Will Obama Bring in New Poker Legislation?

OP-ED: Eventually something will have to cross his desk

by , Nov 18, 2012 | 5:30 am

In 2010, online wagers exceeded $20 billion in the United States.  And the Internet casinos that took the bets were operating in a less-than-legal environment; a grey area of sorts.  As if to clear up any misunderstandings about the legal status of online gambling in America, the Fed cracked down hard on the industry in the Spring of 2011.

About a dozen executives – from three of the biggest online gaming venues, were indicted under a variety of statutes. The sites and their payment processing partners were shut down, and company assets were frozen.  As a result, 2012 will only see about $3 billion worth of U.S. online betting action. Only $3 billion?

Poker is enjoying a bump in popularity that is not going away quickly, and if there is one thing that’s certain; it’s that folks will satisfy their demand for the game, one way or the other – legal or not. Lax enforcement before the crackdown saw lots of novice players pulling up chairs at virtual casinos. And high-stakes televised tournaments have spawned a cadre of interested spectators – many of whom also play the game.

Poker is big business, attracting players like Caesars Entertainment and PokerStars, which support a powerful poker lobby to influence legislators.  And other countries, like Britain, have structures in place to regulate the online gaming industry, as does Canada’s online casinos- so what will happen here?

Regulator in Chief

Now that captain charisma has signed-on for another term, the online poker community wonders if Barack Obama will roll out legislation making online gambling legal in the United States.  After all, Colorado and Washington voted-in ballot initiatives that decriminalize Marijuana – so anything’s possible, right?

Before you start buying chips, consider the reality of the election outcome.  While Obama has another four years to use executive orders to regulate business, he’ll again be facing a Republican Congress.  And the House of Representatives is deeply divided on the issue of whether or not to legally endorse online betting.

Many states have laws on the books prohibiting poker bets; whether they are placed online or in-person.  Nevada, on the other hand, licenses online betting parlors that can legally do business within the state’s borders.  Internet poker players hope future U.S. legislation will break toward tolerance, but the country’s disparate views on gambling might slow centralized change.

Will Legal Trends Sway Chief Executive?

Online poker advocates scored a victory in August – if only symbolic, when a New York Federal Judge issued a ruling that seems to bolster their case.  The prevailing legal definition of gambling utilizes a chance vs. skill metric, which calls chance games gambling.  Poker has traditionally been viewed as gambling, but no Federal Court has ever taken up the definition – until now.

The New York judge ruled that skill plays a larger role in poker hand outcomes than chance does, casting doubt on whether poker can be bundled with games like Roulette and Slot Machines, which are clearly games of chance.  The ruling is not a green light for online poker companies to set up shop in the U.S., but it does weaken the federal anti-gambling position and open the door for Obama to look at poker differently.

  • http://blogs.forbes.com/jonmatonis/ Jon Matonis

    Bitcoin may soon make it irrelevant anyway.