Clearly, online poker should be regulated to make sure kids don't play, the software is legit, and the tax money.
I believe that online poker Random Number Generators have been altered to allow for more interesting hand confrontations and bigger pots. The bigger pots generate a bigger rake for the online companies. Yes, they have an incentive to jiggle the software--it means a lot more money.
There are simply too many bad beats online--and big hand versus big hand confrontation--compared to B&M.
The excuse has been that you see more hands online. That is nonsense. Play online poker for 15 minutes, and you can't doubt the bs in the game.
The one thing people point out is that the sites have no incentive to do that for tournament play. Yes, these people are right that the sites take the same buy-in fee from everyone. But, they miss something very important.
If the RNG is adjusted for cash play, they are not about to re-adjust them for tournament play. There is no incentive needed. The program is already rigged for bigger showdowns and more bad beats. There is no reason to make it more accurate for tournament play.
I admit that sometimes I do play online poker. And I admit that I tend to play heads-up games rather than any other forms of poker. The reason is that while the software is still rigged, it eliminates collusion and I feel I have an edge against many players who plays heads-up like they do at a full table.
Only 4% of the people prefer to play online. My guess is that these people probably like the convenience and/or muulti-tabling.
Frankly, if they actually regulated online poker it would be a boost for everyone in the poker business. More players would participate in poker overall, and more players mean more games and bigger prize pools.