A lot has happened since my last post almost seven months ago. The bad news is that a lot of the top online players (my wild guess is that it's about 500) left the United States and established residence in other countries. Canada, England and Thailand are among the most popular choices. The good news is that slowly, but most think, inexorably, the legal climate for poker in the United States is changing for the better.
Regarding the bad news, even if the president signed a favorable poker bill next week, it wouldn't help most of the expatriates. Those players were and are playing on big sites like PokerStars with hundreds of thousands of players, and millions of dollars to be won. I know of one player on PokerStars who had both net win and net loss days of over one million dollars in 2010.
Yes, you read that correctly. There was so much money flying around, and games available at such high stakes, that a player could win or lose a million dollars in a single day.
But even if President Obama signed a favorable poker bill this week, it wouldn't help the poker expats. The new US regulated sites will start from scratch with small player pools, other-than-US players might not be allowed on the sites (at least right away), and there would be a lot of competition, that is, a lot of casinos and other companies wanting to cash in on the next online poker boom. Given all that, it would take a while for the competition to shake things out, and for fewer but larger sites to emerge..
Until this works itself out, few players making six or seven figures playing on PokerStars and "sharing a sick house in Thailand with my poker buddies"* will come back to the US.
Now for the good news. Online poker is already explicitly legal and regulated in Washington, D.C., and the state of Nevada is writing regulations to do the same thing. A few other states are looking into the possibilites, and at some point there could be interstate poker compacts. An interstate system wouldn't have to be designed from scratch, as there is already a model in place--multistate lotteries.
At the federal level, congressional hearings have already been held on poker bills, and members who were against online poker are mostly on board, in exchange for regulatory concessions such as income tax reporting by the sites and strict regulations to block underage players. However, this is an election year, when almost nothing gets done. In fact, President Obama has actually stated that extending the Bush payroll tax cuts is his only legislative priority in 2012, so we're almost certainly looking at 2013 before federal legislation can happen.
A personal note here. A lot of poker players are very nervous about the income tax reporting requirements because, as with most businesses and professions that deal with cash income, underreporting is rampant. My response to that is twofold:
1. We are all required to pay income taxes, and those players who are breaking the law aren't doing anything to help the image of online poker when we're working to get state and federal legislators on our side.
2. I have always paid taxes on all of my income, including something as small as getting paid $50 for playing my clarinet in a restaurant band. The change to mandatory reporting by the sites would actually help me a lot. If I could get a W2-type document from a poker site, it would save me a lot of time and effort. I wouldn't have to keep records of my hours (necessary if my pro status is questioned by the IRS) or keep track of net wins and net losses for thousands of individual poker tournaments (though I must say that the latest version of my spreadsheet is a work of art.)
So, that's where things stand. As of February 1 I'm playing on Americas [sic] Cardroom, a US-facing state (a site based outside the US but catering to US players.) More about that in future posts.
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*A phrase from a iconic commercial for a poker coaching site, where a poker player (a real one not an actor) describes the results of improving his game by using a poker coaching site.
Regarding the bad news, even if the president signed a favorable poker bill next week, it wouldn't help most of the expatriates. Those players were and are playing on big sites like PokerStars with hundreds of thousands of players, and millions of dollars to be won. I know of one player on PokerStars who had both net win and net loss days of over one million dollars in 2010.
Yes, you read that correctly. There was so much money flying around, and games available at such high stakes, that a player could win or lose a million dollars in a single day.
But even if President Obama signed a favorable poker bill this week, it wouldn't help the poker expats. The new US regulated sites will start from scratch with small player pools, other-than-US players might not be allowed on the sites (at least right away), and there would be a lot of competition, that is, a lot of casinos and other companies wanting to cash in on the next online poker boom. Given all that, it would take a while for the competition to shake things out, and for fewer but larger sites to emerge..
Until this works itself out, few players making six or seven figures playing on PokerStars and "sharing a sick house in Thailand with my poker buddies"* will come back to the US.
Now for the good news. Online poker is already explicitly legal and regulated in Washington, D.C., and the state of Nevada is writing regulations to do the same thing. A few other states are looking into the possibilites, and at some point there could be interstate poker compacts. An interstate system wouldn't have to be designed from scratch, as there is already a model in place--multistate lotteries.
At the federal level, congressional hearings have already been held on poker bills, and members who were against online poker are mostly on board, in exchange for regulatory concessions such as income tax reporting by the sites and strict regulations to block underage players. However, this is an election year, when almost nothing gets done. In fact, President Obama has actually stated that extending the Bush payroll tax cuts is his only legislative priority in 2012, so we're almost certainly looking at 2013 before federal legislation can happen.
A personal note here. A lot of poker players are very nervous about the income tax reporting requirements because, as with most businesses and professions that deal with cash income, underreporting is rampant. My response to that is twofold:
1. We are all required to pay income taxes, and those players who are breaking the law aren't doing anything to help the image of online poker when we're working to get state and federal legislators on our side.
2. I have always paid taxes on all of my income, including something as small as getting paid $50 for playing my clarinet in a restaurant band. The change to mandatory reporting by the sites would actually help me a lot. If I could get a W2-type document from a poker site, it would save me a lot of time and effort. I wouldn't have to keep records of my hours (necessary if my pro status is questioned by the IRS) or keep track of net wins and net losses for thousands of individual poker tournaments (though I must say that the latest version of my spreadsheet is a work of art.)
So, that's where things stand. As of February 1 I'm playing on Americas [sic] Cardroom, a US-facing state (a site based outside the US but catering to US players.) More about that in future posts.
-------------------------------
*A phrase from a iconic commercial for a poker coaching site, where a poker player (a real one not an actor) describes the results of improving his game by using a poker coaching site.
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