Trouble Brewing in the U.S. Online Poker Market

Yes, U.S. online poker players can use offshore poker sites if an offshore operator has hung out a shingle welcoming U.S. players. It's a risky choice because offshore poker sites don't afford U.S. poker players the same legal protections as local players. Still, millions of U.S. poker players will take that chance because they love playing online poker.

It seems absurd that online poker sites are only legal in eight (8) states. That list includes Connecticut, Delaware, Rhode Island, Nevada, New Jersey, Pennsylvania, West Virginia, and Michigan. Note: Each state has unique regulations that must be followed for online poker room operators to secure a license.

What each state has in common is residents in each state can access popular international poker sites like PokerStars and the PartyPoker Network due to proper licensing. Meanwhile, residents in Nevada, New Jersey, Pennsylvania, and Michigan also get access to state-licensed sites like PokerBros and Global Poker, ClubGG, and ClubWPT. It's all a lot more complicated than it should be, and now there could be trouble brewing.

Why Are Online Poker Operators Are Leaving Nevada?

In recent years, lawmakers have become increasingly leery about the trappings of legalizing online gambling options like poker and casinos. That partially explains why only seven (7) states have managed to legalize online casino gambling. At issue is the increase states are seeing in problem gambling issues, plus an increased willingness of operators to try to game regulations for profit.

For the U.S. online poker community, the stress brought on by these issues is causing regulators to start tightening the regulatory reins. That is the primary reason two major social online poker room operators have or are leaving the state of Nevada.

Global Poker announced its withdrawal in Nevada

It started in December 2024. That's when Global Poker announced it would start withdrawing its services from Nevada residents. The 3-phase withdrawal is currently underway. Those phases include:

Jan. 15, 2025 - Nevada players were no longer able to purchase new Gold Coin packages for sweepstakes events. That also included exclusion from being able to obtain 'bonus' Sweeps Coins. At this time, players were still still able to play poker and wager with their existing balances.

Feb. 15, 2025 - The ability for Nevada players to make any kind of wagers using their existing balances was removed. Additionally, each Nevada player was asked to cash out their existing Sweeps Coins balances and go ahead and redeem them for available prizes (including cash).

Apr. 15, 2025 - The withdrawal will be completed. Players will no longer be allowed to submit redemption requests and all access to the Global Poker site will be terminated. Unfortunately, any remaining account balances will have to be forfeited. Note: Nothing in Global Poker's announcement mentions how all of this will be managed.

Note: Global Poker has already completed similar actions in the following states: Idaho, Michigan, Montana, Washington, and Connecticut. Yes, some of these states have not yet legalized online poker play via licensed poker rooms.

PokerBros to follow Global Poker's lead

PokerBros is a highly popular social poker site from the digital poker space. Like Global Poker, they have garnered patronage by promoting poker games and sweepstakes events while allowing online poker players to purchase and redeem coins. Redemptions can be made for prizes, which in some cases include cash.

Word has been released that the operator will be following suit and pulling out of Nevada's robust online poker market. As part of its exit strategy, the operator's management has already announced that Nevada residents will no longer be permitted to use the site, effective almost immediately. Persons accessing the site outside of Nevada will still be allowed to do so. Redemption requirements are expected to be announced soon.

This move was sudden and unexpected, but similar actions are likely to start happening all over the country.

What are the Regulatory Challenges?

While there are several reasons why online poker operators, social and otherwise, are starting to reassess where they stand, there are two regulatory issues that seem to be causing a lot of stress among operators.

Issue number one is the virtual coin issue. That's what today's modern digital social casinos are using as a means of trade. Players can buy virtual coins that allow them to play poker and participate in sweepstakes events. If they win, they get paid in virtual coins that can be redeemed for prizes. Yes, that does include cash payouts.

In the eyes of Nevada regulators, virtual coins are cousins to cryptocurrency. Due to the lack of a meaningful regulatory structure, cryptos are not yet accepted in the U.S. as a viable means of exchange between customers and merchants. That puts virtual coins squarely in a gray area that could prompt lawmakers to make waves for social poker and casino sites.

The fact coins can be redeemed for cash is the other regulatory problem. If social poker or casino players can redeem coins for cash, that's the very definition of gambling. Gambling sites are not permitted to operate in Nevada or any other U.S. state without vetting and proper licensing.

Where there is ambiguity, it's clear that social gambling operators are deciding to stand clear. The potential for regulatory disaster is too high, making the risk too much to bear.

This problem is not unique to Nevada. Regulators in states like Connecticut and Michigan are already looking at pulling in the regulatory reins. Should New Jersey and Pennsylvania decide to follow suit, it could have a major impact on the entire U.S. poker-playing community.

It is possible that operators might look for workarounds that don't violate the rules. However, one would have to wonder if a workaround would leave a product that would interest online gambling enthusiasts. It's also possible operators could work with regulators on some type of compromise. Unfortunately, that doesn't seem likely in an environment where regulators are having major concerns.

There is trouble brewing in the online or digital poker market. You might as well throw online casinos into the same mix. It's a problem that needs resolution because customer demand is big and access is shrinking. That puts online gamblers, social and otherwise, in a position where they have to choose between not playing or taking risks to use offshore resources.

The bottom line is this: States need revenue. Online gambling, social and otherwise, creates revenue. There has to be a meeting of the minds where online social poker sites can operate with "big brother" regulators breathing down their necks.