Published November 17, 2014
Residents of the nation's capital could be able to play government-sponsored Texas Hold 'Em poker and other online games on their laptops within three months even though such wagering is essentially banned in the rest of the country.
But some wonder if the stakes in Washington will be too small for the enterprise to generate much interest or revenue.
The District of Columbia will be the first state or municipal government to offer online gambling within its limits.
The city's venture follows a federal bank fraud case against the operators of popular poker sites that caused them to shut down their U.S. operations. Federal law does not, however, bar state lottery agencies from offering online gambling within state borders.
Still, don't expect out-of-work professional poker players to relocate to the banks of the Potomac. Officials with the D.C. Lottery, which is running the online games, will be imposing strict limits on the amount that can be wagered.
While the dollar amount hasn't been finalized, gamblers will likely be barred from depositing more than $250 a week into their online accounts to begin play, lottery director Buddy Roogow said. There are no limits on what someone can win.
Such low stakes will make the district's online poker rooms unattractive to poker pros, and Roogow is fine with that.
"We don't think that this is the type of play that they're going to be excited about and interested in," he said. "We believe there's a much larger component of social, recreational and casual players who will be interested in a lower-stakes platform."
Online poker is similar to a real poker game in that players sit around a virtual table and wager their money against each other.
In addition to Texas Hold 'Em — which in the past decade has eclipsed all other poker games in popularity — the district will also be offering online blackjack, as well as games that are entirely based on luck. But no form of online gambling has attracted the interest of poker.
Some industry experts and poker players are taking a dim view of the D.C. venture's prospects. Players will have to be inside the borders of the district in order to participate, and some wonder whether a city of 600,000 has enough poker players for the site to sustain itself.
"In the entire world at any given moment, there's plenty of people you can get together in a poker game at pretty much any denomination," said Dave Schwartz, director of the UNLV Center for Gaming Research. "Within D.C., I'm not sure how big that poker-playing population is going to be."
In a poker community still reeling from the shutdown of PokerStars, Full Tilt and other sites, the news that D.C. is getting into the online game has gone virtually unnoticed.
"No one in poker is excited about this," said Robert Fellner, who played online poker professionally for seven years. "I just played a World Series of Poker event last week. Nobody's talking about this. There's probably a good reason."
Within the district, there's also some consternation about how online gambling became legal in the first place. Council member Michael A. Brown, I-At Large, slipped it into a budget bill last December, and the issue wasn't subject to hearings or public debate. It became law in April when Congress declined to block the provision.
Less than a week later, federal authorities charged the operators of the three largest poker sites with bank fraud, accusing them of manipulating banks to process billions of dollars in illegal revenue.
The indictment said the companies ran afoul of the law after the U.S. in October 2006 enacted the Unlawful Internet Gambling Enforcement Act, which makes it a crime for gambling businesses to knowingly accept most forms of payment in connection with the participation of another person in unlawful Internet gambling.
But governments can offer online gambling within their borders.
D.C. Attorney General Irvin Nathan is scheduled to testify at a hearing Wednesday on D.C.'s law, and Roogow said there was no reason to doubt that what the agency is doing is legal.
D.C. Council member Jack Evans, D-Ward 2, called the hearing after he got calls from constituents concerned about the measure.
"Just because it's law doesn't mean you can't make it not law," Evans said. "I haven't made up my mind that it's a good thing or a bad thing."
Brown said he included online gambling in the budget bill because he saw it as a quick way to generate revenue at a time when the district was considering major cuts to social services. He said the Council and Congress had ample opportunity to object and did not.
Online gambling is expected to generate $13 million for the district over four years, according to an estimate from D.C.'s chief financial officer.
A few people plan to ask the Council to repeal the measure. Activist Marie Drissel said she will testify against it, both because of the way it became law and because she's concerned the district would expose itself to cybercrime.
The online gambling will be run by Intralot, a Greece-based company that last year won a four-year, $39 million contract as D.C.'s lottery vendor. The contract included an option for online gaming, and the district simply exercised that option when it became available. The agency was not legally obligated to solicit separate bids for online gambling, said Ridgely Bennett, the lottery's in-house attorney.
Intralot has not operated an online gambling venture in the U.S. but has done so in Europe, lottery officials said. The company will receive a share of the revenue.
"The platform that they're building satisfies us that they have that experience to build a quality program for us," Roogow said.
While the rollout is still being finalized, the lottery plans to allow people to start playing certain games for free starting in late July. The paid site is expected to launch in mid-September. It will accept only debit transactions.
Roogow described the low limits and the refusal to accept credit cards as consumer-protection measures.
"Our job is to gain revenue for the city, but we have to do it responsibly," he said.
Maurice Matthews, a semiprofessional online player who lives in Washington, said he wouldn't be tempted.
"Two hundred fifty dollars a week, that's extremely low stakes. I wouldn't play for that," he said. "People like myself and my friends, I don't see the value of it."
Associated Press writer Oskar Garcia in Las Vegas contributed to this report.