Poker Blog and Poker Gossip

After the FBI shut down PokerStars, Full Tilt Poker and Absolute Poker on Black Friday, the entire online poker community was shocked. Initially, it was thought that with 11 people indicted, over 70 accounts under lockdown and the FBI involved that the sites would go down quietly into the night – however that is not to be the case. Absolute Poker and the government of Antigua are ready to take on the FBI with the help of the WTO.

Harold Lovell, the finance minister of Antigua, was quite incensed about the situation and issued a statement expressing his views on Black Friday. “I am concerned that at this point in time United States authorities continue to prosecute non-domestic suppliers of remote gaming services in clear contravention of international law,” he said, calling Black Friday an illegal closure of the US poker sites.

The case is based on the UIGEA and is sure to have a lot of support – perhaps from the PPA. It is about time that someone questioned the US government on what is one of the shadiest laws to be instituted. Perhaps the Antiguan government will ask questions as to why an act like the UIGEA – which was sure to face a lot of protest – was hidden in fine print in an another bill. The purpose of the UIGEA is also something that does not make sense.

Mark Mendel, who acts as the legal advisor for the Caribbean government also commented on the issue. “I don’t think there’s another country in the world that puts people in jail for engaging in trade that’s lawful under international law. It’s as if Antigua would put Americans in jail for selling pineapples.”

The case will question why US poker sites are being punished while American casinos are allowed to offer poker. Other questions that might be raised are: Why is poker in the US illegal but legal in land based casinos and Is it within international laws to allow the US such freedom.

Mendel showed strong support for the three US poker sites that were recently closed by the FBI authorities. “They’re not defrauding anybody. They’re not stealing money from anybody. They’re just trying to run their businesses,” he said.

The UIGEA hasn’t done much to keep America’s online poker players away. It’s made access to some sites harder, and deposit options have become more complicated, but not by that much. Still, there are forces at work pushing for legalization and regulation of online poker in America. Those forces are mostly obvious. The ones working against it, though, are more subtle.

For example, Harrah’s is making a push for legalization. They own an online poker site under the WSOP label and need to keep their noses clean so they can’t afford to offer their site to American players. The Poker Players Alliance has a clear interest here too. Some of the land-based casinos are taking up the cause for online poker and casinos in the hopes that they’ll be able to influence the laws and get the first licenses. Others, particularly tribal casinos, are concerned that they’ll be left out in the cold. For the first group, the gain would be enormous. Americans are abandoning the land-based casino to play online and these casinos are suffering. If they get their licenses, they’ll get back their financial upper hand. For the latter, the loss might not be as clear-cut, but they’re not willing to risk it.

Let’s not kid ourselves, their current fight is more a bid to become beneficiaries of any tax division of online gaming revenues than a real bid to prevent online gambling in the United States.

What’s more interesting is the states, like New Jersey and California, that are looking to get intrastate online casinos and poker rooms going. Those states seem to be looking to lock in their claims on tax earnings as well. Moreover, they may be looking to claim that they already have licensed online poker rooms in order to try to get their rooms recognized on a national level, bringing national revenues into the states. How this all plays out remains to be seen, but it was undoubtedly be quite interesting.

Earlier this year Representative Jim McDermott had introduced the bill Internet Gambling Regulation and Tax Enforcement Act of 2010, listed as HR 4976. The bill proposes to tax online gambling in order to generate revenue needed by the state. The bill came up for hearing on May 19. There was no vote. The bill did not move forward to the next stage. In short the hearing was a total waste of time. Everyone simply repeated what they have been saying the last two years. The movement for regulated online gambling remains on life support waiting for someone to turn off the switch.

McDermott said that Internet gambling being illegal is making no difference to American poker players. They are simply gambling at offshore online poker rooms. Legalization, regulation and taxation of online poker will bring the revenue to American coffers. He pointed out that the federal authorities, the states and even the tribes would benefit from this. Barney Frank said that he would bring his bill, HR 2267, before the House Financial Services Committee in July. So many dates have been given and then postponed for this bill that it is doubtful if anyone takes it seriously. In any event the UIGEA regulations come into force on June 1 and Frank’s statement is a bit like trying to shut the door after the horse has bolted. The only minuscule achievement of the hearing was that staunch online gambling opponent, Oregon Republican Representative, Earl Blumenauer, became the 70th co-sponsor of Frank’s bill.

Californian Republican Representative Wally Herger and Virginia Republican Representative Bob Goodlatte made the usual noises against McDermott’s bill. In times of economic crises the Congress has more urgent matters to attend to was their view. They completely ignored the fact that taxing online gambling could at least in part alleviate the economic problem. However, the cruelest cut of all came from Democratic Representative Shelley Berkley from Nevada. Though she recently announced support for the legalization of online gambling, she opposed taxing the revenue generated from it. Without the carrot of tax revenues legalization of online gambling can never become a reality.

I have stayed away from this topic for the last little while (except for Monday…this post was actually written for last Wednesday, but i didn’t publish it…but it’s still relevant..), assuming
that it would be dominating the news as the deadline to UIGEA compliance
is June 1st.  I figured that a bunch of states and even the Federal
Government would be well on their way to passing a law to abandon the
whole ill thought out idea.  But alas, that is not the case.  In fact
the Federal Government in the USA has been dragging it’s heels (or, you
know..been busy passing health care and financial reform, cleaning up
toxic oil spills etc..) and because of that there has been no movement
one way or the other.

The last scheduled hearing on UIGEA was on
April 16th, and it got canceled due to a conflict for Chairman Barney
Frank (D-MA).  Chairman Frank has been one of the only outspoken voices
regaling the benefits of online poker.  He is also the man responsible
for Bill HR 2267 or Internet Gambling Regulation, Consumer Protection
and Enforcement Act.  Since the Bill’s inception it has gathered 68
co-sponsors.  HR 2267 would establish a full licensing framework for
Internet gambling, and regulate the customer base from the USA.  As of
yet, no makeup hearing has been scheduled; however there is a meeting of
the House Financial Services Committee on Thursday, May 6th, so there
may be a stay of execution after all.

What will a post June
1st Landscape Look Like?
Will it really affect the everyday
casual player?  No one is really sure.  Because of the vague nature of
the UIGEA, it’s specific statement that it outlaws “unlawful internet
gambling transactions” and it’s deferral to a “tangled web of state and
Federal laws” to govern what exactly “unlawful Internet gambling
transactions” are, most people believe that it’s a whole lot of build up
for nothing.  There is in fact, a push to make June 1st break the
record for most online poker players (during a weekday).  The thread can
be found on twoplustwo. Here is a quote from the post’s author,
“UGotStacked”:

 “We can do this by playing on our preferred
poker site that day – preferably one of the top two – Stars or Full Tilt
– so we can take a stand and possibly break the single day
record of players (for a weekday) of online poker – on the day that it
will be ‘supposedly outlawed’ in the U.S.”

So, it’s
either a whole lot of hot air, and nothing of any note will happen on
June 1st.  Or, there are going to be a lot of shocked and disappointed
online Poker Players trying to figure out how to get money on, or off
their coveted online accounts.

When the Safe Ports Act was signed into law on October 13th 2006, the
Unlawful Internet Gambling Enforcement Act (UIGEA) also came into
existence as a provision of that law.  Consequently, a lot of major
players in the on line casino business shuttered their US operations in
anticipation of required complacency with that law.  Since then, very
little has come of UIGEA and the two biggest on line poker / gambling
locations on the net, Full Tilt and PokerStars have set records on a
regular basis with apparently little push back from US law enforcement.

Well, it seems that PartyGaming is getting set to relaunch their US operations.  Why
now?  Why after 4 years of staying away from the American market do they
want to come back?  When they pulled out of the US market, they were
the world leaders in on line gambling.  It seems that they assumed that
if they pulled out, others would follow and the US would be a veritable
wasteland for on line poker.  This bet failed, and they lost huge market
share.  Now, PartyGaming CEO Jim Ryan is quoted as saying “We are
seeing increased momentum towards regulating on line poker” …” it’s
possible that it could happen this year and we’re prepared if it does.”

But, with the House Financial Services Committee postponing their last
scheduled meeting regarding Chairman Barney Frank’s Bill’s, and no new
date set before the June 1st deadline of UIGEA coming into effect is
this a realistic stance?  Even if it is, it’s been 4 long years since
Americans could play PartyPoker, how much of Full Tilt’s and PokerStar’s
market share is a realistic goal for PartyGaming?  I guess until June
1st, we’ll have to continue waiting and see.

An Australian National found this out the hard way when he was arrested in Las Vegas on a bevvy of charges, ranging from money laundering to gambling conspiracy and Bank Fraud Conspiracy.

Now,
while playing online poker in the United States isn’t strictly illegal,
what IS illegal is funding online poker in the states.  Anyone,
including banks, who process payments to online poker rooms are
technically breaking the law, even with UIGEA not being enforced yet.  With that said, Daniel Tzvetkoff is an idiot.

Tzvetkoff
is, obviously, the Australian National who was arrested; prior to that
he was the man that ran an online poker payment processing company
calledIntabill. The company went under last year, leaving some poker sites out money,. and Tzvetkoff 30 million bucks richer.

So,
you would think if you took your former customers for that much money,
you’d stay out of one of the countries that could potentially arrest
you on some pretty serious charges.  You’d think.  But Tzvetkoff decided to attend a conference on Internet Billing in Las
Vegas.  That was his first mistake.  His second? Attending the
conference with the very people he basically stole money from.  So how
did they respond?  They turned him in.  If convicted he could face up
to 75 years in prison (according to an Australian news article..).

Two things have been made abundantly clear with this news.  1: The American authorities aren’t messing around, and they WILL arrest people suspected of laundering money or committing fraud.  2: No one is invincible, even guys who (were at one point) worth $80 million dollars.  I mean, c’mon guy…you tube the conference…..