In one of the most unique episodes of Perspectives Weekly ever, we discuss major industry news as former Bet on Sports CEO David Carruthers enters a plea in St. Louis. Plus, we follow-up on Party Gaming’s deal with the US Department of Justice, and the National Footbal League’s takes a strategic aim at our industry.
Online gambling news from Party Gaming and the state of Texas. Plus, we follow up on our look at the European Union’s ever-changing stance on our industry. What does all this mean? Is it good news or bad?
Could cracks in the European Union spell trouble for the online gambling industry? The free trade protection afforded to our industry could be in jeopardy if member nations begin to pull out of the alliance. Also this week, J Todd takes us on a fishing expedition!
With banking matters all over the place these days, the IRS reportedly investigating Russ Hamilton, and Barney Frank putting together a bill that would simply strike down the UIGEA as if it never happened, I gotta think, well … I really don’t know what to think. Though it seems major shifts are happening, global-economic finance is admittedly a little beyond my ken. But I’m trying to figure it out, and so far I’ve concluded that banks are clearly important, and anyone who handles the transfer of billions of imaginary dollars has major issues to attend to.
Brilliant, I know.
And actually, not even billions … just $10,000 or more. Apparently a new IRS rule has gone into effect that requires online poker players to treat their online accounts — PokerStars, Full Tilt, et al. — as offshore foreign bank accounts.
Yeow, that’s different. Sources who were winning players online tell me nothing more than a WG-2 was necessary before. Again, I’m not really sure what that means (or what enforcement mechanisms are in place) but do I know this change theoretically affects lots and lots of people and probably at least a few billion dollars. If I’m reading this tax expert right, basically, if all your money in all your accounts added up to $10,000 or more at any point in 2008, you have to file a special form (TD F 90-22.1, which goes to the Dept. of the Treasury, not the IRS) for these accounts, and the fine for not doing so is either $100,000 or half your bankroll, whichever is greater.
That sounds pretty tough. But maybe this is just what comes with the territory as G-men set up a framework for how these online piggy banks, er, poker sites have to work in the future? No word yet on whether or not you’ll ever be able to pay your taxes in PokerStars W$/T$ or Lindens.
A look at the non-poker media’s take on the Kentucky case as it moves through The System:
From the subscription newsletter blog Daily Online Examiner …
By Wendy Davis, Wednesday, January 21, 2009
Kentucky’s Move To Kill Online Gambling Squashed — For Now
In a closely watched case, an appellate court in Kentucky rebuffed the state governor’s attempts to shut down online gambling. But, while the case attracted attention from a wide range of outside groups who made all sorts of lofty constitutional arguments, the judges ended up deciding the case on a technicality.
The court ruled 2-1 that the government couldn’t confiscate domain names of 141 out-of-state gambling sites because the 1974 forfeiture law only applied to gambling “devices,” like roulette wheels.
“It stretches credulity to conclude that a series of numbers, or Internet address, can be said to constitute a ‘machine or any mechanical or other device,’ ” judge Michelle Keller wrote.
The dispute started late last summer, when the state hired a law firm to bring proceedings against online gambling companies. At the time, Kentucky Gov. Steve Beshear made no secret of his protectionist motives. He said he wanted to shutter the gambling sites as part of an effort to preserve horse racing, which he termed the state’s signature industry.
As news of the court showdown spread, a wide range of groups questioned whether one state could legally reach beyond its borders to claim jurisdiction over sites with a global reach. Outside parties — ranging from trade organizations like the Interactive Gaming Council and the Internet Commerce Association to civil rights groups like the Electronic Frontier Foundation and ACLU — weighed in on behalf of the Web sites.
The groups argued the law was unconstitutional for a host of reasons, including that Kentucky had no right to block sites visited by a worldwide audience.
While the appeals court dodged those issues for now, they’re bound to recur. If Kentucky rewrites its laws to specifically include domain names, the court will again be faced with determining how far one state can go to police the Web.
See what others are saying on the Online Examiner blog.
I guess it kinda depends how you look at it. Some might say a 66-33 percent victory is pretty dominating. Others might see winning by just one vote as a tiny margin of error.
The PPA just put out a statement, regarding actions yesterday in Kentucky that shows the Governor has no intention of backing down on his desire to seize control of 141 gambling-related internet domains located outside of Kentucky, and America for that matter. Yee-haw! I’m tellin’ ya … it’s off to the Supreme Court we go on the way-bigger-than-poker issues in play here.
(Anyone wanna agree on a bet over the internet and transfer funds via PayPal?)
Though I’m not totally sure, I think Kentucky higher courts work like volleyball, or tennis after deuce. If you can win two points in a row, you win outright. The state of Kentucky won the first case, and had we lost our first appeal, we’d be dead. But we won … so now it’s their serve, and if we win that — the appeal to the appeal — I think then they can go no higher (can someone confirm this?). But if they win, then we can appeal to the state Supreme Court, yadda yadda.
Anyhow, John Pappas taunting Kentucky gov. Steve Beshear — reminding him he has an election in the not-too-distant future, and a plausibly disgruntled citizenry to answer to:
PPA Statement on Commonwealth of Kentucky Appeal of Domain Name Seizure Ruling
WASHINGTON, DC. (January 21, 2009) – John Pappas, executive director of the Poker Players Alliance (PPA), the leading poker grassroots advocacy group with more than one million members nationwide, today issued the following statement regarding the appeal filed by the Commonwealth of Kentucky in light of yesterday’s ruling by the state court of appeals overturning a lower court decision allowing the Commonwealth to seize Internet gambling domain names.
“Kentucky residents should be outraged that the Commonwealth is investing another minute of time and another dollar of scarce resources in this quixotic case. The appeals court’s sound rejection of the Commonwealth’s case should have ended this legal debacle in its tracks. Unfortunately, the Governor and the hired-gun attorneys want to drag their ultimate defeat to another venue at the expense of Internet freedom and the rights of law-abiding Kentucky poker players.”
A copy of the Commonwealth’s appeal can be found at www.pokerplayersalliance.org.
BTW, for those in need of a lexicographic refresher, here’s a definition of “quixotic”.
A three judge Kentucky Court of Appeals panel ruled today in a 2-1 decision that the state’s attempt to seize 141 internet gambling domain names could not take place. More details can be found at Poker News Daily and the full decision on the Poker Players Alliance website. It’s expected for the state of Kentucky to file an appeal, which would move the matter to the Kentucky Supreme Court, in the very near future. More news as it becomes available.
First we hear word that Full Tilt has plans to open a sports book, and now, apparently, according to an email from Doyle himself — or at least on from his room, with his face and signature embedded — they’ve got “big changes” in store, and it seems to include references to bona-fide online gambling:
Big Changes Are Just Around the Corner!
We respect the privacy of our members and if you prefer to not receive our communications, please click unsubscribe.
As DoylesRoom readies to launch our all new poker room and casino, we ask that you keep a very close eye on your email box.Get ready for over $5,000,000 in monthly guarantees, multiple daily and nightly guaranteed tournaments, an all new rewards program and the most active network that we’ve ever called home. It’s more of everything you love about DoylesRoom.
More players, more tables, and more guarantees at the times of the day you want to play poker.
This week, there will be no Bounty tournament as we transition to our incredible new platform. The Bounty will return on January 21st at 9:30pm ET. We will be sending each of our players detailed emails describing the new exciting changes and what needs to be done to smoothly transition to our new network.
May the Flop Be With You, I’ll see you in The Bounty on the 21st.
I’m not really sure what’s behind this sudden switch to pre-UIGEA standards. But these apparent moves by the likes of Doyle’s Room and Full Tilt almost certainly aren’t being made cavalierly without thought to the current, 2009 political sitch. And January 21, of course, is a significant date in non-poker America.
Click here to check out what’s up at Doyle’s Room.
We kick off the new year with our very last installment of Perspectives Weekly! Plus, a look back at the most important online gambling events of 2008 and current news, including Doyle Brunson vs. Anurag Dikshit with an explanation of what the PartyGaming co-founder really was thinking.
From APCW.org:
Online gambling news, as the founder of Party Gaming pleads guilty to violating the US Federal Wire Act. We also give a follow-up report on the Grand prive’ Casino Group, with evidence of thier lies as they continue to steal affiliate commissions.
The Grand Prive Casino Group recently shut down their affiliate program. However, they continue to run their casinos and profit from the players their webmaster partners sent to them in the past. They have cut their “partners” out of the deal they made with them, and are keeping all the profits!
Webmasters should be informed and take the action they feel is best. Players, do you really want to trust people like this with your deposits or your winnings?
From APCW.org:
So, last week 60 Minutes decides to “expose” our industry with half-truths and spin. This week, it’s our turn to expose them! Also, get a different insite on the Kentucky domain seizure case. Plus an update on the Gambling Wages Challenge!
The Safe and Secure Internet Gambling Initiative, another lobbying organization on the side of internet poker players, released a statement first thing this morning regarding the recent 60 Minutes broadcast and corresponding Washington Post articles. SSIGI really doesn’t mince words, starting with wording that calls government prohibition of internet gambling being “a failure and a mistake.” More about legislation that would regulate the industry in the following statement:
“60 Minutes” and Washington Post Coverage Highlight Why Congress Should Regulate Internet Gambling and Protect Consumers
Current prohibition leaves Americans unprotected
Jeffrey Sandman, spokesperson for the Safe and Secure Internet Gambling Initiative, today issued the following statement in regards to recent coverage on CBS News’ “60 Minutes” and in The Washington Post on the dangers Americans face when they gamble online.
“The 60 Minutes and Washington Post stories demonstrate unambiguously that the existing government prohibition on Internet gambling is a failure and a mistake. The millions of Americans who continue to gamble online are vulnerable to being defrauded by offshore operators who exploit U.S. prohibition policies, leaving U.S. consumers without legal protections when they make a bet or play poker online. It is clear that a different approach is necessary to protect consumers, as well as to recapture the billions of tax dollars currently lost to offshore gambling operators and out of the U.S. economy. Now more than ever, Congress should understand why it should step in and regulate the industry to protect the public. We are hopeful that increased attention in the media about the issue will lead to increased movement in Congress.
Part 1 of the WaPo investigative report
They’re running the story over 2 days, Sunday covers the AP/UB situation. Monday asks the question: Should Internet Gambling Be Legal?
The Reporters Notebook by Gilbert M. Gaul helps answer the question as to how the Kahnawake Nation became a leader in online gambling.
From APCW.org:
Happy Thanksgiving to everyone, except for the crew of the 60 Minutes television show. They plan to air a story of lies about our industry this Sunday, and we’ve got a preview of the piece. Plus we discuss what’s been going on over the past 30 days, and what to look for over the next 30 days.
Chalk one up for poker in Kentucky. A voice of reason came from the Kentucky Court of Appeals today, thanks to the extraordinary efforts of the Interactive Media Entertainment & Gaming Association (iMEGA).
Judge Thomas Wingate previously ordered a December 3rd forfeiture hearing for the 141 gaming-related domain names that Gov. Beshear wanted seized, but the appeals court has stayed that hearing in order to conduct its own hearing on December 12th in Louisville, during which it will consider iMEGA’s petition to overturn Wingate’s original ruling. The courts will hear the iMEGA petition in conjunction with one filed by the Interactive Gaming Council (IGC), both contending that the lower court did not have the jurisdiction to order the domain seizures in the first place.
“We’re please that the Court of Appeals has given us the opportunity to challenge these seizures,” said Joe Brennan Jr., iMEGA’s chairman. “The commonwealth has tried to take these domains for their own financial gain, violating Kentucky law, exceeding their jurisdiction, and setting a terrible precedent in the process.”
For those that want to read it, head over to the Federal Reserve website.
The final rule goes into effect January 19, 2009 with compliance by December 1, 2009.
Update: could a rule passed during the days of Newt Gingrich be the savior to the poker player?
Though they don’t have a point spread on the popular vote, Ladbrokes is taking bets from non-American players on the presidential election.
From Online Casino Reports:
Obama now stands at 1.07 at Ladbrokes, against McCain’s 7.5. The odds on Obama winning more than 370 of the 568 seats on offer have shortened to 2.62, with the Democrat candidate favored to win most of the battleground states.
British bookmakers are also taking bets on who’s gonna be the next Secretary of State. (Wow.) I think we should give the next president authority to take the entire national Treasury and place a wager.
Well, so much for all those jerks who said we’d never last six months! LOL! In Part 1 of this two-part special we not only have fun and celebrate our two- year anniversary, but also cover industry news from Kentucky, and what some Scientists and Psychologists think about our industry!
From APCW.org:
In Part 2 we flash back to my college days (as a gay superhero) more than 15 years ago! Plus, see your donations at work as we wrap-up our Hurricane Ike Relief Fund project on location in Houston and Galveston, Texas! Click here for Part 2.
From APCW.org:
Exposing John McCain! How deeply is he tied to the gambling industry? Does he want to criminalize online gambling? Why are Washington ethics groups calling for an investigation of his gambling activity? It’s certainly not our job to tell Americans whom to vote for this November, but it is our job to make sure people make the most informed decisions that they can. To that end, we have been doing some digging this week on what John McCain says and what John McCain does… and they don’t always seem to agree when it comes to gambling! Plus an in-depth look at the Kentucky domain name game.
The attorneys for all sides have rested their cases, and Franklin County Circuit Judge Thomas Wingate hopes to have a decision by next week, October 15th to be exact. The Associated Press is following the story.
Attorneys for Kentucky tried to make the case that the domain names of 141 gaming websites should be treated as “illegal gambling devices” and blocked so that Kentucky residents cannot access them. On the other side, attorneys representing numerous websites in question spoke up to argue that the domain names are not “devices” and don’t even exist in Kentucky, and thus, the state has no jurisdiction to take control of them.
The case is in the hands of the judge.
Arguments are being heard today in the Franklin County Circuit Court in Kentucky regarding the attempted seizure of 141 gaming-related domain names.
At the request of Governor Steve Beshear, the Commonwealth of Kentucky filed a civil action on September 18, 2008 to order sites like Full Tilt, PokerStars, and Doyles Room seized if they didn’t willingly forfeit their domain names, and they would be transferred to the Commonwealth. The order claimed, as did Beshear in his press conference, that the internet domains were “used to promote, conduct, and/or advance illegal gambling within the Commonwealth of Kentucky.” After a continuance, the hearing is today.
According to Gambling911, the Commonwealth of Kentucky seized some of those sought-after domain names last night, including UltimateBet.com, DoylesRoom.com, and CakePoker.com. The three sites are still running as usual, but the Commonwealth could reportedly stop them at any time. Holy Massacre of the Constitution! No need for panic yet….
Attorneys defending the sites, and even some simply standing up for the rights of online poker like iMega, are in court right now trying to stop the madness. Since Dan is on a Clonie-stalking cruise in the Bahamas business trip and I am holed up in my L.A. apartment, we were unable to get to Kentucky for the hearing today. But the PPA is there and will provide updates, and Gambling911 is live blogging from the courtroom.
Updates here as they become available…
Why was Party Gaming named in a US Lawsuit this week? What’s the deal with Bodog? Where are we with Gambling Wages? All the answers and online gambling news from APCW.org.
The Republican Party has made its intention very clear. They want to render internet gambling illegal, and whether we like it or not, their definition of gambling includes poker.
Earlier this week, when the Republican Party’s national platform was released, internet gambling was notably absent from it, which immediately garnered much praise from the Poker Players Alliance (PPA) and poker media. But within hours, it was back in with harsh language:
Millions of Americans suffer from problem or pathological gambling that can destroy families. We support legislation prohibiting gambling over the Internet or in student athletics by student athletes who are participating in competitive sports.
Nice flip-flop. With McCain hoping to head up the Republican Party and presumably pursuing the goals of the party, internet gambling – and thus, internet poker – will be on the hit list in the name of family values. It brings to mind one of my favorite quotes from the Democratic National Convention in Denver last week from Gov. Bill Richardson: “McCain may pay hundreds of dollars for his shoes, but it will be us who pays for his flip-flops.”
Think what you want about McCain v. Obama and Republicans v. Democrats. That is each person’s individual prerogative. But the Republican Party has made its goals quite clear. Not only did it remove the language and quietly replace it later in a seemingly planned intention to deceive, but the party sincerely plans to tell the American people what we can or cannot do in the privacy of our own homes. Poker is on the line here.
Stand up and make your voice heard.
Rep. Jesse Jackson, Jr. (D-IL) is speaking right now just spoke a little while ago … he’s a friend of poker!
Jackson is one of four cosponsor’s to Rep. Pete Sessions’ (R-TX) HR 6663. That bill, of course, is the most straightforward fix to the UIGEA — simply limiting its reach to online sports gambling — yet one of the more controversial because of, um, politics.
Perhaps shockingly, he didn’t mention anything about the critical importance of being able to easily compete in online WSOP satellites in his five minutes he had to address the world … but hey, that’s where we stand: We have a young, pre-introductory Day 1 speaker to the Democratic party (his debut performance on such a stage) aware of our issues and philosophically on our side, though not exactly the way the PPA would like him to be.
In this week’s episode of Perspectives Weekly, J. Todd tries to get to the brass tacks of what’s going down with Bodog — and he confirms that as of right now, American players can’t get their money out (and the APCW is temporarily withholding any support of the site). But this is not a matter of greedy-corp malfeasance, Todd explains … but rather a situation created by the US Government’s seizure of $24 million from Bodog bank accounts and pressure put on American payment processors.
All I can say is wow. Can’t believe I didn’t think of opening such a joint I guess you can’t really have multiaccounting problems with online slots Wonder if federal authorities realize the UIGEA caused this, and if Texas officials see the clear citizen demand to expand gambling options in the Lone Star State. Interestingly enough, police say the problem wasn’t internet gambling per se — they don’t have much problem with it done in private — but with the public nature of a business set up to help senior citizens circumvent the banking nuisances created by the UIGEA.
Tomatoes/Tomahtoes, really … because you can arguably say police simply saw it as an opportunity to claim moral righteousness while adding to its asset forfeiture stacks.
