Ifrah Law was recruited by the Delaware State Lottery to help draft the ground-breaking liquidity sharing agreement with Nevada. Attorney Sarah Koch explains how it was done and how it could be applied elsewhere.
As a player-versus-player game, poker poses a unique challenge for online gaming operators. No matter how sophisticated the platform or how well-designed the user experience, the game will only be successful if there is a critical mass of players online at any given time. And poker rooms need a range of skill levels and buy-in levels. The best way to ensure 24/7 liquidity is to offer the game to a large number of players across time zones through international liquidity sharing.
The challenge, of course, comes from jurisdictional restrictions implemented on a national and sub-national level. Understandably, jurisdictions seek to protect their players through licensure protocols for operators and suppliers, strict standards for financial transactions and player protections to guard against everything from identity theft to gambling addiction. These laws and regulations may be passed on a national level or on a state or provincial level, and no two sets of rules are exactly alike.
Given the differences in gambling standards among states and nations, there are great difficulties in enabling cross-border play. A state with stricter standards cannot allow an out-of-jurisdiction operator to offer a game to its citizens that does not meet its own standards. A state that conducts in-depth investigations into gaming operator applicants will not want to rely on another jurisdiction’s assessment of the operators’ qualifications. Furthermore, a state may be concerned that it will lose revenue if an operator is licensed, registered, and located in another jurisdiction but is nonetheless collecting money from players in its own jurisdiction.