Online pokerers can get their schadenfreude on, as one of our game’s staunchest opponents, Spencer Bachus (R-AL) faces a Congressional ethics probe for insider trading violations.

The independent, non-partisan Office of Congressional Ethics believes Bachus was “betting” the stock market with privileged information, the Washington Post reports.

OCE says they’ve been looking at the current Chairman of the House Financial Services Committee for more than a year to confirm suspicions that, essentially, Bachus, an active trader, was operating like a stock-options superuser! OK, maybe not exactly, because you gotta think Bachus woulda banked more than a few thousand bucks here and there if he were truly the Russ Hamilton of Wall Street politics. But still …

DC Power Broker? A leader in the cause of stifling online poker, seen here with his wife at an event honoring Rafe Furst and Phil Gordon, two Full Tilt Poker pros.

Regardless of whether or not this level of OCE censure might ultimately land Bachus in prison a la Martha Stewart (it’s often a fine line between unethical and illegal) Bachus’ woe is a big win for poker because such allegations alone effectively neutralize his power and influence on Capitol Hill. In the War on Poker, Bachus has been a General for the other side post-UIGEA, and twice before has shown the ability to stop online poker legalization efforts in their tracks by persuading other members to line up behind him on our issue. But not this go-round, it would seem …

Quick LOL … something I stumbled across while reading what I presumed was just a ho-hum news article about another state gearing up for online gambling (via the PPA’s latest newsletter). I wanted to see what state was next and whether or not they separated out poker. Turns out it was just California, talking about how much money they stand to make if they can just catch up with Nevada. For sure. Righteous, dudes.

But what stands out most to me is a line from one of the opponents of any measures for California to finally get serious about regulating online games within their own borders:

“We don’t want to see any of it,” said pastor James Butler from the California Coalition Against Gambling Expansion. “Pretty soon they’ll have an app that will allow you to connect instantly to a casino or a gambling site. Want to lose your home? We have an app for that,” Butler said.

Emphasis added. Not sure if we should tell the fine pastor that they already do have such an app — all over the UK to be sure, and in Nevada you can bet sports for real money anywhere you want using your Droid or iPhone with Leroy’s App. (It just turns off when you get to the California border — amazing that crazy technology these days!)

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pic: @scarlet_lv

Editor’s Note: After seven months of what seemed like stall-and-get-nowhere — and a delay yesterday until today — the poker-friendly legislation that Barney Frank (and the PPA) has been pushing and refining since 2007 faces a critical vote. It’s an all-in situation … if we “win”, legislative matters related to online poker and gambling still have a ways and means? to go before seeing the desk of Barack Obama. However, if we lose — as we did by a tie vote back in 2008 — it’s back to the drawing board.

You can watch it all going down here, assuming there aren’t shenanigans in play to delay matters further. And because there’s always a chance I don’t know WTF I’m talking about, Pokerati has deployed a Beltway team to not only keep us posted on today’s developments from the Hill, but also to provide a primer on what’s really in play today for the future of internet gambling and/or poker in America.

You can follow reports from the Hill today on Twitter with @Scarlet_LV, and below is more about what she’s walking into.

HR 2267 Markup

A special report for Pokerati by @Scarlet_LV
photos by James Berglie / Be Photography

If all goes well, the House Financial Services Committee will decide today the fate of HR 2267, which seems to be the keystone for any new laws that stand to eliminate burdens of the UIGEA and establish a framework for the future of licensed and regulated online poker in the United States.

Today’s hearing is a “mark-up”, where the full committee debates amendments to a bill, and votes on a motion to send the bill to the House floor with recommendations on the amendments to consider for a decisive vote. Make sense?

I’m pretty sure that’s how it works — but I never would’ve expected two weeks ago when dealing the WSOP that I’d be on Capitol Hill watching a different (but not too different) game with so much riding on the deals being cut. For more explanation, see house rules and parliamentary procedures here and here.

H.R. 2267 Internet Gambling Regulation and Consumer Protection, Consumer Protection, and Enforcement Act.

To amend title 31, United States Code, to provide for the licensing of Internet gambling activities by the Secretary of the Treasury, to provide for consumer protections on the Internet, to enforce the tax code, and for other purposes.

Having attended last week’s meeting, I met this week with people who could fill me in on the amendments the Committee will be discussing today. Though more or fewer are possible, here’s what most expect:

1. Barney Frank “Managers Amendment” — the contents of this will not be disclosed to anyone before the markup, but it will provide the baseline used to “define the debate”
2. Brad Sherman –- his amendment will likely look to limit licensing to US-only companies and those that have not been acting “outside the law”.  Supposedly “smaller internet gaming companies” might be able to get around this if added to the bill, but bigger companies with a notable TV presence (such as FullTilt, PokerStars, and UB) would not be able to so easily if at all.
3. Spencer Bachus / Michele Bachmann –- perhaps with elements of Sherman’s amendment included (I peeked over the shoulder of some lawyer suits holding it yesterday, he’s looking to completely gut the bill and more regulation to strengthen anti-gambling components of the UIGEA.

With these potential amendments, you get a sense of the driving forces currently behind the bill, and the key players. These became apparent during last week’s hearing — which sources tell me was rather unusual for a bill like HR 2267 to get a second hearing like that — as testimony from Members and witnesses helped shape matters that will be in play today.

As the mark-up proceeds, here are the different Members and groups claiming a stake in this piece of legislation.

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Watch the markup hearing here

The markup hearing of the House Financial Services Subcommittee started shortly after 10am. The schedule is to discuss HR 2267 until 11am ET, then take a one-hour break. The Committee will return at 12pm for more discussion with a vote scheduled by 2pm ET.

Watch the archived hearing here

Wednesday’s hearing on HR 2267, which would regulate and license Internet gambling, brought out strong opinions from both sides in over two hours of testimony in front of the House Financial Services Committee. The next step in the legislative process is a mark-up of the bill, tentatively planned for next week where members of the Committee can add amendments to the legislation, with a vote to move the bill out of Committee and have the full House of Representatives vote on the legislation later this year. A couple of items from the hearing:

Bachus v Duke on Ultimate Bet scandal

One of the more contentious moments of the hearing was when Ranking Member Spencer Bachus (R-AL) entered into evidence a two-year old article from MSNBC.com discussing the Ultimate Bet superuser scandal. That article stated that over $75 million had been stolen from its players. Duke corrected Bachus, stating that the figure was $22 million, and the entire amount was refunded to its players. Duke also stated that the scandal was a reason why regulation would be beneficial to those who play online poker so that justice could be served for the parties responsible for the scandal.

Disagreement among opponents

Another point brought up during the hearing was while anti-terrorism/money laundering consultant Michael K. Fagan, a former US attorney, was against all forms of Internet gambling. Meanwhile, California cardroom executive Tom Malkasian was also against the legislation, but he and his coalition of California cardrooms and Native American casinos have been pushing hard for intrastate gambling in California. Another Native American executive, The Honorable Lynn Malerba of the Mohegan Tribe of Connecticut was for the legislation, but the tribes had to be on a level playing field. Rep. Joe Baca (D-CA), who is against the legislation, got into a war of words with Malerba, stating the legislation could threaten the sovereignty of Native American casinos.

You can watch the hearing at the link above, and read the press release from the PPA regarding the hearing:

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No one should get too excited about the supposed Full Committee Hearing for the Barney Frank (D-MA) bills … engines may be revving for HR 2266 + 2267, but these bills aren’t really “moving”. At best they are spinning their wheels and at worst they are flat-out stuck in political mud.

The PPA informs us that the hearing has been “postponed [until] later next week possibly”. Its being scheduled for a Friday shoulda been the first clue that the House Financial Services Committee wasn’t really serious about having a debate on these bills. At this point in an election season, the members often try to get out of Washington DC as early as possible on a Friday so they can return to their home districts.

The whole purpose of this not-so-scheduled hearing is not for debate and mark-up … but rather to appease a Spencer Bachus (R-AL) beef, who previously complained the last time they talked about these bills that Frank did not do his due diligence and invite the Deptartment of Justice and the Treasury (and maybe the Federal Reserve?) to testify. Supposedly someone from California is also looking to speak, saying these regulatory matters should be left to the states, not the Feds.

The Prevent Cancer Foundation presented its 2nd Annual “Cancer Champion” award this weekend in Washington DC to two Full Tilt poker pros — Rafe Furst and Phil Gordon.

You be the judge … good poker face on Spencer Bachus (R-AL) as he and his wife congratulate Rafe and Phil for their good great work fighting cancer?

Perhaps one of poker’s staunchest political opponents is softening … Either that or it’s hard to oppose money for cancer, especially at an event sponsored by Pfizer.

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Here’s a quick rundown of what’s going on in one of the hungriest industries out there, and, game of skill or not, the parent biz of our beloved little poker world:

ALABAMA — A small little gambling fight is going down in the land Spencer Bachus represents, over a matter of semantics, technology, and the millions of dollars bingo machines represent. Bingo is legal in ‘bama … but should video bingo be? The fight is a dirty — complete with one agency repeatedly trying to raid a well-monied operation that believes it’s on the right side of the law.

CHINA — After a slow start, gambling revenues in Macau are reaching record levels.

IOWA — The Iowa Racing and Gaming Commission’s computer system got hacked, and they’re blaming China:

Chinese foreign ministry officials strongly disputed the report, issuing a statement calling it “full of bias and ulterior motives.”

Personal information in the breach included names, Social Security numbers, home addresses and dates of birth. Most of the people in the licensing database are Iowa residents, but it also includes residents of Illinois, Minnesota, Nebraska, South Dakota, Wisconsin and other states, Ketterer said.

The list includes workers such as card dealers, slot machine technicians, jockeys, trainers and owners of horses and greyhounds.

LOUISIANA — The New Orleans-to-Shreveport casino-biz is in a definite recession, one not planned for when the state planned on becoming the central-coast alternative to Las Vegas and Atlantic City. They blame Texans for not gambling enough Oklahoma and Mississippi for cutting in on their action.

NEW JERSEY — Big fight going on over laws related to the building of Revel — the east coast’s $2.5 billion version of CityCenter. Should be an interesting development to watch go up (or down) as New Jersey fights to stay competitive with the smaller casino operations set to open shop in Delaware and Pennsylvania, but not Maryland.

MARYLAND — Gov. Martin O’Malley is saying Maryland’s not gonna jump into the gambling expansion fray, despite assertions that his state is gonna lose out as neighboring locales up their casino offerings to include table games + poker.

OHIO — As we know, Lyle Berman has effectively bought himself a piece of all the newly legalized action to come in Cincinatti, Cleveland, and Toledo. But he’s run into some blowback over the location of a new casino in Columbus. The constitutional amendment voters approved in November called for a full-blown casino-resort downtown, but now a referendum on a May ballot will decide if the Penn Gaming development should be moved to a blighted part of the city.

Related: “It’s Lyle’s Ohio Now”

UNITED KINGDOM — Once upon a time, Great Britain was leading the world in all things online gambling. But regulations and tax issues are messing that up — and it’s turning into a battle of Labour vs. the Tories for the UK’s gambling future. Good rundown on some British gambling-law history and where the different parties stand on gambling in the UK … as the rest of Europe catches up.

Man, things take a long time in politics. Remember Pennsylvania? We almost forgot about them too … it’s been more than three months since they “agreed” to move forward with more casinos in a way that would bring more legal poker to the state with “must pass” legislation to balance the budget … which was already three months overdue. Yet as these things go, there’s been one hurdle after another in pushing this through legislative halls.

Anyhow, they’re back at it starting today — with Gov. Ed Rendell creating a direct and immediate association between casinos (+poker) and jobs. Specifically, the governor has said pass this thing THIS WEEK or 1,100 state employees will be without work. The process of firing them begins Friday.

The nitty-gritty they’re down to is upping the number of licensed resort casinos from two to three (with an option for four in 2017), and increasing the max number of slot machines at each venue from 500 to 600. Fuckin-A. How ’bout three resort casinos, compromise on the slots numbers at 550 … all for a vote to be named later? Politics doesn’t have to be this hard … or maybe it does?

Instapoker

Meanwhile, the Rivers Casino, in Pittsburgh, seems to be getting ready for expanded table games offerings by hiring a bunch of Harrah’s executives to help them run the ship in new waters. David Patent will be the new big-big boss in Pa. His plans include opening a sports bar and running TV commercials. [Pittsburgh Business Journal]

A few other semi-related links:

The PPA plans to attend CPAC again this year — that’s the Conservative Political Action Conference, where all the GOP muckity-mucks gather to shmooze/grovel for money and power. Should be a feisty event, and @TheEngineer is trying to rally some conservative troops to turn against Spencer Bachus (R-AL), calling him out as a past-his-conservative-prime dimwit whom the party should abandon, or at least treat as ineffective and irrelevant. [BigGovernment.com]

In South Carolina, a Catholic church rejoices over Fr. Andrew Trapp’s near-million-dollar run on the PokerStars Million Dollar Challenge. If only he coulda prayed as well as Jerry Yang! [WBMF]

Also in South Carolina, Attorney General Henry McMaster is appealing a court ruling that poker is a game of skill, and trying to take the prosecution of a busted home game to the state Supreme Court. [Charleston Post and Courier]

Toledo, Ohio, is getting ready for its first casino+poker to open. The pre-launch message going out: OK, we look forward to your money, but you better be damn good citizens. [Toledo Blade]

Although jobs and economic development are critical to the city’s recovery, Mayor Bell has to avoid the temptation to give Penn National Gaming a blank check as Toledo’s casino project takes shape. Gambling is not a panacea for Toledo’s ills.

Big score, btw, for Lyle Berman, who made a $4 million bet in October to help make Ohio casinos a reality, politically, and in return locked himself into 10 percent of Ohio casino profits. [Poker Player Newspaper]

Gambling gambling gambling seems to be the big buzz in cities, states, and regions looking to shore up their coffers. And to prepare for our gambling future, the National Center for Responsible Gambling is advising American universities to develop formal gambling policies for students. [NCRG.org]

In Washington DC, readers are challenging editors on their usage of poker metaphors in stories about the Obama vs. Ahmadinejad heads-up match over nuclear proliferation. [Washington Post]

I may or may not be talking about this morning’s House Financial Services Committee hearing on today’s episode of The Poker Beat … so that’s why I’m up listening/watching/clicking. It’s kinda a big deal, I think … we got our 6-month extension on the enforcement deadline, and now, here in Barney Frank’s committee, the good rep is basically (re-re-re?)-reintroducing legislation that could effectively undo the UIGEA.

Here’s what I’m watching. Follow along if you we can …

* Yikes, video is great – HD! – but audio sucks, like irritatingly buzzy and scratchy.

* Barney’s opening argument … personal freedom. On the internet.

* He quotes John Stewart John Stuart Mill.

* Holy shit, you can pause this video? Like even without Tivo … awesome. I’ll be right back … need to get a beverage …

* OK, I’m back. While I was gone a press release came over the wire … apparently something that will be introduced forthcoming:

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via the PPA …

Sen. Jon Kyl (R-AZ) and Rep. Spencer Bachus (R-AL) have submitted their petition asking Treasury Secretary Tim Geithner and Federal Reserve Chairman Ben Bernanke to ignore requests seeking to delay enforcement of the UIGEA.

[DC] Bachus Kyl Letter (11/03/09)

I’m not sure if it’s an endorsement of our efforts or a call to action to our opponents … but be sure to check out this lengthy article in the October issue of The American Conservative:

Coming Up Aces
Legalization of online gambling looks like a sure bet.

The piece does give some important numbers — projected internet gambling revenue in 2011=$144 billion, and a 2 percent tax on deposits in the Frank bill would mean $51 billion over 10 years — but I am a bit concerned that the writer makes repeated references to the UIGA (as opposed to the UIGEA).

However, I do like (I think — not totally sure, as I trust few in politics) that our most vociferous opponent seems to be preparing his supporters for a loss:

As the arguments stack up, opponents of Internet gambling increasingly don’t like their odds. “It’s going to be an uphill battle to stop it this time,” admitted Congressman Spencer Bachus (R-Ala.), the ranking Republican on the Financial Services Committee in an interview with Politico. “We caught them off guard last time. This time we might not be so lucky.”

I also think I like that there’s talk about “putting profits toward helping addicts”. I dunno, just seems a treatment provision is important, and in general we (kudos to the PPA) have our bases covered this year more so than in legislative efforts past.

via @TheEngineer2008

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.

An op-ed in today’s Missoulian — titled “Fund reform with Net poker tax” — does exactly that:

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).

A bunch of PPA state directors and politically involved pros are already booking their plans for after the WSOP — they’re headed to Washington DC for an aggressive play by the PPA supposedly dubbed National Poker Week.

Should be a most interesting gathering — different from previous pokery political collectives in that there are so many legal issues playing out in real ways right now (Kentucky, Minnesota, Pokerstarzistan, etc.) … and all this with a pretty important-looking nuts-and-bolts online banking regulation bill in play … with non-pokery representatives finally aware of the online poker murmurs, and public opinion clearly leaning in our favor.

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Ding ding! Let the first round of the official debate begin!

U.S. News & World Report provided a forum for representatives of both sides of the issue of legalizing and regulating (and taxing) online gaming. When Rep. Barney Frank introduced H.R. 2267 on May 6, Rep. Spencer Bachus was quick to respond with a blurb about criminals, youth, blah blah. But the U.S. News piece allowed both parties to cool down and present their opinions with some bias thought.

In this corner, we have the winning argument from Frank, with a heavy concentration on the personal freedom aspect of the issue. He also takes the time to counter some of the arguments like the alleged criminal element and the sports betting worries. A few excerpts:

With Gambling, Personal Freedom Is Always the Best Bet, Says Barney Frank
There are many vices in the U.S. Those that hurt others must be stopped. Online gaming need not be.
Posted June 1, 2009
By Barney Frank
Massachusetts Democrat and chairman of the House Financial Services Committee

There is one major reason that leads me to oppose the ban on Internet gambling: It is an activity that adult Americans enjoy and that does no conceivable harm to anybody else…

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