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  1. We admit we were surprised that the White House responded to pleas from the online poker community for legalization and regulation of our industry in the United States. In the past, poker players had vocally taken to social media like Facebook and Twitter to fire off questions and suggestions about the issue. In recent days, Deputy Director of the National Economic Council Brian Deese responded to an online poker petition as part of the White House's "We the People" campaign. After claiming the White House "understands that many Americans engage in paid online poker games for entertainment purposes," Deese pointed out that online wagering on sporting events violates Federal law, a notion upheld by a U.S. Department of Justice opinion letter on the Wire Act released two days before Christmas last year. Given that online wagering on sports is not permitted, Deese contended, "It is left to each state to determine whether it wishes to permit such activity between its residents and an online poker business authorized by that state to accept such wagers, but online gambling that is not authorized by state law may also violate Federal statutes." In April 2011, the DOJ came down hard on the three largest U.S.-facing rake-based online poker rooms: PokerStars, Absolute Poker, and Full Tilt. All three sites exited the U.S. market and 11 individuals associated with them were indicted. Only PokerStars has managed to pay back players and is rumored to be in the process of purchasing the assets of Full Tilt. The future of Absolute Poker and UB is up in the air. Deese then digressed into a discussion of the pitfalls of playing online poker for real money. After pointing out that the game is both "rapid" and "anonymous," he wrote, "There are many means of technologically circumventing restrictions on online gambling that can allow individuals from countries where gambling is illegal - or even minors - to play using real currency." Deese shared even more drawbacks to online gaming: "Online games also have greater potential for fraud because gambling websites are much cheaper and easier to establish than onsite locations, and like telemarketing scams, can appear and disappear overnight. Finally, online gambling can be used in money laundering schemes because of the volume, speed, anonymity, and international reach made possible by internet transactions." Deese concluded on a positive note, saying that the administration is "open to solutions" to the aforementioned problems. The petition received nearly 10,000 signatures and the Poker Players Alliance (PPA) promoted it to its 1.2 million members. The virtual document was created in September and emphasized that sites that accept online wagers on horse racing "have proven that online betting sites can be successfully regulated." Speaking of the PPA, Vice President of Player Relations Rich TheEngineer Muny (pictured), who has been instrumental in mobilizing players in other grassroots efforts, told PocketFives, "The response reiterated the DOJ's decision on the Wire Act, which is a real positive. It also noted that intrastate online poker can go forward." What about Deese's heavy emphasis on the difficulties of licensing and regulating internet poker? Does that put a damper on the prospects of legalized gaming? Muny responded, "Those are legitimate concerns and some of the key talking points of the Joe Barton online poker bill [HR 2366]. It's good that the points he put in there are exactly the ones that Barton's bill addresses. To be complete, his letter would have to mention the types of issues that would come up before Congress." Muny admitted that he didn't necessarily expect a direct response from the White House on the issue: "Our goal wasn't to get President Barack Obama to speak to us. It was an opportunity for us to communicate with the White House." View the White House's response to the online poker petition.
  2. This week, Time Magazine released its list of the 100 Most Influential People in the World. Making the cut alongside the likes of New York Jets quarterback Tim Tebow and New York Knicks hoopster Jeremy Lin was United States Attorney for the Southern District of New York Preet Bharara (pictured). The significance to online poker players: Bharara was the lead prosecutor in the Black Friday indictments last April. Time called Bharara the "Zeus" of the Southern District, which has pursued the likes of Times Square bomber Faisal Shahzad, Russian arms dealer Viktor Bout, and drug trafficker Christopher Coke in addition to the founders of PokerStars, Full Tilt Poker, and Absolute Poker during his reign. Time explained why Bharara was among its 100 Most Influential People in 2011: "What sets him above is the patience honed by principle. For years, as others clamored for scalps after the global financial crisis, Preet resisted the temptation of a sloppy kill and instead waited for the facts." Time added that Bharara carries an undefeated record in insider trading cases. The longstanding American magazine agreed with a portrayal of Bharara as an enforcer of the law "who tempers zeal with human kindness, who seeks truth and not victims, who serves the law and not factional purposes, and who approaches his task with humility." He became a household name for internet poker players on April 15th, 2011. On Tax Day last year in the United States, Bharara unveiled an 11-man indictment that brought the online poker world to a standstill. Charges levied against the Black Friday defendants included conspiracy to violate the Unlawful Internet Gambling Enforcement Act (UIGEA), violating the UIGEA, operating an illegal gambling business, conspiracy to commit bank fraud and wire fraud, and money laundering conspiracy. Bharara's targets on Black Friday were PokerStars' Isai Scheinberg and Paul Tate, Full Tilt Poker's Ray Bitar (pictured) and Nelson Burtnick, Absolute Poker's Scott Tom and Brent Beckley, and alleged payment processors Ryan Lang, Ira Rubin, Bradley Franzen, John Campos, and Chad Elie. PokerStars, Full Tilt, Absolute Poker, and UB all vacated the U.S. market within days, and only the former has paid back players one year later. He was quoted in the original Black Friday indictments as saying, "As charged, these defendants concocted an elaborate criminal fraud scheme, alternately tricking some U.S. banks and effectively bribing others to assure the continued flow of billions in illegal gambling profits." The U.S. Attorney added, "In their zeal to circumvent the gambling laws, the defendants also engaged in massive money laundering and bank fraud. Foreign firms that choose to operate in the United States are not free to flout the laws they don't like simply because they can't bear to be parted from their profits." Bharara thanked "the FBI for its outstanding leadership in the investigation [as well as] Immigration and Customs Enforcement's New York and New Jersey offices and the Washington State Gambling Commission for their assistance in the [Black Friday] investigation." In discussing Bharara's influence on the online poker industry, one poster on TwoPlusTwo observed, "He certainly had a big influence on everybody on this forum." Others who made Time's list included U.S. President Barack Obama (pictured), presumed Republican Presidential candidate Mitt Romney, U.S. Secretary of State Hillary Clinton, newscaster Matt Lauer, "Saturday Night Live" funny woman Kristen Wiig, and Grammy Award winner Adele. Time also recognized several personalities it dubbed "Rogues," who included North Korea's Kim Jong Un, Taliban leader Mullah Mohammed Omar, Islamic militia leader Sheik Moktar Ali Zubeyr, and Syrian President Bashar Assad. Also making the grade was "Anonymous." Bharara became a U.S. Attorney for the Southern District of New York in 2009 after appointment by Obama. Other high-profile cases he's worked on include prosecution of the Gambino organized crime syndicate and hedge fund manager Raj Rajaratnam. He attended Harvard University and received a law degree from Columbia. Read the entire Time Magazine 100 Most Influential People list.
  3. Rumors have been flying around the online poker community over the last few weeks that have centered on pro-online poker legislation being tacked onto a possible extension of the payroll tax cut. On Tuesday, Reuters reported that a deal to extend the tax break for a year was nearing completion: "House Speaker John Boehner, the top Republican in Congress, and his lieutenants paved the way for a deal on Monday by backing down on the long-held Republican demand that the payroll tax cuts be offset with spending cuts." It's been a long-held belief that legislation legalizing and regulating internet gambling, which could generate up to $40 billion over a 10-year period, could be a way to pay for extending the payroll tax cut or fund another measure. When asked if online poker was being considered during the process of extending the payroll tax cut, Poker Players Alliance(PPA) Executive Director John Pappas (pictured) told PocketFives last week, "The process by which a bill gets done will be determined by the lawmakers, and any outside speculation is just that, speculation. The PPA will let the lawmakers focus on the process and we will do what we can to ensure that the policy is in the best interest of the poker community." PPA Director of Grassroots and External Affairs Drew Lesofski, who has been intricately involved in the fight for online poker on Capitol Hill, told PocketFives on Tuesday that online poker's inclusion in the payroll bill is not likely. Lesofski revealed that he had talked to the Nevada Congressional delegation, but not Senate Majority Leader Harry Reid's office, and was told that the payroll tax bill is "probably not the correct vehicle" because House Speaker John Boehner and Reid want the final product to be as clean as possible. Lesofski added, however, that a separate unemployment extension bill, which could come to a head in the near future, could be "more likely" of a target. In addition, the situation is constantly changing. On Tuesday, PocketFives sat down with PPA Vice President of Player Relations Rich TheEngineer Muny (pictured), who gave us an update on the legislative process: "We're certainly hearing a lot more chatter overall about online poker legislation. It's clearly something that has the attention of Capitol Hill. They wouldn't be talking about it if it weren't going anywhere. The fact it's up for discussion means it could be discussed for various bills where it's a logical fit." Whether the payroll tax extension is a "logical fit" in lawmakers' minds remains to be seen. Muny addressed, "In terms of the payroll tax cut, poker players have been reaching out to the payroll committee heavily via social networking. It's obvious that they'll be discussing the online poker bill's existence. We've worked hard for the legislation, trying to guide it through an appropriate path." The funding measures included in the forthcoming payroll bill could be few and far between. A Politico article published this week read in part, "In a surprising about-face, House GOP leaders said Monday that if conference committee negotiations fail, they'll push an extension of the payroll tax cut through the end of this year without offsetting the cost." The article contained no mention of online poker, and revealed that debate about the extension could occur in the House on Wednesday. Fox News echoed the sentiments of Politico, publishing a piece claiming that the final bill could be devoid of any funding mechanisms: "On Monday, Congressional Republicans on the bipartisan House-Senate payroll tax cut conference committee offered to cut the tax rate until the end of the year without finding $200 billion in offsets to pay for the extension." Reid and Unlawful Internet Gambling Enforcement Act mastermind Jon Kyl (pictured) are reportedly in discussions to bring an online poker bill to the Senate, but so far, that has not come to fruition. When asked what the feedback of the payroll tax committee has been regarding online poker, Muny told PocketFives, "I haven't heard anyone speak in terms of how it would fit with the payroll tax cut bill. We've heard feed back like, 'We'll keep your thoughts in mind' and, 'The tribes haven't been heard enough,' but we haven't heard a lot in terms of the specifics of how it would fit within the payroll tax committee's work." Do online poker players in the United States have any reason to be optimistic then? "They'll probably find a vehicle somewhere," Muny said. "Which vehicle hasn't been our focus, though. We haven't been sitting back and looking at the best vehicle for Congress to use. We think that's the job of legislators. We're not proponents of one vehicle or another. We just want online poker to go forward." Even if the payroll tax extension doesn't pan out, the work online poker players have done in contacting lawmakers could pay dividends. Muny reminded us, "The payroll tax committee consists of leaders in the House and Senate. All of the outreach we've done will go a long way."
  4. After more than a year of debate, the District of Columbia's City Council has decided to repeal legislation legalizing internet gambling. On Tuesday, the full City Council met for discussion of the issue, which was passed in 2010 after council member Michael Brown (I-At Large) tacked on language authorizing the regulation and taxation of internet gambling to a supplemental budget measure. Read more in the Washington Post. Since that measure's passage, several council members voiced their concerns over what was, at that time, the first law passed that would allow for intrastate online poker. Those concerns, as well as the voices of advocates, came to a head during Tuesday's meeting. Leading the charge for the repeal of the measure was council member Jack Evans (D-Ward 2), who had mentioned in an article in the Washington Post last week that "there [was] no rush to get [online gaming] done." During the council meeting on Tuesday, Evans took that statement one step further, stating, "I want to make sure we get the best deal for the city. I believe it should be set up so the city gets the best price and the best revenue." Many of the members of the D.C. City Council felt that they had been duped into passing the law back in 2010, saying that they "weren't aware" of what they were voting on when the measure previously came before them. "They didn't even use the word 'internet gambling,'" council member Tommy Wells (D-Ward 6), another advocate of repealing the online poker law, said during the hearing. "They used the word 'i-gambling.' It has to go through a public process, and [this] didn't." Former D.C. mayor and current Ward 8 council member Marion Barry, who supported Brown's efforts in getting the internet gambling law passed, spoke out against his colleagues: "What kind of legislature are you?" he asked. "You're giving the public the impression [that] you didn't know what you voted for." One of the key issues in the debate was the contract with Intralot, the Greek gaming outlet that would have been providing the software for the D.C. internet gambling system. That contract, which would have given 51% of the profits to the Greek company, was questioned by many of the opponents of the law. As a last-ditch measure to save online poker in D.C., Brown offered to cancel the contract with Intralot and open up the process of bidding. The yearlong debate ended with the Council voting to repeal the measure by a 10-2 majority. Only Brown and Barry voted against repeal. With the repeal of internet gambling in the District of Columbia, financial difficulties could now be in store. Although the City Council had not spent any money on the proposed online poker operation, Intralot had put in approximately $5 million of development. Intralot could now sue the District of Columbia to recoup its costs. Furthermore, there is the question of replacing the money that the proposed internet gambling operation would have brought in. The budget was written counting the approximately $13 million that an internet gambling operation would have brought in; council members now have to figure out how to make up that lack of revenue. Brown (pictured, image courtesy Washington Post) was disappointed in his fellow council members following the repeal, stating, "This was going to be our thing, our laws, governed by us. We were going to reap the benefits from tourists, from residents." He also stated that it was more likely now that Federal legislation would take precedence. Although the repeal of online poker in the District of Columbia has occurred, there is still a possibility that the subject could come up in the near future. Many council members, including Mary Cheh (D-Ward 3), said they would like to start from scratch on the issue. "I believe there is a place we can try this," Cheh stated. "I just think it can be controlled [better]."
  5. If you haven't heard by now, Republican Presidential frontrunner Mitt Romney (pictured) told a Las Vegas television stationthat he does not support legalized online poker in the United States "because of the social costs and people's addictive gambling habits." As you'd expect, a major Presidential candidate coming out against our industry in a public forum did not sit well with the Poker Players Alliance (PPA), the primary voice for poker players on Capitol Hill. "Governor Romney's statement seems to be based on a misperception of regulation and the status quo," PPA Executive Director John Pappas told PocketFives in an exclusive statement. "We hope to educate him that regulation will mean strong enforcement and meaningful consumer protections, while doing nothing will only exacerbate any perceived problems he has with gaming." Also weighing in on Romney's statement was PPA Executive Vice President of Player Relations Rich TheEngineerMuny, who told PocketFives, "I believe Romney has it wrong here. Licensing and regulation of online poker addresses every concern he mentioned far better than the status quo does. Licensing and regulation will ensure that age verification measures are implemented, consumer protections are provided, and protections for those with excessive gaming habits are mandated. Current law does not provide any protections for anyone." Muny added, "With the recent Justice Department determination that the Wire Act applies solely to wagers on sporting events or contests, and not to online poker or online casino gaming, failure to pass Federal online poker legislation would result in a far greater expansion of gaming. That is because, in the absence of Federal legislation, many states will start offering poker and casino gaming on an intrastate basis. Based on Romney's concerns, one expects he'd be more favorable to a game of skill like poker than casino-style gaming that can be played in a mindless manner." Social ills and problem gambling could grow in Romney's home state of Massachusetts, where land-based casinos may dot the landscape in the near future. According to Businessweek, MGM Resorts International could soon erect a "world-class resort" in Brimfield, Massachusetts, which is a short 65-mile drive down Interstate 90 from Boston. The Massachusetts casino gaming law, which was passed last year, allows for three full-blown casinos in the Commonwealth. Also coming out against online poker in recent days was Republican Presidential hopeful Rick Santorum (pictured), who told Las Vegas' "Face to Face" news program on Tuesday, "I'm someone who takes the opinion that gaming is not something that is beneficial, particularly having that access on the internet. Just like we've seen from a lot of other things that are 'vices,' they tend to grow exponentially as a result of that. It's one thing to come to Las Vegas and do gaming and participate in the shows and entertainment and that kind of thing. It's another thing to be able to sit in your home and have access to that. I just think it would be dangerous for our country." Santorum went on to say in a three-minute critique of Web gaming, "There are certain things that do cost people a lot of money, cost them their lives, [and] cost them their fortunes that we shouldn't have available. That's why we regulate gaming. You have a big commission [in Nevada] that regulates gambling, for a reason. We don't have it everywhere... I for one don't think it's a good thing... A lot of people don't responsibly gamble and lose a lot and end up in not such great economic straits as a result of that." In his daily action plan here on PocketFives, Muny encouraged concerned poker players to reach out to Romney and Santorum on Facebook and Twitter. The Republican caucus in Nevada takes place on Saturday, February 4th. It should be pointed out that Republican Presidential candidate Ron Paul has been a co-sponsor of several pro-online poker bills, including Congressman Joe Barton's HR 2366, which sets up a framework to legalize and regulate internet poker in the United States. Paul is one of 27 co-sponsors of the bipartisan bill, which was introduced last June but has not found its way out of committee.
  6. In a recent Poker Community thread, PocketFives asked for questions from the online poker community for Poker Players Alliance (PPA) Executive Director John Pappas (pictured). With a hearing in the Senate Committee on Indian Affairs on deck for two weeks from now and an election looming in November, can U.S. online poker players expect to see Federal regulation this year? For the answer to that question and many others, PocketFives sat down with Pappas on Tuesday. PocketFives: How likely do you think it is that a Federal online poker bill will be passed during this session of Congress? John Pappas: I'd say it's better than 50-50. I'd say 60% given all that's happened with the DOJ and the positive signals being sent by Senator Harry Reid on this. PocketFives: Is a Federal bill more likely to pass on its own or as a rider? Are there any Senators willing to attach a proposed bill as a rider? John Pappas: It's much more likely as a rider. There would be a Senator or two interested in it. PocketFives: Is the bill to extend the payroll tax break an attractive option for an online poker rider? John Pappas: Any bill in this Congress would be an option. The problem we'll face at some point is that Congress will begin focusing on the election. We need to start looking at potential vehicles as soon as possible. PocketFives: After a bill is passed, how long do you expect it to take before regulations are in place, licenses are awarded, and players are able to play? John Pappas: I would say a minimum of six months. There wouldn't be a blackout period this time around, though. I foresee, if anything, an incentive to rush to market. PocketFives: Do you have any thoughts as to whether the DOJ or state agencies are likely to pursue cases against rake-based sites currently operating in the U.S.? Does the Wire Act clarification make it less likely for the DOJ to get involved? John Pappas: I don't have any information one way or another on the cases. The DOJ's involvement would depend on whether the operators are violating bank law or gambling law. If they were violating bank law, I'd imagine the DOJ would continue its pursuit. Gambling law is murkier. PocketFives: Do you see interstate online poker becoming a reality in the United States? John Pappas: Federal legislation would provide for interstate online poker, which is why we prefer that route. At a state level, it's a question mark whether states could pull together liquidity. We think interstate poker would be the best way to move forward if states did it alone, but there's no guarantee it would be allowable. The DOJ's Wire Act opinion was about intrastate transactions, not interstate transactions. If you pool together transactions from multiple states, then that would clearly be interstate. States do it already via horse racing and Powerball, so there seems to be a precedent that they could do it for poker, but it's not as clean. PocketFives: Can you talk about the involvement of Senators Harry Reid (pictured), Jon Kyl, and Mitch McConnell? Are they all on board with the legalization and regulation of online poker? John Pappas: All of them are coming at it from different perspectives. Kyl isn't looking at this because he wants people to play online poker; he wants stronger enforcement against that which is not online poker. McConnell is looking at it as a way to help Kentucky's horse racing industry. Reid is looking at it from a consumer protection perspective as well as ensuring that Nevada is at the lead of this industry. The motivations of all three of them are quite different and it just so happens that poker players will be the beneficiaries. PocketFives: If there is in fact interstate internet gambling, we're assuming there would be an opt-out possibility for states. Are there any particular states that seem more or less likely to opt out? John Pappas: Utah and Hawaii will not be likely to participate since they have no gambling right now. Some of the more traditional conservative southern states like Alabama and South Carolina may be slow to act. We believe that, over time, a vast majority of states will see the benefits of participating in the system. PocketFives: Do you think there will be licenses required for poker affiliates? John Pappas: I don't know the specifics of those requirements in terms of whether they'd need to be licensed or vetted as part of a background check. It would certainly be wise to make sure that those who are promoting gaming sites are reputable and aren't also, at the same time, promoting unlicensed sites. PocketFives: What's the mood in Washington, DC about this topic in general? John Pappas: Everyone is optimistic that something can get done this year. We are realistic that we're dealing with a dysfunctional Congress, as Frank Fahrenkopf of the American Gaming Association put it, but a lot of the stars have aligned. It's just going to take some final pieces being put together. PocketFives: Can you evaluate which of the four Republican Presidential candidates could be the most amenable to online poker legislation? Also, discuss Sheldon Adelson, who commented that he is "morally opposed" to online gaming, giving $10 million to a PAC associated with Newt Gingrich's campaign. Does that make the former Speaker of the House (pictured) a less desirable candidate? John Pappas: The only one with a record on the issue is Ron Paul, who is a sponsor of Joe Barton's online poker legislation. We don't know Newt's position on it, so I don't want to comment on his relationship with Sheldon Adelson. PocketFives: Is it possible that U.S.-regulated online poker rooms will be able to accept players worldwide? John Pappas: We believe that should be the case and will be the case. It's been something that's been discussed here in DC and we've been arguing why it should be done. The market shouldn't just be open to any players overseas, but certainly those who reside in countries where it's licensed and regulated should be allowed to participate. The U.S. Government has an obligation to U.S. consumers to give them an opportunity to play against foreign competition. From a player's perspective, it would mean a greater liquidity. Visit ThePPA.orgfor more details.
  7. In a conference call held on Wednesday conducted by iGamingBusiness, gambling law expert I. Nelson Rose (pictured) discussed the recent proclamation by the U.S. Department of Justice that the Wire Act only applies to sports betting. While some in the industry have contended that online poker could still be frowned upon, Rose took a much more optimistic approach, telling callers that the letter, which was made public on December 23rd, was a "Christmas present for the states." Rose began by saying that the Wire Act was passed in 1961 as part of a war on organized crime. Designed to cut the telegraph wire that bookies used to get the results of horse races before the bettors did, the Wire Act was long believed only to apply to sports betting. But, up until the final days of 2011, no concrete declaration had been released by the DOJ. Rose claimed that the DOJ had long taken an extreme position regarding the Wire Act. For example, the DOJ contended that the law applied to all forms of gambling. Even if a form of gambling were legal, it could still be considered illegal if the wire crossed into another state. Rose remarked, "The DOJ backed off these extreme positions. They analyzed the history and purpose of the Wire Act and said it applies only to betting on sporting events." Rose concluded, "This is a Christmas present - a gift to the states - which can now raise hundreds of millions of dollars and create thousands of jobs because there is no other Federal law that would apply to intrastate gambling... There is no Federal law that would apply to interstate or even international online gambling that is legal under state law, except sports betting and lotteries." In essence, the door seems to be flung wide open for states to offer internet poker and other games. Much was made about the timing of the DOJ's opinion letter, which was released two days before Christmas. Rose speculated why the cat was let out of the bag when it was: "It was announced two days before Christmas. That's a very slow news cycle and it wasn't picked up. [Several days later,] anti-gambling advocates and some of the competitors finally started to understand that this decision had been made, so there wasn't a lot of press coverage from the opposition." There are a variety of states already looking at online gaming, including Nevada, California, Florida, the District of Columbia, Illinois, Iowa, Minnesota, New York, New Jersey, Virginia, Maryland, Delaware, Massachusetts, Rhode Island, and Connecticut. The former has already begun vetting licensees and could be the first state to open up rooms this year. The onus now appears to be on state legislatures to enact internet gambling legislation if they so choose. Rose told callers, "It'll be up to the state legislature, which is now free to legalize just about any form of gambling. They can legalize it, they can do interstate and even international if they can figure out how to work out the details." Could PokerStarsbegin accepting bets from U.S. players right away? Rose responded that it's still a sticky situation: "If it's sports betting, you're out of luck... If the poker is legal under state law, then in fact it's legal for an operator to take those bets. The problem is we don't know any states where it's clear it's legal under state law. Simply saying that there's no prohibition on [poker] doesn't really work. You have to do a real analysis of the state to find out whether it's legal under state law." What about Indian tribes in the United States? Could they open online poker rooms tomorrow? Rose answered, "Tribal gaming can be done using the internet as long as all of the players are on Indian land. Once you go off Indian land, the situation becomes much more complicated." Finally, there has been speculation within the online poker industry that a future Presidential administration could reverse the DOJ's decision. However, Rose was not a believer: "This isn't a decision from the Supreme Court and it's not an act of Congress, so it can be reversed, but it won't be for two reasons. First, administrative agencies, particularly the DOJ, don't like to reverse themselves very often. Secondly, this decision is legally correct. We have already had court cases where the Federal Court of Appeals has said that the Wire Act only applies to bets on sporting events and races." We'll keep you posted on the latest legal and legislative news.
  8. There's a debate looming in New Jersey over the future of intrastate internet gambling. Would licensing the industry require approval from the general public in the form of a referendum? Or would the state's legislature merely need to pass a bill? According to a CBS News article this week, "[New Jersey Governor Chris] Christie said he could conceivably sign a bill approving internet gambling without a referendum, as long as the state Attorney General's Office and other legal authorities he has consulted say it would be okay [constitutionally]." "Given the fact that casino gambling in New Jersey is already part of the constitution, we need to take our time to make sure any law that was written would conform to New Jersey's constitution," Interactive Media Entertainment and Gaming Association(iMEGA) Chairman Joe Brennan told PocketFives on Thursday. He elaborated, "That's why the bill is written the way it is, limiting the licensing for internet gambling operators solely to Atlantic City-based casinos because those are the only ones provided by law to offer casino gambling in the state. Arguments other than that have been used as stall tactics by Caesars Entertainment and Boyd Gaming, who prefer to have a Federal solution or prefer Nevada to be the center of internet gambling because that's where their corporate headquarters are." You'll recall that last year, Christie vetoed a measure that would have paved the way for Web gaming in the Garden State. The bill, which State Senator Raymond Lesniak (pictured) introduced, passed by a landslide in both chambers of the state's legislature, but failed to make it past the Governor's desk. Christie was concerned, in part, that the bill would violate New Jersey's constitution. "The bill's opponents are raising questions about constitutionality. For the most part, the consensus is doing this through the legislature. The only other threat comes from the horse racing industry. Right now, there is no provision that provides subsidies that the horse owners have accustomed themselves to receiving from the casino industry over the last few years. I think their negotiating hand is weak. They played their hand too early." New Jersey is laid out such that the horse racing tracks are predominantly in the north, while Atlantic City, where the state's only land-based casinos are found, is positioned in the south. "We already know that two decisions by the New Jersey Supreme Court regarding gambling in Atlantic City support the path that's being taken right now of direct legislation and not a referendum. The only people standing on the other side are people doing it for self-interest reasons [like land-based casino owners who prefer a Federal or Nevada-based solution as well as members of the horse racing industry." Since receiving the axe from Christie, Lesniak has introduced another bill that was voted out of a State Senate committee two weeks ago. The Assembly Regulatory Oversight and Gaming Committee has delayed a vote on the bill so that it can take testimony on it from a constitutional perspective. Meanwhile in Nevada, licensees are already being vetted and regulated online poker rooms could launch by year's end. New Jersey law could still prove to be murky, however. To that end, a Seton Hall constitutional law professor told the committee in a report on NJ.com, "Assembly Bill 2578 and Senate Bill 1565 are not violations of the constitutional provisions requiring the voters to approve gambling because the voters have already approved voting in Atlantic City by its vote in 1976... An amendment would be needed, however, if lawmakers were seeking to legalize gambling outside of Atlantic City." If approved, would internet gambling thrive in New Jersey? Would enough liquidity exist for the industry to be economically viable? Brennan was optimistic: "Internet gambling works in populations where people don't want to, or can't, go to a casino. It works in New Jersey because Atlantic City is southeast of the population center in the state."
  9. This month, the PocketFives Podcastremembers Black Friday and gives our listeners an update on Federal and state online poker legislation. The internet gaming industry was turned on its head on April 15th, 2011 when the U.S. Department of Justice indicted 11 individuals associated with PokerStars, Full Tilt Poker, and Absolute Poker. All three sites left the U.S. market, while only PokerStars has managed to scrape up the funds to pay back players. Watching the events of the past year unfold have been Poker Players Alliance(PPA) Executive Director John Pappas and Vice President of Player Relations Rich TheEngineer Muny, who join the PocketFives Podcast this month. Both have played integral roles in advancing online poker legislation on Capitol Hill and speaking out on behalf of players everywhere. PocketFives has published a plethora of legislative articles since Black Friday. If you haven't kept up, Pappas recapped the latest: "Players are already seeing what's happening. It's a combination of Federal and state action. Since Black Friday, we've had a lot of progress made here in Washington. I would characterize it as a lot of starting and stopping. In June following Black Friday, Congressman Joe Barton (R-TX, pictured) introduced his bill, HR 2366, and over the next six months, we had four hearings surrounding that bill and that issue." However, there has been relatively little movement in 2012. Pappas explained what has happened in the New Year: "We haven't seen the type of progress that we would have hoped so far. We would have liked to see a bill passed out of committee by now. We would have loved to see the bill that Senator Harry Reid (D-NV) and Senator Jon Kyl (R-AZ) have spoken about many times, but we haven't. At the same time, we're also seeing the states move." Pappas elaborated, "It's not necessarily related directly to our issue, but just a general slowdown of Congress to truly accomplish anything of substance. They are paralyzed by bipartisanship, particularly by what appears to be a divisive election year. The PPA is continually and constantly engaged with Republican and Democratic leaders talking about how we can get our issue raised between now and when Congress recesses." Nevada has already approved regulations that would allow legal online poker and is in the process of reviewing potential licensees. "I do believe there will be real money, live play on the internet for residents in Nevada beginning sometime in early 2013," Pappas forecasted. "Who knows if New Jersey can get its bill signed by Governor Chris Christie (pictured)? [Nevada and New Jersey]could [have legal online poker] right around the same time." Other states like Iowa and California have investigated the issue, and Illinois recently launched online lottery ticket sales. "In my opinion, it's no longer a matter of if, but a matter of when and how this will happen," Muny said of legalized internet poker in the United States. "The state efforts are pushing the Federal efforts forward... The Federal efforts are also pushing the states forward and that's due to the efforts of the poker community." Muny has spearheaded the Daily Action Plan here on PocketFives, which offers ways members of the community can get involved politically from the comfort of their own homes. Could online poker become a rider? Or will it likely pass as standalone legislation? Pappas told the PocketFives Podcast that the number of opportunities for the former could be limited: "I don't know that there will be a lot of opportunities. I think you'll see the PPA and others make serious plays to make sure online poker is included in those must-pass bills between now and the election. If we're not successful, there's a real opportunity in the lame duck session." There has been a considerable amount of chatter on PocketFives and elsewhere that a piece of pro-online poker legislation could find its way onto the Cyber Security Act, which is still in progress. Pappas revealed, "There has been outreach from our lobbying side on that, but I would certainly encourage our membership to remind their lawmakers that not just the Cyber Security Act, but any moving vehicle this year is an appropriate vehicle for internet gaming, particularly those bills that require some sort of revenue component." Muny noted that the Cyber Security Act is unique because it is germane to our issue, "whereas some of the other pieces of legislation, it would be hard to envision how we would fit in other than a revenue aspect." Get up to speed on online poker's prospects in the United States by listening to this month's PocketFives Poker Podcast.
  10. Held in recent days were the London Affiliate Conference and ICE, which brought together members of the internet gambling and online poker industries. Many of the online poker sites that PocketFives works with were in attendance, as was PokerTracker's Steven McLoughlin, who gave us his takeaways from this major industry event. McLoughlin broke down the sale of Full Tilt Poker, talked about the future of PokerTracker, and forecasted legislation in the United States, among other topics. PocketFives: Give us your top takeawaysfrom the London Affiliate Conference and ICE. Steven McLoughlin: Number one would be how much the industry has matured now that the U.S. market is no longer available. Just a year ago, you'd still hear people working at various companies complaining about PokerStars and Full Tilt, saying that they had an unfair advantage because they served the U.S. market. The common misconception in the industry was that the reason Stars and Tilt were big was because of their access to the U.S. market. This is partly true, but what was often ignored was that these two sites were simply doing something innovative and different from everyone else - and players liked the innovation provided by Stars and Tilt. That is the real reason why they were the biggest. This appears to have been a wakeup call for the online poker industry. What we've seen now is a return to customer service ethics and product innovation - finding ways to make the gaming experience better for customers and improving service by providing more transparency. The network that has impressed me the most on this front is 888. Their product today is night and day from what they had last year. They have not alienated the hardcore players; at the same time, they've embraced the recreational players in new ways that make both market segments happy. They have done a phenomenal job. Another takeaway from London was what's happening the U.S. The discussion is now focused on who would or would not be able to apply for a license, what types of licenses will be available in Nevada, and what other states might be pursuing online gaming. Much of the industry appears to have moved away from the one-nation solution; instead, they are embracing a state-by-state solution. As I see it, the poker industry generally realizes that everyone wants a Federal solution, but the industry has accepted that it's likely going to proceed state-by-state. That was fascinating to see and it is a radical change of perception. I'm going to predict that a lot of the big poker companies we know now won't be operating in Nevada. I can only discuss Nevada right now because it is the only state that is virtually guaranteed to proceed with online gaming, with the first licenses to be assigned in the coming months. My prediction is that the future will center on the big, existing gaming providers in Nevada like ShuffleMasterand IGT. They will be guiding the industry going forward. Without going into specific deals, there are numerous existing online networks that are in the middle of negotiating with Nevada-based gaming manufacturers to be bought or licensed out. PocketFives: We've had multiple PocketFives members ask if they can expect to see PokerStars service the U.S. market in the future. What do you think? Steven McLoughlin: I think there is almost no chance of that now. The future is a state-by-state solution and PokerStars hasn't made amends with the DOJ yet on a Federal level. Even when that does occur, it will not guarantee a safe path for Stars at the state level. We haven't seen the end of PokerStars' legal concerns in the USA; that's all still to come. The U.S.-based companies that will be licensed in Nevada have the incentive to block foreign companies from coming in. Each state will consider its own issues, its own laws, and its own reading on Federal law, making entry for Stars a very complicated matter. PocketFives: Are you writing off the prospects of a Federal bill? Steven McLoughlin: Everyone I spoke with has low hopes for it. Everyone wants a Federal solution, but nobody is banking on it anymore. What the industry is hoping for is a Federal compact solution will be created between states. A compact is an agreement between two states; this is how other interstate gambling is managed such as multi-state lotteries and horseracing. Like it or not, I think compacts will be the future of online poker in the USA. In order for states to work together as a team under a compact, they'd need similar gaming laws. It could take many years for the whole system to develop, but we're beginning to see movement for the most part. In the meantime, I am advising online poker players to consider relocating to Nevada or New Jersey in order to keep playing in the U.S. It is likely that these two states will be operational within the year. PocketFives: Was there any new information revealed in London about the state of Full Tilt Poker? Steven McLoughlin: I didn't hear anything new about Full Tilt player funds or the GBT deal. The only conversation I had was about the acquisition of Full Tilt's intellectual property. Apparently, there were companies that looked at acquiring the IP for Tilt, but passed. Additionally, there were other companies that thought the assets were toxic and could not be bought for use in the USA. By the way, the International Stadiums Poker Tour, which Group Bernard Tapie runs, had a giant booth in London. Allegedly, you'll start qualifying for it online and then you'll go to the main floor of Wembley Stadium and play, which is interesting. It would explain why Tapie is interested in acquiring an online poker site. PocketFives: How will PokerTrackerbe able to operate in a state-by-state framework? Steven McLoughlin: The majority of our business is non-U.S. right now. In the U.S., we'd continue to support sites and networks in each state as they come online as long as we see it as profitable. We're going to have to analyze every state and network and take it one by one. It's going to create some problems for us as a company because it'll create far more rooms for us to support. With that said, balkanization is already happening in Europe, and we have adjusted fairly well to the country-specific networks that have popped up. We're already in conversations with who we believe will be the bigger players in Nevada to make sure they understand the PokerTracker business model and how we help attract more players who play on more tables and rake more. Those conversations have gone well so far. Every company we have spoken with understands the benefits their business will gain from allowing personal tracking and they have all followed and learned from the bigger European poker rooms like PokerStars that embrace PokerTracker users.
  11. After looking like a sure bet after its passage, the laws in the District of Columbia that would open up internet gaming and online poker in the backyard of the Federal Government have come under fire and may, in fact, be rescinded before any online operations come to fruition. Reports in both the Washington Post and Washington Times over the past week have discussed how members of the D.C. City Council are looking to repeal the passage of online poker. According to the Times, the "odds are slim" that online gambling will begin this yearin the District, while the Post takes a different tack, stating that the Council is "divided" on how or whether to be the first territory in the United States to offer online gambling and poker. At issue with some of the members of the D.C. City Council is how the language that authorized online gambling and poker was pushed through the committee. Back in 2010, council member Michael Brown, a proponent of the online gaming push, inserted language into a supplemental budget bill authorizing online gaming and poker that passed through the City Council. After Congress, which has to approve legislation by the D.C. City Council, failed to act on that part of the supplemental budget bill, it was thought that the District would become the first "legal" intrastate online gaming outlet in the U.S. It was only after other council members began to examine the new law on online gaming, as well as some of the contracts that were signed with Greek gaming provider Intralot, that the arguments between the politicians began. That contract with Intralot, which is estimated to be worth $39 million, has brought accusations from some members of the Council. These center on the allegation that D.C. Chief Financial Officer Natwar Gandhi circumvented the Council by making the deal. The ongoing debate with the D.C. City Council has seemingly split the panel as to whether the District can or should offer online gaming and poker to its citizens. Although the law appears to have several security measures, including ISP and GPS recognition to make sure that players are inside the District, and is definitely far from high-stakes (players would have to be 19 and could only wager up to $250 per week), some members of the Council have come out opposing the activation of online gaming to the point of introducing legislation to repeal the previously passed law. Tommy Wells, a Democrat representing Ward 6 of the District of Columbia, has introduced a bill that repeals the online gaming law that was passed; several members of the Council and the city's government are pushing for its passage. Jack Evans, the Democratic Ward 2 councilman who chairs the D.C. Council Committee on Finance and Revenue, stated to the Times that he would push any legislation repealing online gaming through to the full Council, while at-large council member David Catania has said he would support the defeat of online gaming. "Given where we are now, should we go back and revisit it or not? That's what I'll decide," Evans is quoted by the Post as saying. He added, "There's no rush to get this (online gaming) done." Catania went as far as saying to the Post, "I'm pretty sure we can throw a monkey wrench into this." Others supporting the repeal of online gaming include council members Phil Mendelson and Kwame Brown, while Muriel Bowser has stated she is "uncomfortable" with the prospect of online gaming, but wonders where the money that could be made through it (estimated to be up to $13 million over four years) could be made up. Supporters of online gaming in D.C. include council members Marion Barry, Yvette Alexander, and Brown. With the turmoil over the online gaming question in the District of Columbia, proponents of online poker now look to Nevada, which has enacted regulation of online poker and has already begun looking at potential operators. The proposed intrastate system could be activated in the desert state before the end of the year, according to a statement by the Post as well as a previous feature article here on PocketFives.
  12. Over the weekend, U.S. Senator Harry Reid (D-NV, pictured) offered American online poker players hope that a Federal solution to licensing and regulation the game will come to fruition within the year. After appearing on NBC's "Meet the Press," Reid was met outside the studios by Tony Batt of GamblingCompliance.com. Reid stated to Batt that the change of the U.S. Department of Justice's stance regarding the Wire Act of 1961 should help to push efforts in Congress to pass Federal regulation of online poker. "It'll give us an incentive to get something done," Reid told Batt as he left the "Meet the Press" studios. The senior Nevada Senator then outlined his reluctance to see any regulation of online poker done on a state-by-state basis: "We cannot have a series of laws around the country related to gaming. I know a lot about gaming... I'm a former chairman of the Nevada (Gaming) Commission and I think it's very important that we have a national law." Reid indicated to GamingCompliance.com that he is in negotiations with Senator Jon Kyl (R-AZ, pictured), who is not seeking reelection in November and has been a stalwart in the fight against online gaming. Those negotiations are "making progress," according to Reid, but it is unclear when such legislation would make its way to the floor of the Senate. Speculation has been rampant that any proposed online poker legislation could potentially be attached to a bill to extend the Federal payroll tax legislation, which could come next month. The Federal payroll tax "holiday" was a hotly contested issue in December. Reid would not speculate on such a possibility of the online poker legislation being a "rider" on the payroll tax bill, saying, "I'm not going to get into how we're going to get it done... We're going to work together to get it." Reid and Kyl were, in part, the catalysts behind the change in the stance of the Justice Department's views on online gaming. Last July, the two Senators sent a letter to the Justice Department asking for a reaffirmation of its position that all internet gaming, including online poker, was illegal under the Wire Act. GamblingCompliance.com opines that it was an attempt by Reid and Kyl to discourage states from their efforts to open up intrastate online gaming options. When the Department of Justice came out in December clarifying its stance on the Wire Act of 1961 - that the law only presumably applied to sports betting - GamblingCompliance.com quoted Joe Kelly, a business law professor at SUNY College in Buffalo, as saying, "Be careful of what you ask for, you just might get it." There are several reasons behind Kelly's statement. By indicating that the Wire Act was only applicable to sports betting, the door was opened for the legalization of online gaming, lotteries, and bingo operations. The problem for the Federal Government, however, is that the DOJ's clarification seemingly invited all 50 states to move on the issue; states could potentially move quicker to enact legislation than the Federal Government could. Fifty different licenses for each state, and their differing regulations, could create a nightmare for potential gaming companies looking to get into the business, whereas a single Federal set of regulations would likely be more appealing to operators. As of now, locales including Nevada and the District of Columbia have already adopted legislation for internet gaming within their borders, while several other states are preparing to step into the online gaming and poker business, including Iowa and California. Nevada is already vetting potential licensees. Stay tuned to PocketFives for the latest poker legislation news.
  13. On Thursday, the Senate Committee on Indian Affairsmet for the second time in three months to discuss the impact of internet gambling. This time, the recent Department of Justice opinion letter saying that the Wire Act only applies to sports betting took center stage and the meeting had a witness lineup that included gambling law expert I. Nelson Rose and Poker Players Alliance (PPA) Litigation Support Director Patrick Fleming. The meeting lasted about 90 minutes and started 30 minutes late. As onlookers viewed a series of pie charts spread out in the hearing room, Committee Chairman Daniel Akaka (D-HI, pictured above) told the assembled crowd, "This issue is of great importance to tribes. Indian gaming is currently the only form of Federally authorized and regulated gaming in the United States. Currently, tribal gaming makes up 40% of the gaming market in the United States." Seneca Nation of Indians President Robert Odawi Porter was the lone member of the first of three panels. His testimony largely focused on the danger Indian tribes could face if their voices aren't heard: "In recent years, big gaming and state regulatory interests in Nevada and New Jersey have pushed for Federal legislation that would give them monopolistic control of internet gaming in the USA... They are determined to shove Indian gaming away from the table." He concluded his testimony by imploring the assembled Senators and their staffers, "Send your colleagues a message that you won't tolerate any new legal authority that results in job losses in Indian country. Indian nations not only demand a seat at the table, we insist we already own a table and should not have it stolen from us." The Seneca Tribe employs about 4,000 people in its gaming business alone. The second panel began with testimony from Kevin Washburn, the Dean of the School of Law Administration at the University of New Mexico. Washburn called for a Federal regulatory framework, saying that the DOJ "created a chaotic atmosphere. It created a situation that has forced Congress' hand. Congress needs to act here. There is a strong Federal interest in Indian gaming. This was viewed as a very important resource for tribes by the Federal Government... We have to protect this Federal resource for tribes. Tribes need to have access to this resource that's been so important for their self-determination and self-government." Nelson Rose (pictured), who also appeared on the second panel, noted that the DOJ's memo opened the floodgates for state-based online gaming: "There is no Federal statute that would prevent a state from legalizing virtually any form of internet gambling other than sports betting. States can legalize it, they can form compacts via interstate and even international to form pools of players." Rose admitted that it's unclear whether Indian tribes can accept wagers from players located off tribal lands. You can read an exclusive PocketFives interview with Rose about the DOJ's Wire Act decision. S.J. Quinney College of Law professor Alex Skibine rounded out the second panel in the Senate committee hearing and spoke about the unique challenges that some tribes could face: "For many Indian tribes that have state compacts, internet gambling would be legal under these compacts. However, for other tribes, that may not be the case. Those tribes would have a very hard time amending their compacts... Even for those tribes for whom it is legal, they may be restricted to wagering originating on Indian land. This limitation makes no sense when it comes to internet gaming since internet gaming is borderless." Skibine added that any potential legislation should recognize tribes as sovereign governments with the authority to regulate gaming. He emphasized that tribes should be able to conduct internet gambling in any jurisdiction where gambling is allowed, there should be no state taxation of tribal gaming revenues, and tribes should not have to amend their compacts to make online gambling a reality. The third and final panel began with Patrick Fleming (pictured), who hails from New Hampshire and spoke in front of a Senate committee for the first time. Fleming drove home the belief that poker is fundamentally different from other casino games: "Internet poker is not a threat to tribal gaming interests. Poker itself only represents 1% of tribal gaming revenues. It's clear that, at the very least, internet poker is not a threat to tribal operations. There is a symbiotic relationship between those who play poker online and those who play poker live." Indian law attorney Glenn Feldman was the final witness to speak and cautioned Congress not to rush to pass ineffective internet gaming legislation: "Lawful internet gaming in the United States is inevitable. The advice I give all of my tribal clients is, 'Just saying no is not an effective strategy for dealing with inevitable change.' Tribes need to be at the table and need to be flexible and smart in their thinking. There is no need to rush to enact Federal internet gaming legislation... Congress would make a serious mistake to rush into internet gambling legislation without the discussion this subject deserves." There were virtually no questions from lawmakers in attendance other than follow-up inquiries from Akaka for each panelist. No markup of any bill on Capitol Hill is scheduled.
  14. On Thursday, the Senate Committee on Indian Affairs will hold an oversight hearing entitled, "The U.S. Department of Justice Opinion on Internet Gaming: What's at Stake for Tribes?" The witness list includes two names that should ring a bell in the online poker world: gambling law expert I. Nelson Rose and Poker Players Alliance(PPA) Board Member and Litigation Support Director Patrick SkallagrimFleming (pictured). You can view the full witness list by clicking here. PocketFives caught up with Fleming to talk about his prepared testimony and his views on the recent DOJ statement that the Wire Act only applies to sports betting. PocketFives: Congratulations on being selected to testify in front of the Senate committee on Thursday. How did this come to pass? Patrick Fleming: I was recently asked to publish a short article on the DOJ's revision of its stance on the Wire Act. From what I understand, the committee contacted the PPA and said they wanted someone to speak about it. They had seen that I published an article about it and wanted me to testify. PocketFives: What went through your mind when you heard you'd be testifying? Patrick Fleming: I was a little surprised. Usually, these DC things go to public faces like PPA Chairman and former Senator Alfonse D'Amato, but I'm happy to do it and I'm honored. PocketFives: What can you tell us about the core of your testimony? Patrick Fleming: The change in the DOJ's interpretation of the Wire Act is like the barn doors being flung open; the only question is what animals will run out. We have 50 state possibilities with respect to everything other than sports wagering. The key question is where are we right now? We have the vast majority of states - 41 - that don't have a law in place addressing internet gaming. When the remaining states do address the internet, what are they going to do? We've seen all sorts of different proposals. The biggest question is whether it'll be 50 different state proposals or whether the Federal Government will step in. PocketFives: What's your sentiment on whether we'll see a Federal regulatory scheme or state-by-state online poker? Patrick Fleming: I'm guardedly hopeful for the passage of Federal regulation. The DOJ's change is sort of the "burr under the saddle" and will hopefully get this Congress to take up the issue. There is certainly an incentive for Congress to act at this point in this time. PocketFives: We've heard critics of the DOJ's Wire Act clarification say that online poker might not be permitted under the Wire Act because the clarification did not directly address it. Respond to those critics. Patrick Fleming: They wouldn't be taking the DOJ at its word. The DOJ's word in their letter is that the Wire Act is limited to wagers on sporting events. If you're plunking down money to play online poker, you're outside of the Wire Act. PocketFives: What testimony have you seen from the other witnesses invited to Thursday's hearing? Patrick Fleming: I'm not aware of anyone who is taking a different angle than I am, but I haven't seen everyone's testimony. Professor Rose is another person scheduled to speak, and his published articles have the same analysis as my testimony. PocketFives: CardPlayer published an article on Tuesday saying that Black Friday defendants Chad Elie and John Campos are seeking to have their Illegal Gambling Business Act (IGBA) and Unlawful Internet Gambling Enforcement Act (UIGEA) charges dismissed due to the Wire Act clarification. What do you think their chances are? Patrick Fleming: If Elie and Campos were to be convicted, then it has to be based on a valid state law. What's going on here is that the UIGEA and IGBA don't just require a violation of a state law, they also have their own preliminary requirements. Especially with respect to IGBA, it's a question of whether poker is included in what IGBA covers. There's a list of games in IGBA - and poker is not one of them - which is designed to limit the scope of the law. In the UIGEA, it says the law only applies to games subject to chance. The change with the Wire Act doesn't directly change what happened on Black Friday, though. There were no Wire Act violations on Black Friday. The IGBA and UIGEA counts were based on violating New York state law and other state laws. What's being argued is that there are preliminary requirements for both laws. PocketFives: What do you foresee happening if state-by-state online poker becomes a reality? Patrick Fleming: We want to end up with a competitive interstate market with strong consumer protections. The interstate market is the key. If we can get a good Federal law that creates that interstate market, we should shoot for that first. If we can't get that Federal law, then we should go back to the states and educate them on the importance of liquidity and state compacts and start to build that state by state. That's a process that could take some time. PocketFives: Do you believe that interstate online poker is permitted following the DOJ's Wire Act interpretation? Patrick Fleming: Yes. The distinction would have to be that online poker is legal in both jurisdictions. Some jurisdictions like Washington State have made it illegal, but there's nothing that prevents states from having compacts that allow for interstate play.
  15. On February 9th, the United States Senate Committee on Indian Affairs will hold its second hearing about internet gambling. The first, which took place at the tail end of 2011, discussed how the Federal Government legalizing online gaming would impact tribal interests. This time around, the December opinion letter from the U.S. Department of Justice stating that the Wire Act only applies to sports bettingwill be the focal point of an oversight hearing. Read more about the first hearing. The committee hearing will commence at 2:00pm ET on February 9th and take place in the Dirksen Building, Room 628. In an e-mail sent to members of the Poker Players Alliance (PPA) on Tuesday, the organization's Vice President of Player Relations, Rich TheEngineer Muny, discussed the significance of the hearing: "These continued hearings are hard evidence of the great work the poker community has been doing to ensure our elected representatives hear from us." Runy concluded by saying, "I thank everyone for taking the steps necessary to ensure our elected representatives understand that we poker enthusiasts will not back down and will not simply go away." The PPA is over one million members strong and serves as the primary lobbying voice for live and online poker players in the United States. The Senate Committee on Indian Affairs first tackled online gaming in mid-November. The highlight of that two-hour hearing was a quote from Mohegan Tribe Chairman and witness Bruce Bozsum (pictured), who heralded to the assembled crowd of tribal representatives, reporters, lawmakers, and spectators, "There are no boundaries. There's no limit as to what they can do. I don't think anyone is at a disadvantage. It's an opportunity tribes should not miss.If commercial businesses do it, we'll never be able to catch up to the pack." On Tuesday, NPR published a story asserting that Connecticut tribes could be put in charge of regulated intrastate online gaming, and among those that stand to benefit is Mohegan Sun. Bozsum told NPR that the DOJ letter relegating the Wire Act to sports betting was a wake-up call: "We're talking about the employment of tens of thousands of individuals." Foxwoods is also located in Connecticut and hosts a World Poker Tour event each year. Bozsum added that successful intrastate online poker in Connecticut requires the Commonwealth's legislature to act swiftly: "[Massachusetts has]announced they're going to have five casinos. [New Jersey Governor Chris Christie] has announced that he wants New Jersey to be the online gaming capital of the world, tied to the presence of the casino industry, which is competitive with our industry in the state of Connecticut. We've got to watch those things." A list of witnesses for next month's Senate Committee on Indian Affairs hearing has not yet been announced, but not everyone will likely be for internet gaming. Speaking out against the expansion of gambling to the Web in November's hearing was Tulalip Tribe Vice Chairman Glen Gobin, who told supporters, "The legalization of internet gambling comes at a risk to tribal economies. The proponents that seek to legalize internet gambling say it will create $41 billion over the next ten years. However, let's not forget that Indian gaming will provide $256 billion in the same period." Also serving as a witness at the last Indian Affairs hearing was PPA Chairman Alfonse D'Amato (pictured with Committee Chairman Daniel Kahikina Akaka), a former three-term Senator from New York who appeared in front of several of his ex-colleagues. D'Amato fired back at Gobin's gloom-and-doom scenario during the meeting, arguing, "This will not have the kind of devastating impact that Gobin is legitimately concerned with. Right now, only 1% of all of the revenues at Indian casinos comes from the poker tables." We'll keep you posted on the latest poker legislation news right here on PocketFives.
  16. As each day passes, the legalization and regulation of online poker in the United States seems to draw nearer. With Nevada already vetting potential operatorsand New Jersey trying to catch up, the state of Iowa has jumped into the fray as well. However, with a population of three million, roughly one-third as large as the Chicago metro area, Iowa offering intrastate online poker could be a hairy proposition due to its small size. In a Des Moines Register article from last week, however, it was revealed that Iowa could soon be investigating interstate, as opposed to intrastate, online poker. State Senator Jeff Danielson (pictured above) is spearheading the charge for internet poker in Iowa. Late last year, he attended an online gaming conference in Washington, DC that PocketFives was also present at. Danielson sat near the front of the room and attentively asked questions of each panel on topics that included cheating in poker, the growth of internet gambling, and the challenges of state versus Federal licensing. One month after the summit, Danielson and the rest of the industry have digested an opinion letter from the U.S. Department of Justice saying that the Wire Act only applies to sports betting, seemingly opening the floodgates for state-by-state online poker and online gaming. The State Senator told the Register, "We believe that because of the Department of Justice ruling, we can now have a multi-state compact." If you're familiar with Powerball, then you know that over 30 states and the U.S. Virgin Islands already participate in an interstate game. In fact, it's still growing in popularity, as the multi-state lottery just bumped its ticket price up to $2 in an effort to create larger jackpots. In case you're wondering, by the way, tonight's Powerball jackpot is $100 million and drawings are held every Wednesday and Saturday. Let's get back to talking about Iowa. The Register noted that Danielson "plans to draft a bill soon to legalize internet poker in Iowa, and he expects it to be considered this session, although he doesn't have a timetable yet." In Washington, DC, Danielson told the crowd that his rationale for expanding poker online was not financial: "We don't have a budget problem. Our impulse is not to regulate online gaming for revenue. I think that's the last reason to contemplate it. As technology explodes, I want every Iowan who wants to avail themselves of [online gambling] to be able to do so safely and securely." The Poker Players Alliance (PPA) and FairPlayUSA have been championing a Federal internet poker framework on the grounds that a state-by-state licensing scheme would be difficult for operators to navigate and result in a lower player count. Danielson, however, appears tired of waiting for Congress to act. Speaking in DC, he observed, "Congress is so boggled up, they can't even pass gas, let alone a good bill. What are the states supposed to do? We have an obligation as states to experiment." A network of states participating in an online poker game could be a real possibility. On a conference call last week, gambling law expert I. Nelson Rose remarked that the recent DOJ Wire Act decision paved the way for interstate, and even global, online poker: "There is no Federal law that would apply to interstate or even international online gambling that is legal under state law, except sports betting and lotteries." It's estimated that legalized online poker in Iowa could generate between $3 million and $13 million in annual tax revenue. In addition, a study by California-based U.S. Digital Gaming concluded that the Midwestern state has a large enough population to support its own online poker network if push came to shove. A representative of U.S. Digital Gaming was quoted in the Register as saying, "We believe that Iowa has enough of a population of players to support a network on its own, that you wouldn't need the interstate component in order to make it viable. But, it certainly makes for a more robust opportunity if you set up the interstate opportunity." Iowa already has a bevy of land-based casinos, including Harrah's Council Bluffs, which will host a World Series of Poker Circuit Event from March 29th to April 10th. Other casinos can be found in cities like Waterloo, Dubuque, and Sioux City.
  17. Chad Elie, a former online poker payment processor named in the infamous Black Friday indictment, established a Twitter account late last week and has since been posting photos and documents in an attempt to give the poker community a glimpse at his side of things regarding his criminal case. Elie, who processed payment payments for Full Tilt Poker, PokerStars, and Absolute Poker, pled guilty to bank fraud in March. In the Black Friday indictment, the U.S. Department of Justice alleged that that he opened "bank accounts in the United States, including through deceptive means, through which each of the poker companies received payments from United States-based gamblers." On October 3, U.S. District Judge Lewis Kaplan sentenced Elie to five months in prison. The charge to which Elie pled guilty carried with it a maximum sentence of five years, but Kaplan agreed to limit the sentence to between six and 12 months at the original plea hearing; he ultimately received five months. In addition to the prison term, Elie must pay $500,000 in fines, forfeit the $25 million he made from payment processing, and be subject to two years of supervised release. In response to questions about how he could be Tweeting from prison, Elie explained on TwoPlusTwo that he will not be locked up until January 3. The Tweets, posted from the account @BlackFridayChad, include photos and documents. The photos were apparently taken at an event at the 2010 World Series of Poker and show some of the biggest names from the Black Friday scandal, including Ray Bitar, Howard Lederer, and Elie, in attendance. Nevada Senate Majority Leader Harry Reid (pictured with Bitar and Lederer) is present in several pictures speaking with likes of Lederer, Bitar, and Phil Ivey. It looks as if Elie posted these pictures to refute Lederer's claim that he never met with a payment processor. More interesting are the documents posted on the Twitter account. These consist of portions of legal opinions supporting Elie's legal team's belief that online poker payment processing is not illegal and were attached to a February 2012 motion in his case. One document, penned by Catherine Hanaway of the Ashcroft Law Firm, concluded with the sentence, "In our opinion, the processing of transactions on behalf of online peer-to-peer poker operators does not violate either the UIGEA or the Wire Act." Prior to entering private practice, Hanaway was the U.S. Attorney for the Eastern District of Missouri, the same district in which ex-BetOnSports CEO David Carruthers was sentenced. The Ashcroft in the name of the firm is none other than former U.S. Attorney General John Ashcroft. Two other documents from the law firms Akin Gump and Zwillinger Genetski LLP come to essentially the same conclusions. It is not quite clear if Elie believes he was in the right when it came to processing payments for online poker rooms. On the one hand, he had several legal opinions from respected firms saying processing payments was not illegal, but on the other hand, he Tweeted, "I sure wish I didn't listen to some lawyers" when posting an image of a letter that requested a delay of the UIGEA. At Elie's plea hearing, Kaplan asked him, "You are pleading guilty because you are guilty?" Elie's reply of "Yes, your honor, I know that my conduct was wrong" could be interpreted literally or it could have just been Elie saying what he needed to say to get the process over with. On TwoPlusTwo, Elie commented, "These are strong, reputable firms that wrote them (the legal opinions). Which means absolutely nothing. You can't argue your state of mind if your charge doesn't allow it... I pled guilty because I was in fact guilty." Want the latest poker headlines and interviews? Follow PocketFives on Twitterand Like PocketFives on Facebook. You can also subscribe to our RSS feed.
  18. With the Presidential election finally upon us, here is a look at how the candidates stack up on the online poker issue. Republican nominee Mitt Romney (pictured) expressed his support for banning online poker during the Nevada primary. His position was reinforced by the Republican Party platform adopted at the convention in August, which says in part, "We support the prohibition of gambling over the internet and call for reversal of the Justice Department's decision distorting the formerly accepted meaning of the Wire Act that could open the door to internet betting." PresidentBarack Obama has been largely silent on the issue of licensing online poker. In response to a question on online poker on a White House petition site, Brian Deese, Deputy Director of the National Economic Council, replied in part, "It is left to each state to determine whether it wishes to permit such activity between its residents and an online poker business authorized by that state to accept such wagers, but online gambling that is not authorized by state law may also violate Federal statutes." This was followed by the December 2011 Justice Department issuance of its opinion stating that the Wire Act does not apply to poker. Gary Johnson (pictured), the Libertarian candidate and former two-term Governor of New Mexico, is strongly supportive of poker. Johnson opposes efforts to ban online poker, saying it is an individual freedom and that government should not interfere with how Americans spend their own money. While third-party candidates are always long shots (the deck is stacked against them), Johnson says he hopes to get over 5% of the vote. He says this will be enough to begin the end of the two-party system. Click here for an interview with Johnson. The most important thing for all of us to do now is go to the polls on Tuesday and ensure that our lawmakers hear from all of us! The opinions expressed in this article are solely those of the authors and do not constitute an endorsement by Poker Players Alliance, PokerPAC, or PocketFives. Rich Muny and Mark Runningen contributed to this article. Want the latest poker headlines and interviews? Follow PocketFives on Twitterand Like PocketFives on Facebook. You can also subscribe to our RSS feed.
  19. In his keynote address given on Tuesday morning at the G2E conference in Las Vegas, American Gaming Association President and CEO Frank Fahrenkopf (pictured) told reporters there's no evidence that Las Vegas Sands front man Sheldon Adelson is actively working against the online gaming industry despite coming out vocally against it. Fahrenkopf explained, "Sheldon has been transparent and straightforward with me that it's his personal opinion and not the position of the Las Vegas Sands... He's entitled to his opinion. I've seen no evidence that he's out there working against us." Fahrenkopf also touched on the GOP platform including an anti-online gambling position. Fahrenkopf was not overly concerned about the plank, revealing, "We didn't fight it... We believe it can be helpful to us in our lobbying... The [Harry Reid and Jon Kyl] bill will make a real dent in the gambling that's going on. It strengthens the Wire Act and the UIGEA." Fahrenkopf joked that he read the GOP platform once and has no plans to read it again. G2Eis taking place at Adelson's flagship Venetian in Las Vegas. We're right next to the Blue Man Group Theater and thousands of attendees are on hand. This year, well over 400 exhibitors will take up shop in the Sands Expo Center across 262,000 square feet of floor space. It's the largest G2E show since 2008 and the second straight one to be held at the Venetian after moving over from the Las Vegas Convention Center. Eighty-five countries have legalized online gaming. In the U.S., Fahrenkopf touched on efforts to bring the web version of gaming to life in Nevada and Delaware and called for Congress to act: "Without Congress acting quickly, we will see states legalize online gaming one by one." Fahrenkopf and others are concerned that a patchwork online gaming framework will emerge that will be less-than-optimal for consumers. Fahrenkopf spent several minutes talking about the dangers of internet sweepstakes cafes, which he dubbed "the latest attempt to pass off a gambling product as not gambling." These cafes exist in 24 states and their revenues clipped $10 billion last year. Customers purchase phone cards loaded with credits that they use to play games like video poker and slots. "These facilities are dangerous because there are no standards or regulations in place," Fahrenkopf stated. Finally, we'll turn to the upcoming Federal election, which is now just one month away. Will Mitt Romney or Barack Obama be more amenable to gaming? Fahrenkopf admitted, "I don't think it makes a difference. Both champion states' rights." We'll have more for you from G2E right here on PocketFives.
  20. One of the United States' foremost champions of online gambling experienced a health scare early last week, but fortunately, to this point it is an "all's well that ends well" story. New Jersey State Senator Raymond Lesniak (D-Union, pictured) suffered a minor stroke while playing golf last Tuesday. He described his symptoms to the website NJ.com: "After I got off the golf course, I was driving. I was having a hard time, veering into the other lane." It just so happened that Lesniak's golf buddy that day was a neurologist, so his friend checked him out when they got home. There did not seem to be anything to be concerned about. Lesniak's condition worsened throughout the night, however, as he had trouble maintaining his balance, bumping into walls in his house. Lesniak went to Trinitas Hospital the next day, where it was found that he had suffered a stroke. While it was considered minor (he is fine now and resting at home), anything involving blood clots in the brain can be quite scary. He was prescribed the drug Plavix, which helps prevent blood clots. "All my arteries are clear," he told NJ.com. "Something just got loose and went up to my brain in the balance area. I was in the hospital one day. Every single test was all clear. I've just got to slow down my hard charging self a little bit." Lesniak, along with Sen. James Whelan (D-Atlantic), is the sponsor of Senate Bill 1565, a bill that "authorizes internet wagering at Atlantic City casinos to enable New Jersey residents to place wagers on casino games via the internet." The bill passed through the state Senate's State Government, Wagering, Tourism, and Historic Preservation Committee at the beginning of April. The bill would require all servers and other equipment used to offer online gambling to be located in a secure facility in Atlantic City either on a brick-and-mortar casino's property or in a location specifically designed for the purpose of online gambling. All types of casino games would be allowed, although it would still be restricted to people within New Jersey's borders. Online poker would be included. New Jersey Governor Chris Christie vetoed a similar bill last year, but changed his tune this January, shortly after the U.S. Department of Justice pronounced that the Wire Act of 1961 applied only to online sports betting. In a statement at the time, Christie (pictured) said, "Folks should know I favor it. I want to do it. I vetoed the last bill because I felt that it would open up the opportunity for there to be internet gambling houses all over the State of New Jersey. I don't think that's what anybody wants. But, I think being able to have this be an Atlantic City-centric thing is something that makes sense to me. And given the Justice Department's go-ahead for people to be able to do it, I think we should go ahead and move on it. But, we have to do it in a responsible way and it should be Atlantic City-centric." Having passed through the Senate committee and with the backing of the Governor, it looked like SB 1565 was on its way to becoming law, but nothing has happened beyond that. In May, Lesniak was disappointed to announce that the bill would not be voted on until the fall, blaming Christie's political ambitions for the delay. Lesniak told the Philadelphia Inquirer that Christie, who at the time was a potential running-mate for Mitt Romney in November's Presidential election, did not want to get on the bad side of those who could boost him up the political ladder, namely major players in the brick-and-mortar casino industry and the National Football League, an organization which in the past has been a major opponent of online gambling.
  21. In a rather alarming headline broken by Poker Players Alliance(PPA) Vice President of Player Relations Rich TheEngineerMuny on Tuesday afternoon, a GOP platform entitled "Renewing American Values" calls for the prohibition of internet gambling. The platform was finalized on Tuesday night with the anti-internet gambling language included. What does the platform say? And why should internet gamblers and online poker players be concerned? Text found on the third page of the 11-page document reads in part, "Millions of Americans suffer from problem or pathological gambling that can destroy families. We support the prohibition of gambling over the internet and call for the reversal of the Justice Department's decision distorting the formerly accepted meaning of the Wire Act that could open the door to internet betting." Last December, just two days before Christmas, the U.S. Department of Justice decreed that the Wire Act only applies to online wagering on sports, seemingly absolving internet poker. Just a few days ago, poker also received a pass from the Illegal Gambling Business Act (IGBA). In that decision, a Federal judge said that poker is a game of skill and therefore does not fit the description of illegal gambling under IGBA. The GOP platform continues by concluding, "The internet must be made safe for children." It then dives into protecting minors online from "predators," "sex offenders," "child pornography," and "obscenity." Pappas (pictured) reacted to the strong language by telling PocketFives in an exclusive statement, "The one-time party of individual freedom and personal liberty has once again shown their abandonment of these core principles. Ironically, it is House Republicans who are leading the charge for an accountable and regulated market for internet poker. Those who formulate the GOP platform are clearly out of sync when it comes to their own elected officials. Ultimately, the platform is nothing more than a political statement. The real test will be if Republicans and all of Congress can put politics aside and do what they can to protect families and consumers by enacting HR 2366 this year." Republican Congressman Joe Barton, who calls Texas home and will be running for reelection in November, introduced HR 2366, the Internet Gambling Prohibition, Poker Consumer Protection, and Strengthening UIGEA Act, last June. However, there has not been a considerable movement on the bill, which has received 30 cosponsors. It approves online poker at the Federal level and its best shot at being passed into law appears to be during the so-called "lame duck" Congressional session after the general election has concluded. One might wonder whether poker, if decreed a game of skill, will be under fire in the GOP platform as it currently stands. To answer that question, Muny posted on Twitter, "They are including poker IMO. The platform calls for a return to the pre-Dec. interpretation of the Wire Act." Read the entire GOP platform on "Renewing American Values."
  22. Absolute Poker co-founder Brent Beckley was sentenced to 14 months in prison on Monday, 7 months after admitting to violating U.S. gambling laws and committing bank fraud. Beckley was one of 11 people named in the 2011 Black Friday indictments that targeted Absolute Poker, Full Tilt Poker, and PokerStars. In December 2011, Beckley stood before Judge Ronald Ellis and pleaded guilty to conspiracy to violate the Unlawful Internet Gambling Enforcement Act (UIGEA) and conspiracy to commit bank and wire fraud. During the hearing, he admitted, "I knew it was illegal to accept credit cards from players to gamble on the internet... I knew it was illegal to deceive the banks." The Washington Post provided more details as to what was discussed in the plea hearing at the time, writing, "Beckley said his crime began in the fall of 2006 and continued until last spring." The accepted plea deal came with a recommended sentence of 12 to 18 months, though the maximum sentence could have been 30 years. While the 14 months that was handed down falls within that recommended range, there was a possibility for a while that it might have been more. In May, Judge Lewis Kaplan delayed Brent Beckley's sentencing, as he intended to consider an "upward departure" from the sentencing guidelines for Beckley (pictured). An upward departure refers to an increase in the severity of a sentence beyond the standard sentencing guidelines. In his May order, Judge Kaplan wrote that there was "an aggravating circumstance in this case of a kind, or to a degree, not adequately taken into consideration by the Sentencing Commission in formulating the guidelines." Kaplan cited a part of the sentencing guideline manual that strongly weighs monetary loss and relies on the Government to determine the potential financial harm the offender could have expected to inflict. Kaplan didn't believe that the Government could make that determination, but still believed an upward departure may have been warranted because Beckley knowingly broke the law and engaged in a multi-million dollar business. The U.S. sentencing guidelines start with a scale of offenses ranging from 1 to 43 and a criminal history scale in Roman numerals from I to VI. Because the two counts to which Beckley pleaded were closely related, a single range was used based on whichever count resulted in the higher level. Both counts ended up with a level of 12: the UIGEA had a base level of 12, while the fraud count had a base of 7, which was then increased to 12 because a large portion of the crime took place outside of the United States. That level of 12 was then upped to 15 because of Beckley's managerial role and then down to 13 because he took responsibility for his actions. In addition, Beckley had no prior criminal history, so that part of the scale was just level I. When cross-referenced on the sentencing guidelines table, the two scores resulted in the aforementioned guideline of 12 to 18 months. In court on Monday, Beckley said, "I fooled myself into thinking that what I was doing was okay," according to a Reuters report. Despite Beckley's cooperation, Kaplan still felt a 14-month prison sentence was warranted, saying, "The sentence has to make clear that the Government of the United States means business in these types of cases." Stay tuned to PocketFives for the latest Black Friday fallout.
  23. Last week, the U.S. Government, in its ongoing case against PokerStarsas part of the Black Friday indictments, submitted a documentcalling for "a date and time to be set by the Court for an Order (1) Permitting the Government to Take Expedited Discovery Relating to Fugitive Disentitlement and (2) Staying Consideration of the PokerStars Claimants' Motion to Dismiss the Verified First Amended Complaint." You'll recall that 10 days ago, defendants from PokerStars and Full Tilt Poker filed to dismiss the civil charges levied against them. According to Diamond Flush Poker, the Government's latest action means the following: "The Fugitive Disentitlement Doctrine basically provides that a fugitive from justice may not seek relief from the courts whose authority they are evading. In other words, a fugitive would not be able to take advantage of a court's ruling that may be in his favor (a positive ruling via the motion to dismiss or claims for assets facing forfeiture) while avoiding the authority of the court by keeping fugitive status." Diamond Flush Poker added that discerning Isai Scheinberg's ownership of PokerStars will be near the top of the Government's to-do list: "Even if he is not, as the person making the claim on behalf of the company, does he control the corporate claimant (PokerStars) or does the corporation operate as his alter ego?" Also to be determined is whether Scheinberg, who was one of 11 individuals indicted on Black Friday, is a fugitive in the contemporary sense of the word. According to Wendeen Eolis in an article published in Poker Player Newspaper one day after the Fugitive Motion was filed, PokerStars was set to announce a deal to purchase the assets of the now defunct Full Tilt Poker on July 11: "The most reliable pundits close to PokerStars were saying for days that the company had a definite plan to announce the deal on July 11, an off-day for half of the WSOP Main Event Day 2 contenders." However, no such announcement came. PocketFives heard rumblings that PokerStars' purchase of Full Tilt Poker's assets was set to be announced on Day 1C of the Main Event on July 9, but that timetable did not come to fruition. Neither side has commented. On the DOJ's motives during the negotiating process, one Texan wrote in a thread in the PocketFives forums, "I think the DOJ is looking for a resolution that is fair and that serves as a disincentive to future law-breaking. We just don't know whether they've done that faithfully or gotten carried away in their demands. And we probably can't really know since none of the parties in this process is likely to be transparent about it." News of PokerStars potentially buying Full Tilt originally surfaced in late April, when Chili Poker CEO Alex Dreyfus Tweeted, "PokerStars buys Full Tilt for a consideration of $750M, including settlement with DOJ and full balances of players ($330M). I'm impressed." The price tag has since been speculated to be as high as $1.5 billion. Earlier this month, Full Tilt Poker executive Ray Bitar surrendered to U.S. authorities and lent credence to the reported PokerStars deal in an e-mail sent to employees. Bitar's correspondence read in part, "We have all worked hard over the last 15 months to preserve Full Tilt's assets and potential in order to provide for the repayment of all players, and that continues to be our top priority. It is as important as ever that we all do everything possible to make that happen and hopefully our deal with PokerStars will very soon make our goal a reality. My return to the U.S. is part of this process." In a filing outlining the legal rationale behind its Fugitive Motion, the U.S. Government stated that it will likely move for a summary judgment once discovery is complete. The document will reportedly be filed within 30 days. Meanwhile, according to court documents, Full Tilt Poker, also targeted on Black Friday, has until Monday to "file a motion to dismiss and the Government shall have until that same date to file a motion to strike the claim of Full Tilt." According to PokerScout, PokerStars remains the largest online poker room in the world in terms of cash game volume with a seven-day running average of 20,400 real money ring game players and a 24-hour peak of nearly 30,000. Year-over-year, its cash game traffic is off 12%, although PokerStars has since introduced Zoom Poker, which could help inflate its ring game numbers. Stay tuned to PocketFives for the latest Black Friday fallout.
  24. On Thursday, July 26, the second hearing focused on internet gambling of 2012 will be held. As all Representatives and one-third of Senators gear up for their election bids in November, the Senate Indian Affairs Committee will hold a hearing entitled, "Regulation of Tribal Gaming: From Brick and Mortar to the Internet." A live webcast will be available next Thursday and the action gets underway at 2:15pm ET in the Senate Dirksen Building, Room 628. Poker Players Alliance (PPA) Vice President of Player Relations Rich TheEngineerMuny broke the news to the community in a thread on the PocketFives forums this week: "Great news! On Thursday, July 26 at 2:15 pm, the Senate Indian Affairs Committee will hold an oversight hearing to 'examine the regulation of tribal gaming, focusing on brick and mortar to the internet.' We don't yet have a list of witnesses. At this point, I don't know if there will be a witness representing poker players." The last time the Senate Indian Affairs Committee took up internet gambling was in February, when PPA Litigation Director Patrick Skallagrim Fleming (pictured) was part of the witness panel. Fleming spoke about the complex web of state and Federal gaming laws and tried to reassure Indian casino operators that opening the door for online poker would not severely erode land-based revenues. To that end, Fleming argued, "All the preliminary evidence strongly suggests that there is a healthy relationship between online poker and live poker. Poker is, at its core, a social game of person against person. Hence, poker players as a general rule enjoy both settings and use one to compliment the other. While there are some poker players who prefer live games and some who prefer online games, the majority play both with equal enthusiasm." He added that many players use low-stakes online poker as a primer for live games. Fleming reminded those in attendance that the 2011 opinion by the U.S. Department of Justice that the Wire Act only applies to online sports bettingcould have a profound impact on Tribes: "The DOJ's new position that the Wire Act does not apply to gaming other than wagering on sporting events will have large and significant ramifications for Tribal gaming interests. Depending on future developments in state laws, those ramifications will present Tribal gaming operators with significant competition issues that current law leaves them woefully unprepared to meet." Also at February's hearing, Seneca Nation of Indians President Robert Odawi Porter asked Tribal leaders to contemplate the following when considering whether to support online gaming. "As a Tribal leader, there are two questions that must frame our discussion," Porter narrated. "First, will the decision of the Congress support or destroy the Indian gaming jobs held by our tribal citizens? Second, will your decision support or erode the gaming revenue that tribes use for services? In recent years, big gaming and state regulating interests in Nevada and New Jersey have pushed for Federal legislation that would give them monopolistic control of internet gaming in the USA... They are determined to shove Indian gaming away from the table." Poker Players AllianceVice President of Player Relations Rich TheEngineerMuny reacted to news of the hearing, telling PocketFives, "The hearing is terrific news. The desire of the Senate Indian Affairs Committee to hold a third hearing on this issue shows that it is under serious consideration right now. I hope everyone interested in licensed online poker in the U.S. will do their part to help ensure this hearing is a success by participating in the Fight for Poker Daily Action Plan on PocketFives." States have already begun to move. Nevada has already doled out licensesto offer online poker and, recently, Kentucky-based Churchill Downs Incorporated applied for an interactive gaming licensein the desert state. Across the country, Delaware's Governor signed a bill green-lighting internet gambling into law in the final days of June. Online games, including poker, could launch as soon as the early part of 2013 in both states. The Senate Indian Affairs Committee also took up internet gambling last November, when PPA Chairman and former three-term Republican Senator from New York Alfonse D'Amato (pictured) testified on behalf of the poker community. D'Amato drove home the fact that Tribes would feel little negative impact from the expansion of online poker: "Right now, only 1% of all of the revenues at Indian casinos come from the poker tables. We have empirical evidence that since we have had a TV craze for Texas Hold'em and since the internet has been used by offshore companies, the revenues in the card rooms have gone up. It has encouraged participation. It is not a revenue loser." The consensus remains that any progress on any internet gambling legislation would not likely occur until the Congressional lame duck session after November's elections. We'll have more information for you on this still developing story right here on PocketFives.
  25. In another twist to the ongoing Full Tilt Poker saga, a Federal judge has temporarily delayed the civil suit against former Full Tilt Poker Chief Executive Officer Ray Bitar (pictured). According to a report from eGaming Review, Federal Judge Leonard Sand has temporarily halted the proceedings in the civil case against Bitar due to the Federal Government's continued pursuit of a criminal case against him. This is not uncommon in the legal world. Normally, a criminal complaint is completed first - with its "beyond a reasonable doubt" standard of proof of guilt - before a civil case can be litigated. It has been a tough couple of weeks for the former Full Tilt CEO, once looked at as one of the "power players" in the poker industry and especially in the online poker world. Earlier this month, Bitar voluntarily returned to the United Statesfrom his exile in Ireland and was immediately arrested by Federal Bureau of Investigation agents upon his arrival at John F. Kennedy Airport in New York. A superseding indictment was unsealed against him. After spending a few days in jail, bond was set at $2.5 million, with $1 million of that secured. Bitar was able to pull together the required funds to guarantee his release. Bitar had several conditions once his release on bond was confirmed. He had to give up any travel documents, including his passport, to guarantee that he wouldn't flee the country. Bitar also had severe restrictions placed on his ability to travel: electronic monitoring and rules stipulating that he could only be in two areas: New York for any legal proceedings and his home in California. As of earlier this month, these are the criminal charges that Bitar is facing and the potential punishments for those offenses: 1. Conspiracy to Violate the UIGEA - Five years in prison; $250,000 fine or twice the gain or loss from offense; three years of supervised release. 2. Violation of the UIGEA- Five years in prison; $250,000 fine or twice the gain or loss from offense; three years of supervised release. 3. Operation of an Illegal Gambling Business- Five years in prison; $250,000 fine or twice the gain or loss from offense; three years of supervised release; forfeiture of proceeds of offense. 4. Conspiracy to Defraud Banks - 30 years in prison; $1,000,000 fine or twice the gain or loss from offense; five years of supervised release; forfeiture of proceeds of offense. 5. Three counts of Wire Fraud - 20 years in prison; $250,000 fine or twice the gain or loss from offense; three years of supervised release. 6. Money Laundering Conspiracy, Promotion- 20 years in prison; $500,000 fine or twice the amount laundered; three years of supervised release; forfeiture of proceeds of offense. 7. Money Laundering Conspiracy, Use of Funds- 20 years in prison; $250,000 fine or twice the amount laundered or twice the gain or loss; three years of supervised release; forfeiture of proceeds of offense. If the charges are litigated and Bitar is found guilty, the punishment could be severe. If Bitar is to serve his sentence consecutively, it would mean he could be in prison for 145 years and face, at minimum, over $3 million in fines. If Bitar is found guilty and the sentence is to be served concurrently, then the jail term would be 30 years and there would be at least $1 million in fines. In other news, eGaming Review also reports that the Federal Government has filed a motion to dismiss the claims by the Commonwealth of Kentucky against Full Tilt Poker, which were originally filed by Kentucky Justice and Public Safety Cabinet Secretary J. Michael Brown (pictured). Those claims stem from the 2008 lawsuit filed by the state to seize the URLs of not only Full Tilt Poker, but also those of PokerStars, Ultimate Bet, and Absolute Poker, all of whom were charged under the Black Friday indictments. The Department of Justice is claiming "lack of standing" for the Kentucky case and has asked the judge to dismiss the claims outright. Finally, a court has not ruled yet on last week's motions by PokerStars and the other defendants from Full Tilt Poker - Howard Lederer, Chris Ferguson, and Rafe Furst - to dismiss the civil complaints against them. A decision on that could come at any time and PocketFives will keep you updated on any future action in that and the other cases from the Black Friday indictments.
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