The idea of using online gaming tax revenues to help fund elements of health care reform became part of the Congressional conversation this weekend. On Saturday, Sen. Ron Wyden (D-OR) introduced a possible amendment to the Baucus bill (America’s Healthy Future Act of 2009) that would rely on the passage of Rep. Barney Frank’s HR 2267 to set up a regulatory structure that would provide health care revenue.

According to the Safe and Secure Internet Gambling Initiative, the tens of billions of dollars collected by the U.S. government from online gaming could offset health care costs going forward:

An increased focus on the benefits of Internet gambling regulation are expected as the Senate Finance Committee considers a proposal introduced on Saturday to use Internet gambling revenue to offset the costs of health care reform. The amendment offered by Senator Ron Wyden (D-OR) would dedicate Internet gambling tax revenue generated through implementation of the currently pending Internet Regulation, Consumer Protection and Enforcement Act (H.R. 2267) to increase low-income subsidies provided through the America’s Healthy Future Act of 2009. A PricewaterhouseCoopers analysis shows that collecting taxes on regulated Internet gambling would allow the U.S. to capture up to $62.7 billion over the next decade.

Wyden is a chairman of the Senate Finance subcommittee on International Trade, Customs and Global Competitiveness.

The Feds have made another grab at money in US banks that at some point passed through online gambling and/or poker sites — seizing three more accounts held by payment processors with claims that the undisclosed sums in them are “forfeitable”.

This time it was the Maryland district going after accounts in California belonging to HMD, Inc.

In late July, Maryland-based federal authorities seized six other bank accounts from Electracash, Inc., also a payment processor alleged to be involved in laundering “proceeds of an illegal gambling business”.

Click here for a little more detail in the Baltimore City Paper, along with the latest seizure warrants.

In all these cases, the US District Court in Maryland has kept investigators’ affidavits calling for the warrants under seal. The New York Southern District handled their June payment processor seizures the same way, until the folks behind Gambling911 filed a motion that forced the courts to unseal them (with redactions).

A year ago, Maryland authorities charged (but did not arrest) two men — Edward Courdy and Michael Garone — with money laundering connected to $24 million seized from various bank accounts during an ongoing investigation of Bodog. The charges against Garone and Courdy stem from two specific transactions they allegedly facilitated — one from Germany to Georgia (for $1.5 million), the other from Dublin to Nevada (for $2.4 million).

G911 claims the most recent payment processor seizures involve online gambling and operations other than Bodog.

Mark it on your calendars (or just check back here) around October 22. The case of the Governor Beshear and the Commonwealth of Kentucky trying to claim the ability to seize 141 online gaming domains, or “gambling devices” as they were called, to keep them from accessing Kentucky residents will see the halls of the KY Supreme Court next month on an appeal from the Commonwealth.

Many months ago, a group of organizations representing internet freedoms and the rights of online gambling companies won an important appeal in the Kentucky court system, and that victory prohibited the Commonwealth from proceeding with its attempted seizure of those domains. The state promised to appeal to the Supreme Court, and that latest appeal was granted this month. Those fighting the state on the matter include iMEGA (Internet Media Entertainment & Gaming Association), PPA (Poker Players Alliance), ACLU (American Civil Liberties Union), CDT (Center for Democracy and Technology, EFF (Electronic Frontier Foundation), Internet Commerce Association, eBay, and Network Solutions. (Can we win on number of appellees alone?)

According to iMEGA’s announcement:

The Supreme Court has set oral argument in Commonwealth of Kentucky v. IMEGA, et al for 11 a.m. on Thursday October 22, 2009 in the Supreme Court courtroom. The order allots 15 minutes for each side.

“We’ve been waiting for this for a long time, and we’re going to win again,” said Joe Brennan Jr., iMEGA’s chairman. “From the beginning, Kentucky law has clearly supported our position, and a win in the State Supreme Court will put the final emphasis on that.”

It was no secret that Harrah’s Entertainment planned to enter the online gaming business, especially after hiring former PartyGaming bigwig Mitch Garber as the CEO of its new Interactive Entertainment division in May of this year. But the next big step was announced today.

Gaming Intelligence reported that Harrah’s signed a deal with Dragonfish, a subsidiary of online giant 888, to support Harrah’s entry into the online market with the World Series of Poker and Caesars Casino.

“This is a ground breaking deal for 888 and demonstrates our ability to provide real value to globally renowned, land-based casinos and their leading brands,” said Gigi Levy, Chief Executive Officer of 888.

“We have the structure in place to realise our B2B division’s full potential over the next 18 months and beyond and today’s announcement of our partnership with an industry giant is further vindication of this strategy.”

Mitch Garber, CEO of Harrah’s Interactive Entertainment, added: “As we develop and roll out our interactive strategy, we have chosen to work with 888, primarily for their world-class technology, scalability, and a strong commitment to compliance, and responsible gaming,” said Mitch Garber, Chief Executive Officer of HIE.

No specific time frame was given for the official launch.

Funny, here in the USA we’re screaming, “tax us! tax us, dammnit! for all in the name of freedom!” Elsewhere around the world they’re saying, yeah, we should tax … which has some companies considering new homes.

Costa Rica plans to officially introduce a bill this week that has been brewing for a few months to tax and regulate the many online gambling entities with operations there. The assertion is that a 2 percent tax would generate $100 million in revenue. There also was talk of a 1 percent tax on the end users, though it’s not clear if that provision is included in the legislation.

(Does anyone notice how much faster bills seem to move through Congress in Latin American countries?)

An estimated 300-some online gambling purveyors make at least one home in Costa Rica, though some might consider moves to Panama should the new tax pass. Several, such as Bodog, have already moved to Antigua, the UK, and elsewhere.

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Funny … as Brazil accelerates efforts to ban online poker+gambling, Argentina is going completely the other way — looking to legally regulate it. And in a hurry, no less …

From Dow Jones via NASDAQ:

The Argentine government is working on plans to allow online gambling throughout the country, presidential Cabinet Chief Anibal Fernandez said Wednesday.

“We’re working so that this will become law within two or three months,” Fernandez said, adding that it could take notably longer and possibly up to two years.

Fernandez said the main aim behind the project is to combat illicit gambling that’s already occurring.

Wow, just a year ago Argentina was looking to ban online gambling — looking to force ISPs to block citizen access, threatening jail time for offenders, and shutting down a site run out of Buenos Aires ( FormoApuestas.com.ar ). So why the change of heart? Common sense, and money of course. But supposedly also soccer.

In what was a controversial Argentinean political issue this year, the government basically ran a hostile takeover of soccer broadcast rights from private cable operators (to the tune of $154 million) in an effort to bail out the AFA (their version of the NFL), which had several major clubs owing tons of back taxes and unable to pay their players. Though the government will neither confirm nor deny the connection, conventional wisdom south of the equator says that online gambling is what will bring in the revenue to pay for that.

Last November, Argentinean futbol got a taste of what the sites they want to regulate could bring to the table, when PokerStars (dot-net variety) — as part of its aggressive move into Latin America — signed on as a (very warmly received) sponsor for River Plate (pictured above).

A Brazilian UIGEA could seriously hurt their biggest national hero’s ability to bring in real-money players.

The Brazilian senate is soon to consider a bill modeled after the UIGEA — banning payments to and from online gambling sites. The original legislation was introduced 15 months ago, but more recently has grown some teeth. At President Lula de Silva’s behest, in an effort to move the bill forward and pass it before the end of 2010, the Senate has attached companion legislation that requires Brazilian ISPs to block access to prohibited sites, and calls for prison time for violations. Also attached to the bill now is a parallel ban on child pornography.

From GamblingCompliance:

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Apparently our good friends across the pond are a bit more optimistic about the notion of the US opening its online gambling market in 2010 than we are … and in preparation, the buzz around England is that Betfair — the British online poker-and-more company and title sponsor of WSOP-Europe — is getting serious about making an estimated £1.5 billion ($2.5 billion) initial public offering.

The intent would be to raise capital in preparation for all sorts of crazy consolidation and forthcoming acquisitions in the online gambling sector.

At least one Betfair exec dismisses the talk as little more than speculation, despite meetings with Credit Suisse and other banking advisors that have the European financial press getting their knickers in a bunch as “companies seek to position themselves to enter the world’s biggest gambling market.” Should the rumored floatation happen, it would be the first major listing on the London Stock Exchange since the global economic collapse.

$400k HORSE

At the same time, Betfair last week made another move toward American soil by pledging $400,000 to the New York (Horse) Racing Association as an overlay should two specific horses face off against each other in October at Belmont Park:

Rachel Alexandra, the first filly to win the second leg of horse racing’s Triple Crown since 1924, has won her last eight races. Zenyatta is undefeated in 12 career starts, including the 2008 Breeders’ Cup Ladies Classic.

LOL, I didn’t even realize they had ladies events in horse racing!

Across the Chunnel: Refashioning French Poker

Arnault.

Betfair also just got themselves approved to enter France’s online gambling market, which is set to open next year … apparently with some nice poker-friendly alterations to the rake. (The new French law originally had players paying tax on every bet and raise, on every street … which can totally screw with your pot-odds calculations!) Helping get Betfair to the front of the French licensing line, with a better rake structure no less? Heavy lobbying efforts from billionaire bling merchant Bernard Arnault, CEO of Louis Vuitton, 10 percent owner of Betfair, and the 15th richest person in the world.

New-and-improved Yahoo! Poker Coming Soon

We’re talking Yahoo! Uk & Ireland, of course, not Yahoo! USA. The British arm of the web behemoth just re-upped its partnership with GTech G2, for two years, to provide real-money gaming options — and part of that deal includes plans to unveil a fully downloadable real-money Yahoo! poker room, not just the (lame) in-browser version currently available.

Magazine Moguls Jump into Mobile Gambling

PartyGaming CEO Jim Ryan recently said that the biggest threat to established online gaming brands comes from major media outlets, not current competitors. And sure enough … Dennis Publishing — the mega-magazine company behind Maxim, MacUser, Computer Shopper, Bizarre, Men’s Fitness, and more than a dozen other publications (including PokerPlayer, Inside Poker Business, and Stacked) — just launched its Monkey Mobile Casino, offering real-money online gambling on handheld devices. (The current issue of Monkey, fwiw, features a picture of Lady Gaga’s recent nipple slip.

The Swedish Taxman Cometh

Meanwhile, the Swedish Tax Authority (Skatteverket) has been studying all forms of internet commerce tax evasion since 2007, and has concluded that online poker companies with offshore servers are one of their biggest sources of uncollected e-commerce taxes.

George Will and I rarely see eye to eye on anything (understatement), which is why I would never have seen this column had @TheEngineer2008 pointed it out on Twitter. But in his latest Washington Post column, Will stumps for the passage of pro-online poker legislation after what seems like a conversation with Howard Lederer.

The piece opines about the criminalization of online gambling, which imposes on personal freedoms. Keeping the government out of private homes used to be something that the conservative movement traditionally viewed as an important and core issue, and Will stays true to that belief with his recent article.

It is a poker skill to know when to hold ‘em and when to fold ‘em. Congress probably should fold its interference with Internet gambling and certainly should get its 10 thumbs off Americans’ freedom to exercise their poker skills online.

Interesting, however, that he misses a key point when describing the threefold interest of Lederer in the issue…

First, his libertarian temperament — he lives in Las Vegas, where almost anything goes — is offended by mother-hen government. Second, he wants as many people as possible to have access to poker’s delights. Third, the more poker players there are, the larger will be the ranks of competitors, and the television audiences, for professional poker competitions. Hence the larger will be the potential winnings.

Full Tilt Poker, the cash cow of Lederer and others, stands to be one of the first sites to receive a license and legally cater to U.S. customers should the legislation pass. That doesn’t in any way discount his other reasons for pushing for the bills, but disclosing his part in FTP might be pertinent.

Interesting op-ed in the New York Times today about the WTO and China, particularly pointing out the need for China to not just stop pirating American music and movies, but also to respect WTO rulings outright:

http://www.nytimes.com/2009/08/14/opinion/14fri2.html

China has also increasingly turned to the W.T.O. to defend its interests. Last month, it challenged an American ban on Chinese poultry imports. It has another case against American anti-dumping policy. And there will be more. China has as big a stake as the United States in a well-functioning, lawful trading system. If it wants to protect its own rights, it will accept the W.T.O.’s rulings.

Funny. You’d think in the world of trade, this might be a two-way street. Perhaps the NYT is just a bit clueless on the US’s thumbing its nose at the WTO as it pertains to online gambling? And considering that we owe China more than they owe us … who’s really in the driver’s seat on this one?

Ed. Note: Will be curious to see what gets more views — the latest episode of Perspectives Weekly or Face the Ace. LOL. -dm

Breaking News! A grand jury has just indicted an online gambling payment processor! Plus, a New Jersey Senator rolls out new poker legislation, and affiliate programs change their Terms & Conditions!

You can see how the debate over online poker regulation is getting more sophisticated. (And it makes a fun subplot during these times of health care debate.) While our side has effectively taken the argument away from our opponents about needing to protect children and potential addicts (and John Pappas’ TV skillz have gotten more polished), Les Bernal of Stop Predatory Gambling is now claiming the online poker model is unsustainable because it relies on 10 percent losing players to profit. (I think Full Tilt and PokerStars would respectfully disagree.)

While the opposition argument may be one of those frustrating argghs from someone who clearly just doesn’t get it — poker profits are based on rake, not degenerates who can’t afford their next buy-in — you can see we are moving to that next necessary phase of poker enlightenment, which is separating poker from other forms of gambling.

We all know how difficult and complicated poker-related legislation can get/be in the United States … and we often look at Europe as providing a model of how things could and should be. However, things can actually get pretty complicated across the pond — different languages and all — and if anything, what we have to compare is how actively engaged so many different countries are in dealing with difficult online gambling legal matters … while we in the US seem much more content moving slowly as we figure out how we really will handle billions of dollars worth of online, multi-jurisdictional financial transactions in the 21st century … you know, in a way that doesn’t get the NFL’s fantasy panties in a wad.

Seriously, if it weren’t for the PPA — which we all know is a mere infant, toddler at best, amongst American political organizations — I’m not so sure we’d be moving at all on these matters … and the United States would be leaving it to the Europeans to establish frameworks for what ultimately will prove to be trillions of dollars worth of virtual finance in the future. That’s the undercurrent of why we’re all here in Washington DC right now … as much as we say, and many believe, it’s just about the freedom to bring more dead money into the game.

It’s a lot to chew on, I know. And while you may not have the inclination or scratch to lay down for Gambling Compliance‘s new book on the online gambling situation in Europe, you can click here to read a 5-page summary of Market Barriers: An impartial and comprehensive evaluation of the current legal, regulatory and market landscape for online gambling in Europe:

An entirely new and independently researched 80,000 word survey, the report provides an impartial and comprehensive snapshot of the regulation of Europe’s online gambling sector – a market that the European Commission estimates to be worth US$10.1bn by 2010.

Detailed analysis of all 27 EU member states underlines how the proliferation of national level rules is steadily balkanising Europe’s gambling market and creating new conflicts and regulatory risks for operators:

Europe’s online gambling map is being redrawn with unprecedented speed. 19 of 27 member states across Europe are currently addressing online gambling through reform, while seven of these have made concrete plans to shift towards local licensing models.

Financial transaction (FT) and ISP blocking restrictions are gathering momentum. Since the introduction of payment blocking regulations in the United States in 2006, seven EU member states have introduced mechanisms for blocking online gambling, and a further eight jurisdictions are presently considering blocking measures as part of broader reform debates.

As the nature of European licensing changes, existing land-based casinos and national lottery monopolies are starting to move online while previously excluded private operators are entering markets as B2B service and payment providers.

A product of GamblingCompliance’s international legal research team, the report cites legislation, much of which is not available in English, and uses over 50 primary sources including exclusive consultation with regulators and legal experts on the ground in each jurisdiction.

Price costs £899 for non-subscribers and £799 for subscribers.

The American Government recently froze over $30 Million belonging to online poker players, and now a payment processor is fighting back! Plus, the British betting company Betfair prepares to bring legal online gambling to the US!

There’s a new company in the song (and video) downloading game — Zookz.com — and its entire business model is based on selling “pirated” copies of American songs and movies, as permitted by WTO sanctions against the United States for infringing on Antigua’s ability to compete in the online gambling industry.

Click below for the press release announcing Zookz’s existence. From what we understand, ZookZ offers a subscription-based model for unlimited monthly movie and music downloads. It is not pay-per-song like iTunes, nor a file-sharing “service” like LimeWire or BitTorrent. Members simply download stuff directly from Zookz’ servers in Antigua. Supposedly the new company operates within the parameters of the 2007 WTO ruling between Antigua and the United States, which allows them to break US copyright law to the tune of $21 million/year.

What’s not clear is if that means they can peddle $21 million worth of rights-protected bits, or run a business limited to $21 million in profit. Either way, I gotta think the ever-litigious RIAA won’t take lightly that much money being ganked from its artists. Could be wrong … we’ll see.

UPDATE: TechDirt, for a non-poker perspective.

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