Since Black Friday

’10 years since Black Friday and the US is now witnessing a resurgent iGaming industry!’ (Image by mmi9 from Pixabay)

This month marks 10 years since Black Friday in the USA when we saw the shutdown of online poker, sports betting, and iGaming websites in the USA.

Now a decade on, we are seeing new state laws reactivating online casinos, poker rooms, and sports betting websites, which are now contributing to the resurgence of online gambling across a country. Where the internet space that once hosted thousands of gambling sites was once a virtual barren wasteland, signs of life are emerging, so to speak!

Today, in 2021, the USA is bouncing back with record online sports betting and iGaming revenues in states where online gambling is once again legal.

This is all thanks to the joint efforts of land-based casinos and online casino platforms as well as software providers such as MGM, Caesars Entertainment, Flutter, Entain, Evolution, Playtech, SoftSwiss and many more reassuring and working with US state regulators and legislators to build a framework that protects US citizens. A system that also takes into account the interests of land-based casinos so these establishments can have a piece of the pie. 

From no licensing to a full regulatory framework, multiple states have come full circle using a system that is not used anywhere else in the world. One whereby online gambling websites must operate under the current licensing of existing land-based operations. That means all data centres and live table games must operate from within a US land-based casino or licensed gambling establishment. This key point also means that each license issued is only applicable within a single state, making the US market unique compared to heavily licensed regions such as Europe, where there is one license for the entire country.

One of the key difference to the US online gambling licensing rules is that online gambling establishments do not have access to the entire US population but instead only to the population of the state it is licensed! For example, Evolution’s Pennsylvania live casino studio can only offer its live games to online gambling websites within in PA!

US Citizens Gambling on Overseas Websites With No US Tax Payments Would Never Last!

Whether you played online poker, dabbled in video poker or table games, spun the reels of Microgaming slots, or worked in the iGaming industry, you will know just how much of a pain in the backside that Black Friday crackdown was, and for some states, still is! It is still a day that most US online gamblers will remember and still look upon with disdain!

Pre-Black Friday, when a population of what was 311 million people (now 328 million) had access to online gambling sites across the US, you could gamble at virtual casinos, poker rooms, and sports bookies licensed in Europe, and at casinos with more colourful licensing issued in places such as Costa Rica, and at those that simply had no license at all! Yet, as the US online gambling scene grew, beyond a scale even the US authorities thought imaginable, the government’s tolerance or willingness to turn a blind eye was always treading on thin ice – in fact, there were already howls coming from multiple corners of Congress to address the state of online gambling in the country, so it wasn’t as if no one had noticed!

Of course, the biting point came, and what better way to get the Federal government’s attention than to mention that golden phrase ‘TAX’!!! When you consider the US as the country of ‘taxation’ and 99.9% of post-2011 online gambling businesses were serving US citizens operated offshore with no tax or US regulatory frameworks to follow, Black Friday was never a matter of ‘if’ – it was always a matter of ‘when’.

In fact, most companies, including the huge number of land-based casinos lobbying the government with anti-online gambling rhetoric were surprised that it took the FBI until 2011 to act! However, there was the slight matter of the Iraq war taking up most of the headlines not to mention government resources, while there was also a global manhunt for Osama bin Laden, which ironically both came to an end around the same time as Black Friday!

Black Friday In Full Swing

It all started on the morning of April 16 in 2011, when those in the US who usually frequented online poker sites such as PokerStars and Full Tilt Poker, were greeted with a message from the Department of Justice. That message explained that the domains for these sites had been seized and shut down. On top of this, 100s of online casino websites had their IPs blacklisted with only a few missed casinos remaining in operation that would on defying the US government’s requests to liquidate their US members’ casino, poker, and sports betting accounts for as long they could before the US issued statements saying that should these company owners enter the US in the future, the full force of the law would be used against them – that seemed to be enough to see the biggest player in the industry, Microgaming, exit sharply!

Up until that fateful day, the online gambling industry thrived. Poker was a hard hit sector in a country that had, and still does, a love affair with poker. The World Series of Poker is a testament to that! Despite COVID-19 the event is still going strong and will even return to a live format this year! However, running online poker sites was illegal in all states in much the same way as running all other forms of online gambling. The Unlawful Internet Gambling Enforcement Act of 2006 made it illegal on a federal level for companies to accept ‘wagers’ using the internet.

It was effectively the end of online gambling for the country, and surprisingly not because of a law that forbids gambling online, but a law that prevents companies from accepting USD to fund online gambling. Any financial institution caught doing so would be subject to huge fines – something that has spilled over to companies like Coinbase even through non-US currency crypto wallets!

In the Years Since Black Friday  

It has been a long road back for online gambling in the US. That road began when it was revealed that states had the power to legalise and regulate online gambling. Since then, numerous states put into motion the legalisation of different types of online gambling. Things moved slowly at first with just several states opening up, but once the floodgates were open, state after state began looking at their online gambling legislation.   

Online sports betting is now legal in over a dozen states, while people can now gamble at online casinos in Delaware, Michigan, New Jersey, Pennsylvania, and West Virginia! Meanwhile, online poker and sports betting is also available in most of these sates!

As new liberal state laws have come into effect, people have flocked to online casinos, sportsbooks, and poker rooms. Gaming revenues have gone through the roof in many states, as record numbers of people have logged on to test their luck.

We just need to look at Pennsylvania as evidence of this. March saw gross gaming revenue (GGR) records broken in the state thanks to the re-opening of land-based casinos closed due to COVID-19, and the fact that gambling at online casinos and sports betting sites was illegal in March 2020. GGR rose 162.7% in the state, while Delaware also reported a 74.3% increase in revenue for March compared to the same month last year.

More to Come From US Online Gambling!

Something widely expected is for the US iGaming industry to continue to flourish, thanks to the relaxation of laws on a state-by-state basis. Why wouldn’t it? Pre-Black Friday, it was clear that online gambling is something that many people in the US enjoy. After so many years, they can now reenter the online gambling scene and catch up on the evolution of online tech and software including the formidable rise of live dealer tables via European household names such as Playtech, Evolution, and Ezugi depending on which state they are in. For now, the stories of record-breaking revenues coming out of the US will continue, plus reports of new states coming online will hit the iGaming and online sports betting headlines!

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