This week’s online gambling news included several poker pros as the latest victims of “Black Friday”. Plus, some of the stupidest stories we could find… with a Chuck E. Cheese lawsuit and the end of life on this planet!
The political arm of America’s brick-and-mortar casino industry is working on its own federal online poker bill, Frank Fahrenkopf, CEO of the American Gaming Association, revealed yesterday at a press conference in Washington DC. The AGA bill will likely be a hybrid between inter- and intra-state, providing federal oversight of independent state regulations.
Joining Fahrenkopf at the press conference were Keith Smith, president of Boyd Gaming; Gordon Kanofsky, CEO of Ameristar Casinos; and Virginia McDowell, president of Isle of Capri Casinos. The lobbying push the AGA kicked off yesterday talked about online poker most immediately, but language used didn’t seem to exclude the possibility of online slots and other casino games becoming part of these efforts.
Senate Majority Leader Harry Reid (D-NV) is holding a lunch today with top Democratic leaders and casino executives to discuss, they say, a broad range of online gambling matters.
Gary Loveman, CEO of Caesars Entertainment (parent company to the WSOP), made note of the importance of online poker yesterday in an SEC filing yesterdayreporting Caesars Q1 2011 financial results. In the positive spin put on losing $147 million in the first three months of this year, he told Uncle Sam:
“Finally, we believe strongly that the recent federal indictments of illegal online poker operators should convince Congress to allow American citizens to play online poker and to allow American companies to compete in a multi-billion-dollar industry,” Loveman said. “By acting now to legalize a game enjoyed by millions of adult citizens, Congress can clarify ambiguous federal laws, generate tax revenues for federal and state governments and bring thousands of jobs to this country.”
The surge actually goes down on a Monday and Tuesday, but do days even matter any more when Americans can’t compete against the rest of the developed world on Sunday?
The Poker Players Alliance moved up plans for a Washington DC member fly-in scheduled for September to later this month, May 23-24 … where the official call to action is supposedly to hit Congress hard to legalize online poker and do it quickly … if not before the WSOP then at least some time in 2011, maybe, please? Click here for details on the fly-in, and here for what you can do from afar to support what should be poker’s biggest political assault on Washington DC ever.
Congress has seen the numbers — millions of voting-age American players, a $6 billion US industry, $10-40 billion in tax revenue (over 10 years), thousands of jobs — and most members know they won’t face much backlash at the polls for opposing internet prohibitions and allowing online poker the same protections as other forms of legal recreation. But what they may not realize is why it may not be so cool to wait a few years to fix things, nor how many non-criminals have been hurt by recent DOJ actions, which are rather unprecedented in that the case against online poker operators ultimately hinges on a thusfar unsettled matter of what legally defines gambling and/or games of skill.
I think for the PPA, beyond reinforcing sensible-government arguments, they plan to get their members on message — because as more and more sign on with positions the PPA first advocated after the UIGEA, the game of legitimizing online poker has evolved — while getting Congress to realize the need for more immediate action because:
It’s time to have a poker player run for President of the United States. Forget Joe the Plumber. How about Tom the Gambler?
I actually gave serious consideration to running for President in 2012. However, when I woke up, it didn’t seem like such a great idea. I thought what could a gambler offer that others can’t? I came up with several ideas and am going to share one here. This is not an article about bashing one side or the other. I’m trying to show how gamblers typically get right to the root of the problem by viewing the world differently than others.
First, I wanted to identify a problem that 95 percent of Americans would agree was a problem, thus removing all political bias. The Problem: Politicians lie, misrepresent facts and gamble with our money. Do you agree?
How do gamblers find the truth?
We wager.
And if you make bad decisions repeatedly,
you are no longer gambling because you run out of money.
In a debate, if a politician sounds convincing, we believe him. He can’t be lying, he sounds so sure. The debate is concluded and the viewers have no idea that the bastard lied for an hour straight. He made up stuff and pulled answers out of his ass to avoid having to say, “I don’t know.” (Note: when pulling numbers out of asses, avoid the sharp ones like 4 and 7.)
When trying to get the Healthcare bill passed one Senator made a huge deal about the American Medical Association (AMA) supporting the bill, thus trying to make the public feel better since all doctors support it. Did you know that only 17% of all doctors belong to the AMA, because most doctors don’t like the political stands the AMA takes? Did you know that a significant majority of doctors were opposed to the proposed Healthcare bill? It is outrageously disingenuous to act like doctors are supporting the bill.
Our elected officials say that if we pass a stimulus package, we will create one million new jobs…oops, sorry, we were wrong. No big deal, we will try something else. They are guessing with our money. I like idiots in a poker game, but I’m tired of idiots in Washington. It’s like all of us voters decided to put the worst poker player in the biggest game. Unfortunately, unlike poker, these idiots can’t get lucky with our money.
We showed you the 52-page criminal complaint — 9 charges against 11 individuals facing between 5 and 30 years in prison. Now here’s the 80-page civil complaint in the DOJ vs. PokerStars, FullTilt, AP/UB, et al:
http://www.scribd.com/doc/53170382/3bb-Civil-Complaint-DOJ-vs-PokerStars-Full-Tilt-UB-AP-et-al
The Feds’ allegations tell a rather compelling narrative of illegal gambling, bank fraud, money laundering, and conspiracy to circumvent US law — that if proven calls for the forfeiture of not just domain names, but also:
$1.5 billion from PokerStars
$1 billion from Full Tilt
$500 million from UB/AP
The court documents also spell out the details on the 76 bank accounts money allegedly passed through … in multiple countries and currencies, making USA vs. PokerStars+ not just a federal case but also an international one. And with the US Feds seeking to freeze these accounts, industry types get a hint of which Stars- and Tilt-funded paychecks may soon be in jeopardy … if they aren’t already.
With the criminal indictment and civil complaint together, federal prosecutors Arlo Devlin Brown and crew, seem unafraid to telgraph their intent: People have to go to prison and we take their money, but if that’s not gonna work, we’re at least gonna get $3 billion guaranteed … and we now have two tries to take it down!
(I use the term we because these cases are technically “the people of United States of America vs.” … thus it really is you and I and my dad and grandma and her priest and the electrician and Bristol Palin and Justin Bieber … claiming that all those online poker spoils are rightfully ours.)
The regulated online poker-only “Reid bill”, if you recall, promised to generate $1 to $4 billion a year for the US government. So you gotta figure $3 billion in forfeitures buys another year for the forces who do wanna see fully legal licensed and regulated online poker — and other casino games — to craft a bill to their liking.
Here’s the actual indictment, in the case of DOJ vs. Scheinberg et al.
UPDATE: Sorry for the bad link … have put it in a more easily accessible place via Scribd:
http://www.scribd.com/doc/53107543/Indictment-DOJ-vs-Scheinberg-Bitar-Tom-et-al
UPDATE: Going live on Donkdown Radio to try to help online poker degens make sense of it all. http://donkdown.com/radio
Just before the hearing on AB258 held in the Nevada Legislature this morning, the PPA released an official press statement supporting the “interstate” iPoker bill. This announcement made an for an interesting preface to over three hours of testimony on internet poker in Nevada, featuring a bevy of high-octane witnesses presenting an array of statistics and factoids *in favor* the bill, without a whole lot of testimony (publicly) against.
It kicked off a major rush of online poker activity in the state of Nevada today.
At the hearing, witnesses giving testimony in support of the bill included Vanessa Rousso, who made the obligatory “poker star” (pun-intended) appearance. She gave a rather harried and then hurried Online Poker 101 primer to Nevada Legislature, who by all appearances needed it – one state rep asking during the hearing for clarification on the difference between “video poker” at a casino and “online poker”. There were some questionable large quotations of gargantuan customer bases and revenue projections by Applied Analysis, revelations of the wealth iPoker has provided the Isle of Man, and an infomercial reassurances from the Aristotle group (whose client is PokerStars) that their INTEGRITY age verification software could protect Nevada children from gaining access to iPoker.
Or – in short – a whole ton of high-end testimony that the backers of this bill would surely like to have presented. No vote was held in the Assembly Judiciary. The next step per @RindelAP is that AB258 will proceed to the committee’s “work session” for amendments; date to be announced.
What I was truly intrigued by was the testimony of the “objector”, Pete Ernaut, representing the Nevada Resort Association, who seems to be the public voice for at least some of the Nevada casinos. Ernaut did not testify against iPoker, but opined that Nevada should not pass their own bill, but rather wait for federal legislation. He agreed, when questioned, that the federal process may be indeed too slow for Nevada to have competitive advantage.
His solution? A “re-ordering” of things where Nevada doesn’t need new legislation to begin building their advantage, and can begin planning for business without federal legislation like #campbill already in place. He referred to some previous internet gambling legislation in November 2001 named AB466 (see full bill text).
Only two states in the US have no legal gambling — Hawaii and Utah. Could be just one soon, say supporters and opponents alike of a bill in Hawaii that would specifically legalize Texas Hold’em and Omaha poker, live and online.
The bill, which passed out of committee yesterday, looks to make Hawaii a destination for big-time live (and televised) poker events … as well as a potential home base for online sites serving US players … by designating the foundations of Pokerati NLH/PLO as games of skill, not played against a casino “house” and therefore exempt from state gambling prohibitions.
PPA Exec Dir. John Pappas supplied written testimony for the hearing, suggesting that the way this current bill is crafted could be problematically prohibitive, as it seeks to charge $100 million for a server license and impose a 20 percent tax on all wagers while potentially challenging federal law. Pappas, however, did not provide any statement on the economic impact such a law would have on Waikiki vendors selling T-shirts like these:
The Hawaii poker bill — originally written supposedly to provide a tax holiday for buying school supplies — passed out of the Economic Revitalization & Business Committee on a 7-1 vote, and the House Judiciary Committee, 9-3. It now moves on to the House Finance Committee.
(Mahalo Poker Gnome for the heads-up.)
The Nevada Legislature’s Assembly Judiciary will be hearing the PokerStars-backed iPoker bill, aka AB258 (complete bill text here) this morning at 11am PT. The hearing is the next step in the process for this bill to become a law, though not the final one.
This internet-poker specific bill is both uniquely controversial among all of the proposed intrastate iGambling bills. Not only does it explicitly state that the NGC may not discriminate against the likes of Poker Stars and Full Tilt, which have operated gambling sites unlicensed with US players, but the legislation defines a model by which internet poker websites *outside* of Nevada could pay to connect player pools with new Nevada player pools through B2B state-regulated “compacts.”
That’s right. If passed as is, players on new Nevada iGambling sites could play with people that live in places outside the state of Nevada “where interactive gaming is not prohibited” – so long as a regulated deal exists between the state and external websites.
One has to wonder – if this NV bill is made into law before the newly re-introduced federal internet gambling #campbill, what will the landscape of the future internet gambling market in the United States look like?
Watch it -> Live feed for AB258 in Carson City 11AM PST here -> Assembly Judiciary @ NV Legislature webcast
The CampBill is now available on www.govtrack.us. A copy of the bill is here. (If you can’t download the copy from that link, you can view it in a number of formats here.)
As mentioned in the press release by the House Financial Services Committee and in my blog post from this past Saturday (here), this version is the same as the version of H.R. 2267 as amended by the Committee last summer. Don’t get too excited about this version. Any federal law that passes regulating Internet gaming (and most likely only poker) will look very different from this draft. There is a broad consensus among AGA members that regulation needs to come at the federal level, but there are a lot of items yet to be negotiated among many different interests.
The House Committee on Financial Services released an official statement this evening which announced the awaited introduction of a new federal internet gambling bill by Rep. John Campbell (R-CA). The new <shall-we-say> #campbellbill is, at the moment, identical to the last amended HR2267, whose most recent version can be found-> here.
From the press release:
WASHINGTON – The Internet Gambling Regulation, Consumer Protection, and Enforcement Act was introduced in the House today by Congressman John Campbell (R-CA) with Congressman Barney Frank (D-MA) as a leading sponsor. Congressmen Ed Perlmutter (D-CO) and Peter King (R-NY) are also leading co-sponsors. The bill is identical to H.R. 2267 that was passed out of the House Financial Services Committee on July 28, 2010 with bi-partisan support. The bill would establish a federal regulatory and enforcement framework under which Internet gambling operators could obtain licenses authorizing them to accept bets and wagers from individuals in the United States. The legislation comes in response to the enactment of Unlawful Internet Gambling Enforcement Act (UIGEA), which restricted the use of the payments system for Americans who gamble online.
As a recap, HR2267 passed through the Financial Service Committee last July. It never took further steps in Congress last year, despite a significant sweat. Harry Reid floated a draft of an internet gambling bill in December, known lovingly as #reidbill in Twitter, which also never made further official progress on Capitol Hill. HR2267 contained no mention of the now dreaded “blackout” period that was the most infamous part of the #reidbill draft.
You can read the full statement by PPA, giving Campbell/Frank a virtual pat on the back-> here.
The nuances and import of this story are probably a little beyond my ken — involving more factors than just online gaming and Indian poker lands … but it’s not a tough leap to see it as potentially relevant as the US continues to move in this period of “pre-regulation” we seem to be in at the federal level.
Sen. Diane Feinstein (D-CA) is pushing revisions to the Indian Gaming Regulatory Act — the first such changes in 22 years — which would make it harder for Native American tribes with gaming licenses to acquire new land on which to build casinos.
Does Feinsiten have a sincere interest in limiting various Tribes’ expansions? Or could this be part of a multi-level political negotiation connected to future online poker and gambling bills currently being haggled over in Washington DC? It’s just a hypothesis at this point — no real information on my end — but it seems likely that Feinstein’s legislation could become a bargaining chip for Harry Reid should it gather momentum. Just the threat of such restrictions, you would think, limits the power of Native Americans as they lobby to make sure they factor into the 21st Century gambling equation.
I secretly fear that the regulations online pokerers are fighting for could provide the foundations of a 21st Century global Internet police force that I would probably strongly oppose. Starts as an issue of taxation … then before you know it we’re talking freedom, death rays, and war!
But meh … we can deal with that later, as the internet tyrants will likely need consultants the way armies need bot programmers and access to our online funds.
Still … You can see the roots of such oppression in a land known for slippery slopes, as Norway thinks about blocking ISPs to keep out offshore purveyors of online gambling.
Rep. John Campbell (R-CA) intends to take the lead in a Republican-controlled US House of Representatives on the internet gambling debate by bringing forth legislation similar to what Barney Frank (D-MA) has been pushing for years, according to Gambling Compliance.
Frank has reportedly signed on as the lead Democratic co-sponsor.
You may remember Campbell from his efforts to remove sports betting from last year’s Frank bill.
Campbell will be on hand in San Francisco in May as a keynote speaker for GIGSE 2011. The Global iGaming Summit and Expo was once one of the pre-eminent “annual” gaming conferences in the world, but went on a two-year hiatus after a move from Montreal to Malta. Returning to North America, and specifically US soil (California, no less!) seems to be a big deal for the conference and the gambling industry overall.
GIGSE says it has no political agenda — though its 2011 lineup of speakers suggests licensed and regulated online gaming in the US really is a matter of when not if. In addition to Campbell and likely supporters of his bills such as the PPA, conference speakers will include representatives from the Department of Justice, California Indians, other Native American gaming interests, Caesars Interactive, iMEGA, the Kentucky horse racing industry, various lottery interests, Jeffery Pollack’s Federated Sports+Gaming … and several others who have long found themselves at opposing ends of mutual interests.
Sounds to me like this could be the biggest think-tank confab of people shaping our lives ever. Or, at a minimum, if they can’t all put their heads together to reach the same overall endgame, it could turn into a massively awesome battle royale that could include the throwing of chairs.
A sign seen in the new Aviator Casino, in Delano, California, reminding me of a difference between casinos regulated in lands we know well and virtual establishments based out of places that may or may not exist beyond our poker imaginations:
@BJNemeth or perhaps ahead of his time? Thinking he might have a very different experience today.
Great crAAKKer post by @Grange95: http://t.co/KcaobMfP) I wish I could write like Michael. Maybe someday. #poker #onlinegaming
