False Alarm: No Boycott

caponeAfter giving it a great deal of thought, I’ve decided not to support the boycott of online poker sites that I recently recommended. I’ve come to the conclusion that the US facing poker sites have no desire to see online gaming become legal in the US. In fact, not only do they not wish for it to become legal but it would actually not be in their self-interest to see online gaming legalized.

I compare the US facing online gaming sites to Al Capone during prohibition. Obviously, I don’t think any of them are murdering thugs but the economic model is very similar. As long as things are illegal they can all but guarantee that no real competition will ever enter the market. When Party, OnGame, etc all exited the market the remaining sites experienced a financial windfall. Some sites grew by 25% – 50% overnight. No legitimate company who has any sort of real financial backing will enter the market to pose any sort of threat. Much like prohibition, the US legal environment is providing the US facing companies a license to print money.

Legalization of online gaming would only serve to open the market back up to all of the operators who previously served the US market as well as new competition in the form of well financed companys like Harrah’s. Additionally no site currently in violation of US anti-gaming laws is ever going to get a license to offer gaming in a legalized US market. You can’t thumb your nose at Uncle Sam and expect him to welcome you with open arms when the laws change.

So for the above reasons, I don’t believe that a boycott would serve any real purpose. The US facing sites are not going to lobby US lawmakers to do something that would put them out of business. That would make as much sense as Al Capone lobbying for the repeal of prohibition.