Poker Blog and Poker Gossip

Since the recent legalization of US online poker, the poker community has noted a lot of changes taking place in the industry. These include tie-ups and partnerships between big poker companies like PartyGaming and Bwin and possible agreements between 888 Holdings and a competitor. There have also been concerns about PokerStars and Full Tilt Poker continuing their poker services in America, while the PPA rose to reassure players that this would not be a problem.

And, among all this excitement, online poker sites are getting ready to once again receive US poker players. However, it is not just the online casinos who are getting ready for the new flow of US player traffic as casinos in Atlantic City are also gearing up for the changes that the new bill is bringing. Considering the difficult times that these AC casinos have been going through, it would seem that they are looking for nay kind of player traffic, be it online or land based.

Mark Juliano, the president of the New Jersey Casino Association claimed that the casinos in AC were preparing for the legalization of US online gaming. “We are all working with software programs to provide a mode for online poker rooms and casino games and we’re obviously watching the legislation on this very carefully,” he said.

Currently, Juliano and others in the NJ gaming industry are awaiting rulings on whether the state will be allowed to handle intra state gaming or if the AC gaming will be accessible only to state residents. Juliano believes that this is a federal issue and hopes that the new laws will settle this question of intrastate gaming. “We would love to have the amenity, but it’s not a statewide issue. It’s a federal issue,” he said.

Much to the happy surprise of poker players all across America, Congressman Barney Frank’s HR2267 bill got the green light from Federal lawmakers yesterday.

The HR2267 bill, which has been strongly supported by poker players like Annie Duke and Andy Bloch, and had the full strength of the Poker Players Alliance behind it, secured a margin of 41 votes for it and 22 votes against it. The bill eventually garnered the approval of the House Financial Services Committee, although the organization first instituted a total of 14 amendments in Frank’s original bill. The bill was then passed by lawmakers and is expected to spurt on growth in the online gambling industry when it brings back American revenue to online casinos.

This bill which legalizes internet gambling and games like online poker in the US also permits American players to transact with foreign online casinos. The bill also attempts to regulate online gambling and has instituted a good system of laws to protect minors from gambling online.

Surprisingly, one the amendments in the bill included the exclusion of any online gaming sites that were in present violation of existing Internet gambling laws. This amendment apparently helped the votes swing in favour of the bill as it would appear that some representatives were in favour of cutting out sites like Full Tilt and PokerStars from being granted licenses to operate in the US in the future.

Some of the other amendments made to the HR2267 bill included restrictions for players, setting an age bar of a minimum of 21 years and imposing regulations to see that gamblers with problems or gaming addicts would not be encouraged by the casinos. These rules covered casinos not receiving funds from child support payments and not accepting credit card deposits. The bill also called for a statistics database and established US casino licensing laws.

After a successful hearing on the 21st of July, the House Financial Services Committee appears to be looking favorably on Barney Frank’s HR 2267 bill, which aims to legalize and regulate internet gambling in the US and permit American players and bettors to place wagers with foreign casinos and gaming sites. The presence of five strong poker personalities at the hearing may have had a lot to do with the success of the HR 2267, which has led to it being pushed for a mark up, a few days after the hearing.

Annie Duke, the outspoken “Poker Duchess” represented the Pokers Players Alliance and stated that the HR 2267 provided adult gamers the freedom to play an entertaining game online. “At its most basic level, the issue before this committee is personal freedom, the right of individual Americans to do what they want in the privacy of their homes without the intrusion of the government.”

She also commented on the UIGEA saying, “The UIGEA is not about consumer protection. It’s a banking law. I hit that point so many times. There’s no protection for consumers.”

Other speakers present at the hearing included Ed Williams from the Credit Union National Association, Lynn Malerba who was there on behalf of the Mohegan Tribe, Tom Malkasian from the Commerce Casino and Michael Fagan, who was there to discuss the legal aspects of the bill.

Like Duke, Williams also put the Unlawful Internet Gambling Enforcement Act under fire and claimed that it had caused too much of compliance costs. He also brought out the ambiguity of the UIGEA as it exists stating that it did not define “unlawful internet gambling” leaving too much of room for subjective interpretation. He also commented on the difficulty the bill had put US financial institutions under.

Currently, the HR 2267, the Internet Gambling Regulation, Consumer Protection and Enforcement Act is due for a mark up and review on July 27th, where it will be edited, amended and voted on. The mark up is process that readies a new bill for the floor by clearly defining its tenets, and it is only after this that a bill can be implemented as a law.

If the HR 2267 bill is passed after the mark up, online poker would become legal in the US and this has the gaming community awaiting it with eager anticipation. Fagan and Malkasian are in favour of legalizing online poker, but believe the bill should be amended before being put on the floor.

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.

On April 7, 2010 France passed an historic bill legalizing and
regulating online gambling, and that included poker.  At the time of the
bill passing people were very excited, as the legalization and taxation
of online poker would put online casino’s into a position of “legal,”
and on the same level as brick and mortar casinos in France.  French
residents were optimistic that the new law would diversify a largely
state run monopoly and give the French consumer more choice in where
they spend their money, while not worrying that what they were doing was
“illegal.”

Unfortunately, that doesn’t seem to be how it all
turned out.  As of May 13th 2010 the new law has seen it’s first two
casualties.  As of May 13, both Betfair and Sportingbet (owners of
Paradise Poker) have pulled out of the French market sighting an
insurmountable tax burden and stiff state-run competition. Tim Phillips
(European Public Affairs Director @ Betfair) was quoted as saying  “We
are looking very hard at the French market and how we might operate
within the new licensed regime. Though it’s not impossible for a
newcomer to create a commercially viable business, most projections show
it will be very difficult to do so, given the proposed restrictions
imposed on licence holders.  French legislation will certainly benefit
the incumbent players and the ultimate loser will be the French
consumer. The new law does not adequately open the former monopoly’s
market to true competition from other operators. We hope that the
review, scheduled 18 months from now, will amend the law to address
these flaws.”

Currently in France the application process is
beginning without the full law being decided upon yet, but this much is
known: The industry will be brought in line with live casinos and horse
racing. Taxes will be levied on any licensed regulator so that two
percent of each poker bet and 7.5 percent of each sports or horse racing
bet will go directly to the French government. However, a portion of
those monies will be dedicated to gambling addiction programs.  No word
yet on the cost of the license, but typically these licenses cost a lot
of money up front, and then yearly to maintain. The bill also includes
provisions to address the issue of underage gambling and rooting out
criminal activities.

So, it seems to me that the holy grail of
American Online poker players may be a false hope. After France
legalized the practice, a whole slew of new problems arose.  Maybe
keeping it as a “don’t ask, don’t tell” operation is preferable to
shining a light on an imperfect industry.

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.