Will Stars and Tilt Take a Bad Beat in a Regulated US Market?

I’ve had some people suggest that I seem to enjoy making negative predictions. I really don’t. In fact, I actually hope most of the stuff I speculate about doesn’t happen but I also call it like I see it.

I’ve written over and over again (going back to 2006) that Full Tilt and PokerStars would have a tough time getting back into the US market if/when poker becomes fully legalized and regulated. I’ve speculated about various ways the brick and mortar and others looking to jump into the industry could block them.

So, I can’t say I was really surprised when I read over at eGaming Review that The American Gaming Association (AGA) are actively in discussions that would prevent Stars or Tilt from licensing their software or selling their player databases to a US company. Frank Fahrenkopf, president of the AGA, told eGaming Review, “I have talked to legislators who say, ‘So, you deny someone a licence because they have been operating in violation of US law, that’s a penalty for what they did. But if you let them turn around and sell their assets, and make millions of dollars, they have benefitted from violating the law, they shouldn’t allow that.’”

So it appears that the AGA is specifically targeting companies like Stars and Tilt. And that completely makes sense from the AGA’s standpoint. They represent the land based casinos who would stand to benefit if Stars or Tilt was kept out of the market.

I’ve seen some people write about how Harrah’s could get a huge head start by either licensing Tilt or Star’s software or buying their database but if you can shut them out completely and force them to stop doing business in the US you get the same net effect but at a much cheaper cost. Anybody can reverse engineer the software and throw a team of coders at it. You could even buy a cheap network or independent room with a decent platform for pennies on the dollar. And if all of those US players can no longer play on Stars or Tilt . . . they’re going to come to you anyway so why pay for them?

Of all the people I know who involved in the online poker industry the one thing I’ve been able to get out of them as that none of us knows how any of this will eventually play out. A lot of people are just sitting around on the sidelines waiting to see how things settle out because nobody knows what’s going to happen.

The only thing you can predict with any degree of certainty is human nature. And what I know about human nature suggests nobody is going to go out of their way to make it easy for Tilt or Stars in the US.