Stu Hoegner, our resident international gaming attorney here at Pokerati – a.k.a. @GamingCounsel as he is well-followed on Twitter – has located a copy of a document that has been widely requested by our readers in the past 24 hours.
Check it out -> Las Vegas Review Journal has placed the following draft copy of the Reid Internet Poker Bill on the web.
Hold on to your legal hats … here’s Stu’s detailed analysis of this draft copy of Reid’s bill.
This post is based on one version of the Reid bill that is circulating. There may be others.
The top-line provisions of the Prohibition of Internet Gambling, Internet Poker Regulation and UIGEA Enforcement Act (the “Bill”) are as follows. This is not an exhaustive analysis – it’s too soon for that and the participation of many others in that kind of exercise is required (and salutary).
The Bill acknowledges that Internet gambling has continued to flourish since adoption of the Unlawful Internet Gambling Enforcement Act (UIGEA) and that the UIGEA has been unable to stop operators from offering sports wagering and other forms of gambling. The Bill goes on to affirm the longstanding federal policy against interstate gaming on professional, scholastic, or amateur sporting events.
In the Bill, Congress finds that poker enjoys a long history and cultural tradition in the US. The Bill states that in the long run the outcome of poker is influenced by the skill of the participants and it distinguishes house-banked games (where wagers are made against a casino) from poker (where wagers are made between and among the participants).
The Findings section of the Bill clearly sets the stage for the licensing of Internet poker only, and the Bill goes on to do just that.
Congress also finds that a new federal Internet poker market “should be regulated by entities that have an established track record of providing a well regulated gaming market to American consumers” and “should be limited to service should be limited, at least initially, to service providers that have an established track record of complying with a strict regulatory environment, have an established track record of providing fair games to consumers, and have significant goodwill and assets at stake, in addition to their Internet poker assets, to ensure they will comply strictly with the new regulatory regime.”
Notwithstanding that the World Trade Organization decisions in the US-Antigua and Barbuda dispute are “erroneous,” the Bill asserts that the US should “conclude” the dispute in an orderly and expeditious fashion that respects World Trade Organization rules and the federal and State prerogative to restrict and control wagering on sporting events and games of chance.
Some of the more important definitions in the Bill are set out below.
“Bet or wager” as used in the Bill has the same definition as under 31 U.S.C. §5362(1) (i.e., UIGEA) but excludes bets or wagers under the Interstate Horseracing Act of 1978, bets or wagers that are intratribal transactions, and bets or wagers that are a chance to win a lottery or other game authorized by a state or a tribe that is an intrastate transaction as described under UIGEA.
We have a definition of poker in the Bill. “Poker” means any of several card games in which success over the long run is influenced by the skill of the player and
(A) that is commonly referred to as poker;
(B) that is played by 2 or more people who bet or wager against each other on cards dealt to them out of a common deck of cards
i. including games using community cards that any player may use to make his or her hand, and
ii. including games using electronic devices that simulate a deck of cards;
(C) in which players compete against each other and not against the person operating the game;
(D) in which bets or wagers of one player are often designed to affect the decision of another player in the game; and
(E) in which the person operating the game may assess a commission fee or any other type of fee.
Poker also includes poker tournaments in which players pay a fee to play against each other, including tournaments where the licensee guarantees a minimum tournament pot.
As a threshold matter, poker must be a card game where success over the long run is influenced by skill. This is an interesting definition that will generate a lot of discussion. How long is the long run and how many hands does it contain? How much skill need be involved if the skill of the player must merely “influence” success? Provided any particular iteration of poker that’s out there (and there are many) meet these various tests, it should qualify.
An “Internet poker facility” means an “Internet gaming facility” (also defined) that provides bets or wagers only with respect to a game, hand, tournament, or other contest of poker. Only persons operating Internet poker facilities under a license issued by a Qualified Body (see below) may be licensees under the Bill.
A “Qualified Body” means a State or tribal regulatory body that has been qualified by the Secretary of Commerce as provided in of section 8202(c) of the Bill (including entities qualified as a matter of law under subsection (c)(1)). This part of the Bill automatically qualifies state and tribal agencies as bodies qualified to grant licences that, among other things: currently regulate casino gaming and have done so for 5 years preceding the date of enactment of the Bill; have regulated casino gaming facilities involving gross gaming revenue of at least 5% of the total US casino gaming revenue for at least 3 out of the last 5 years preceding enactment of the Bill; are in states or on Indian lands that are opted in under section 8204 of the Bill (see below). Those not automatically qualified under section 8202(c)(1) can apply to the Secretary of Commerce for designation as a Qualified Body.
Finally, a “Significant Vendor” means an individual or entity that, with respect to a licensee or applicant under the Bill:
(A) knowingly manages, administers, or controls bets or wagers that are initiated, received, or otherwise made within the United States;
(B) knowingly manages, administers, or controls the games with which such bets or wagers are associated;
(C) develops, maintains, operates, the software, other system programs or hardware on which the games or the bets or wagers are managed, administered or controlled;
(D) provides the trademarks, trade names, service marks, or similar intellectual property under which the licensee identifies its Internet Poker Facility to its customers in the United States;
(E) provides any products, services, or assets and is paid a percentage of gaming revenue by the licensee in order to do so; or,
(F) with respect to an applicant, proposes to provide any of the activities, services or items identified in (A)-(E), above.