Hmm, you know, it’s what been perplexing me, too … how some of the people who are pushing hardest for “our issue” are the people who stand to lose the most (in the short-term at least) should the Barney Frank or Robert Menendez bill(s) pass. The only explanation I can come up with is religious in nature … like sacrificing a cow.
But a drinky Steve Lipscomb and even drinkier online poker exec were offering up a bit more at G2E this week.
After his segment, Lipscomb found the executive at the bar — “three or four drinks ahead of me,†he said this week at the Global Gaming Expo at the Las Vegas Convention Center.
The executive had just finished an interview in which he said he wants his business to be regulated and taxed in the United States, instead of operating in a legal gray area. He had a different story for Lipscomb.
“He said, ‘Are you kidding me?’ †Lipscomb said. “ ‘I don’t want to be regulated and taxed. That’s the most ridiculous thing in the world. I’m making money without being taxed, without being regulated.’ â€
The executive’s conflicting statements illustrate the fractured nature of online poker in the U.S., Lipscomb said.
Word I’m hearing, btw, is that we’re drawing dead to a 1-outer in a 47-card deck for any anti-UIGEA legislation passing in 2009 … though I am (supposedly) eagerly awaiting to hear “good news” on the UIGEA delay — a move being pushed through the executive branch, not the legislative — like today … which I have come to learn in political circles probably means like Tuesdayish or maybe never.
Barack Obama is in Montana today — where he’ll be cavorting with Sen. Max Baucus (D-MT)*, who is chairman of the Senate Finance Committee, and therefore has to come up with ways to fund any major health care reform. A daunting challenge to be sure, but a good time to float the possibility of floating Sen. Robert Menendez’s (D-NJ) online poker bill as a potential source of much-needed revenue.
Instead of raising taxes during an economic slump to pay for these programs, what if Baucus and his colleagues could collect revenue that’s currently going to other countries from an industry that’s ready and willing to be taxed?
That industry is Internet poker, and Baucus can help make this a reality by supporting his colleague from New Jersey, Sen. Bob Menendez, who recently introduced a bill to license and regulate online games of skill such as Internet poker.
According to recent economic studies, tax revenue from licensing will add billions to the U.S. Treasury. Projections have shown that as much as $3 billion annually could be raised through Internet poker, which can be used to help fund key domestic priorities, like health care.
If the Dems are serious about passing Obamacare, then they should have a hard time turning their back on a few billion to pay for it annually. Of course, as we know, politics is seldom about what makes sense.
* Not to be confused with the strongly anti-poker Rep. Spencer Bachus (R-AL).
This is a semi-significant ruling because while the First Amendment has stood up for such requests in most criminal prosecutions, there is less case law directly addressing matters of civil forfeiture, according to Judge Laura Taylor Swain … but ultimately, yes, when thousands of American citizens are having funds they believe to be theirs seized by the government, yes, the public has a right to know what’s going on.
The losing side, btw, in this mini case-within-a-case are ultimately the same Manhattan federal prosecutors who followed up these payment processee seizures with an indictment against Douglas Rennick — the Canadian payment processor who faces more than 50 years in prison (cumulative), $1.75 million in fines, and the forfeiture of nearly $566 million on charges of fraud, money laundering, and illegal gambling operations for his doing business with websites such as Full Tilt, PokerStars, Ultimate Bet, and others.
Regardless of what’s in play there, I think it’s clear why, indeed online poker related money issues really can’t be handled in the shadows — as much as some federal prosecutors would like such transactions to stay that way.
Amy Calistri always has eyes on the stock market and the corporate goings-on of poker-related businesses, and her latest take on the sale of the WPT assets is right on the money. She gives the latest about stockholder rage over the WPT/Gamynia move and puts into words what I’ve been thinking for years, since shortly after I left the WPT fold and began to notice its downfall. That’s not to say it can’t rise again, but it might need new leadership to make that happen. An excerpt:
Frustration and envy appear to be the seeds of the series of missteps that sapped millions of dollars and focus away from the company’s core business. While the WPT helped create the poker boom, its television production business model only got a small piece of the obscene profits that were being generated by poker’s popularity. Online poker companies and online media sites reaped the lion’s share. This infuriated the WPT; they felt they were owed.
Gambling law professor I. Nelson Rose can break down a legal document or political issue like nobody’s business, and it’s a good thing he took the time to analyze the Menendez bill introduced to the Senate this week. Thanks to Poker Grump, this piece takes a look at the 91-page document and sheds some light on the proposed participation of states in the regulation/licensing of online poker, the tax on deposits to online sites, and the possible exemption of sites like PartyPoker from licensing. A sampling from the article:
Taxes might be a problem. The Frank bills have no limit on what taxes states can impose on operators, but limit the federal government to what is called a fee of 2% on deposits. Menendez is asking for less and more: A Federal Internet gaming license fee of 5% of deposited funds and a State or Indian tribal government gaming license fee of another 5%. This does get over the big problem with the Frank bills, that the big states, like California, where the customers will be, have no incentive to support Internet gambling operated and taxed by Nevada. Under Menendez, California gets that 5% tax. Although the states won’t like this provision: Tribes are treated like states, so if a player is on Indian land, that tribe gets the full 5% and the state in which the tribe is located gets nothing.
Of course, the tax system is still screwy, since it is a tax on deposits, not revenue. But it might work.
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!
Senator Robert Menendez has submitted S 1597 (AKA Internet Poker and Games of Skill Regulation, Consumer Protection and Enforcement Act of 2009) to regulate online poker and other games of skill. The full bill has been uploaded by the PPA for viewing here.
I couldn’t resist posting the view of where I’m blogging from. There’s something quite serene about sitting on grass in pinstripe slacks, leaning against a tree, with the view seen here …
I’m in a park just outside the Senate office building, where I just had a meeting with a rising* Kay Bailey Hutchison staffer. Didn’t get to pitch the future governor of Texas senator herself — today is a crazy health care day around the Capitol — but we did get to educate her office on a Senate online poker bill that will supposedly be introduced in the next week or two. This bill — a re-introduction of Sen. Robert Menendez’s (D-NJ) S-3616 — will be “like the Barney Frank bill, only it’s a cleaner bill … without any political bullshit,” one lobbyist explained to me.
Anyhow, the meeting went well, or at least well-ish. It was clear that KBH’s office hadn’t yet given any consideration to poker nor online gambling … so we got to lead out, and counteract the opposition arguments before they were even made. One noted positive — her staff has already been hit by a mini flood of letters supporting all our anti-UIGEA initiatives, so they know it’s an issue that matters to a sizable enough constituency to make it matter to elected officials, who apparently are very aware of any issue that potentially leaves them losing voters in bulk.
With that said, it also became clear that Hutchison (R-TX) will not be leading the way on this bill. Her staff was most interested in where Sen. Jon Kyl (R-AZ) currently stands. Now while we know him as a previous bad guy, he and other UIGEA strongmen are apparently “coming around”. That’s not to say they’re suddenly going to switch teams, but Howard Lederer specifically made some persuasive arguments that made him far less likely to vehemently oppose us. The estimated $3 billion a year (which doesn’t even count the corporate taxes American-based online poker companies would pay) is resonating loud and clear, particularly this week as those wanting to position themselves as fiscal conservatives are trying to come up with a way to support health care despite its $200 billion shortfall. And being pegged as people who turned down tax revenue generated on behalf of protecting citizens and internet freedoms alike, they know may not sit well with voters.
Nice statement from the Poker Players Alliance just came across the transom. We’ll see if it leads to more coverage of our issue in the non-poker political press. Regardless, I think historically November ’08 will be seen as a period where everything changed for the industry (for better or worse is yet to be determined) … probably the most significant period since Sep/Oct ’06.
Statement by PPA Chairman D’Amato on “60 Minutes†and Washington Post Coverage of the Absolute Poker and Ultimate Bet Cheating Scandals
Washington, D.C. – “The recent cheating scandals underscore the need for U.S. licensing and regulation of online poker to help protect consumers. While even the most highly regulated industries are susceptible to fraud and abuse, regulation does provide assurances that when consumers are harmed they have recourse, and that the offenders will be sanctioned. The continued pursuit of poker prohibition, on the other hand, will only drive this industry underground. As the Washington Post pointed out, prohibition represents a widening disconnect between 21st-century technology and 20th-century laws.
The US Senate is hard at work … as we speak/type/read, they’re fixin’ to vote on their version of the Bush-Obama-McCain-endorsed $700 billion Wall Street bailout bill (currently at 450 pages) … hope that works out the way it should.
Mandatory implementation of technologies to protect against underage gambling and to monitor and detect individuals with excessive gaming habits;
High standards to thwart fraud and abuse of customers;
Regulation to prevent money laundering; and,
Processes to prevent tax avoidance.
Kinda fascinating to see the (potential) future of online poker (potentially) taking shape, no? It’s taken nine bills to get to this point. Combine this one with the recent bipartisan pushing of HR 6870 from the House Financial Services Committee to the House floor — requiring clarification of the vague definition of “unlawful Internet gambling” contained in the 2006 Unlawful Internet Gambling Enforcement Act after industry officials and regulators, including the Federal Reserve and Department of Treasury, testified to the UIGEA’s unworkable nature and the burden it places on the already troubled banking industry — and, well, you do the math.
The nation may or may not be on the verge of economic crumble, but as far as poker’s concerned, I think we’re looking at positive EV.
I couldn’t resist posting the view of where I’m blogging from. There’s something quite serene about sitting on grass in pinstripe slacks, leaning against a tree, with the view seen here …
