New draft of Harry Reid online poker bill making the rounds

new-draft-harry-reid-billThough its origin and authenticity are unconfirmed, there’s a new version of Sen. Harry Reid’s proposed online poker bill making the rounds, which you can wade through yourself here. The day has also seen a draft of the omnibus spending bill released, and although it runs to 1,924 pages, Reid’s poker language doesn’t (yet) appear amidst all its legalese.

According to timely analyses by Chris Krafcik (@CKrafcik) and F-TrainPoker (@ftrainpoker), some of the changes contained in this latest ‘discussion draft’ seem designed to bring some of the bill’s more vocal opponents onside, such as adding California card rooms to the list of Eligible Licensees. Other alterations include the stipulation that the first licenses cannot be issued until all relevant Federal departments (Commerce, Treasury, Justice) have reworked their own regs to accommodate Reid’s bill. The licensing fee would be reduced from 20% to 16% of revenue (it’s not clear whether the feds and states would reduce their stakes equally). States offering intrastate online gaming can now decide to opt out. And interestingly, the ‘bad actor’ penalty has been reduced from 3 years to 18 months, with the same penalty applied to these actors’ ‘covered assets’.

While it’s this site’s belief that Reid’s bill will not pass, stranger things have happened. So for argument’s sake, what would the online poker landscape look like if the bill succeeds in becoming law? Above all, we believe it would be a net bad for the major pure poker networks, which would have to exit the US market in order to meet the requirements for applying for one of the licenses. Things would just go downhill from there, as we’re going on record as saying that NO poker company currently serving the US market will EVER be granted a license. That leaves these companies with two options: sell their software and database to a US company, or call it business as usual and continue servicing the US market.

This choice will be both difficult and somewhat ironic, given how much cash the two biggest poker operators (and the big European public companies) have splashed out in lobbying fees to achieve this type of regulatory change. Having paid out all this cash solely for the benefit of the major US land-based casino chains will undoubtedly put a serious damper on some European seasonal holiday celebrations. Goddamn us, every one.

Since the start of the past decade’s poker boom, Calvin Ayre has been predicting that international gaming companies spending large sums on lobbying the US gov’t were wasting their time and money. The hope that they would somehow be allowed into the US market at some future date was the primary reason most public gaming companies pulled out of the US post-UIGEA — and offered up ‘make nice’ payments à la PartyGaming — but Calvin doubts that any international company will ever receive a US license.

In Calvin’s view, any move the US makes toward liberalizing its market will be done with the sole purpose of benefiting US companies. Worse, given the traditional US attitude towards international trade, Calvin believes that the day is coming when these same US companies will start accepting bets from countries outside the US, while still denying outside companies access to American customers. ‘American exceptionalism,’ and all that.