Pennsylvania in Talks to Join Multistate Online Poker Agreement
Pennsylvania is set to become part of the Multi-State Internet Gaming Agreement (MSiGA), indicating that it may soon start sharing its online poker liquidity with other states within the compact.
Present signatories of MSiGA exchange player pools across state lines, and shortly, players in Pennsylvania might be check-raising new challengers from Nevada, Delaware, Michigan, and New Jersey.
On Friday, the Pennsylvania Gaming Control Board (PGCB) informed PlayPannsylvania that it has started discussions for the state to join MSiGA at the request of Democratic Governor Josh Shapiro.
The Importance of This
For online poker to succeed, it requires a sufficient number of players. A larger player pool leads to increased tournament prize pools and a wider selection of games and stakes offered, which subsequently draws in more players.
When the initial states approved and controlled online gambling in 2013, the emerging markets were tightly enclosed. This was implemented to limit access for residents from states where online gambling was illegal, and also because it simplified tax collection in those markets.
This scenario wasn't suitable for online poker. Delaware, for instance, has a population of just under 1 million and could hardly support a few six-handed sit-and-gos, much less a robust online poker environment. In the absence of significant liquidity, online poker became stagnant.
Join MSiGA
In 2014, Delaware and Nevada were the initial signatories of MSiGA, with New Jersey following soon after. MSiGA is fundamentally a collection of basic regulatory and technical benchmarks for liquidity pooling.
The contract also mandates that the operators allocate the rake according to each player's weighted input to the pot, enabling fund redistribution for tax reasons to the state in which the player resides.
Pennsylvania approved online poker in 2018 but refrained from entering MSiGA due to an unforeseen shift in the legal landscape.
At the Last Minute
In that year, the Trump administration dramatically overturned the 2011 DOJ opinion that the federal Wire Act restricted only the interstate transmission of sports bets and not other types of gambling.
The 2011 ruling had encouraged early adopters such as Nevada and New Jersey to approve online poker. However, the legality of these activities, along with online lotteries, and especially MSiGA, has now become uncertain.
The New Hampshire Lottery won a lawsuit against the DOJ regarding the reversal, which detractors argued was executed as a favor to the late Republican donor and casino tycoon Sheldon Adelson, who was opposed to online gambling.
With the 2011 interpretation reinstated, Pennsylvania is now set to join MSiGA, making it the most populous state yet—13 million—to do so, giving online poker in the US a significant boost.
It could create a snowball effect, enticing additional states to join as online poker becomes a more manageable product to oversee.