China Bans Mobile Poker, But The Chinese Poker Scene Will Go On

Playing poker in China became much tougher this month. The country’s video game licensing bureau, the State Administration of Press and Publications, effectively banned mobile poker, leaving millions of players out of the game.

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How the Chinese mobile poker ban happened

Last year, the government agency suspended the licensing of games for nine months. Officially, the suspension came as part of a government initiative to combat youth video game addiction.

The State Administration of Press and Publications, which is overseen by the Communist Party‘s propaganda department, has approved 795 new video games in the first quarter of 2019. However, none of those approved games include poker.

The effect of the hiatus on approvals has already shown. As the South China Morning Post noted,

“China’s gaming market, the world’s largest, recorded its slowest revenue growth in 2018 in at least a decade.”

Any company hoping to market a game in China must be licensed by the government. So, unfortunately, those titles featuring poker or card games are out of luck.

At a time when the game is an upswing, the ban certainly disappoints players and those in the industry.

Poker in China WAS a growing market

With 1.3 billion people, China represents a huge opportunity to grow the poker industry. Poker’s popularity in China had been growing in recent years, mostly online as a social game.

Gambling is illegal in the country, but social poker offered an alternative to heading to Macau or Hong Kong. In a 2016 Business Insider article, Global Poker League founder Alex Dreyfus said:

Texas Hold’em is not part of the cultural roots of China, but this has changed in the last few years thanks to the introduction of free poker applications on mobile phones. Therefore, you have new generations of white-collar, educated and influential individuals that love the game and play regularly.”

At the time, he estimated 100 million Chinese citizens had downloaded poker games onto their devices. However, the Chinese government is now looking to stop that. 

According to Niko Reports, regulators launched a “crackdown on titles in the poker and mah-jong genre after China’s government became concerned about real world money being used in these games.” 

Beyond the ban, as of June 1, even discussing or promoting the game on social media will be outlawed. Some in the industry expect the moves to have a major negative impact on the Asian poker market. As Hong Kong Poker Players Association managing director Stephen Lai told the Morning Post,

“(The Asian market) was growing very fast, (but) now it is going to be more difficult for operators in Asia to organise poker events. Chinese players make up over half of the field.” 

An inside perspective about the Chinese poker scene

Professional poker player Xuan Liu and her family immigrated to Toronto when she was 5. Born in Tianjin, China,  Liu has almost $2 million in live tournament winnings and has played regularly in Asia.

On mainland China, poker has flourished even in a live atmosphere. Gambling is illegal on the mainland, but underground card rooms and even casinos do exist.

Liu believes those operations will continue.

“There has been significant interest in poker in China for awhile, but it’s always operated in the mainland in various shades of gray,” she said. “Those who really want to play will always find places to do so, whether it’s through the various local clubs that hold games, or online through VPNs and cashless play money sites.”

Liu also emphasized the importance of Chinese nationals playing in high profile events. A Chinese face at the EPT or the WSOP is critical to the growth of the game’s popularity on the mainland.

Several US States Are Considering Launching Online Poker Sometime Soon

While the growing sports betting market has gotten plenty of news in recent months, poker players in the U.S. received some welcome news recently. A few states are making moves to launch online poker in the near future.

Pennsylvania

Most notably, Pennsylvania is in the process of trying to roll out online gaming, including poker, by the spring.

Only Nevada, New Jersey, and Delaware currently have legal online poker. All three states share their player pools through a multi-state compact.

Pennsylvania hopes to become the fourth state to join that compact, which would expand the US player pool to almost double its current size. However, a recent reinterpretation of the Wire Act by the Department of Justice has thrown a wrench into that plan.

The DOJ opinion declares that the Act’s purview covers all types wagering across state lines, rather than just sports betting. The fallout from this opinion could potentially affect the existence of the compact, payment processing, and online poker itself.

As a result, Pennsylvania is likely to begin with intrastate poker only. 

Kentucky

Nevertheless, other states appear to be interested in getting in the poker businesss. Kentucky is one of them.

State lawmakers have introduced a bill that would legalize sports betting, online poker, and fantasy sports. Even though there aren’t any casinos in the state, many feel the addition of sports betting fits in well with the state’s horse racing industry.

Rep. Adam Koenig (R – Erlanger) is chairman of the House Committee on Licensing, Occupations, and Administrative Regulations and introduced the legislation. Koenig told WDBR,

“You can bet on sports on this right now illegally. We have an opportunity now to make sure this is done legally, safely, and in a regulated fashion.”

According to Koenig’s bill, players over 18 would be allowed to play and operators would face a 6.75 percent tax on revenue. Lawmakers see online poker as a possible solution to the state’s broken pension system. 

So far, the bill has several sponsors. Koenig believes it could pass the House. Movement on the issue may be slow, but offers the state’s poker players a glimmer of hope.

West Virginia

West Virginia was quick to get on the sports betting bandwagon in 2018. The Mountain State is now looking to add poker to the mix.

A new house bill, H 2178, would legalize online gambling in all forms including poker. The state’s lottery commission, which already oversees sports betting, would be charged with overseeing the expanded gaming options.

The bill also makes provisions for possibly joining interstate compacts if the issue became clearer in the courts. Similar to its sports betting expansion law, H 2178 would only allow five online gambling licenses, matching the same number of casinos in the state.

Thus, the state’s casinos would have the opportunity to run their own online games. They could also partner with other operators as has been seen in other states. 

There might be a bit of delay in passing the bill, however. In January 2019, lottery officials announced that they would focus on the expansion of keno and limited video lottery terminals for right now.

They pledged to return to online gambling soon, though. The lottery just wants sports betting to be a bit more settled before piling on.

New York

In New York, it’s been a bit of a roller coaster ride for supporters of online gaming in the last few years. State Sen. Joseph Addabbo Jr. is hoping that recent news of a $2.3 billion budget deficit would propel his three-year plan to bring online poker and gaming to the state. He recently told Online Poker Report,

“When the governor is behind something, it moves. I would really hope to have the governor have an initiative behind the legalized expansion of gaming in our state. To maximize our potential as a state in this industry and for the recreational purposes of our residents, we need an initiative.”

It is possible that the state can legalize online poker as a game of skill. With a population of almost 20 million, the Empire State would become the largest state with legalized online poker.

Run It Once Poker Looks Awesome, But Not For Americans

New poker site Run It Once Poker launched to the general public this week. The site, a brainchild of poker star Phil Galfond, opened for a public beta test on Feb. 6.

For right now, the site only offers cash games for no-limit hold’em and pot-limit Omaha games. Unfortunately, the site is not and will not be available for players in the United States.

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Run It Once is different in practice, not appearance

Galfond first devised the site after the 2016 World Series of Poker. He made a long post on the Run It Once forums about all the things that he felt a poker site should be.

Most of all, Galfond indicated the overarching need for transparency. This site is the product of that set of values he wrote.

Run It Once is a meat-and-potatoes site. The overall presentation of the site remains, at this point, rather rudimentary.

However, this simplistic quality belies the fact that there are some excellent design features on Run It Once. The chief differentiating feature on this site is the use of so-called “dynamic” avatars.

Dynamic avatars

Avatars on poker sites are nothing new, and players can often use them as an extra element of their online game and presence. However, the dynamic avatars on Run It Once will actually yield information about their players to other opponents.

So, a tight player’s avatar might appear to be asleep. A wild maniac might have an avatar with hair and clothing askew.

In this aspect, the avatar acts similarly to a real-life person’s face, yielding information and tells to the opposition. On the other hand, the ever-changing avatar will also serve to help the player monitor his or her own table image.

Player protection

The site will also take numerous steps to reduce the amount of player targeting. In other words, good players won’t be able to make notes and alerts when weaker players sit at various tables.

As a result, recreational players without a target on their backs. Any player who sits down at a new table will both have their identity concealed and be assigned a new avatar.

Run It Once also bans the use of heads-up displays at most of its buy-in levels. Only players at the highest levels can use these types of software.

Game selection

These highest levels are meant to be the province of top players. At present, the cash games range from €4 buy-ins to €2000 buy-ins.

There are only five strata of buy-ins right now. Both the hold’em and Omaha games host each level of buy-in.

Run It Once offers a host of generous promotions

In keeping with Galfond’s ethos, Run It Once has more generous promotions than players might typically see. One of the most robust promotions is the Splash the Pot feature.

Run It Once Poker is already pledging to return 51 percent of rake back to all players in the form of splash pots. Pots at all buy-in levels will receive boosts at random times as play goes on.

Run It Once is also offering rakeback to players that stream their gameplay through various websites. The feature, known as StreamR, rewards players based upon their number of view hours. Potentially, a player could receive up to 110 percent rakeback through this functionality.

Finally, Run It Once is welcoming new players to the site with an expansive first deposit bonus. The site will match 100 percent of the player’s first deposit up to €600.

The match bonus will dispense in chunks according to a playthrough schedule. However, unlike many similar bonuses, there is very little in the way of a time limit on this bonus.

As long as the player plays one hand in a calendar month, the bonus will remain active on the player’s account. So, players don’t have to feel rushed to achieve any particular number of hands.

American players can’t run it at all

As indicated by the € symbol above, Run It Once Poker operates using the Euro as its currency. That choice is reflective of the fact that the site does not have any plans to open its operations to residents of the United States.

Although that fact may seem unfair or harsh, it’s quite understandable. For a new site trying to get off the ground, operating in the United States, under its numerous laws and red tape, would be an unnecessary headache.

For those of us in the “land of the free,” though, it’s a shame. There are a lot of things about Run It Once that would be fun to try out.

What the DOJ Opinion Means for Online Poker in NJ and PA

Poker players across the country, including in New Jersey and Pennsylvania, are wondering what this week’s Department of Justice opinion on the Wire Act means for online poker. The new opinion reversed a previous department opinion of the act, which stated that the Wire Act affected sports betting only.

The new opinion stands in stark contrast to the previous one. As Online Poker Report noted:

“The new opinion now makes the Wire Act applicable to any form of gambling that crosses state lines, including online gambling and online lottery. Several states have legalized online gambling in the wake of the 2011 opinion, including New Jersey, Nevada, Delaware and Pennsylvania.”

The DOJ finalized the opinion in November 2018, but it wasn’t released until Jan. 14. The department has delayed implementation of the new opinion of the act for 90 days to give operators time to comply. A department official told Reuters:

“DOJ will continue to prioritize the most egregious conduct, including gambling activity that is part of a larger criminal scheme.” 

The Impact in NJ and PA

New Jersey

Legal experts believe the opinion will be challenged in court soon. New Jersey officials have shown particular stubborness in challenging gaming laws in court as of late.

In fact, New Jersey led the fight for state-by-state sports betting to the US Supreme Court. Now, less than a year after the state’s triumphant Supreme Court victory, there may be another major legal case about gambling taking shape.

“The opinion acknowledges that the decision will likely be tested judicially,” tweeted gaming attorney Daniel L. Wallach. “I think we could be headed toward the next big gambling case that reaches the Supreme Court, or at the very least, the U.S. Court of Appeals.”

Wallach, a Florida-based attorney and a founding director of the sports wagering program at the University of New Hampshire School of Law, believes several entities will look to challenge the DOJ. Potential challenges possibly range from online poker operators and their land-based casino partners, as in New Jersey, to vendors and suppliers.

Pennsylvania

In Pennsylvania, the online poker industry appeared to be gaining a bit of traction after the state passed legislation last year. Online gaming, including poker, expected to come online in the early part of this year.

Observers also expect that Pennsylvania will want to share liquidity with New Jersey, Nevada, and Delaware. However, Monday’s opinion casts considerable doubt on the viability of the Keystone State’s plan. For that matter, it casts doubt on the existing compact itself.

There are many possible scenarios for the outcome of this opinion

It may become hard to play and hard to pay

The DOJ’s move could be quite a setback for the industry. The opinion casts uncertainty on the future of online poker operators and support companies.

One possible scenario is that operators may revert solely to intrastate poker offerings until the legal situation can be clarified. Obviously, that would be a setback for what had been a slowly burgeoning industry. The effects would manifest in the form of lower player pools and smaller prizes.

Unfortunately, it is even possible that the opinion would affect intrastate online poker and gaming.  Even though the start and end point of a signal could be in the same state, it is possible that it could go out of state during its travel. Hence, a court could conceivably classify the transmission as an interstate transaction, and subject to the Wire Act.

Payment processing might also suffer due to this opinion. Some banking institutions may fear DOJ action for taking payments that might cross state lines. In states like New Jersey and Delaware, payment processing has already been problematic from time to time.

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The silver lining to a rather dark cloud

However, online poker players don’t need to start closing their accounts just yet. In past rulings, the 1st and 5th Circuit Courts of Appeal have defined the scope of the Wire Act to sports betting only – in direct opposition to the DOJ opinion.

The DOJ may also choose not to enforce its own opinion. Several states have passed recreational marijuana usage laws in recent years, but the practice remains technically against federal law. On the other hand, a federal solution via Congress seems highly unlikely.

Investors Business Daily notes that the DOJ may have difficulty justifying its opinion, too. There is considerable legal opposition, which includes previous court opinions, regarding the Wire Act.

That could offer some hope for online poker. As Deutsche Bank managing director Carlo Santarelli said,

“Given the genie has left the bottle, we think the DOJ will have a somewhat uphill battle to successfully defend its new position. We think it will require considerable leg work to undo what’s been done, and we think the process will take an extended period of time.”

Report Reveals North Korea Cyber Criminals Targeting Online Poker

North Korea Online Poker

That tough day at the online poker table just seems to be getting worse. No matter what you do, those two players at the table just have your number. Are they bots or are they just that much better? Most of the time, the latter is the answer. But maybe not always.

According to a new study and recent media reports, one country stands out as a home to online poker collusion – North Korea. That’s right, when it’s not holding the world ransom with its nuclear weapons programs, dictator Kim Jong Un has his underlings cheating at poker.

How does this work? Cybercrime has long been a major part of the regime’s efforts to secure dollars in the face of crippling global economic sanctions. Those crimes range from digital bank heists to email phishing scams and mining operations to cryptocurrency thefts, according to a new study by cyber threat intelligence service Recorded Future.

As if the country’s hackers weren’t busy enough, the study also notes that Kim’s henchmen are even involved in petty crime to acquire cash for the regime – and that includes cheating at online poker and other online gaming. The enterprise is just a small part of an effort to siphon money into regime coffers via the Internet.

“The Kim regime has developed a model for using and exploiting the internet that is unique – it is a nation run like a criminal syndicate,” the report notes. “In particular, the Kim regime has cultivated the Internet as a potent tool for revenue generation and sanctions circumvention by utilizing (and exploiting) cryptocurrencies, various interbank transfer systems, the pluralized nature of the ‘gig economy,’ online gaming, and more. They have paired this with a decades-old smuggling network and system of corrupted diplomats, embassies, and consulates.”

The regime is believed to be responsible for a 2016 cyber-bank heist of the  Federal Reserve Bank of New York, in which hackers were able to get away with $81 million.

North Korea has long been involved international criminal enterprises to secure hard currency for the regime – from trafficking drugs and arms to counterfeiting currency – as it circumvents sanctions that Kim himself has described as the work of “hostile forces trying to stifle the Korean people.

Why online poker?

It seems so small-time. But not all those online crimes have to be seven or eight figures – every dollar counts.

“North Korean hackers spend most of the day doing low-level crime — cheating at online poker, cracking video games, committing low-level financial crime,” Recorded Future Director of Strategic Threat Development Priscilla Moriuchi told Axios.com. “That’s where most of the money comes from.”

A major score online through collusion or hacking adds to the Kim bottom line and keeps the regime afloat. The Recorded Future study notes that Internet usage has been embraced more by the regime in recent years, and that leaders are given more freedom to use it at their disposal to bring in dollars for the country. The report noted higher levels of usage on Saturdays and Sundays, which could be timed well with major online tournaments and increased player traffic.

Interestingly, the increased usage of the Internet by North Korea has also made the country itself now more of a target for hackers around the world hoping to thwart some of the regime’s efforts. More computers accessing the Internet means more opportunities to be hacked itself.

“We can’t say the online computers are, say, missile testing systems,” Moriuchi tells Axios. “But knowing that they are increasingly reliant on the Internet realistically means more targets.”

WSOP.com Hosts Three More Bracelet Events, Continues To Lead U.S. Online Poker Traffic

Poker players in Nevada, New Jersey, and Delaware are two months into shared liquidity, and the news mixed.

Not surprising, the benefit of WSOP.com being the only operator in Nevada and Delaware is an advantage to the online poker site. Its lead is growing, and it is at the expense of PokerStarsNJ and partypokerNJ.

The key stories since our last report published on June 19:

  • Three more gold bracelet events ran on WSOP.com, and the first bracelet went to a player outside of Nevada
  • PokerStarsNJ and partypokerNJ lower their Sunday guarantees as tournament entries continue to decline
  • The seven-day rolling average for cash game players grows for WSOP.com while declining for PokerStarsNJ and partypokerNJ.

Now, let’s take a look back at the cash game and tournament trends for the two-week period ending July 1, 2018.

U.S. Regulated Online Poker Operators

The major U.S. poker operators are:

Operator Network Provider Other Sites in the Network
WSOP.com 888 888poker
PokerStarsNJ PokerStars None
partypokerNJ partypoker Borgata Poker and PlayMGM-NJ

Pala Poker also operates in New Jersey on its own network. We do not include Pala Poker in this report because the traffic volume is low and doesn’t affect the latest US online poker trends.

Major online poker tournaments summary

The big tournament news from the last two weeks is golden. Three more online bracelet events took place, and there was more history in the making for WSOP.com.

As expected, the final three online bracelet events did not disappoint with entries, prize pools, and some history-making headlines for WSOP.com.

WSOP.com awards three online bracelets

The first PLO bracelet played out on the virtual felt, and the bracelet went to a New Jersey player while playing in New Jersey.

Event #47: $565 WSOP.com ONLINE Pot-Limit Omaha 6-Handed generated a total of 1,223 total entries. There were 657 unique players and 566 re-entries which created a prize pool of $635,950.

Matthew ‘mendey’ Mendez from Sicklerville, NJ, earned the top prize of $135,077 after battling it out for over 15 hours from his home in New Jersey. He then packed up the family and headed to Las Vegas to collect his first gold bracelet in person.

Event #61: $1,000 WSOP.com ONLINE No-Limit Hold’em Championship registered 1180 unique players. Those players re-entered 455 times for a total 1635 entries.

Ryan ‘Toosick’ Tosoc collected all the chips and took home his share of the $1,553,250 prize pool. It’s the first gold bracelet for Tosoc, and the first-place prize of $238,778 puts Tosoc at over $3.7 million in live earnings.

Event #63: $3,200 WSOP.com ONLINE No-Limit Hold’em High Roller saw a 13% increase in entries over last year with 480. There were 356 players and 124 re-entries that generated a prize pool of $1,459,200.

Chance “BingShui” Kornuth collected his second gold bracelet and the first-place prize of $341,598. It was his sixth cash of the WSOP, and he is nearing $6 million in lifetime earnings.

The expanded online bracelet event schedule was a success. Compared to the technical glitches from the first event, the three events ran rather smoothly.

Of course, there was the occasional player that failed to create a new account on WSOP.com. That was a requirement following the launch of shared liquidity. WSOP.com worked to get players online and playing as fast as they could.

Pennsylvania is likely to be online by the 2019 World Series of Poker. It already indicated it would join the Multi-State Internet Gaming Agreement.

It would not be surprising to see more online bracelet tournaments and more history-making events when poker players convene in the Nevada desert next summer – both in person and virtually.

PokerstarsNJ and partypokerNJ lower their guarantees

The second big tournament poker story from the last two weeks is PokerStarsNJ and partypokerNJ lowered their Sunday major tournament guarantees to $35,000.

It is the second time since the launch of shared liquidity that PokerStarsNJ lowered its guarantee hoping to find the sweet spot. It reduced it for the first time on June 3 and again on June 24. Even so, it barely squeaked by, only exceeding the guarantee by $526.00. On July 1, it was another story as the online poker site posted an overlay of $7,844.

On July 1, partypokerNJ also lowered its guarantee. The site has not met its guarantee for the last six weeks, and the overlays seem to be getting larger. Even after the reduction, it posted a hefty overlay of $10,800. partypokerNJ

Looking at the trend lines for Sunday tournament entries and PokerStarsNJ and the picture isn’t rosy. It is hard to say for sure if this a bonafide trend or if it is a symptom of a big online weekend for WSOP.com.

It will be another few weeks before the WSOP closes down summer camp. The picture is likely to become more clear after that. Overall, the news is not good for the two online poker operators not named WSOP.com.

Major Sunday online poker tournament data

Sunday, June 24, 2018

Tournament Entries Guarantee Prize Pool Difference
WSOP $320 Sunday Weekly $100,000 NLH 394 $100,000 $173,100.00 $73,100.00
PokerStarsNJ $200 Sunday Special, $35,000 Guaranteed 191 $35,000 $35,526.00 $526.00
partypokerNJ $215 Sunday $40,000 Guaranteed NLH 158 $40,000.00 $31,600.00 -$8,400.00

Sunday, July 1, 2018

Tournament Entries Guarantee Prize Pool Difference
WSOP OC #122 $320 Sunday Weekly $100,000 NLH 472 $100,000.00 $141,600.00 $41,600.00
PokerStarsNJ $200 Sunday Special, $35,000 Guaranteed 146 $35,000 27,156 -7,844
partypokerNJ $215 Sunday $35,000 Guaranteed NLH 121 $35,000 24,200 -10,800

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Average cash game and peak traffic summary

The cash game picture isn’t much better than the tournament one, but it’s a bit brighter for WSOP.com than PokerStarsNJ and partypokerNJ.

WSOP.com barely managed a positive trend line last week, but as of July 1 is has a more solid footing.

When we reported last, WSOP.com posted a seven-day rolling average of 260 cash game players. That number was down from 240 for the two-weeks prior. The all-time high was about 280 upon the launch of shared liquidity.

As of July 1, WSOP.com is posting 280 average cash game players on its site. It looks like all that online gold bracelet action helped propel the cash game traffic to some post-liquidity highs giving their rolling average a nice bump.

All that traffic on WSOP.com is taking away from the average cash game traffic on PokerStarsNJ and partypokerNJ. There is no denying that shared liquidity is impacting their traffic even though the declines leveled off a bit over the last week.

As of July 1, PokerStarsNJ has a seven-day rolling average of 70 cash game players, down from its pre-liquidity number of 85. partypokerNJ has 45, down from 50. You can see the more significant drop-off for PokerStars reflected in its trend line.

Peak traffic numbers are reporting similar trend lines to that of the average cash game players. All three online poker sites are trending down.

It is concerning that WSOP.com’s trend line is slightly in negative territory especially during the height of activity on the site.

As mentioned earlier, it is just too hard to tell what this means in an environment that is conflated with online bracelet events, live tournaments, and little to talk about outside of the WSOP.

Factors that will impact U.S. regulated online poker in the coming weeks

WSOP.com’s dominance of the online poker landscape will continue. We will be watching how the market settles down as the World Series of Poker marks the beginning of the end with the Main Event starting this week.

Expect more activity from PokerStarsNJ and partypokerNJ as they start to woo players back to their platforms. It would not be surprising to see healthy promotions or maybe a big tournament series to attract players.

We will be watching the U.S. regulated online poker landscape and reporting back here on July 17.