the money once estimated in the months and years following the passage of the UIGEA. As the U.S. iGaming market develops, it is becoming increasingly clear that online table games and slots are more important to a successful market than online poker.

Pappas alluded to this in his comments with PokerNews, stating, “We as a poker community need to recognize that the success of poker often is built on other forms of gaming. If you cut off all other games in the U.S. market, investment and interest would shrink considerably. We’re going to fight tooth and nail to protect the interests of poker players, but poker-only in the U.S. might not be a sustainable model to benefit players long term.”

New Jersey Shows the Reality of U.S. Igaming

Looking at New Jersey iGaming revenues, it is painfully obvious that poker is just a small chunk of the overall picture. At present, online poker represents only about 20% of the overall market.

In July alone, the state took in $10.54 million in overall revenue with just $2.25 million from online poker. Borgata and Caesars provided the majority of online poker revenue in the state. With the exit of Ultimate Gaming, they will likely provide 100% of that revenue until PokerStars launches.

Not all providers in the state offer online poker. Betfair, Golden Nugget and Tropicana are all exclusively table games. The Tropicana pulled in $2.26 million in revenue for August.

While they offer online poker, both the Borgata and Caesars pulled in more money from table games than from online poker. Borgata pulled in $2.3 million from table games versus $1.16 million from poker. Caesars pulled in $1.64 million from table games and $1.06 from other gaming.

When New Jersey pursued iGaming, they didn’t limit themselves by offering just online poker. While first year estimates for revenue were lower than expected, there’s still a lot of room for growth in the state. The future reopening of the Revel casino should contribute to this growth as well as the return of PokerStars to the United States.

PPA Claims Online Poker Carve Out Deceiving

While many spent the day throwing jabs at the PPA for their comments in PokerNews, Steve Ruddock of NJ.com decided to contact Pappas for a follow-up interview. In that interview, Pappas clarified the organizations position on online poker legislation and the Restoration of America’s Wire Act.

According to Pappas, the carve out that was being mentioned in connection with RAWA will not legalize the game. Rather, it is simply an exemption from the bill’s ban on iGaming.

While on the surface this sounds good, what this does is prevents states from legalizing anything but online poker. As New Jersey, Nevada and Delaware have proven already, online poker is not a big enough market for some states to pursue.

A carve out sounds good on paper, but Pappas fears it will actually slow the overall growth of online poker legislation in the U.S. Rather, what he prefers is a bill such as the Barton bill that would make online poker legal but doesn’t touch other forms of iGaming. States would then be free to decide the issue.

What about a bill that legalizes poker only? Pappas claims that the PPA would still support a bill that would legalize online poker, even if it banned all other forms of iGaming. They claim their loyalty is still with online poker.

What’s Next for RAWA?

The primary reason that Pappas discussed RAWA was the upcoming Lame Duck session in Congress. He is concerned that the bill will be pushed through at the end of the year much in the same way the UIGEA was in 2006. He is trying to raise awareness and prevent any “shenanigans” on the part of Congress.

Outside of Sheldon Adelson’s Coalition to Stop Internet Gambling, there has been very little vocal support for the bill as of late. This leaves one to wonder if the bill will even be floated during the Lame Duck.

Should it come to a vote, it would get further than any potential federal online poker bill has to date. Bills have been rumored the last couple of years and none have come close to being presented for a vote. Odds are that RAWA will meet the same fate but it is too early to make that a lock.

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