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Florida Internet Poker FAQ

1. What is Internet poker?
2. Why does Internet poker need to be licensed and regulated?
3. Who will be eligible to obtain a license and offer Internet poker in Florida?
4. Who will receive the gaming revenues of the Florida-licensed Internet poker sites?
5. What will be the economic benefits to Florida?
6. Won’t Internet poker cannibalize the players from the live Florida cardrooms?
7. What protections will regulated Internet poker in Florida provide?
8. What will regulated Internet poker in Florida mean for the future of poker and players everywhere?
9. Who will benefit from regulated Internet poker in Florida?

1. What is Internet poker?

Internet poker is just like live poker – a player sits at a virtual poker table through their Internet connection and plays against other live players sitting at the same table. It does not include the casino game “Video Poker”, or any other simulation of poker where a player is just playing against the machine or the house dealer.

There are two categories of poker games – “cash” or “ring” games, and poker tournaments.

In ring games, the value of the chips that players use represent the actual amount of money that a player is wagering. Most of the ring-game wagering in Internet poker takes place with players buying into a game for between $5.00 and $200.00. The minimum buy-ins available for ring games in Internet poker are much lower than the minimum that is available in live cardrooms – as low as $1.00 versus $40.00 or more. Ring game tables online have seating for two, six, nine or ten players at a time, although players can choose to sit at a table that isn’t full yet and play each other with less than the full table. Players can sit at any open ring game seat whenever they choose, and leave the ring game whenever they choose.

Tournaments can run with as few as two players or as many as a few hundred, or even a few thousand, split between tables of two, six, nine or ten players (or in-between numbers when the tables aren’t all full). As players are eliminated from a tournament, the number of active tables in the tournament is reduced and players are moved to a remaining table as needed to keep the tables as full as possible. A tournament has a preset buy-in fee, paid by each player before they are seated.. Players receive “playing units” in the form of chips, but the chips do not have a cash value and the number of playing units each player receives is usually much larger than the amount of the buy-in fee. For instance, a tournament might cost $6.00 to play, but each player might start with $2,000 in playing chips. Tournaments play down until one player has all of the chips. The total player buy-ins form a prize pool, from which the winning player gets paid about 25% to 50%, and the other players who finished in the top of the field (usually the top 10%) split the rest of the prize pool in tiered amounts based on their final standings. The tournament buy-in fee can range from about $1.00 to a few hundred dollars, or on occasion over a thousand dollars. For larger buy-in tournaments, players often have a chance to win their entry by competing in lower buy-in “satellite” tournaments.

A poker site is just the provider of the gaming services platform – the poker gaming software, account tracking and funds transfers. Poker sites do not participate in the poker games or tournaments, and have no stake in their outcomes. For their services, poker sites take a “rake” or “fee”, which is usually a percentage of each pot won in ring games (usually 3% to 5%) or a fee added to tournament buy-ins (usually 5% to 10% of the buy-in). The poker sites, under oversight by the regulatory authority that grants them a license, are also responsible for detecting and preventing cheating, fraud and theft at the gaming tables or from player accounts, and for protections against underage access, problem gambling behavior and money laundering.

2. Why does Internet poker need to be licensed and regulated?

The easy answer to this question is “to make Internet poker lawful.” Most current laws which might apply to Internet poker, both state and federal, were written long before the Internet existed. This leaves their legal interpretation up to law enforcement and courts, without any clear direction from the legislature. And as the Internet is global in scope, what happens on the Internet is more often than not out of the jurisdictional reach of U.S. courts, thereby making it a legal grey area. Establishing licensing and regulation within the state will bring the industry under clear statutory and regulatory control.

The more important answer is that the licensing and regulation of Internet poker in Florida will fulfill the public health mandate of the legislature. Internet poker is currently easily accessible to Florida residents through offshore providers, despite all the efforts in recent years of federal law enforcement to shut it down. It is a recreational activity of choice for many Florida residents. Leaving it in the hands of scofflaw offshore operators makes it impossible to protect Florida residents from cheating, fraud and theft, or to impose protections for the underage and vulnerable populations.

Under a robust system of licensing and regulation, Internet poker providers, state-licensed cardrooms and Florida poker players can come together for a safe and fair online playing environment. It will make state-regulated Internet poker available in Florida to those adults who enjoy the game, while protecting the underage and those susceptible to compulsive and addictive gambling behavior. This is already being accomplished effectively with current state-of-the-industry technology in three U.S. states – Delaware, New Jersey and Nevada – as well as many foreign jurisdictions.

3. Who will be eligible to obtain a license and offer Internet poker in Florida?

Under our proposed legislation, any company which has the necessary legal, technical and financial qualifications may apply for a license to be a poker network operator in Florida. The company must meet strict suitability and eligibility requirements to receive a license. Only Florida pari-mutuel facilities with a licensed cardroom will be eligible to receive a “network affiliate” license to run portal Internet sites, which will allow players to register and play on the licensed poker networks.

4. Who will receive the gaming revenues from Florida-licensed Internet poker?

The poker networks will earn gaming revenues by charging players rake and fees for participation in the poker games and tournaments. Each month, the poker networks will make the following distributions from their gaming revenues:

10% goes to the state as gaming taxes.
40% minimum after the gaming taxes goes to the network affiliates (Florida cardrooms) of the network, according to whatever the contract terms are between the network and its affiliates.
10% after the taxes gets split evenly to all Florida cardrooms in the state that are operating as network affiliates.
3.5% must be spent by the poker network on in-state advertising of Internet poker during the year.
1% goes to problem gambling programs.
The remainder is retained by the poker network operator.

5. What will be the economic benefits to Florida?

The 10% tax on Internet poker gaming revenues will go to the state’s general fund, to be used to help meet the state’s yearly budgetary obligations. Over half of the remaining revenues will be distributed to Florida businesses, mainly the state-licensed pari-mutuel wagering facilities, allowing them to expand their services and employment. There are also all of the ancillary services which will see increased employment and revenues, such as financial processors, technology providers and customer service centers. We also expect that bringing regulated Internet poker to Florida will make this state the #1 destination for poker, attracting players and their families from around the world to visit and spend their vacation dollars in Florida.

6. Won’t Internet poker cannibalize players from the live Florida cardrooms?

Just the opposite actually. It has been shown time and again that wherever Internet poker becomes freely available and popular, live poker play sees a boom in participation. In fact, prior to the advent of Internet poker, participation in live cardrooms in Florida was far less than it is today. Under our proposal, all of the Florida cardrooms will be able to offer Internet poker, which will bring their brand to more players through the Internet. Cross-promotion of Internet and live games will bring an increase in participation at the live cardrooms, both from Florida residents and out-of-state visitors.

7. What protections will regulated Internet poker in Florida provide?

Under our proposed legislation, regulated Internet poker networks must provide extensive protections both for  players and for vulnerable populations, the underage and those suffering from gambling addiction. The state will provide regulatory oversight and auditing, to ensure that these protections are implemented and effective.

Regarding player protections, the poker networks will be required to provide protections for security of player funds; hardware and software access security; privacy of personal and account information; fairness of the games; against cheating, fraud and theft; and against money laundering. The poker networks must provide accessible customer service; and players will be able to bring unresolved disputes to the state regulatory authority for arbitration and adjudication.

Regarding protections for the underage, the poker networks will be required to implement industry-best “know your customer” standards. The networks must verify the age and identity of newly registered players before their player account is established. It will be unlawful for any person under the age of 18 to participate in Internet poker in Florida, or for the poker networks to allow them access to the games. Parents will be able to utilize simple measures, provided for by the poker network systems, to keep their children from gaining access, such as keeping their account pass-code private; tying a personal cell phone to their account access; keeping the access codes for any debit or credit card tied to their account inaccessible; and monitoring their account for unauthorized access.

Regarding protections for those suffering from gambling addiction, the poker networks and affiliates will be required to implement extensive technological practices, including: options for the players to set self-limitations on their time, deposits, game choices, stakes, losses or access to any or all poker networks; the option to self-exclude from all Internet poker in Florida for a limited time or for lifetime; display of referral information to all players upon registration and each log-in to their gaming account to the state-authorized organization for the prevention of compulsive and addictive gambling; and industry-best technology for the detection and prevention of compulsive and addictive gambling behavior.

8. What will regulated Internet poker in Florida mean for the future of poker and players everywhere?

Properly regulated Internet poker is being achieved in many jurisdictions across the globe. European countries are far ahead of the United States in this area. While some countries have chosen to “ring-fence” their Internet poker by restricting access to only players within their country, this model has proven to be unsustainable in the long run and those countries are currently considering changing their laws.

In the United States, there are currently three states with regulated Internet poker – Nevada, Delaware and New Jersey. In early 2015, Nevada and Delaware implemented an agreement to share their Internet poker “player pools”. This does not mean that players in Nevada can register and play on the Delaware poker sites and vice versa. It does mean that players registered in Nevada can sit at the same tables with players registered in Delaware on the same poker network to play together, and vice versa. This increases the pool of players that can play with each other on the same poker network, thereby increasing interest and participation by players. A similar agreement is currently under consideration in New Jersey.

Florida, as the third-most populous state in the country, can develop and maintain a thriving intrastate Internet poker industry. However, for the long-term sustainability of and player interest in Internet poker gaming, our draft legislation grants the authority to the Florida Division of Pari-mutuel Wagering to enter into reciprocal agreements with other regulated jurisdictions for the pooling of Internet poker players. This will improve the player experience by facilitating competition between players in-state and out-of-state, without compromising the protections of a regulated industry. In fact, Florida can lead the way to multiple-jurisdiction player pooling for the benefit of players everywhere, as well as Florida businesses.

9. Who will benefit from regulated Internet poker in Florida?

  • The State of Florida: The state will receive a percentage of the Internet poker gaming revenues.
  • Florida Poker Players: Regulation will provide a safe and secure playing environment, bringing players back from shady offshore websites.
  • Compulsive Gamblers and The Underage: Strict regulations will protect these vulnerable populations, and new criminal penalties will drive away unregulated foreign operators.
  • Florida Businesses: The website portals to Internet poker will be operated only by Florida businesses, ensuring most of the gaming revenues stay in-state.
  • Florida Residents: The new business and revenues will generate new jobs and new economic growth.
  • Florida Tourism: The availability of Internet poker to go hand-in-hand with our Florida cardrooms will make Florida the #1 destination for poker players around the world.
  • Poker Players Everywhere: As more states authorize Internet poker, Florida can lead the way to inter-jurisdictional sharing of player pools under regulatory protections.