What were you doing in 1999? Did you have Internet access? If you did, smart money says you weren’t playing online poker. While the global online-gaming industry keeps growing and poker moves into more and more homes around the world, it’s kind of strange to think that just 10 years ago you could only play cards in a casino or at your kitchen table. What’s even more astonishing, though, is that in just as much time all the major online poker rooms we know and love have come into their own. Now, online poker isn’t just a thriving industry. It’s an Internet renegade, loved by some and spurned by others. How did all this manage to happen in such a short time? For that answer, we need to go back to the very beginning…
The Early Days
Technically, you could’ve played online poker 11 or 12 years ago, but since it was really only being played by a select group of computer geeks, chances are you didn’t. Back then, the graphics were certainly laughable by today’s standards, and A.I. was virtually non-existent. In fact, every single one of these early online poker games was played in Internet Relay Chat (IRC) rooms, in a text-only format more reminiscent of “Hunt the Wumpus” than Playstation III.
Even when advances in software technology finally did make a reasonable replication of a live game possible, there wasn’t exactly a race to the virtual tables. Hardly anyone noticed on that fateful day in 1998 when Planet Poker became the first online poker room of its kind, and it was almost six month before the site began attracting players. Online poker hadn’t yet experienced the explosion that was just around the corner, but the buzz was definitely building. Other sites, like PartyPoker.com, began entering the fray in 1999, and a few people on Wall Street and the London Stock Exchange began to take notice of the potentially booming industry. Meanwhile, many of the game’s early pioneers—guys like Greg Raymer and Chris Ferguson—continued to play a huge role in the its development and were now beginning to reap the benefits.
The Golden Age
As poker started to move into the homes of more and more players, word of the Internet’s new poker-mania spread rapidly thanks to the launch of televised poker in 2001. At first, nobody thought poker on TV would be much more than a way for ESPN to fill up time slots between baseball and football coverage. But televised events like the World Series of Poker proved extremely popular almost right away. One of the developments that led to this newfound appeal was the advent of the “hole camera,” which allowed viewers to see players’ cards without compromising the game. In doing so, it gave amateur players a glimpse of the inner workings and mindset of top players and greatly aided the personal development of those watching from home.
All the while, the people behind these sites were becoming increasingly successful and unbelievably rich. At one point, even before the official boom, PartyPoker.com was reportedly netting more than $1 million per day! In turn, reports of these massive profits led to a massive influx of new sites. It now seemed that every poker hobbyist and his dog wanted a piece of the pie. And, while many of the shoddier sites did fall by the wayside, many more prospered and went on to help shape the market we have today.
No doubt, all this unprecedented growth would eventually have to end. But few could have anticipated how soon that end would come. In 2006, just as the burgeoning online poker industry seemed unstoppable, the gravy train came to crashing halt when the U.S. government stepped in and made an indelible print on its operations.
For years, Republican congressmen had been trying to clamp down on the growth of online gambling as a way to appease the Christian Right, but were constantly met with opposition. Each session, they introduced a bill aimed at ending online gambling, and each session, it was shot down. However, just as the U.S. Democratic party was poised to take Congress, a few of the G.O.P.’s slyest operators managed to tack The Unlawful Internet Gambling Enforcement Act onto a port security bill. It was the perfect play since nobody on either side of the aisle was willing to oppose an anti-terrorism bill in the middle an election cycle. As a result, the bill became law, and U.S. banks were forbidden to fund or receive payments from gambling sites. By this time, several big-name poker firms had already gone public and, in order to protect the interests of their shareholders, were left with no choice but to restrict access to U.S. players.
Game of Skill?
Much of the debate in the U.S. government about the future of online poker stems from the issue of whether poker constitutes a “game of skill.” Although a federal definition has yet to reveal whether poker will fall under the general umbrella of “illegal online gambling,” many poker rooms haven’t dared resume their operations. Some firms outside U.S. jurisdiction have ignored the UIGEA’s possible reprisals, reasoning that the American government would be hard pressed to force this issue outside its national borders. However, court battles like Kentucky v. 141—which was spawned by brick-and-mortar partisans—have still managed to tie up operations for many international sites regardless.
Overturning the UIGEA seems like one possible escape from the stalemate now in place, and there have already been several attempts to do so—one being the introduction of a new bill entitled the Internet Gambling Regulation and Enforcement Act (HR 2046). IGREA is seen an effort to establish a comprehensive licensing and regulatory framework for online gambling in the United States. But the bill and others like it are currently languishing in congressional committees.
Added to the legal debacle are recent publicity scares, such as the security breach at Absolute Poker in which an employee used his inside knowledge to view the hole cards of everyone sitting at his table! Clearly this type of incident threatens the entire industry and has forced most of the major poker rooms to up their security to the enth.
So it’s difficult to say where online poker will be in 10 or even five years, especially now that very tough economic times are upon us. If one thing is certain, though, it’s that an entire generation has been turned on to the game and there will always be the desire to play poker for money in the comfort of your own home. Whether or not that will be easy to do is another matter altogether, but the future does look promising. Albeit U.S. lawmakers will have their hands full in 2009, the wave of public sentiment has broken in favor of online-gambling supporters in both Congress and the White House. Meanwhile, the old “vice survives recession” logic seems to be holding true for many online gambling firms, meaning their next five years could be even greater than their first.