Which do you think is better to gamble with, regular currency or cryptocurrency? Everyone knows novelty is key if you’re trying to stand out in a saturated market. You want potential customers to feel as though they get a unique experience at your site and, with the recent proliferation of cryptocurrencies, particularly Bitcoin, the connection seems obvious. Start a casino which accepts cryptocurrencies and you’ll soon see your market share shoot up. The novelty is certain to wear off but if the cryptocurrency boom continues, you’ll be in a strong position in a few years as one of the first to adopt this new technology.

The logic is reasonably sound, but the question is: Are cryptocurrencies ready to be the prime currency for online gambling?

There are opposing viewpoints, with one of the core elements being security. If you’re playing a casino game online, be it slots, blackjack or anything else, you want to know that your money is secure and that you can get the money out afterwards. With the standard online casino, the process is fairly well understood – you deposit funds in a secure wallet for the site from your bank, you gamble with that money and once you win they transfer the funds back in. The downside to this method, as secure as it is, is that the transfer can be slow. Some transfers can take up to seven days to clear.

The contrast is that cryptocurrencies enable a far faster speed of transfer. As the currency is already digital, having it processed between your account and the casinos can happen in minutes and means any win you make can be with you in a matter of moments. But this speed brings its own assortment of problems. As the money is entirely digital and there’s no central bank behind it, if you find yourself ripped off by a rogue casino, you have no chance of ever seeing your money again. This is compounded by the fact that cryptocurrency has recently been exposed as being not as secure as previously believed with heists occurring all too frequently. The trade-off for speed versus security is a fairly simple one and makes it pretty obvious what you should bet on; slow and steady wins the race after all.

For a more comprehensive breakdown of the pros and cons of both, read on and check out this infographic.

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Preet Bharara, the US attorney for the Southern District of New York, today announced the unsealing of a federal criminal complaint against Robert Faiella and Charlie Shrem. It’s alleged that Faiella ran an underground bitcoin exchange on Silk Road. Shrem is well-known in the bitcoin community as the CEO of BitInstant and the Vice Chairman of the Bitcoin Foundation.

A copy of the criminal complaint against both men is here.

The complaint alleges that both Shrem and Faiella operated an unlicensed money transmitting and that Shrem specifically facilitated that business through BitInstant. Further to those allegations, Shrem is also charged with violations of the Bank Secrecy Act because of his purported wilfull failure to file reports with the Treasury Department. Finally, both men are charged with money laundering conspiracy under 18 U.S.C. 1956.

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I will be personally appearing before Judge J. Bixler at the sentencing hearing of Edmond Paul Price at 8:30am in room 10C at the Clark County District Court Regional Justice Center, 200 Lewis Avenue, Las Vegas, Nevada 89101 this Thursday morning, August 1st 2013. As the victim in this crime I will read my impact statement, which I am composing today. Afterwards Judge Bixler will sentence Edmond Price for the six felonies he was convicted of committing against me:

1) Conspiracy to commit kidnapping
2) Conspiracy to commit robbery
3) Robbery with a deadly weapon
4) Burglary while in possession of a deadly weapon
5) False imprisonment with a deadly weapon
6) Battery with a deadly weapon

Unbelievably, the jury acquitted Edmond Price on the charge of Attempted Murder and Conspiracy to Commit Murder. The following is my opinion in regard to the jury’s recent Attempted Murder and Conspiracy to Commit Murder acquittal of Ed Price:

On June 26th, 2010 I was cowardly attacked from the rear with a tire iron by Edmond Price. I was initially hit at least twice on the head with full force with this lethal item. Have you ever been hit by a tire iron with full force? It could easily crack your skull open and spill your brains out. As dazed as I was I still had the presence of mind to grapple with Price to keep him from hitting me with this tire iron again. While defending myself against Price’s attack Victoria Edelman, his fellow conspirator, starts bludgeoning my cracked skull with anything she can get her hands on. She breaks a lamp over my head into thousands of chards of glass. She breaks a toilet tank lid over my head. She impales the crown of my head with an iron. She takes my two wheel dolly and converts it into a hoe that she rakes across my bleeding skull. These are only the items I recall being pummeled with. There were probably many more. During this assault I sustain a severe concussion, fractured cheek bones, ruptured ear drums, several severe lacerations on my head and hands and multiple broken bones in my hands and fingers. My right thumb is almost detached, my left middle finger is almost severed. My ring finger nail is almost ripped off. My ribs are all damaged, perhaps fractured, making it excruciating to breath. Somewhere in this fray I am even scalped! In this century I’m probably one of the only people in the entire World who has had the misfortune of being scalped let alone surviving this brutal torture!

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Licensed gaming is slowly becoming just another legal business; which is a very good thing.

Many of the strangest restrictions in the law arose from centuries of gambling being seen by society, or at least by opinion-leaders and law-makers, as an activity that was simply not respectable.  Gambling debts were unenforceable, and courts would no more allow casinos to advertise than they would brothels.  A gaming license was similar to James Bond’s “license to kill”:  It merely protected the operator from being prosecuted for what was otherwise an illegal act.

In the past, other industries struggled with becoming respectable in the eyes of the law.  This usually took the route of trying to show they were not forms of gambling, even if they were.  They also knew they had to come up with arguments on why they were actually good for society.  The best examples are trading in securities and commodity futures, and insurance.

Insurance is, of course, gambling.

Insurance eventually overcame its gambling roots because it was seen as creating a benefit for the general public, as an efficient way of spreading and lessening risk. Hence, the introduction of insurance to the drivers who follow car seat laws in california.

Looking just at the required three elements, insurance has prize, chance and consideration.  After all, a policy holder is merely betting a small sum with the expectation of winning a larger sum if a certain contingent future event occurs.

Systems similar to modern insurance are at least 3,500 years old.  Shippers, merchants and financiers developed schemes to share the risk and spread unexpected losses caused by pirates and shipwrecks.

Insurance as a separate contract first developed in Genoa in the 14th century, and was again focused on marine shipping.  The long history of maritime insurance made it the least susceptible of being viewed as merely gambling in more modern times.

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Senate Bill 346 is looking like a favorite at the Nevada Legislature.

The bill would allow investor groups to bet as a single entity much in the way hedge funds pool their money. Proponents of SB346 say it could bring millions of dollars in sports wagering to Nevada, money that now is bet illegally in the 49 other states where such gambling is forbidden.

While that sounds like a dandy idea on the surface, it would change a fundamental element of Nevada law. And although its backers say safeguards could be put in place to ensure transparency, multiple law enforcement sources and Nevada Gaming Control Board Chairman A.G. Burnett are concerned that just the opposite might be the case.

It might bring money, but it almost certainly would bring heat in the form of increased law enforcement scrutiny of the states sports gambling industry.

Heat is something one of SB346s key proponents, Cantor Gaming, knows something about these days. Cantor Gamings Lee Amaitis, who spoke on behalf of the bill at last weeks Senate Judiciary Committee hearing, arched eyebrows in the sports book industry when he touted his friendship with mega-sports bettor Billy Walters in a 2011 60 Minutes broadcast. The entity betting idea is not new to Walters, and Amaitis is a hedge fund expert and former CEO of Cantor Fitzgerald.

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As CEO of William Hill, Joe Asher is in the odds business.

But I’m not sure he would put up a line on whether his sports book outfit will be allowed to continue to place satellite-betting kiosks in bars across the state.

The spread of those kiosks will cease if Senate Bill 416 runs to daylight at the Legislature and becomes law.

Asher offers an articulate argument against what he calls the anti-competitive bill being pushed by lobbyists for the Nevada Resort Association. And if the playing field of Nevada gaming were ever level, he might have an unbeatable argument capable of transcending even Carson City politics.

One of my favorite media misimpressions on this issue is that it’s basically a Big Guys vs. Little Guys matchup, a ’27 Yankees vs. the Bad News Bears sort of thing. William Hill is not some unsophisticated hayseed but the planet’s largest sports wagering company.

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Putting a 24-hour casino in every home comes with great responsibility. Ensuring a safe, responsible gambling experience should be of paramount importance. Online gambling companies talk incessantly about revenue, but it is everyone’s responsibility–from regulatory bodies to operators, from governments to the citizens themselves–to require that all proper consumer protections and safeguards are in place before online gambling can go live. It is imperative that all stakeholders in online gambling be well versed not just in its benefits but in its pitfalls as well.

Perhaps one of the most dramatic illustrations of what happens when a gaming company puts revenue before responsibility is the case of Terrance Watanabe who is reported to have lost most of his personal fortune recklessly gambling in Las Vegas. According to an article in the Wall Street Journal published December 5, 2009, “During a year-long gambling binge at the Caesars Palace and Rio casinos in 2007, Terrance Watanabe managed to lose nearly $127 million. The run is believed to be one of the biggest losing streaks by an individual in Las Vegas history.” While Steve Wynn is reported to have barred Watanabe from his casino for compulsive gambling, Harrah’s Entertainment Inc. welcomed him and derived 5.6% of its Las Vegas gambling revenue from him that year.

This case showed such an egregious lack of sound business judgment on the part of Harrah’s, now Caesars Entertainment, that the company was fined $225,000 by New Jersey regulators in March of this year. Gary Thompson, Director of Corporate Communications for Caesars Entertainment said, “Because of the confidential settlement agreement we reached with Watanabe, neither he nor we can make any official comment.” However, he points out that Caesars hired an outside agency to investigate the situation and made procedural changes deemed necessary to prevent recurrences.

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The Texas Legislature convened its 140-day biennial session last week … and right out the gate, gambling is an issue du jour.

Two relevant bills to follow: the poker bill (Rodriguez – HB 292), which looks to provide for legal and regulated live poker at Texas racetracks and elsewhere; and the casino amendment bill (Ellis – SJR 6), which seeks to establish a Texas Gaming Commission by popular vote of the people, allowing for different types of gaming in specified regions.

Though much remains to be seen about current efforts and their ability to finally bring results to disenfranchised Texas poker commuters and pokerati expats, The Dallas Morning News ran an editorial last week suggesting that the people, even in ever-conservative Texas, are ready to push gaming matters forward, even if it results in a casino:

• Editorial (1-3-2013): Let Texans weigh the risk on casinos

It makes plenty of good points about money realities (see the sidebar to the right) … and challenges newly elected Tea Party reps to show they really believe in principles of fiscal conservatism more so than being in the pockets of social conservatives. But what caught my eye (and fueled my optimism?) was the “Related” box, where you can see a progression of influential opinion on the matter:

• Editorial (3-16-2011): Texans deserve a chance to legalize casino gambling
• Editorial (5-7-2010): Legislature should study gambling options

It’s a subtle change, but significant, imho. In 2010 it was about how the legislature *should study* … you know like they should, kinda-sorta look at it, and maybe think about it … by 2011, with Session rolling and different casino interests fighting for the business of building resorts, it was *Texans Deserve*. As in yeah they do, because we’re Texans by-darnit!

Now it’s a more active and agressive *Let’s [do this!]*

So … We should think about it (ok, done that), we deserve this (yes we do), so now there’s nothing else to do but act (and your inaction as a legislator is an assault on my intelligence and freedom).

OK, maybe I’m stretching things a bit. But The Dallas Morning News editorial page is hardly some liberal pink sheet. If anything, the Blue-Haired Lady of Texas journalism represents the collective voice of the conservative heart of the Texas GOP (in a region where George W. Bush and Mr. and Mrs. Pokerati, Sr. alike currently reside). So this slight variation in word choice over the years reveals not just an evolving willingness to see casino entertainment in Texas, but perhaps more important attaches the notion to matters of fiscal responsibility and the conservative principals that got many of them elected.

Every legislative session, the issue of expanding gaming comes up for consideration, and every session it becomes the target of inflammatory rhetoric, propaganda campaigns, and back and forth struggles among different factions until it stalls somewhere in the legislative process.

A dozen or more different bills may be offered, along with polls, sermons, editorials and heated testimony. But historically, gaming gets everything except the one thing that the people of Texas deserve — a chance for a statewide public vote on the issue.

As Texans, we can decide for ourselves how we spend our time and money. We like big sporting events, such as the Cotton Bowl and NASCAR. We like destination vacation attractions, such as the River Walk, SeaWorld and Moody Gardens. We like our fairs and rodeos and town festivals.

Some think legislators are under too much pressure from different interest groups to act objectively. But legislators don’t have to be for gaming to support a vote of the people.

We spend a lot of money on entertainment, and if what we want isn’t available here in Texas, we’re willing to travel to get it. With our relatively strong economy, our prosperity spills over into neighboring states, and we don’t spend that money grudgingly, even if we’d rather spend it closer to home.

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Here’s a quick rundown of some opinions from the past week or so from various corners of the internet that got me thinkin’ one way or another … all raising plenty of interesting questions that various poker people are sure to wrestle with in the future.

Opinion
Poker Shot Clocks Coming?
There seems to be some growing buzz for it, especially since so many of us found ourselves glued to a TV for 12 hours watching totally enjoyable poker but realizing we can’t be tryng to be the next Cricket if we expect TV to help our game grow. So how much longer do we have to wait for poker technology to catch up with Who Wants to Be a Millionaire? [InsideSTL Sports]

Opinion
Free Willy?
While Vegas grinders want Aria and other MGM Resorts to ban Howard Lederer, across the country in Atlantic City players are trying to get Caesars to unban a player who goes by “the poker monkey.” No idea what the story behind this one is and whether or not the dude’s a table shithead or unfortunate victim of poker room imperialism … so you decide what to do with William Souther, who apparently has enough fans to get a petition encouraging Caesars to reconsider forbidding his presence on their properties. [Change.org]


Opinion
Bitcoin Revolution?
Here’s a piece that says why our Donkdown radio cohort Bryan Micon may or may not be a genius as per his dedication to an open-source, bankless digital virtual currency that is apparently all the rage with Somali pirates, drug traffickers, and of course, online casinos. [CalvinAyre.com]

(For optional reading, here’s a bonus non-poker Bitcoin opinion from Al Jazeera … and a recently released assessment from the European Central Bank, who have been through it before with Lindens and Second Life.)

Opinion
4 More Pokers?
Zack Tracy thinks Election Day couldn’t have gone better for US poker players, with the stars finally ready to align for Americans who have too long borne the brunt of bad poker news. [Pokerfuse]

The arrest questioning of Norbert Teufelberger in Belgium on Tuesday seems as good a time as any to post about something that may seem obvious to many but still gets asked often enough (and perhaps too often): how to build an Internet gaming business that’s onside the laws of the jurisdictions in which it operates.

The detention of Teufelberger, co-CEO of Bwin.Party, concerns the continued operations of a publicly traded online gaming company in Belgium and its presence on that country’s so-called “blacklist.” Bwin.Party is “whitelisted” in other jurisdictions, and contends Belgium’s laws restricting foreign-based operators run afoul of European Union law. But with that matter yet to be resolved, people are already wondering what Belgium’s legal interpretations mean for Bwin.Party’s licensing prospects in Nevada — and its partnership with US casino companies, MGM and Boyd Gaming. (On that subject, I defer to @BrianPempus‘s tweets, comments, and queries.)

But the Teufelberger-Belgium affair raises the question I still get asked all the time: What jurisdictions should I stay away from if I’m an Internet gaming operator?

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Our state was founded by men and women who exhibited fierce independence and self-determination. These values are manifested in our limited approach to state government and the belief that if you have a dream or an idea, Texas’ friendly business climate will provide the fertile ground to grow it. Over the past few years, Texas has been the national leader in job growth and economic development. Folks are flocking to Texas from other states with their dreams in tow. Unfortunately, there is one issue where we’re being outsmarted by our neighbors.

Anyone who has read the Austin American-Statesman lately knows illegal gaming has become a big industry in Texas. We have closed our eyes and allowed illegal “eight-liners” to run rampant across Texas – some within just a few miles of our Capitol. The issue is not whether Texans are gambling — they are — but whether we will reap the economic benefits of it.

Expanded gaming is by no means a cure-all fix, and no one is proposing a casino on every corner, but it’s a private enterprise with proven economic results without the need for government subsidies or handouts.

Each year our fellow Texans spend more than $2.5 billion in strategically placed, just-across-the-border gaming facilities in Oklahoma, Louisiana and New Mexico. That includes $1 billion in Oklahoma, alone. Simply put, Texans are creating jobs and paying for schools, firefighters and other infrastructure needs across our borders. Texas is getting fleeced by our neighbors. I firmly believe that bringing back the billions of dollars that are leaving Texas and going to our neighbor states is a service to our state. The Legislature should let us vote to stop it.

I’m not alone in this belief. Poll after poll shows that an overwhelming majority of Texas voters, regardless of political party or geographic region, believe that Texans are smart enough to decide this issue. For those who believe that gambling is morally wrong, I respectfully ask: Doesn’t it make more sense to regulate an activity that good Texans are already doing in huge numbers?

Our willful blindness on this issue has also devastated the homegrown Texas horse industry. Texas should be the national epicenter of ranching and agriculture but the thoroughbred and quarter horse breeders have all but left the state for greener pastures in states where purses are enhanced with gaming proceeds. We can’t even play Texas Hold ’em at our racetracks, while a once proud part of our ranching and agricultural heritage crumbles.

The potential benefits to our economy are huge. Depending on the specifics, expanded gaming could create 75,000 permanent jobs in 40 different sectors of the economy, and it would bring several billion dollars in economic development to Texas. Gaming can be a profitable industry no different than manufacturing, agriculture, energy or technology, that will allow Texas to expand its tax base and contribute toward our needs — whether it is schools, water resources or property tax relief. Expanded gaming is by no means a cure-all fix, and no one is proposing a casino on every corner, but it’s a private enterprise with proven economic results without the need for government subsidies or handouts.

The numbers appeal to the part of me that spent many sleepless nights at the Capitol wrangling and squeezing the state budget for every last dollar and wondering how to grow our economy without raising taxes. But guess what? The gaming interests in our neighboring states are shrewd. They have gone to financial extremes to protect their Texas revenue stream. Since 2008, gaming interests in neighboring states (mostly Oklahoma) have poured about $2 million in political contributions into Texas trying to influence our state politics. They will stop at nothing to defeat the issue at the ballot box.

Texans are smart enough to decide this issue in a statewide referendum and the Legislature has the power to make that happen. For me, this issue comes down to a pretty simple question: Are you for Texas, or are you for Oklahoma?

It’s time to Let Texans Decide.

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John T. Montford is a former marine, district attorney, state senator, and chancellor to Texas Tech University. This op-ed originally appeared in the Austin American-Statesmen.

A federal judge in New York shook the gaming world in August 2012 by ruling that poker is predominantly a game of skill and therefore not “gambling” under the federal Illegal Gambling Business Act (“IGBA”).

The editorial headline from the Christian Science Monitor was typical:  “Misdeal on Internet poker gambling:  A federal court ruling that poker is mainly a game of skill and thus not gambling could steer Congress down the wrong path of approving Internet gaming.”

The opinion is significant.  The IGBA was the most important remaining federal statute that could be applied to Internet poker, now that the Department of Justice has limited the Wire Act to sports betting.  And any court that wants to declare that poker is predominantly chance will have to deal with Judge Jack B. Weinstein’s detailed 120-page-long opinion.

But the impact will be less than most commentators think.  The decision deals with only one specific statute, the IGBA, and expressly states that poker is still illegal gambling under other laws.  And the decision is so weak in so many places, that it will probably be overturned, if taken up on appeal.

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Not a story about poker, but an interesting op-ed nonetheless about a bipartisan effort in the US Senate to clarify financing options for college loans, grants, scholarships, etc …  In the piece, Times columnist Gail Collins uses the newly not-released Reid online poker bill as a comparative benchmark for a bill that everyone might want in principal yet still stalls at the peak of election season.

She explains:

Franken is hoping the Senate might take up his proposal next year. I presume you weren’t expecting anything sooner. Congress can’t even get it together to keep the Postal Service from defaulting. And the Senate leaders admitted the other day that they’re not going to be able to pass a bipartisan bill to legalize Internet gambling on poker, which seems to be a really high priority for some important people. If they can’t do poker, they are not going to get to student loan transparency.

So OMG did they just call the PPA Harry Reid Big Casinos the 2+2 community poker players “important people”?  Whoop-whoop! Wait your turn whiney college bitchez! And yet with the online poker bill(s) … well, the implication is that any stalemates in Washington DC are now all but official.  (Or at least that’s what our Senate Majority Leader would like us to believe!) So bummer, but not a shocker going into the Presidential debates … hope may still be alive, but no matter what your special interest, it’s gonna have to wait until at least 2013.

Of course for poker being #1 at the gate probably means we can expect an artificial bubble of opportunity in states looking to move forward with their own online gambling legislation a la Nevada and/or Delaware …

ALT HED: Four More Years?

What seemed like a tremendous decision for the gaming industry nine months ago – the re-evaluation of the Federal Wire Act of 1961 – may not be so advantageous for Nevada unless Congress takes steps to enact Internet poker legislation.

A window of opportunity that could place Nevada at the center of the potential U.S. Internet gaming market is closing quickly, and some in the gaming industry worry that lack of federal action could cost the state tax revenues and casino customers, while making Nevada subservient to less-regulated states.

“There are different standards for gaming regulation in one state versus another,” Station Casinos Vice Chairman Lorenzo Fertitta said. “We know some companies will shop for the lowest common denominator. We could start seeing bets being taken away from Nevada.”

The U.S. Department of Justice on Dec. 23 reversed a 50-year-old interpretation of the Wire Act, saying the law covers only sports wagering. Legal experts said the decision frees individual states to let online operators offer poker and traditional casino games such as slot machines and blackjack if the play doesn’t cross state lines.

It’s been estimated that U.S. gamblers spent as much as $26 billion annually gambling online before federal prosecutors indicted the operators of three of the largest Internet poker websites in April 2011. Closing those sites, which had violated federal law by accepting wagers from the U.S., effectively walled Americans off from the online gaming universe.

Now, states dealing with tight budgets are looking at that huge, untapped Internet market and are increasingly open to allowing – and taxing – it. Lawmakers in several states are in various stages of adopting regulations to allow full-scale online gaming.

Several Nevada gaming companies are on the verge of offering in-state online poker, but they foresee trouble ahead if their market is limited only to players in the sparsely populated Silver State.

And not only are they concerned about missing out on poker profits, they fear gamblers who can play online at home won’t bother traveling to Las Vegas’s tourist-dependent resorts.

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