Also not expecting quick action on the online poker front is Rep. Barney Frank (D-MA). In an interview with PokerNews’ Matthew Kredell, Frank said he doubted poker legislation would pass at the federal level during the current legislative session. “I’d like to do it but I’m not optimistic. It’s still possible. [Sen. Harry] Reid wants to do it. A lot of people here want to do it. It might get done in the lame duck [session between the November election and the New Year]. It could get done as part of an overall package. But I think other things will replace it.”

Frank painted a dire picture of the competing forces at work on Capitol Hill. The Department of Justice’s pre-Christmas flip-flop on the Wire Act had alerted federal lawmakers to the potential “threat of different states doing different things. The chaos inherent in that is a good argument for legislation.” But obstacles to legislation remain in the form of Indian tribes and traditionally anti-gambling Sen. Jon Kyl (R-AZ). While Kyl was said to have undergone a ‘road to Damascus’ conversion on the gambling issue, Frank says Kyl’s position is more nuanced. Unlike most online poker backers, Kyl remains opposed to adding a revenue component to any online poker bill, lest it be interpreted as the government encouraging more people to gamble.

According to Frank, who like Kyl, is not seeking re-election this fall: “We might have to wait until Kyl is out of office for this to get done.” But Frank’s been around Washington long enough to never say never. Frank feels that the best hope for online poker lies in the Senate. If legislation passes there, Frank’s convinced the House will go along. But that’s a big ‘if’, considering Frank’s view of the playing field. “The Senate’s got a lot of problems these days.”

Legal News

1. Barney Frank and Ron Paul

Congressmen Barney Frank (D-MA) and Ron Paul (R-TX) have been the voice of poker players in Washington for several years now. On paper they’re unlikely bedfellows – one is a big-government liberal, the other a small-government conservative – but in action they’ve been one of the few While it hasn’t resulted in successful legislation to keep American poker players from having their game of choice cut off from them, the Frank-Paul alliance has been the engine that has pushed poker forward in D.C.

Their joining of forces despite a difference in personal politics is symbolic of the diversity within the poker community, one of its greatest strengths. It’s also been the most reliable conduit to getting the issue of legalization to the House floor because both men are philosophically predisposed to support personal freedom. Unfortunately there’s one big problem with having these men as allies: neither is running for reelection. Paul has chosen to push his philosophy on the presidential campaign trail, which could be the seed of a much brighter future for poker players down the road but isn’t going to do much to affect legislation in the short term. As for Frank, he isn’t running for president but he has already announced he will retire from the House at the end of this year.

At this point Frank and Paul are like retiring veterans who have carried a sports club into the playoffs numerous times but never gotten within sight of a championship. They’ve served the team well and it’s absolutely worth celebrating them for that service. But at the same time, the game moves on; you have to constantly be on the lookout for advantageous positions unless you want to cede ground to your opponents. Online poker players can’t afford such a cession.

2. Joe Barton

Outside of Paul and Frank there’s really only one voice on Capitol Hill speaking up for poker players right now, and it belongs to Rep. Joe Barton (R-TX).

So far as allies go, Barton is a curious one for online poker players. He is a poker player himself, though not of the online variety. He has introduced legislation that would relieve states of having to worry about federal intervention if they choose to get into the business of regulating online poker, even though the states already have the authority to regulate businesses within their own borders. He has given online poker issues a greater profile in Washington through multiple Congressional hearings, but the testimony in those hearings has focused almost exclusively on issues with only the loosest connection to players’ concerns. He appears to make all the right moves, but he doesn’t have a lot to show for making them.

While he’s not the most divisive figure, there also isn’t a true consensus in the community about Barton. Some are more than happy to have Barton on its side – after all, he is championing a bill that would theoretically get American poker players on the fast track to returning to the online tables – but some of the support for him is rather tepid. Others aren’t convinced that the Congressman, who has enjoyed a boost to his campaign coffers since taking up the cause of poker players, is entirely good for them. Some, like I. Nelson Rose, have even wondered aloud whether Barton is playing the players for all they’re worth – and then caught flak from the rest of the community for doing so.

To carry my earlier metaphor one step further: if Paul and Frank are veteran leaders heading into retirement, then Barton is the player who logged one good season and had the good sense to employ an agent who could land him a sweetheart deal at the expense of a team in desperate need. Some of the fans are happy to have him, and others hope the team will get rid of him. He’s going to hold down a roster spot for a while and most likely put up serviceable numbers. But if a chance came along to land a bargain or a true star player, management would probably look to offload him at the first opportunity.

3. The Poker Players Alliance

There’s one notable group with the express stated goal of promoting the interests of poker players, and that’s the Poker Players Alliance. Despite this raison d’être, the online poker community’s support for the PPA has varied from weak to middling for all sorts of reasons.

If the sole measure of effectiveness is passing a bill to get poker players back to the online tables, the PPA has not been very effective at all. But looking at the bigger picture, the PPA most certainly has value for poker players. It has put significant effort into identifying who poker players’ friends and enemies are in Washington. And while it’s impossible to prove, it’s highly likely that the PPA’s amplification of the voices of poker players through a persistent presence on Capitol Hill has at the very least held off even more damaging legislation than UIGEA. That certainly counts for something.

Perhaps the biggest problem for the PPA is that it can only be truly successful if significant numbers of poker players jell into an organized mass. That’s an uphill battle to say the least. It’s unlikely that you could find a group less suited than poker players to speaking with with one voice. (This is, after all, a group of people capable of using “it depends” as an answer to just about any conceivable question.) Yet poker players desperately need to be able to present a united front, given that their interests are last on a list behind those of social conservatives who oppose gambling for opposition’s sake, big-government types who hate the idea of anyone not paying for the privilege of being free, and casino corporations whose mission of padding the bottom line can many times run directly counter to what’s best for players. Even if the community can’t always get its act completely together, the PPA still stands as the best vehicle for representing player interests.

4. Writers

One of the biggest obstacles facing American poker players is that their voices are nearly mute when compared to the booming bravado of the forces aligned against them. Luckily there are always writers out there looking for a good story – and some of them are capable of reaching wide audiences.

For a solid example of how writers help American poker players, one need look no further than an article entitled “Online poker kings get cashed out” published yesterday in a number of American alternative weeklies, including Miami’s New Times, Denver’s Westword, Dallas’ Observer and Los Angeles’s LA Weekly. In the article, writer Chris Parker tells the stories of a cross-section of those hit hardest by Black Friday: American poker players.

Parker sketches out the tales of online players Walter Wright, Maxwell Fritz, Michael LaTour, Brian Mogelefsky, and Vanessa Peng, all of whom have moved away from their previous homes in order to continue plying their trade. He also explores the reach of Black Friday into ancillary markets by telling of how business has fallen off for gambling bookstore owner Michael Minkoff. In the middle of these tales of livelihoods devastated and families separated by the fallout from Black Friday, Parker asks a pointed question: “Why are the feds chasing honest, taxpaying citizens out of the country? Especially for something as benign as playing cards, an act committed by nearly every American?”

That sort of questioning is invaluable; when it comes to the online gambling industry the mainstream press rarely bothers to delve any deeper into the story than the latest PR release from government or big-business sources. It’s not hard to understand why they’re so shallow in their reporting – most journalists know next to nothing about online gambling, so in a way it’s almost better for them to write nothing at all than to craft something damaging. But their inability to to counter the more outlandish claims of online gambling’s opponents is easily exploited by those looking to exercise power at the industry’s – and players’ – expense.

Every time a writer from outside the poker press publishes a story about the hardships faced by Americans who once made their living playing the game, the public gets to see a different side of the issue that has nothing to do with casino companies or the machinations of government. They get to see the human side of an issue that is normally only discussed in the terms set out by agents of government. For most people, unless they personally know someone affected by Black Friday, these kinds of stories can be a first glimpse into how cracking down on online poker has more impact than just burnishing some aspiring US Attorney’s resumé. Given that players are fighting against a very powerful assortment of enemies, there’s no underestimating the PR value of writers penning these kinds of stories for publications outside of poker’s orbit.

5. The players themselves

Retiring representatives, representatives who can’t muscle bills through Congress, an advocacy group that can’t assemble a critical mass, and writers whose work takes a long time and doesn’t always reach large audiences: if each of these people and institutions were a card in a poker hand their collective strength would be middling at best and very poor at worst. That’s the kind of hand you’re likely to fold in an awful lot of situations. Yet in the fight for explicitly legalized online poker in the United States, most poker players simply aren’t willing to consider folding an option. That leaves them in the kind of situation where coming out a winner requires determination and wits of the highest degree.

One of the oldest truths in poker is that the only person who can truly look after a poker player’s best interests is the player himself. (As the old saying goes, “Trust everyone, but always cut the cards.”) If they want things not just to change but to actually get better, American online poker players have to marshal all their resources. They need to seek out true allies in every level of government. They need to get their stories out to the media. They need to do what they can to organize. And most of all, they need to not roll over for their opponents.

In the spectrum of parties interested in the future of online poker in the U.S., there are undoubtedly individuals and groups that have an interest in protecting players. But it’s equally undoubtable that those interests are all motivated by something other than being the one whose bankroll is on the line every hand. If players get thrown under the bus those interested parties may shed a tear… but they certainly won’t feel the pain of being run over.

Poker News

Reid declined to confirm by what method he’d introduce his poker bill, but speculation is rampant that a poker provision might find its way into a Senate bill to extend the payroll tax deduction. That legislation is expected to come up in late February, but Rep. Barney Frank (D-MA) dismissed it as a potential vehicle, saying the timeframe was “too quick” if tribal interests – which Kyl is reportedly keen to satisfy – are to be properly addressed. Speaking at a Bank of America Merrill Lynch investment conference in Las Vegas this week, Dan Walsh, director of governmental affairs at law firm Greenberg Traurig, suggested the lack of specifics from the Reid and Kyl camps on how their poker bill would find its way onto the Senate floor was “intentional.” UIGEA/Safe Port Act payback time?

Behnam Dayanim, last seen repping Groupe Bernard Tapie in its discussions with the DoJ to reanimate the corpse of Full Tilt Poker, said the DoJ Wire Act reversal had put online gambling opponents in Congress on the spot. “You’re stuck. If you don’t do anything, it’s going to happen. Nevada has already done it, and other states are going to move forward as well and you’re going to have no control of it.” But Dayanim predicted a “painful birthing process” if states went their own way, possibly resulting in “malformed” regulation. “It’s very easy to get it wrong, and I don’t know I have a lot of confidence that a lot of states will get it right. Nevada will, but I don’t know whether any others will.”

While Reid continues to blow his one-note ‘we can do it’ trumpet, another staunch backer of federal legislation – American Gaming Association president Frank Fahrenkopf – struck an uncharacteristically despondent note, saying the current climate of congressional gridlock doesn’t bode well for online poker’s chances in 2012. Fahrenkopf told the Merrill Lynch conference attendees the “level of acrimony” that exists between the parties – which Fahrenkopf characterized as the worst he’d seen in 30 years – creates “a tremendous amount of difficulty.” As such, Fahrenkopf admitted he was “not looking forward to a lot getting done.”

Legal News

"Don't f*** it up."

One of the main proponents of online poker legalisation in the USA – Rep. Barney Frank (D-MA) – announced this week he will be stepping down at the end of his current two-year term after more than 30 years work in various governmental positions.

But what does this mean to the online gambling industry, and players who want online gambling legalised in the US? Well, more than you think. When looking into who is set to replace him, it seems worrying times could be ahead.

As the ranking Democratic member of the House Financial Services Committee, which oversees the country’s banking and credit card systems – and makes laws regulating them – Frank does their bidding. Meaning he supports legalisation of online gambling because it would make money for the banks and credit card companies.

However, as of 31 December next year when he is set to be replaced; filling his shoes will be California congresswoman Maxine Waters. Yep, Waters is the second-ranking Democratic member on the House Financial Services Committee so puts her next in line. What a way to welcome in year 2013: a number that will be even more unlucky for some. Here’s why:

• When good old Frank voted against the bill passed by the U.S. House of Representatives in 2003, which would make it illegal for credit cards to be used to fund online gambling – Waters voted in favour of it. (Although it never became law because it wasn’t approved by Senate that year)
• Then, when the bill was brought back to life three years later, in 2006 (part of a larger bill involving port security in the U.S), Waters voted in favour of the bill yet again. This helped it along its way, which eventually saw it passed by both the House of Representatives and the Senate. Do we even need to mention Frank’s position? He was against it, of course.

So, a year from now – when Barney Frank retires – we have none other than Waters to look forward to. Online gamblers looking for legalisation in the U.S will certainly be living in fear of what changes she will bring to the table. Our bets are, they won’t be pro-gambling ones.

What damage do you think Maxine Waters could cause…to the online gambling industry, that is ?

Legal News

While Barton allows for the possibility that Senate Majority Leader Harry Reid (D-NV) might introduce his own online poker bill before then, Barton thinks the situation is “a little more dicey in the Senate because of the 60-vote requirement. Our whole strategy is to get something on the president’s desk this Congress, so we have 13 months to go.”

Of course, if there’s no federal progress before next November’s elections, Barton will have to move any future poker legislation through a House minus longtime gambling advocate Barney Frank, who announced this week that the current term would be his last. Frank intends to use his remaining time in office to keep pushing for the “important issue” of online gambling, but Frank also would appreciate a little help from Sen. Reid. Pro-poker types like Barton notwithstanding, Frank thinks the Republican caucus in the House “consists half of people who think like Michele Bachmann and half of people who are afraid of losing a primary to people who think like Michele Bachmann, and that leaves very little room to work things out.”

Regardless of online poker’s progress in Washington, the individual states may (and will, in our view) beat the feds to the punch. More and more state lotteries are either selling ticket subscriptions online or planning to do so, and a bold few are musing aloud about launching their own online poker operations without first seeking federal permission. And on Thursday, New Jersey will hold public hearings on its plan to bring sports betting to the Garden State – which would also be made available online. So our advice to the feds would be, get a move on or get out of the way.

Legal News

Rep. Barney Frank

This has accelerated over the years since the UIGEA was passed in 2006. Frank introduced H.R. 2267 just under 18 months ago. It may have been passed by the Financial Services Committee but couldn’t negotiate the hurdles that remained between the first approval and it actually becoming law. He then teamed up with Rep. John Campbell (R-CA) with a similar bill and tried to push it through for a full vote in the house. The bill is still hanging around as the US decides what it wants to do and Frank leaving the House could have an effect on the weight this bill carries.

Frank spoke on the subject as recently as 10 days ago in the second subcommittee hearing on online gaming, chaired by Rep Mary Bono Mack. He reiterated the American’s right to choose what they do and that the Republicans were simply reneging on their “Hands off the Internet” mantra. Two months previous, Frank came under fire from some quarters after accepting campaign contributions from three of those indicted in the Full Tilt mess. One unashamed cheap shop came from GOP spokesperson Tim Buckley, when he said, “Frank is just another congressman who has been willing to associate with criminals.”

This was ignoring the fact that Frank’s tenure as a congressman has been beyond reproach and his efforts to overhaul financial industry regulations mean many outside the gambling industry will hold him in high regard. The bill being a federal one means that it having less chance of slipping through the government net – even if the whole world and his wife are behind it. That should in no way scupper the work that Frank has done for the gaming industry during his time in office and the legacy that he leaves behind.

Legal News

Next up was that wiley Texan himself, Rep Joe Barton (R-TX), who is always at pains to point out that his bill is exclusively poker and that he’s living proof that poker’s a game of skill. Barton added that UIGEA is unenforceable and needs to be reformed. Rep Charlie Bass (R-NH) gave his short pre-panel spiel about how much the lottery has done for the state’s education system.

After all that, we welcomed the first panelist of the day, Barney Frank (D-MA). His and Mr Campbell’s bill, covering all online gambling, has been around for some time and at its heart is allowing adult Americans to spend their money as they wish. He reiterated his assertion that federal government shouldn’t be allowed to control people this way and it goes against everything that has been said about the “Nanny State.” It also goes against the Republican view that the Internet shouldn’t be interfered with and that special controls on a certain part of the internet is not something that “Hands Off The Internet” agrees with.

Frank Wolf (R-VA) then gave across his plethora of reason why allowing this bill to pass is bad with a capital B. Some of the gems he revealed were that you can now gambling in your bathrobe and the old-favorite describing internet gambling as “crack cocaine” was brought out not once but twice. We’re just hoping Wolf doesn’t turn up to the next debate in a bathrobe.

The last member of the panel was John Campbell (R-CA), with four points at the crux of his argument. Firstly it was freedom for all adults to do what they want to do. Then that the bill would provide protection to online gamblers, jobs as all infrastructure would be in the USA and lastly revenue, but not as the main point. He made the valid point that alcohol prohibition didn’t work and that internet gambling has better protection against problem gamblers than brick and mortar venues can provide.

Overall it didn’t really reveal much apart from the panel all being on the same sides of the fence that they were before.

Legal News

Team 888poker has confirmed it’ll be taking part in the inaugural International Federation of Poker Nations Cup. Tonight, Shane Warne, Padraig Parkinson and Sam Holden will take part in the unique contest that takes place at the London Eye. The format of the competition is Duplicate Poker, where players are given identical sets of cards at different tables and the winner is the player that plays his cards best. It apparently removes the element of luck meaning it won’t be long before it’s latched onto by the “poker as skill” stable.

The Grand Series of Poker (GSOP) stops off in the European capital of debauchery, Prague, from 7-12 December and by qualifying online players can seal a package like no other. Qualifying through an Ongame satellite will give you a five-day stay for two at the Corinthia Hotel – but that isn’t all. Anyone that manages to qualify through is entered into a free-roll coin flip tournament for the chance to win one of five pairs of tickets to the next event, in Salzburg from February 1-6, 2012. David Pittel, Managing Director of Ongame Network, explained the concept behind choosing each venue, saying: “We select our host cities and resorts to make the thrill of live championship play even more memorable.  We invite all poker lovers to discover it for themselves: Prague in December is a city-wide, non-stop, 24/7 party. Czech it out.”

Finals for online qualifers are running on Tuesday, Thursday and Sunday until the deadline on November 27. The tour itself culminates in Punta Cana from 21-28 April. If you’ve never experience Punta Cana before, check out our interview with Poker Classic organizer Ivonna Montealegre.

Poker News

Barney Frank’s political campaign has come under fire for accepting contributions by numerous online gaming sites over the years including over $18,000 from the three men who are now being indicted by the U.S. Feds for running an alleged “Ponzi” scheme at Full Tilt.

Mr. Frank has stated that if the three men are found guilty, he would in good faith withdraw that money and return it to the victims of this crime. Frank was also vocal on how disappointed he was in the allegations against the Full Tilt management.
His forthright comments didn’t stop politician Tim Buckley from taking what can only be seen as a blatant cheap shot. State GOP spokesman Tim Buckley spouted some nonsense along the lines that of “…Mr. Frank is just another congressman who has been willing to associate with criminals.”

Given the fact that Frank’s tenure as a congressman has been beyond reproach, in my opinion, Buckley’s comments are distasteful to say the very least. For all Frank has done for the industry, it would be a shame if this incident should cast a poor shadow on his career and contributions.

Legal News

✖ The iGaming Post got the ball rolling by issuing a statement to the effect that the Alderney Gambling Control Commision (AGCC) had decided to permanently revoke Full Tilt Poker’s gaming license, a claim that has yet to be confirmed by either FTP or the AGCC. iGaming Post subsequently claimed that both parties were keeping mum until FTP could formally relay the news to its employees on Thursday morning.

✖ Jeff Ifrah, who had been acting as FTP’s legal counsel in a class action suit brought against Team Full Tilt members by disgruntled players (although Ifrah had tried to get a judge to let his firm withdraw from the suit), took to the 2+2 forums in an attempt to scupper the notion of any definitive AGCC decision. “There has been no official release of a ruling.” (Note that this doesn’t mean the AGCC hasn’t made a decision, just that they haven’t made it public.) Ifrah claimed the AGCC hadn’t said anything publicly because he believed “they are reconsidering the investor’s plea for an adjournament [sic].”

Ifrah then made a somewhat bizarre plea for grassroots action, asking players to email the AGCC and request that they not issue any ruling for “a minimum of 30 days in order to permit a timely transition to a new ownership structure … A negative AGCC ruling will cause all efforts that have been undertaken to secure this investor group to fail and leave customers in the cold.” Ifrah underscored the urgency of the situation: “This is most certainly a hail mary. Doug Flutie style.” Either that or a ‘clap your hands and Tinkerbell will live’ gambit. (Pick which metaphor you prefer.)

✖ As for the identity of those investors allegedly talking with FTP, Ifrah (in true FTP fashion) disclosed some details without really saying much. A few highlights:

• “The company has found a great and motivated investor and has been working for weeks now on closing this deal. An AGCC ruling now will not be well received by this investor team.”

• “We have given the [Department of Justice] the name of the investor group.”

• “Satisfying player liabilities remains a mandatory term of any deal.”

• The target date for completion of the deal is Sept. 30, although Ifrah noted that was subject to change.

Ifrah then proceeded to play a game of 20 (four, actually) questions:
“1. Letter of Intent signed.“
“2. Buyer is in gaming industry.”
“3. Investor first visited Dublin on August 24. They have visited Dublin since then to conduct due diligence and managers of the company have visited them in their home country.”
“4. Additional meetings are planned this weekend with the larger group and a larger contingencey [sic] representing the company.”

• Finally, in response to player questions, Ifrah provided the following answers (in brackets): Public company? (No.) Any committed financing? (Yes.) DoJ involved in negotiations? (Yes.)

✖ Italian website assopoker.com (for the benefit of you puerile types, Asso = Aces in Italian) reported that FTP reps were scheduled to meet Friday with members of French casino giant Partouche Group, although if Ifrah’s comments about FTP’s white knight investor being privately-held were true, that would seem to exclude the publicly traded Partouche from the picture. In an interview with Subject:Poker, Ifrah confirmed that the investors were French, but declined to identify them.

Seriously, keep me out of this...

These semantic arguments are missing the point. US Attorney Preet Bharara used the phrase ‘Ponzi scheme’ to give the mainstream media an easy way to slot the FTP story into one of their carbon-copy soundbite-friendly narrative paradigms. It allows them to avoid having to do any serious investigation of a world most of them find confusing, and provides an easy hero/villain archetype for teleprompter-readers/bingo-callers to understand. Speaking of villains… has anybody told CNN about the Covers/BetED fiasco?

✖ In other fallout from Terrible Tuesday (we’re open to suggestions as to an alternate name), the Epic Poker League (EPL) has officially suspended Howard Lederer and Chris Ferguson. Stephen Martin, chairman of the EPL’s Standards and Conduct Committee, said the suspension would last “indefinitely, pending the outcome of the DoJ’s action.” Lederer, the brother of EPL commissioner Annie Duke, has an EPL player card, but has yet to compete in an EPL event. Ferguson was on the EPL’s approved player list but never bothered to file the paperwork necessary to obtain his player card. All in all, it’s been an epically bad start for the league, which has generated more press for its disciplinary activities (putting inaugural event winner David Rheem on probation due to his demonstrated disinterest in repaying private loans, and having to disqualify a registered sex offender from a Pro/Am event) than for high-level poker play.

Anyone seen Ray lately?

✖ Rep. Barney Frank (D-MA), a longtime champion of online gambling, has announced he will return thousands of dollars in campaign contributions he received over the years from the three FTP principals named in Tuesday’s amended DoJ complaint. Trouble is, Frank’s not entirely clear where to send the money. A spokesman said Frank was waiting to see if the DoJ set up a fund to compensate US players who’ve seen their bankrolls vanish.

✖ One of the three men added to the amended complaint, Rafe Furst, has penned an open letter on Emergentfool.com. Stressing that legal advice prevented him from saying much, Furst nonetheless claimed that “from a moral, personal and interpersonal perspective I feel I’ve got nothing to hide.” Furst also requested that “skeptics, please consider that not everything you read is true, and our society is built on a presumption of innocence until proven otherwise.” We think that’s an exact quote from one of the witches who went to the gallows in Salem, but we’ll have to check on that.

✖ Like the AGA’s Frank Fahrenkopf, Richard Bronson, chairman of US Digital Gaming (the wannabe intrastate online poker turnkey provider who’ve yet to score a client in several years of existence), is using FTP’s woes to promote his own company’s eagerness (desperation?) to offer a safe and secure alternative to the current ‘wild west’ online poker landscape. Bronson called the FTP ‘Ponzi scheme’ allegations “Exhibit A as to why we need to have a fully-regulated, above-board gaming industry in this country that operates in the light of day and within the context of the law.” To his credit, Bronson chose not to characterize the entire international online poker business as a rogue’s gallery, referencing “a handful of bad apples that are impacting the entire bushel of the industry.” And then, we like to think, he broke into a sweet and wholesome version of The Osmond Brothers’ One Bad Apple. Now, if you’ll excuse us, we’re going to blast some Bad Brains and do a couple shots of Hendricks Gin…

Business News

Sensing blood in DC’s swamp water, Councilmember Tommy Wells is planning to introduce legislation this fall to completely scuttle the District’s online gaming plans. Wells claims that the law needs to go because “it didn’t go through a public process.” It’s not clear whether Wells would change his stance if the public meetings DC Lottery intends to hold this fall result in the public’s approval. Regardless, these two developments will likely come as sweet music to the ears of US Senators Harry Reid (D-Nev.) and Jon Kyl (R-Ariz.), who co-wrote a letter to US Attorney General Eric Holder last week asking for a tougher stand on state lottery outfits that had publicly contemplated launching online products.

But it seems nobody told Sen. Barney Frank (D-Mass.). Frank, a fervent advocate of federal online poker legislation, has publicly given his blessing to a proposed bill that would allow the Massachusetts Lottery Commission to sell lottery tickets online via credit cards. The bill, introduced in January by Massachusetts State Sen. Michael Rush (a Navy Reserves member currently serving in Iraq who won’t be back stateside until 2012), projects increased revenues for the state of up to $1b annually.

The bill faces opposition from retail merchants who fear that online lottery sales will reduce the over-the-counter sales on which they rely for a significant chunk of their foot traffic. Also opposed is the Massachusetts Lottery’s boss, State Treasurer Steve Grossman, who claims that “allowing credit card payments without careful analysis of the consequences could very easily exacerbate problem gambling across the state.” But regardless of his personal feelings, Grossman estimated that if/when the Rush bill passed, the state lottery could/would have a workable online product in place nine months later. (It’s a boy!) Grossman acknowledged that “it’s clear Washington is moving toward online gambling. I want to make sure we are ahead of the curve and are one of the winners of the new world of online gaming and not a loser because we stuck our heads in the sand.”

A frustrated Frank told the Boston Herald that he didn’t understand “why liberals think they’re supposed to tell people not to gamble. They favor gay marriage, legalization of marijuana and sex-oriented literature, but not gambling. It’s totally inconsistent. It’s wrong for state and federal government to make betting a crime … I am in favor of people being able to gambling online.” And so say all of us.

Legal News

FTPDoug clarifies that the ongoing silence from FTP pros about Black Friday was “not their choice. But they are constrained by the pending legal actions.” As for the company’s low public profile, “It has not been easy to stay silent and watch the damage being done to our company brand and personal reputations, but we need to be mindful of the complicated and serious legal issues raised in the pending cases.”

The Alderney Gambling Control Commission released a statement dated May 16, saying (in part): “The AGCC’s investigation into the affairs of it [sic] licensee Vantage Limited, trading as Full Tilt.com, is ongoing; initial investigations indicate no reason to believe that player fund transactions are fundamentally threatened by any consequence of the US authorities’ actions. Delays caused by these actions are in the process of resolution, with normal service now being restored for non-US players. We understand that progress in respect of US player fund repatriation is anticipated and will be the subject of a separate statement from Full Tilt in due course. The Commission will remain engaged in this process.”

✖ In less encouraging FTP news, a report on Subject: Poker claims that last week’s eGamingReview article, which stated the Department of Justice had unfrozen one of FTP’s bank accounts, is bunk. The Public Information Office of the US Attorney’s Office told Subject: Poker that no such deal had been struck with FTP, and that if it had, it would have been accompanied by a DoJ public statement to that effect. No statement, no deal, no joy.

✖ Sources have told Nevada journalist Jon Ralston (@RalstonFlash) that the FBI has contacted lobbyist Richard Perkins over his dealings with Nevada legislators on behalf of PokerStars pre-Black Friday. Ralston’s sources haven’t yet been able to confirm that the FBI also plans to interview elected officials with whom Perkins discussed the PokerStars-friendly (at least, in its initial version) AB258 online poker bill.

✖ GamblingCompliance.com has reported that Rep. Rob Andrews (D-NJ) attempted last week to attach language from Rep. Barney Frank’s July 2010 HR2267 online poker bill to a Department of Defense bill. Andrews, one of HR2267’s 70 co-sponsors, suggested that the revenue from taxing online poker could help pay for military veterans’ benefits, but the House Rules Committee rejected Andrews’ bid. A Frank spokesperson said that Frank did not support Andrews’ move because Frank saw the issue of online gambling “in terms of personal freedom rather than revenue raising.” Andrews has not signed on as co-sponsor for Rep. John Campbell’s HR1174 poker bill because Andrews doesn’t think Campbell “has the jurisdictional reach to move his bill.”

✖ Rep. Joe Barton (R-TX) is hoping Rep. Mary Bono Mack (R-CA) takes a jurisdictional shine to his as-yet-unseen online poker legislation. Bono Mack heads the commerce, manufacturing and trade subcommittee of the House Energy and Commerce committee, through which Barton hopes to guide his poker bill. However, while Bono Mack has previously been described as ‘receptive’ to Barton’s bill, her spokesperson clarified that the congresswoman “simply said she is open to the idea. That said, the congresswoman does not have plans at this time to move any legislation through her subcommittee. There are a lot of people in our district she would want to consult with first.”

✖ Finally, Victory Poker players received an email informing them that their accounts will ‘automatically upgrade’ to a Cake Poker account on June 1. Victory CEO Dan Fleyshman, who previously announced he was withdrawing from the US market post-Black Friday, has apparently decided to transform Victory into a “strategy/news/affiliate site for poker and non-poker related products.” Victory oven mitts, anyone?

Business News

✖ While Cereus sites Ultimate Bet and Absolute Poker originally claimed to be sticking with the US market, some sober reflection over the weekend may have prompted a change of heart. Or has it? Early Monday reports suggested both Cereus sites had joined PokerStars and Full Tilt in blocking US players from real money action (see notice at right), but some players are now claiming AP is still open for business on their US-based computers. What is certain is that Victory Poker, currently on the US-facing Cake Network, has publicly requested that US players be blocked from playing on Victory.

✖ In a Manhattan court Monday morning, Black Friday defendant Bradley Franzen entered a plea of ‘not guilty’ to the nine counts listed on his indictment, including bank fraud and money laundering charges. The 41-year-old Franzen’s bail was set at $200k, for which his parents’ house was used as collateral. Franzen’s lawyer, Sam Schmidt, would only say that he and his client will be “reviewing the indictment.”

✖ Also on Monday, defendant John Campos appeared in a Utah court, although he did not enter a plea to his charges. The part owner of SunFirst Bank was ordered to surrender his passport and to appear in a New York court for his next appearance, for which no date has been set.

✖ Somewhat unrelated, but New Jersey Sen. Ray Lesniak is now saying his pro-poker referendum bill will now be introduced into the legislature in early May, not April 29 as earlier reported.

✖ As was widely expected, some European gaming stocks saw dramatic upward spikes as sheep, er, investors dutifully did as the mainstream business press instructed. Bwin.party (Pwin) closed up almost 30%, 888 Holdings was up over 19% and Playtech was up almost 11%. It wasn’t all public company gravy, however, as William Hill lost 2% and Betfair lost 5.5%. On the other side of the pond, Las Vegas Sands gained 3.6%, Wynn gained 1.5%, while MGM was off 1.6%. Clearly, the US market is far more ‘meh’ on the prospects of any future tie-ups between US gaming licensees and foreign online gaming firms paying off anytime soon.

✖ Speaking out re Black Friday for the first time, Rep. Barney Frank (D-MA) told The Hill that “protecting the public from the scourge of inside straights” was “an incredible waste of resources.” Calling the UIGEA “a bad law,” Frank urged the US Department of Justice to refocus its energies on the execs behind the 2008 global economic crisis. “Go after the people responsible for empty houses, not full houses … I’m not saying violate the law, but to give this priority in law enforcement … is a terrible idea and I think the administration is wrong on this.” Appreciate the support, Barney, but fold the poker puns, okay? It was bad enough when the Feds did it. This is serious business, not open mic night at Second City.

✖ Lobbying disclosure docs indicate that Frank took in over $51k in campaign contributions from the Poker Players Alliance in 2010, on top of the $50k Frank derived from other poker industry sources, such as players Annie Duke and Howard Lederer. Meanwhile, Nevada’s Assembly Democratic Caucus has decided to return the now-tainted money it received from PokerStars during the 2010 midterm elections (unless the Feds claim it first), and Republican State Sen. Greg Brower is pressing Sec. of State Ross Miller to probe whether PokerStars’ $272k worth of Nevada lobbying activities broke the law. Brower also plans to introduce legislation barring foreign contributions to state political campaigns, similar to existing federal legislation.

✖ ESPN has officially axed its coverage of the 2011 North American Poker Tour (presented by PokerStars.net), which was set to make its debut on the network Monday night. ESPN released a statement reading: “We are aware of the indictment only though what has been announced publicly. For the immediate future, we are making efforts to remove related advertising & programming pending further review.” And presumably, pending a good cry. (PokerStars’ contract with ESPN was reported to be worth $22m to the network.) The broadcast of the upcoming 2011 World Series of Poker will reportedly not be affected. Elsewhere, Fox Broadcasting has reportedly cancelled its two poker offerings, Million Dollar Challenge and The Big Game.

✖ Finally, in the ‘no, really?’ department, IrishDev.com contacted FullTilt’s associated Dublin-based company Pocket Kings for comment. No such comment was issued, but an employee described the atmosphere among the 700 staff at the Cherrywood Science and Technology Park office this morning as ‘sombre’ and ‘concerning’. Imagine that…

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Legal News

Proponents of this year’s model appear to be stressing the consumer protections that the bill would offer, including implementing technology to block underage gamblers; requiring operators to set daily/weekly/monthly limits on deposits and losses; and preventing the use of a credit card to gamble online. The bill would also prohibit sports betting; ban violators of federal and state gambling laws from obtaining a license; and require a substantial U.S. presence as a condition of obtaining a license. Guess this bill, unlike Nevada’s, wasn’t written with the help of a PokerStars lobbyist.

The Poker Players Alliance is first out the gate in applauding the bill’s introduction, with PPA Chairman Alfonse D’Amato saying that “instead of a patchwork of state laws … the time is now for Congress to step up and pass federal legislation … that allows the entire country to benefit.” In this, D’Amato is echoing the preferences of casino giants like Caesars Entertainment and MGM Resorts, who don’t relish the idea of setting up separate operations to handle the intrastate systems being proposed in New Jersey, California, Florida, Nevada, Iowa, etc.

We here at CalvinAyre.com have already weighed in with our opinion on the bill’s chances of getting past Rep. Spencer Bachus (R-AL), the new chair of the Financial Services Committee, but you don’t have to just take our word on it. Back in January, while the memory of Sen. Harry Reid’s failed attempt to gain traction on his own online poker bill was still fresh in Bachus’ mind, a ‘top House GOP staffer’ was quoted as saying that preventing the further spread of online gambling was “a huge priority for Spencer.” The staffer went on to say that if Bachus approved any gambling-related legislation, it would be to make anti-gambling laws tougher. So, by all means, have a drink if you feel like celebrating, but the introduction of this bill probably doesn’t merit popping that champagne cork.

Legal News

Much hope is being pinned on the rumored bi-partisan effort in the House of Representatives led by Rep. Barney Frank (D-MA) and Rep. John Campbell (R-CA) to revive Frank’s HR2267 bill, which was approved by the Financial Services Committee last July. Some elements of Sen. Harry Reid’s failed late-2010 draft bill may also be incorporated, minus Reid’s proposed 15-month ‘blackout’ period that so dismayed US poker players.

Of course, players’ opinions matter little in Washington, DC. Hell, basic math barely counts for much in the District of Columbia. Last year, even though Democrats controlled both houses of Congress, they couldn’t muster the legislative will to bring Frank’s bill to the House floor for a vote. That seems even less likely to occur now that Republicans on the Financial Services Committee outnumber Democrats 34-27.

What’s more, anti-gambling zealot Rep. Spencer Bachus (R-AL) took last July’s vote as a real slap in the face. It seems a safe bet that Bachus, who took over chairmanship of the Financial Services Committee from Frank, would be itching for the opportunity to do some slapping of his own, should Frank and Campbell be so bold as to darken his door. There are some suggestions that pro-poker pols would attempt to circumvent the committee by attaching the bill to a crime control measure or some other procedural judo move, but that seems a long shot at best.

There are 87 new Republican members in the House, many of them having earned their stripes by parroting the Tea Party mantra of smaller government, states’ rights and dropping nuclear weapons on Kenya. As such, they may not be too eager to expand the federal government’s scope via the creation of a new regulatory body to oversee online poker. And, let’s face it, under their libertarian veneer, most of these Teabaggers are social conservatives at heart — to be seen as opening the gambling floodgates may not play well with the older evangelical Christian voters on whose goodwill they depend. At any rate, the mere suggestion of Reid’s even peripheral involvement might be enough to stop the bill dead in its tracks. Reid was Face #3 on the Tea Partier’s Guide to Recognizing the Anti-Christ, just behind President Obama and House Speaker Nancy Pelosi (D-CA).

Bottom line, variations on this new bi-partisan legislation have been circulating in the House for years. They’re a lot like dogs that chase cars, in that they make a lot of noise, attract a lot of attention, but they don’t last too long. Each previous incarnation has died with the close of the two-year Congressional cycle, only to be resurrected with great fanfare by the new House, only to die again as the pols decamp Washington and head out on the campaign trail. Of course, past performance doesn’t necessarily dictate future results, so there’s always a chance that this time around could produce a different outcome. But we doubt it. It’s because of this predictable paralysis at the federal level that states are taking matters into their own hands. The casino giants may not like it, but they may not have a choice in the matter.

Legal News

The state’s Governor Chris Christie vetoed the bill on the day that he had to make a decision by due to “legal and constitutional concerns,” but there’s speculation that pressure from federal level may have forced his hand.

All this points to current proposals by Rep. Barney Frank (D-MA) and Rep. John Campbell (R-CA) to revive a bill at federal level much like the one that was proposed by Nevada Senator and whore hater Harry Reid.

Reported in the New York Post, the bi-partisan bill proposal is due in April and will allow Internet poker, blackjack, and other games. It will also give companies from outside the US the chance to open shops on US soil and pay taxes in order to be given that privilege.

Roger Gros, publisher of Global Gaming Business, told the Post, “The planets have aligned rather quickly for this federal version to succeed in Congress,” he said, noting that it’s being presented as a law enforcement bill to clean up the multibillion online gambling already in full bloom in the US.

“Since it’s is couched as law enforcement legislation, it’s gained new support from conservative Republicans,” he said, adding it adds billions to depleted state and federal coffers as an alternative to hikes taxes.

It will also give more weight behind the argument that the legislation won’t get very far if it doesn’t please the Caesar’s and Harrah’s gaming brand who hold a significant clout at Federal level.

The interesting part of this story will be if Frank has a new strategy to give online gaming a home in the US.

Legal News

While around 80 percent of that money was spent by pro-gambling sources, the biggest story is Harrah’s Entertainment. The gaming giant, and owner of the World Series of Poker brand, has initially shat on the idea of legalized online gambling, but has since come around and dropped an impressive $1 million in support of the passage of Representative Barney Frank’s HR 2267 bill.

Other groups making a push to legalizing iGaming in the U.S. include the Poker Players Alliance, the UC Group and even Mastercard.

Legal News

In 2008, the anti-Bush/Republican sentiment was so overwhelming, the Democrats could have run the stiff from Weekend At Bernie’s and he would likely have beaten McCain. Young voters turned out in droves in 2008, while right-leaning old folks stayed at home, more or less resigned to defeat.

The opposite was true in 2010, with 25% of voters belonging to the 65+ bracket (most of them white males), a big bump over the 19% share they represented in 2008. A Nov. 2nd Gallup poll revealed that 63% of Republicans reported being more enthusiastic than normal over voting – an all-time high. As John Lydon sagely observed, anger is an energy.

Contrast the old white folks shuffling to the polls in 2010 with the 9% of participating voters aged 18-29 who turned out, just half the figure that showed up in 2008. This may have something to do with the political naiveté of younger voters, who may not fully understand the significance of non-presidential elections.

Regardless, it has been somewhat amusing to see a few sites proclaiming the re-election of Rep. Barney Frank and Sen. Harry Reid as a ‘victory’ for online gambling. Pardon our mirth, but this is the kind of blinkered denial displayed by the Black Knight in Monty Python & The Holy Grail, who was left limbless and bleeding as King Arthur rode off to continue his quest. With Barney Frank set to cede his chairmanship of the powerful Financial Services Committee to vehemently anti-gambling Republican Spencer Bachus, each new copy of Frank’s HR2267 online poker legislation should come with a giant fork stuck in it, cuz it’s done.

Anyone expecting compromise on behalf of the Republicans should heed the words of Kentucky Sen. Mitch McConnell, who stated in no uncertain terms that “the mandate for change is directed at the other guys. We are right where we have been.” In case you needed reminding just where the Republicans were/are, the House vote on HR2267 was 34-4 in favor (Democrat) and 7-18 (Republican).

In the short term, on issues great and small, what we can expect from US politics is gridlock. In the long term, we have a hard time envisioning a scenario in which anyone reading this will see legal online gambling in America during their lifetime. Or, at the very least, not until a whole bunch of American senior citizens start biting the dust.

Legal News

Tuesday’s mid-term election appears likely to result in a vast Republican sweep. Many online gamblers worry about the prospects of legalizing online gambling if Barney Frank were to lose his powerful position as Chairman of the House Financial Services Committee. There is also the small possibility that Frank could lose his election and no longer have any influence at all in the discussion of legalized gambling. Are these worries justified?

The most likely outcome of the mid-term elections is that Rep. Frank will win reelection, but lose his position as Chairman of the House Financial Services Committee. Based on recent Boston Globe polling data, Barney Frank has a decent lead (about 13 points) over his Republican opponent, Sean Bielat. Majority party members operate as committee chairmen. Recent Gallup polling indicates that Republicans in general are up by about 15 percentage points and are likely to pick up enough seats to become the majority party in Congress, which would leave Frank in the minority.

After the election:

After the fallout of tomorrow’s elections, there is the possibility that Barney Frank will try to cram legislation through during the House lame duck session, before losing his position as Chairman—or, much less likely, exiting Congress entirely. There has been some discussion about passing the bill in the Senate, which is less likely to find itself under Republican control following the election. There is also the possibility that proponents could get the bill passed by attaching it to a larger bill. According to an article last month in the newspaper The Hill, a Senate Democratic aide indicated there is a small chance that the bill could move once Congress reconvenes as an attachment to the jobs bill.

Even if Barney Frank wins his seat and Congress and the Senate remains under Democratic control, it is possible that the 69-year old veteran lawmaker could simply retire from Congress. In his recently released biography, Frank noted his interest in taking a cabinet post in the Obama administration.

Life after Barney

Were Barney Frank to leave Congress or lose chairmanship, it would not necessarily spell the end for legalized Internet gambling. For one thing, many Republican congressmen have begun to see the positive side of legalization. For instance, during the committee vote that approved Frank’s legalization bill (HR 2267), seven Republican congressmen approved the bill, including Reps. Judy Biggert (R-Ill.), John Campbell (R-Calif.), Jim Gerlach (R-Pa.), Peter king (R-N.Y.), Leonard Lance (R-N.J.), Christopher Lee (R-N.Y.), and Kenny Merchant (R-TX). In addition Ron Paul (R-TX) strongly supports the idea of decriminalizing Internet gambling, though he voted “Present” during the hearing.

More Republicans could swing towards supporting legalized Internet gambling once they realize its possibilities as a monster revenue generator. According to political strategy analyst Chris Krueger in a CNBC interview (video available here):

[T]he trump card for Internet gaming for lack of a better word is that it raises $42 billion over 10 years. That’s a big offset that you can tack onto an expensive tax extenders bill or even some sort of a transportation bill. … So in the lame duck with a Republican sweep the odds would go up that an Internet gaming ban lift could get through. Next year though without Barney Frank in his position of leadership I think it faces some long odds. But again it raises $42 billion over 10 years and you can’t discount that in a congress that’s really going to be starved for revenue raisers.

For many of the incoming Republicans, a poker bill could seem like the perfect way to continue generating funds while fulfilling their campaign promises to lower taxes and extend tax cuts. So, while Barney Frank has been the primary proponent in Congress for legalizing Internet gambling, its greatest advocate might just be the revenue it could raise. For better or worse, money is the argument that seems to transcend party lines these days. As a result, the prospects for an Internet gambling legalization bill look good, with or without Barney Frank.

Legal News

Frank is a familiar face with online poker players, so it’s not surprising that pros would go all-in on his behalf, but other like-minded politicians may not enjoy the same celebrity. Thus, ahead of the November 2nd midterm elections, the grass-roots advocacy group Poker Players Alliance has published a list of poker-friendly politicians to help its one-million members identify friend from foe at the ballot box.

The list of 58 Congressional reps endorsed by the Poker Political Action Committee crosses party lines and includes both incumbents and challengers. In compiling the list, the PPA considered a politican’s support of poker-friendly legislation (such as HR2267), Congressional letters of support, public statements and private meetings with PPA members. (If your local pol didn’t make the list, find out their grade by visiting the PPA’s site and using their searchable by state/zip-code guide.)

Based on the above criteria, PokerPAC endorses the following candidates (*indicates non-incumbent).

• John Adler (D-NJ)
• Robert Andrews (D-NJ)
• Joe Barton (R-TX)
• Shelley Berkley (D-NV)
• Michael Bennet (D-CO)
• Judy Biggert (R-IL)
• Earl Blumenauer (D-OR)
• John Callahan* (D-PA)
• John Campbell (R-CA)
• Russ Carnahan (D-MO)
• Lacy Clay (D-MO)
• Steve Cohen (D-TN)
• John Conyers (D-MI)
• Joe Courtney (D-CT)
• Steve Driehaus (D-OH)
• Barney Frank (D-MA)
• Joe Garcia* (D-FL)
• Jim Gerlach (R-PA)
• Alan Grayson (D-FL)
• Alcee Hastings (D-FL)
• Dean Heller (R-NV)
• Jim Himes (D-CT)
• Paul Hodes (D-NH)
• Steve Israel (D-NY)
• Darrell Issa (R-CA)
• Paul Kanjorski (D-PA)
• Peter King (R-NY)
• Mary Jo Kilroy (D-OH)
• Suzanne Kosmas (D-FL)
• Leonard Lance (R-NJ)
• John Larson (D-CT)
• Christopher Lee (R-NY)
• Frank LoBiondo (R-NJ)
• Connie Mack (R-FL)
• Dan Maffei (D-NY)
• Kenny Marchant (R-TX)
• Betsy Markey (D-CO)
• Jim McDermott (D-WA)
• George Miller (D-CA)
• Walt Minnick (D-ID)
• Jim Moran (D-VA)
• Christopher Murphy (D-CT)
• Scott Murphy (D-NY)
• Ron Paul (R-TX)
• Ed Perlmutter (D-CO)
• Tom Perriello (D-VA)
• Gary Peters (D-MI)
• Jared Polis (D-CO)
• Harry Reid (D-NV)
• Linda Sanchez (D-CA)
• Adam Schiff (D-CA)
• Robert Scott (D-VA)
• Pete Sessions (R-TX)
• Bennie Thompson (D-MS)
• Dina Titus (D-NV)
• Mel Watt (D-NC)
• Anthony Weiner (D-NY)
• Lynn Westmoreland (R-GA)

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