USA Online Poker Licenses Under The Microscope

by David Burke - Monday, March 7th, 2022 6:56


usa legal poker licenses

According to ResearchAndMarkets.com, the current estimates state that the gambling market as a whole is growing at an annual rate of almost 6% and is expected to be worth over $565.4 billion by 2022.

Lawmakers and regulators worldwide have been making sweeping changes over the past 5 years bringing safe, regulated online gambling to consumers, while generating tax-dollars for local economies.

As of March 2022, there are just seven U.S states where online poker is regulated and legal, with a handful of gambling operators sharing offering poker in partnership with established, licensed land-based casinos. This is in stark contrast to sportsbetting, which is legal in more than half of U.S states (March 2022).

The licensing of land-based and online gambling is handled on a per-state basis, due to the structure of the U.S regulatory system. Each state has a department or departments whose sole function is to ensure that poker rooms, casinos and sportsbooks offer fair service to customers in their respective states.

Gambling companies interested in moving into the U.S need to know about a number of things:

  • The overall online poker market make-up in the US
  • The Tri-state poker agreement
  • Details of state licensing procedures and requirements
  • Revenue date from states already providing legal U.S online poker

The Legal Online Poker Landscape in the U.S

The U.S had the world’s most profitable online gambling market until what became known as “Black Friday” on 15th April 2011, when the U.S Department of Justice (DOJ) issued indictments against the three largest online poker operators in the country at the time: PokerStars, Full Tilt Poker, and Absolute Poker.

The U.S iGaming industry in 2022 is heavily regulated, but eleven years on, the online poker sector is slowly rebuilding, albeit at a snail’s pace.

According to Optimove’s 2021 iGaming Pulse report, the average monthly player deposit in sports betting and online casinos in the U.S up 9% year-on-year in January 2022.

Online poker in the USA currently legal & regulated in in the states of Nevada, New Jersey, Delaware, Pennsylvania, West Virginia, and Connecticut

Smaller states with less population density can suffer from poker liquidity issues. To provide a “critical mass” of poker players around the clock, so that players can always find opponents, and tournaments can offer large prize-pools, small states can bolster their player numbers by effectively sharing the player pool with poker room companies in other states.

So far three states signed such an agreement “The Tri State Agreement” – in order to create an interstate player pool of poker players in Nevada, New Jersey and Delaware.

With an interstate poker player pool, game providers can operators must check the geo-location of each customer and and prevent the access of players out of the geo-fenced area covered by the gambling license.

Poker players must physically be inside state lines to register, log in and play online poker

How to Obtain an Online Poker License in the U.S

Individual state regulators request a plethora of documents, including information on company founders and partners as well as company financial records, business plans and other data. Online gambling companies looking to offer online poker in a state generally need to partner with an existing local land-based licensed casino or sportsbook. Taxes paid by online poker sites to the state will vary from state to state, as will poker license renewal fees.

Why Does a Company Need a License to offer Online Poker?

Any company which offers online gambling of any kind must be both registered, and compliant with at least one jurisdiction or country.

Main reasons for acquiring an online gaming license:

  • Operate in a long list of international jurisdictions legally
  • Provide your product to citizens across the world in a legal manner
  • Enjoy fiscal benefits such as zero tax or low tax rates in some of the offshore licensing jurisdictions such as Malta, Curacao, Costa Rica and Isle of Man.
  • Negotiate solid relationships and terms with payment providers and merchants including all the big names
  • Open a settlement account in a range of jurisdictions
  • Benefit from lucrative advertising deals, as well as advertising your brand elsewhere, or sponsor
  • List your gaming app on app stores such as Google Play and the iPhone App Store.
  • Enjoy the credibility and trust that licensing brings. Clients and potential customers will be reassured and more likely to pick you.
  • You won’t be at risk of being shut down, arrested, prosecuted, convicted, or fined for illegally operating an online gambling site, and your players can rest assured that their funds are safeguarded.

Nevada Poker License

Nevada Population: 3.1 M
License fee: $500k for 2 years, then $250k annually
Tax: 6.75%

Online Poker Licensees

Nevada poker licensees include:

  • REAL GAMING (South Point Poker LLC)
  • WSOP – World Series of Poker (Caesars Interactive Entertainment, Inc.)

NB. It is rumored that GVC and Roar Digital have licenses in the works- but currently there is no information on the Nevada Gaming Control Board official website.


New Jersey Poker License

New Jersey Population: 8.9m
License fee: $300k — first year, $150k — annually & $250k annually to a responsible internet gaming fund
Tax: 15% on gross revenue + 2.5% for Investment Tax Obligators

Online Poker Licensees

  • Borgata Hotel Casino & Spa
  • Caesars Interactive Entertainment for Boardwalk Regency LLC
  • Golden Nugget Atlantic City
  • Hard Rock Hotel & Casino
  • Ocean Resort Casino
  • Resorts Casino Hotel Atlantic City
  • Tropicana Casino Resort Atlantic City

Delaware Poker License

Delaware Population: 1m
License fee: $50k — annually
Tax: 29.4%.

Online Poker Licensees

Online poker in Delaware is provided by:

  • Delaware Park and Casino
  • Dover Downs Hotel and Casino
  • Harrington Raceway & Casino

Pennsylvania Poker License

Pennsylvania Population: 12.8m
License fee: For an Interactive Gaming Operator — $1m for 5 years. Renewal — $250k/year.
Tax: 14% state tax + 2% local tax

Online Poker Licensees

  • Betfair Interactive US LLC DBA
  • BetMGM, LLC DBA
  • Crown PA Gaming, Inc. DBA
  • Digital Gaming Corporation USA
  • PointsBet Pennsylvania LLC
  • Rush Street Interactive PA, LLC
  • TSG Interactive US Services Limited
  • Unibet Interactive, Inc.

West Virginia Poker Licenses

West Virginia Population: 1.8m
License fee: $250k and then $100k every 5 years
Tax: 15%

Online Poker Licensees

None


Michigan Poker License

Michigan Population: 10m
Application fee — $50k
License fee: $100k following approval, $50k — annually.
Tax: 20-28%

Online Poker Licensees

Online poker in Michigan is legal via:

  • MGM Grand Detroit
  • PokerStars Michigan (in partnership with Odawa Casino Resort)

Connecticut Poker License

Connecticut Population: 3.6m
Tax: 18% for online casino gaming until 2026 when it will increase to 20%

Online Poker Licensees

None

Notes: Despite online poker becoming legal in March 2021, neither of the two licensed operators in the state (Mashantucket Pequots and Mohegans, in partnership with FanDuel and DraftKings respectively) have so far made any moves to bring online poker to consumers. Legislative restrictions are place which prevent joining the multi-state pool.


Last Updated: 7th March, 2022.

David Burke

iGaming news journalist & editor at PokerIndustryNews.com & GamblingIndustryNews.com