Will VPN’s Be Necessary If More States Legalize Online Poker?

Virtual Private Networks (VPN’s) are a way to secure an online connection, so Internet service providers (ISPs) cannot track your every move. ISPs track your activity and even sell this information to parties, who then spam your online searches and email with advertisements. Government agencies try to block your access to certain websites, which is a gross invasion of privacy.

In states that ban online poker, card players must use VPN’s to play at online poker sites. Many American poker players have wondered whether the legalization of online poker in the United States would eliminate the need for a VPN connection, so we’ll explore whether the current rage for VPN’s is temporary or permanent. A look at U.S. online poker laws is the key to the debate.

Poker Liquidity Sharing Compacts

Due to a 2011 opinion by Assistant Attorney General Virginia Seitz of the U.S. Department of Justice, individual U.S. states have the right legalize intrastate online poker, or iPoker inside one state. The 2011 DOJ opinion does not allow interstate online poker across state borders. Geolocation technology similar to GPS systems works to assure no one outside New Jersey can play for real money at a New Jersey online card room.

States which have legal online poker can sign an interstate poker compact in which they agree to share player pools — generally called a liquidity sharing agreement. These poker liquidity agreements are the key to understanding the iPoker legalization process in the United States.

US States with Legal Poker

Online poker is legal at the present in only four U.S. states: New Jersey, Delaware, Nevada, and Pennsylvania. The three states which legalized online card sites in 2013 — Nevada, Delaware, and New Jersey — signed the “Multi-State Internet Gaming Agreement”, an interstate poker compact which allows the states to share poker liquidity across state boundaries. Pennsylvania passed online poker legislation in October 2017, so it is still in the process of licensing land-based operators to launch online poker sites.

Delaware and Nevada are among the smallest US states in population, so the MSIGA currently has had a relatively minor impact on U.S. poker gaming. The inclusion of New Jersey helped build the size of the player community, because New Jersey’s population is more than twice the size of Delaware’s and Nevada’s population combined.

Pennsylvania Is Pivotal to MSIGA

If Pennsylvania joined the interstate poker compact, it would become a major factor. Nine companies have already joined requesting licensing. It would become more lucrative for big states like California to join the MSIGA. Like the multi-state lottery associations, Powerball and Mega Millions, when enough states join, they reach critical mass where huge jackpots become possible.

We don’t know what Pennsylvania’s leaders will do, but their smart move would be to join the interstate poker compact. New Jersey’s 9 million residents would combine with Pennsylvania’s 12 million to create a poker community the size of Australia’s entire population (if you added in Delaware and Nevada). The four states combined have a population two-thirds the size of Canada.

California Online Poker Debate

Such a large shared liquidity might convince other states to legalize online poker and join the MSIGA. Of those, California is by far the most important. California has the largest state population in the United States, with 39.5 million people. If it were its own economy, California’s $2.7 trillion GDP would make it 5th largest economy in the world, behind only the US, China, Japan, and Germany.

The biggest stumbling block to legal online poker in California has been rivalry among the tribal gaming casinos. The two sides argue over PokerStars’ potential role in California iPoker and whether to consider the world’s largest poker site a “bad actor”. On December 31, 2006, the Unlawful Internet Gambling Enforcement Act (UIGEA) went into effect, making it illegal to process online poker withdrawals in the United States. Between that day and April 15, 2011 (Black Friday), PokerStars continued to accept US real money poker players.

Why California Tribes Don’t Back Online Poker

For that reason, one group of California gaming tribes (the Pechanga Band of Luiseno Indians, the Agua Caliente Tribe, and the Pala Tribe) believe in banning PokerStars as a bad actor. The other faction (led by the Morongo Tribe of Cabazon) signed a deal with PokerStars to launch a joint venture poker site together, so they obviously want PokerStars approved and licensed for California online poker. Both groups lobby the California state government and have lawmakers they consider allies, so the impasse has assured that California’s state legislature never have passed an online poker bill.

In essence, the two groups can’t agree how to the split the profits. But if the profits become massively larger, then that isn’t as much of a concern. If the interstate poker compact becomes large and successful, California will want to join. Nearly a half-dozen California lawmakers have introduced online poker bills, so the political will exists to make it happen. The tribes have to agree on a bill, then jointly lobby their favorite lawmakers. If California ever legalizes online poker, expect dozens of US states to follow suit. California online poker would be the surest way for the interstate poker compact to succeed.

Even if California is slow to adopt iPoker regulations, other important states might do so. New York state, Michigan, Illinois, Massachusetts, and Connecticut all have discussed online gambling legalization and some have introduced bills. New York, Illinois, and Michigan are the 4th, 6th, and 10th largest US states by population, so their adoption of pro-online poker laws could have a big effect on an interstate poker compact. If those states legalized online poker and signed the interstate poker compact, the MSIGA would constitute a poker community the size of the United Kingdom’s population — even without California involved.

What If 50 States Legalize Online Poker?

It is unlikely 50 US states will legalize online poker. Hawaii and Utah have a 100% ban on gambling of any kind, so they are unlikely to ever legalize Internet poker sites. Even states like Texas and Alabama which legalize some form of gambling do not appear likely to change their online gambling bans. Texas banned fantasy sports of any kind, while Alabama refuses to legalize lottery betting. A 50-state interstate poker compact is therefore unlikely to materialize.

It is more realistic that the Multi-State Internet Gaming Agreement could collect 20 states one day. In 2014, Morgan Stanley estimated 20 US states would legalize online poker by the year 2020. Morgan Stanley has lowered the estimate since then, but as we’ve mentioned, if a few more states join the MSIGA, it could spur others to do the same.

If so, then you might not need a VPN to enjoy online poker, at least in 40% of the US states. Individuals might want to keep their VPNs for other reasons, but players in those twenty states probably would prefer to play on licensed and regulated US poker sites.

Federal Ban on Online Poker Could Happen

Of course, the U.S. Justice Department could reverse its opinion on online poker. US Attorney General Jeff Sessions is hostile to most forms of gambling, though recused from decisions on online gambling due to hiring a lobbyist for Sheldon Adelson. US Deputy Attorney General Rod Rosenstein, who would make the decision, also was hostile to online gambling when he was a US Attorney in Baltimore. It was Rod Rosenstein who brought a case against Calvin Ayre in 2012, which was settled after Rosenstein left the Baltimore US Attorney’s Office.

Sen. Dianne Feinstein, Sen. Lindsay Graham, and former Sen. Blanche Lincoln all have written Rosenstein in the past year, asking him to reverse the 2011 DOJ opinion. If Rosenstein took their advice, online poker would be banned in the United States across all 50 states.

Why VPNs Might Be Here to Stay

VPN’s might be useful in the American online poker industry for other reasons. For instance, Players residing in the other 30 US states could be banned from licensed play in the USA. Or US poker players might prefer to play in even bigger card playing communities (for bigger prize pools) in the international market. Or players might consider it an intrusion their ISPs or governmental agencies to know their Internet habits at all.

The truth is, VPN’s are here to stay for many American card players. The use of VPN’s would not be as widespread as it is today, but I can see no realistic scenario where Virtual private networks disappear entirely from US online poker.

Saurabh Saha
Pursuing MCA from the University of Delhi, Saurabh Saha is an experienced blogger and internet marketer. Through his popular technology blogs: TechGYD.COM & Sguru.org, he is helping several brands to gain exposure in front of high-quality web visitors.