Poker Blog and Poker Gossip

Longest. Post Title. EVER.

Alright, so i read
today in “The Financial Times of London”(note, the link sucks, as after about 20 seconds you have to register
to read the article….i’ll summarise, but you can feel free to click
to the source if you can handle the registering…i barely could..)
that Full Tilt Poker is currently being investigated by a Federal Grand Jury in Manhattan.  The investigation is solely structured around weather specific gambling and or civil laws have been broken by the online poker room.

From the Financial Times:

FBI
agents or prosecutors have spoken to at least two people involved in
disputes with Full Tilt, paying special attention to the possibility of
money-laundering violations, those familiar with the inquiry say.

As
the investigation is under way at the moment (and, has apparently been
ongoing for a little while..) no one is commenting and no direct
information is getting out.  There have, however, been allusions to the
investigation looking to prosecute or consequence any pro players who
are associated with Full Tilt poker.

Now, in my opinion, this looks like a scare tactic brought on by the short time left before UIGEA comes into effect.  If you make the public see poker as an evil, addictive, money-laundering and illegal pass time, you will have more public support to muscle ahead with the outdated UIGEA.
If on the other hand, if people see all the good poker players do
(there are many reports of poker sites participating in fund-raisers for Haiti, as well as many other acts of selflessness), and realise that it is an acceptable pass time for most American’s, they will have a very difficult time holding back Barney Frank, the PPA, and all the others who see the potential for poker to do more good even than it does now.

UIGEA has been well documented in this blog as well as countless
others.  It’s a fact that the out and out legalisation of online poker
is coming to the USA if no one steps in to stop it.  It is also a fact
that there are high powered people working to stop it even now, but
everyone has different agenda items, and everyone’s goals are
different.  Barney Frank is easily the most powerful and influential
poker “friend” in Washington, but now other lawmakers are starting to
see the value and have begun to introduce their own legislation.

Rep.
Jim Mcdermott (D-WA) has introduced his own Online Gambling Taxation
Bill, designed to sit alongside Frank’s legislation.  It was originally
created in October, and named the Internet Gambling Regulation and Tax
Enforcement Act (HR 4796), and has been resubmitted recently with some
key changes.  He stated to the Washington paper “The Hill” the
following:

“the key change was to make it possible for
states to have access to online gambling revenue. Given the many
critical government programs currently going under-funded or not funded
at all, Internet gambling regulation should be given fair and immediate
consideration. Prohibition in various guises has failed before and is
failing once again. There is a better way.”

He is speaking
of the fact that under the old rules and legislation the lion’s share
of the revenue would automatically go to the federal government,
leaving the individual states out of the estimated 42 billion dollar
(over 10 years) industry.  

What this bill does is created
taxes  that are centred on player deposits.  8% of every deposit made
to an online gambling site would be sliced off as a tax.  The first 6%
of that will go to the state and tribal governments while the other 2%
is slated for the Federal Government.  A portion of the 2% will be
permanently earmarked for aiding foster children in the USA (a personal
charitable concern for Rep. McDermott).

As far as the effect on
players, this legislation will affect casual players the most.  People
who are use to topping up their bankroll with lots of small, regular
deposits will be a boon for the tax man, while winning players wont
notice much difference or care. 

Barney Frank has signed on as
a co-sponsor to this bill, and they are hoping to get it passed quickly
along side Franks UIGEA-killing bill.  We’ll have to see how it goes. 
Does anyone here mind paying tax dollars to deposit to online sites? 
How about if a percentage goes to foster children? does that make a
difference?

Well it appears that Estonia, which garnered headlines in recent months for legalising and legislating online casino and poker websites, has made the move to start blocking any online gaming sites who do not comply with their new Gambling Act.  This is the first step in a 2 tier strategy to implement the new legislation, and the block only applies to websites that do not yet have the licenses to operate in Estonia.  Currently the only group to be granted a local license is the Olympic Group (Playtech-powered casino), and so Estonian gamers are facing low traffic to the sites, fewer games and low profit potential for the tax man.

Estonia made the decision to legalise online gambling / poker to help out their struggling economy, and as part of their battle to keep Estonian money flowing into the government coffers, have closed Estonian gambling right until 2011.  In 2011, Estonia’s gambling market will be opened up to foreign investors, and i would imagine that Estonian’s will then see “Estonian state online poker portal, now sponsored by Party Poker Gaming!”  Their decision has drawn criticism from the European Commission, EU trade legislation as regards gambling are particularly vague and so Estonia’s decision is likely to proceed without any outside interference. Estonia is also claiming that its protectionist policy is temporary and necessary to iron out the precise details and rules required to operate a successful and legitimate international online gaming operation.

This brings up an interesting point. Lithuania has recently legalised online poker, and we have yet to see any of this type of action from them, but to be fair, Estonia did this months ago, and is only now coming out and blocking the competition.  Could Estonia be leading the way yet again, and by acting in such a protectionist way be setting the standard?  Will this be how all online “legalisation” will go, and you’ll only be allowed to play online poker against people in your own geographic area to satisfy the Government tax situation? Could that limit the games, or the competition? It’s an interesting take on the matter.

Estonian professional poker player Imre Leibold said:

“The possibility that online poker gaming could be restricted is not good news for us. If things get tough, one may have to consider moving residence or start working abroad like Estonian builders in Finland.”

Lithuania has become the first country to break ground on turning poker into a legitimate sport.  On March 20th the official ruling body of Lithuanian sports issued and official decree recognising the Lithuanian sports poker federation as an official sports federation.  What this essentially means is that in Lithuania it is now “Legal” for the LSPF to organise non-commercial poker tournaments outside of the casinos in Lithuania.  This also, apparently, includes the online world. 

Andrius Tapinas, President of the LSPF said “This is extremely important step in our work, We are receiving congratulations from many of our colleagues abroad and I know that we are breaking thick ice with our progress for similar international initiatives.”

With this step Lithuania is hoping to boost the popularity of the game of poker, as well as blaze trail for other countries currently on the fence about legalising online poker.  Those countries include: most of the rest of Europe and the United States where the UIGEA is set to come into effect on June 1st if no one steps in to repeal it.  But now that health care has passed, i’m sure that’s next on Obama’s list of things to do.

What is not clear is if Lithuania will be going the route of taxing online / non-casino poker when the LSPF does set up their freshly legal poker games.  I’m sure in this world economy the Department of Physical Education and Sports in Lithuania (the body that passed the decree) had an idea of how to make this aslucrative as they could, and i’m sure we’ll be hearing more about how in the coming weeks.

So, who’s moving to Lithuania??

With Congressman Barney Frank (D- MA) largely leading the charge against UIEGA in Washington, the PPA have focused their attention mostly on the state level.  This has been a gradual shift in strategy, but a necessary one to ensure that all levels of government are participating in the discussion.  In Florida, the PPA Executive Director John Pappas was called to testify in front of the Florida Senate Regulated Industries Committee, due to more support for legalised intrastate online poker.  The unfortunate thing is the fact that the PPA is hesitant to put their weight behind any and they explain their reasoning as such:

“Florida is contemplating a single-source provider of online poker, i.e. one poker website. PPA is concerned that the lack of competition and consumer choice could also negatively impact the player experience.”  
Pappas stated to Poker News Daily “…Players will be bored with one site and they currently like the ability to play on multiple sites. My pitch has been to look at what’s going on at the federal level.”

Not to mention, with one regulatory agency controlling one online poker option, can you imagine the cries of “cheating!” by the players?  If only one “legal” online option is adopted in Florida or anywhere else for that matter, making all other options “illegal,” giving players no choice, they will quickly flood back to Full Tilt or Pokerstars (the only online poker sites still accepting US poker players), legal or not. In contrast, Congressman Frank’s HR 2267 bill  (internet Gambling Regulation, Consumer Protection and Enforcement Act) will allow for multiple online gambling sites to solicit US customers.

Hopefully the powers that be will recognise the value of legalisation and repeal UIGEA before the June 1st deadline!

It appears that the Ontario Government is quickly getting in line behind Quebec and Vancouver to be the next province to offer Government run online gambling.  The new chairman of Ontario Lottery and Gaming (note..not gambling) stated that he wanted the province to provide Internet gambling instead of watching the potential revenues go to other provinces and offshore websites.

My main problem with this whole set up is this question:  if there were government offered online poker, would they go the way of the USA, and create a set of rules, and licences and costs to allow the major players (Full Tilt and Pokerstarset all) “legally” into the Ontario market, or would they charge the OLGA (Ontario Lottery and Gaming Association) with setting up an online poker site that would theoretically serve Ontario (or Canada depending on the rules)??   If they were to allow the OLGA to create and run a website, who is to say they would do it as well as Pokerstars or Full Tilt?  The OLGA has a long history of questionable insider wins and malfunctioning slot machines and to lawsuits from gambling addicts and botched scratch-and-win tickets, and it would concern me greatly loading a Government run poker room with my hard won poker money;  But maybe that’s just me.

The opposition party has not started shaking their sabers, and in fact, has only brought up one area of concern and that is making sure young people whoshouldn ‘t be accessing gambling sites can’t gain access.  It’s quite a different battle in Canada when you compare what’s going on in the states. 

Loto-Quebec’s online poker site will launch this fall, with Finance Minister Raymond Bachand predicting the province will pull in about $50 million in dividends after three years. The Atlantic Lottery Corp.’s website, in operation for six years, has five interactive games including Hold’em Poker. British Columbia offers online poker, and imposes a $10,000 a week limit on gamblers. The Western Canada Lottery Corp., which oversees gambling in the three Prairie provinces and the three territories, has said it has no plans to move into online gambling.