John T. Montford

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OP-ED

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.

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.

We are all looking for the Big Casinos to benefit from online gamining legislation. But the parimutuel race tracks are also setting themselves up to be players.

Kentucky-based Churchill Downs, now owner of Bluff Magazine, operates TwinSpires, one of the country’s only legal online gambling sites (thanks to the UIGEA carve out for horse racing).

UK-based Betfair, owner of  TVG, another legal online horse wagering site operating in the US, just completed a five-year naming rights deal with California’s Hollywood Park.  

And now Las Vegas-based casino operator Pinnacle Entertainment bought a 75.5% stake in Retama Park in Texas for $22.8 million. Since Texas is one of the few states that hasn’t legalized gambling, Retama is an unlikely racino conversion. Pinnacle could, however, augment its revenues with an online wagering site.   

In the not too distant past, parimutuel racing was a stagnant enterprise. But the industry’s UIGEA exemption has made it a gateway to online gaming revenues, initially from horse racing, and perhaps ultimately from poker.

People may not realize this … because we have gotten along just fine even with the UIGEA for more than three years now … but December 1st is something of a D-Day for online poker. If no bill or procedural measure undoes the status quo in the next six weeks … well it’s not clear how the game will change, but it will. Dramatically.

That’s why the PPA has partnered with many groups to get this enforcement deadline extended — including the horse racing people, who should LOVE the UIGEA, since it specifically singles them out as A-OK. But even they know the law itself, as it was passed in 2006, is whack … and potentially will mess up their business big-time.

The PPA’s John Pappas gives a brief explanation:

It really is amazing what the people of Texas have built in Oklahoma. Not only is WinStar now the third-largest casino in the world*, but also Choctaw (the “other” casino for Dallas people) is undergoing an expansion that will make it the 17th largest in the world.

* Third is my number, btw, based on Business Week data, despite WinStar’s claim that they are just 5th.

At 110,000 square feet, the Choctaw Casino in Durant, Okla., will have the same amount of gaming space as Wynn Las Vegas, and slightly more than Wynn Macao.

Check it out:

“Texas hold’em / Ain’t nobody foldin’!” Rockin’!

We all know where that came from, of course:

More…

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.

Few details, other than that I think you can now bet on horse racing there … as of a few minutes ago, or at least today. (No sports betting?)

My source is @CommerceCasino:

And awaaay they go!! The Racebook at Commerce Casino is now open!!
3 minutes ago from web

While we know sports betting and poker have gone hand in hand ever since Stu Ungar introduced the concept of winning millions playing cards and almost immediately losing it all on the Bengals, I’m not so sure there’s as much overlap between the horses and poker. Could be wrong … and still, the convergence of poker and horses is kinda what we were going for in Texas earlier this year, except we had horses first and were trying to add poker, as opposed to the other way around.

It’s true. And she’s been palling around with druggies and convicts just so she can “write about it” and (don’t tell anyone I said this) I’m even hearing unconfirmed, squalidly detailed rumors from an imaginary source that she’s got a thing for Somali pirates! I’ll pull short of calling her The Ann Coulter of Poker … but she certainly touched a nerve by questioning the “good fight” behind our beloved little Texas HB 222.

Player safety, protection from shady games, capitalist personal freedom not real enough issues to vote on?

I might be extra-sensitive because, frankly, the bill seems to be stalling in Calendars Committee. Why that is, I’m not sure … they’ve heard our message, they know it has passable support … throw an amendment on if you need to, but c’mon … put us on the agenda already! I’m a little removed from what’s going on in Austin during this hectic part of the Session, but I’m pretty sure if we don’t move the bill forward in like the next -2 days, we might be in trouble … Just sitting there for like two weeks seems odd, assuming it’s ready for a simple yay or nay. I suppose it’s possible we’re getting Fristed somewhere in the process. Or, perhaps they’re just having a sincere intellectual dilemma, inspired by Amy Calistri’s question:

Why Do I Want to Pay a Rake?

Why is the PPA wasting time feigning a “grass roots” issue over a Texas bill whose only beneficiary is commercial poker – in a state where poker is unquestionably legal? … It doesn’t exactly meet my definition of fighting the good fight. I mean, even the banking lobby doesn’t ask me to petition my legislators for higher ATM fees. And they can be shameless.

[OK, deep breath, find peace … no tilt]

More…

As we know, HB 222 actually isn’t up for a vote until next week … but it’s looking strong. Here’s The Dallas Morning News’ take on yesterday’s meeting:

Texas Poker Players Willing to Ante Up Tax Money for Legalization

As is always the case in these mainstream media stories, check the comments for a pulse of the people. In this situation, so far, there are 14 comments supporting the bill (with 41 thumbs-ups), and 0 against (with 1 thumbs-down).

Could this thing be any more obvious? It’s a big matter of technicalities and lobbying and money and stuff at this point — along with some political infighting between proponents of the bigger casino bill and a horse-racing slot machine bill (which has been unsuccessfully fought for for about, oh, like 12 years now?). For good measure, Jose Menendez did extend an olive branch to the horse-track people Wednesday, letting them know that poker is indeed happy to help their bottom line — and you can look at other states where bringing poker rooms into the race tracks to get a sense of the many millions they do bring in.

That’s all good and cool — go horse-track poker! — but at the same time, why does politics have to be so hard (and expensive)? I’ve got a solution that should save everyone time and money, and could fit easily on just about any ballot for anything:

Poker in Texas
☐ Yes
☐ No

Isn’t politics at least in part about representing the will of the people? Because we already clearly know the answer to the above question.

From The Guardian: Betfair takes a £35m punt on American racing channel

Betfair, of course, sponsors WSOP-Europe. And they’re willing to take a $50 million gamble on their being able to somehow facilitate bets among American horse race fans? Very interesting …

Interesting story out of Detroit, about a struggling horse track (and thriving bowling alleys) suddenly offering No-Limit Texas Hold’em … thanks to a little legally creative finagling that allows third-party fundraisers to run poker games to benefit properly accredited tax-exempt endeavors.

You follow? Basically they’re taking something akin to the old Red Men’s model … run a game, make sure some charity really does get a cut … and making it fit within Michigan law. Presumably inspired by the recent success in Florida with poker rooms in race tracks.

They’re limited to running games four days at a stretch, so each week is technically a different event, with a different charitable recipient. The first beneficiary was a high school theater club. Should be interesting to see who lines up to get in on the action.

UPDATE: Though the above news article is only a couple hours old, according to the Northville Downs website, they’ll be running games 7 days a week starting, um, tomorrow.

Here’re more specifics about the charity hold’em set-up in Northville, and for folks in Texas and other states fighting to play the game above-ground … a glimpse of what even barely legal poker could look like. You’ll NOTE: It’s not just NLH … they’ve got a $1/$2 Hold’em/Omaha round-of-each game, and $3/$6 Omaha Hi-Lo.

NEATO: Northville is an outer Detroit suburb, and the new poker room is located right off 8 Mile road — Eminem’s hood! (Or at least his street.)

UPDATE UPDATE: OK, really, I had no idea how much charity poker action there was in Michigan. Check it out. So I guess what’s new is just that the horse tracks are finally getting on board, realizing the slot machines and/or “video lottery terminals” they’ve been fighting for just may never come. Lesson for Texas horse tracks?

This article breaks down what issues on the Texas Lege’s radar in 2009 — essentially our political competition. Gambling is high up on the list of matters to tackle, but others will be seeking to hoist the gambling flag (for better of for worse). Specifically, The Dallas Morning News explains:

GAMBLING
Is luck in the cards for casino, slot machine bills?

Proponents of expanded gambling in Texas will be back in full force this session, fighting for Las Vegas-style casinos, slot machines at racetracks, tribal gaming rights and legalized poker.

Bills to open casino gambling statewide are unlikely to go far, though the struggling economy may give them slightly more traction. Even if a bill passed, Gov. Rick Perry would probably veto it.

But measures granting special permission for the Alabama-Coushatta and Tigua tribes to reopen their casinos – shuttered in 2002 after a court order by then-Attorney General John Cornyn – may well succeed. The tribal reservations have struggled to fund basic services since the casinos that ran their local economies closed, and very narrowly missed getting legislation approved last session.

Past efforts to legalize slot machines at racetracks have fallen prey to industry infighting, but the horse racers and breeders are presenting a unified front this year. Though they would appear to have an ally in likely House Speaker Joe Straus, who has financial ties to the Retama Park racetrack his father helped found, it’s still unclear what good it will do. Straus has said that in his new role, he will do nothing to further racetrack legislation.

FACT: Advocates of legalized poker have filed legislation to develop a regulated poker gaming system in Texas.

One of the powerful and important people we’re hoping will support a pending bill that establishes a framework for legal poker in Texas is new House speaker Joe Straus (R-San Antonio), who describes himself as a “pass-the-budget-and-go-home conservative”. Sweet, then he should get it: with HB 222, the state increases its revenue while protecting citizens (and their personal freedoms); without it, state and local authorities have to spend lots of resources to ineffectively shut down poker while seeing more and more money shipped to Oklahoma and an increase in violent crime in otherwise peaceful Texas neighborhoods.

Evan Smith interviewed Straus the other day on Texas Monthly Talks. Specifically the new Speaker discusses his views on gambling-related issues (and his family’s long-time involvement with the horse racing biz) at 20:00:

Don’t tell anyone, but psychologically speaking, we want Straus, through the course of the session, to make a subconscious positive connection when he thinks about HB 222 … remembering fondly a flood of intelligent, warm-hearted, well-crafted emails from from frazzled poker degenerates who just wanna play a friggin’ game!!! concerned poker citizens who are proud to do whatever they can in pursuit of a better Texas.

Email to Joe Straus et al. expressing your support for legal poker in Texas.

I’ve improved the link, btw, so you only have to click once … type a brief message … and then click send. Two clicks for poker! Customize it to your liking — give’em your name and city — and yo, Texans (and non-Texans interested in playing poker in Texas) … conditions are good for this bill, and we know we are on the right side of the law-to-be. But if we can’t show that we’re serious about it, the number of representatives willing to vote for us won’t matter … because, frankly, we won’t ever get that far without this first step. Need some talking points? Here ya go:

* Poker is a game of skill
* It is being played every day for real money in Texas
* Tens of millions of dollars are passing hands unregulated
* Live poker games are increasingly a safety issue
* Poker could bring in millions of dollars in State revenue, and many more millions in economic impact

I use the phrase “last minute” loosely, because it’s possible this changed occurred back in 2007 and I just missed it … but Change100 points out there’s been a change in how the WSOP calculates its Player of the Year. It used to be that HORSE and the main event didn’t count — the intent being to create a “triple crown” for anyone who might manage to win all three in their lifetime … main event, POY, and $50k HORSE.

But now, according to the official WSOP website, POY points come from all open events (meaning seniors, ladies, and casino employees don’t count) except the main event. I suppose it’s not a bad change — maybe it is, who knows, will reserve judgment for now — but I know I heard some complaints about the old system before from Greg Raymer and others … the beef being that making the final table in HORSE hurts you a lot in the Player of the Year race because you missed out on so many other POY events in that five days.

Again, click here to see where the 2008 HORSE-friendly race stands, and thanks to Change100 for pointing out what I’ve been missing.

UPDATE: Change informs me that the change was made last week.

OPINION OF THE MOMENT: OK, I like it … why shouldn’t this big event count towards Player of the Year? Fuck, it probably should count double. And it doesn’t take away from the Triple Crown concept … in fact, facilitates it greatly, as winning the HORSE Championship and any other bracelet in the same year would take one a long way towards knocking out two of the three triple-crown prongs in one WSOP swoop. I wonder how much, if at all, the added excitement Harrah’s must’ve seen around the June 7 Belmont Stakes factored into a decision that makes a WSOP Triple Crown a slightly more realistic possibility.

Limiting POY points to only open events also seems right, so all contenders theoretically have the same chance.

Here’s an interesting story on MSNBC — about concerns within the horse racing community about the legality of their favorite pastime. What-the? Here we are in the poker world wishing we could be like the competitive equestrian industry — with a stated exemption from the UIGEA … but apparently the Department of Justice is contending that betting on horses on the internet is still illegal:

The online horse betting industry says the IHA, in effect, amended the Wire Act – the main federal anti-gambling statute – but the justice department has stated publicly that it believes the Wire Act remains paramount and that interstate horse betting online remains illegal. […]

“My gut feeling is that they haven’t tried to prosecute somebody because they don’t want to lose, because then you have case law that says they’re wrong […] And I think they would lose,” says Steven Barham, associate co-ordinator of the race track industry programme at the University of Arizona.

While most industries might be alarmed by a pronouncement by justice officials that it is operating illegally, the leading industry body takes the department’s latest opinion with little more than a shrug. The willingness of established companies to defy the department highlights the industry’s confidence that it has the upper hand in its analysis of the law.

Wow, sounds so much like poker in the “old days.” It also reminds me of 1) the impacts of badly crafted laws, which continue to need to be rewritten; and 2) how important the courts can be in determining who’s interpretation of a bad law matters most.