NJ And PA Likely To Agree For Intra-State Poker Compact

Industry experts believe the legalization of online poker in Pennsylvania could have a major hand in reviving the fortunes of the struggling New Jersey online poker market.

The recent budget passed by the Pennsylvania Legislature has included revenue of $100 million from online gaming that includes poker and casino-style games like slot machines. A bill to legalize online gambling has been approved by House of Representatives but awaits passage in the Senate.

If the bill is cleared in the Senate, lawmakers from neighbouring New Jersey as well as experts believe that an agreement between the two states could be formed to allow shared player liquidity.

The pooling of players would provide a significant boost to New Jersey’s poker liquidity. The revenue from New Jersey’s online gambling industry has declined from 39 percent in December 2013 when the online gaming was approved to just 12 percent in June 2016. The online poker market generated taxes of $3.5 million for the state in 2015.

Casinos in Atlantic City declared online gambling profits of $17.4 million for the month of July 2016 which was up by 39 percent over July 2015. Poker however accounted for only $2 million in profits.

Pennsylvanian lawmakers are confident of the online gambling bill passing given the strained finances of the state. Rep. John Payne, the chairman of Pennsylvania’s House Gaming Oversight Committee and the sponsor of the bill said that the attraction of gaining more revenue through taxes from the online poker industry could sway lawmakers into supporting the bill since there is little scope to raise additional income via higher taxes this year. Poker Players Alliance’s executive director John Pappas said that Pennsylvania has made brisk progress towards legalizing online gaming ahead of California and Michigan who are still working out issues.

In a statement, Pappas said

There’s still some work to be done, but the revenue is booked [in Pennsylvania’s budget], and I think the case for legalization as being an issue of consumer protection has been very well made. We’ll see the battle lines drawn in the next couple of months, though.

David Rebuck, executive director of New Jersey’s Division of Gaming Enforcement has confirmed that there are ongoing discussions regarding sharing poker player pools between the regulators of the two states. State officials have said that tax revenues would rise faster with a poker compact rather than from going alone.

If the states agree to share player liquidity it is likely to have a ripple effect nationwide causing other states which have legalized the online poker industry to also look at an intra-state agreement. The move could also push states like Florida and Illinois to consider legalizing the online poker industry.