While there are plenty of large states in America that could offer lucrative online poker markets, none are more appealing than California. With a population of over 38 million people and laying claim to the world’s eighth-largest economy, California could have a pretty good iPoker player pool all on their own. Unfortunately, this looks like the proposed plan for many gaming interests in the state.
California is expected to regulate online poker in 2015 since lawmakers, tribal gaming groups and the state’s land-based card rooms are moving closer to an agreement on the “bad actor” clause. But one important issue that’s being overlooked right now is sharing player liquidity. Many of these same interests are so focused on resolving the bad actor clause debate that they seem uninterested in forming online poker pacts with other states and/or foreign countries.
Richard Schuetz, Commissioner of California Gambling Control Commission, did say that he would be open to the idea of interstate poker. However, in an interview with OnlinePokerReport, Schuetz added that iGaming “compacts are going to be negotiated on our terms, largely.”
So is California limiting themselves with the attitude that they are the biggest state, so they must control the discussions? Moreover, are they even that interested in forming interstate pacts? Let’s discuss these questions by looking at international examples that California should consider, and the projected success of a standalone iPoker market in the state.
The Lessons of France, Italy and Spain
With 64.5 million, 61 million and 47 million people respectively, France, Italy and Spain are all larger than California. But when economy is taken into account, they represent reasonable examples of what the Golden State can expect if they ring-fence their online poker player pool. All three countries have discussed combining player liquidity with each other, however, this has yet to happen.
The end result is that they’s all experienced a revenue dip since regulating online poker. Italy has seen the worst of it with their revenue declining 30% in the past two years. Spain, which only legalized iPoker in the summer of 2012, has experienced a 20% revenue drop since then. And France, which does allow non-French players on their poker sites, has still seen a 10% dip over a two-year span.
How California would do with a Ring-fenced Market
When California does legalize online poker, they’ll experience a relatively large player pool in the beginning. However, as time goes on, they too may be facing the same problems that the aforementioned three countries have experienced with ring-fencing player pools.
Even if they perform as good as Italy, which has more residents but a less-affluent economy, California would only do mildly well. According to PokerScout, Italy’s 7-day average for all of their poker sites combined is just over 2,000 cash players an hour. This is pretty good, but likely nowhere near the full potential of California’s iPoker market. So they should definitely think more about sharing liquidity with other states and European countries.