Two Plus Two Publishing LLC Two Plus Two Publishing LLC
 

Go Back   Two Plus Two Poker Forums > >

Notices

Poker Legislation & PPA Discussion hosted by Rich Muny Discussions of various poker-related laws and steps players can take to push for better laws.

Closed Thread
 
Thread Tools Display Modes
Old 12-06-2010, 07:07 AM   #1
NoahSD
Is Right
 
NoahSD's Avatar
 
Join Date: Aug 2005
Posts: 18,865
Re: Reid Pushing Plan to Legalize U.S. Online Gambling

Quote:
Originally Posted by insidemanpoker View Post
sorry to be a bother, but could anyone give some kind of cliffs as to what is going on right now? i can't read all 1600 posts right now and would love to just hear what the general idea is at the moment in a minute or so..

also, would the sites seeking regulation (stars, FT etc.) still be operating for the rest of the world? and what if you are an American living abroad, would the blackout still apply or could you play?
My attempt at cliffs:

The Congress is currently in a lame duck session. Basically a bunch of Dems got voted out, but there's a 1.5 month window where they're still in control. That window's likely to end in about a week and a half, so they're trying to get some stuff through before the reps take over.

In particular, Senator Reid (majority leader of the senate, so a powerful dude) is considering attaching a bill to license and regulate online poker (only poker) to other legislation that's almost definitely going to pass. The most likely target is a bill to extend tax cuts that the Dems and Reps have been negotiating over since the election. Nobody's really sure how likely this is to actually happen, as it's likely to be an unpopular move if the Reps decide to make a big deal out of it. However, there's been very little resistance so far.

An old draft of the bill has leaked, and obviously the gist of it is to license and regulate online poker, which basically everyone wants obv. Some of the details are also pretty positive--the tax is a 20% revenue tax, which consensus suggests is really small and would be more likely to lead to lower rakes than higher rakes.

However, there are some pretty huge negatives that are causing some people to argue that this bill could be worse than the status quo. Probably the biggest is a 15-month "blackout" in which no sites would be allowed to legally serve the US. If this ends up in the bill and the bill passes, the consensus is that the more "legit" sites like Stars and FTP will pull out of the US market and wait to get licenses. Sites that pretty much have no chance of getting a license like Bodog will probably stick around.

It's not clear whether or not the blackout will be in the bill and if it is if it will be 15 months. TheEngineer has said they're still negotiating this point and trying to get rid of it or make it a shorter time period or whatever.

Non-US players won't be allowed to play on US-based sites. So that would be something like the equivalent of Stars.fr and FTP.fr. A while from now, they might be allowed in, but the default is no. Stars and FTP will have no reason to stop serving non-US players during the blackout, but of course during the blackout they'll have basically no US players if this happens, so that'll hurt their traffic a ton I imagine.
NoahSD is offline  
Old 12-07-2010, 10:20 AM   #2
Berge20
Carpal \'Tunnel
 
Join Date: Jun 2004
Location: Angering the Poker Gods
Posts: 9,233
Re: Cliffs on Reid's Plan to License U.S. Online Poker

As of Tuesday morning this is the legislative situation:

President Obama announced a compromise framework for extending/changing a number of tax policies. It is widely considered a "must pass" bill before Congress adjourns at the end of the year (December 17th is a soft date for adjourning at this point). This is important because this will be the only potential vehicle for attaching IG type legislation. Such legislation would not move on its own at this stage.

No specific legislative text is currently available for what the President proposed, so it is unclear if the various IG related drafts leaked (see above) will be included. Much of Tuesday will be spent determining the political viability of the Obama framework, as it appears some on the left are uncomfortable (at best) about it.

If a full compromise/deal is reached on the tax package, it will likely be introduced the same in both the House and Senate--and it is unlikely that it can/will be amended/changed. So likely no conference committee in the future. Should any IG related material be included, it will be done so out the outset.

It is assumed that the process will gain clarity over the next 24-48 hours, with actual text of a final bill showing up before the end of the week--if the framework of the deal is acceptable to enough members on both sides of the aisle.

Last edited by Berge20; 12-07-2010 at 11:08 AM.
Berge20 is offline  
Old 12-07-2010, 10:59 AM   #3
Berge20
Carpal \'Tunnel
 
Join Date: Jun 2004
Location: Angering the Poker Gods
Posts: 9,233
Re: Cliffs on Reid's Plan to License U.S. Online Poker

From PokerXanadu:

Based on the draft bill that was circulated, and additional hints of subsequent changes to the draft, here are the general highlights of the legislation (details may change in the final draft). Some good, some bad - but we will end up with a legal, open, competitive iPoker market in the U.S. under this bill.

1 Licensing: every site that wants to accept US players must get a license and locate their operations for their US-facing business in the U.S.

2. Regulation: existing gaming regulatory bodies (like in NV, NJ, CA, et al) will be authorized to license and regulate sites.

3. Player pools: For three years, all play from players located outside the U.S. at the time of play will be excluded from licensed sites. After that, new regulations can be issued (likely) allowing foreign players in jurisdictions where it is legal to sign up and play on the US sites.

4. Eligible sites: All US casinos and race tracks (who have been in business at least 5 years and operate at least 500 slot machines), plus slot machine manufacturers, will immediately be eligible to get a license. Current iPoker sites will also be eligible to be licensed. After two years, new regulations can be issued (likely) allowing other businesses (e.g. AOL, Zynga Poker, new sites, Yahoo, etc.) to get a license.

5. State options: Each state has the option to opt in or out of this program, by state legislative or executive action (depending on who has the authority to make such decisions under the state's law). iPoker will be illegal in states that opt out. If a state passes its own intrastate iPoker legislation, it cannot opt out of the federal system. As the draft bill stands, initially some states will be automatically opted in (at a minimum, those states that currently have live poker) and some states initially will be automatcially opted out. Either way, they can change their option at any time. Licensed sites cannot allow play from anyone located in an opt-out state at the time of play (based on location, not residence).

6. Unlicensed sites; Other gaming: iPoker sites that are unlicensed are forbidden from accepting play from anyone located in the US. The penalties are severe fines and jail time. Play on unlicensed sites will not be illegal for players. All other types of iGambling (except for Horse Racing, state lottery sales, intrastate-only iGambling and skill games such as fantasy sports) will become clearly illegal in the US, subject to criminal prosecution. Financial transactions to unlicensed and illegal sites will be unlawful for financial service providers and the sites under federal law. The government will maintain a list of unlawful sites to be used by banks and other financial service providers to determine which transactions they must block. They will not be required to block transactions except to sites on the list.

7. Site Taxation: There will be a tax on sites equal to 20% of all iPoker revenues (rakes & fees) generated from player deposits. The tax will not apply to revenues generated from player account monies that are not deposited by the player (e.g., bonuses, rewards, etc.). Of the 20%, 6% goes to the federal government, 7% is allocated to the states based on the location of the players at the time of play, 7% goes to the state where the site is licensed.

8. Player Taxation: Players will receive a Federal Form 1099 at the end of each year with their gross wins, gross losses, net wins, etc., to use for income tax reporting. Players will be liable to pay income taxes on iPoker winnings just as they are now. Sites will also do income tax backup withholding on winnings unless you provide them with a standard W-9 tax form (give them your social security number and attest that you are not subject to backup withholding).

9. Transitional period: For 15 months, no site will be licensed and all iPoker sites must cease operations in the US. Current sites have a 30-day (possibly 60-day in latest draft) grace period to stop. All US player account funds will be returned within 30 days after that. Any site that violates this will never be able to get a US license nor sell their assets to a US licensed site. At the end of the 15 months, there will be a simultaneous launch of all initially licensed sites, creating a new competitive market to the benefit of players (competitive rakes, player incentives, etc.) and giving a level playing field for all the initially licensed sites.

10. Consumer protections: The bill contains detailed protections against underage gaming (must be 21+), problem gaming (self-exclusion program and funding of help programs), site security, site integrity (software/hardware inspections), cheating (criminal offense to use any aids that are against site TOS or designed for cheating) and fraud (subject to the US justice system).

PS & FTP reportedly support this bill. The writing is on the wall for iPoker in the US without passage of a federal licensing bill, and this one is probably as good as we can get for players and sites. If this one isn't passed, it will likely be years before another opportunity at the federal level comes about, if ever (due to the change in Congressional control). In the meantime, more states will pass legislative bans on iPoker (like in WA), and others will fragment the player pool with intrastate iPoker bills that are protectionist for their B&M casinos.

Here is the original draft bill text (but there have already been significant changes):
Linky

Here is a thread with speculations about which states might opt out:
Linky

To send your Senators a quick message in support of this federal legislation:
Linky

Last edited by Berge20; 12-07-2010 at 11:07 AM.
Berge20 is offline  
Old 12-07-2010, 11:12 PM   #4
Berge20
Carpal \'Tunnel
 
Join Date: Jun 2004
Location: Angering the Poker Gods
Posts: 9,233
Re: Cliffs on Reid's Plan to License U.S. Online Poker

Tuesday evening update:

The situation surrounding the overall tax extenders package has not gained much clarity over the course of the day. Potentially it has become muddied a bit more, as many news reports (see Politico, The Hill, Roll Call, Congressional Quarterly, National Journal) indicated that there is significant frustration over the tax bill framework laid out by President Obama Monday. Both House and Senate Democrats caucused Tuesday to discuss the situation, with reports varying after the Senate caucus if the votes were there to advance the plan.

It is widely expected that the Senate will ultimately take up the tax package, whenever it is finalized and put into legislative language.

Senator Reid's plan to include some sort of IG language appears to be gaining more press/attention in DC as this Politico Article shows. That certainly does not mean the likelihood of it being included has increased, and depending on how people interpret Sen. Kyl's comments, those efforts could be failing.

Over the next 2-3 days, it seems likely that final agreements will be reached if there is the political support overall for President Obama's framework and it will be put into text. Until that happens, it is difficult to speculate what not outlined in the framework will look like or if items are even included at all (this includes any IG related matters).

The other "must pass" item on the Congressional agenda is an annual spending bill that funds the government. The House will pass a "CR" (continuing resolution) that funds the government for a period of time and the Senate will potentially consider doing an "omnibus" spending package which is fundamentally the same concept, funding government, but in a manner that likely spends more/different/has earmarks.

While some mention this as a possible alternative vehicle for any IG language, it seems very unlikely from my view.
Berge20 is offline  
Old 12-08-2010, 04:33 PM   #5
Berge20
Carpal \'Tunnel
 
Join Date: Jun 2004
Location: Angering the Poker Gods
Posts: 9,233
Re: Cliffs on Reid's Plan to License U.S. Online Poker

From PokerXanadu:

Good morning!

Would you like to add the following to the Reid bill sticky:

Here is a link to a newer version of the Reid bill:
Linky

This version seems to be the most recent one in circulation. However, that doesn't mean it is a final version and further changes are possible. The main changes from the early draft bill include:

Current sites no longer have a separate waiting period to get licensed. Initially, US casinos, race tracks and slot machine manufacturers can get licensed at the end of the blackout period. Two years later, new regulations can be issued to allow everyone else (including the current sites) to get licensed. Note: An interpretation of this change was published by the news media (Feldman of ESPN) a couple days ago, which seemed to say that current sites would be eligible to be licensed at the same time as US casinos, right after the blackout period. This was never the case.

US licensed sites can buy current sites or some of their assets. Also, licensed sites can contract with current sites to provide hardware and/or software. In other words, we might see PokerStars.US, FullTiltPoker.US, etc. operating in the US at the end of the blackout period as either owned by a US casino or leased to a US casino on a contract or affiliate basis.

After three years, the player pool, at the discretion of the Commerce Secretary, can be extended to include non-US players. This provision now allows for combined player pools across US and non-US skins.

State opt-ins or opt-outs have to be done in accordance with state law - not just by the whim of each state governor. No state law existing prior to this legislation can be construed to require a state to opt in or opt out. So, in most states it will take a new act of the legislature, or public referendum, to change the state option. This is not actually a change to state options, but just the addition of wording to this provision that makes it clear. Automatic opt-ins are still just 15 states initially in this version of the bill.

The 20% tax on revenues will apply to all site revenues. There won't be an exception for revenues generated on bonus money, etc.

Current sites have to cease US operations within 30 days of the enactment of the law. Thereby, the 15-month blackout period becomes 14 months. Current sites have to notify all US players immediately, and then repeatedly for two years, of the availability to withdraw their funds. At the end of two years, any US player funds not cashed out are placed in an escrow account in the U.S. for safekeeping and disposition at the discretion of the Commerce Secretary.

The bill does not take effect until 30 days after it is passed. This means current sites don't have to cease operations for an additional 30 days (60 days total), and the blackout period will continue for 14 months thereafter.

The criminal penalty for operating an unlicensed site in the US is increased from up to 2 years to up to 5 years in prison (plus applicable severe fines).
Berge20 is offline  
Old 12-08-2010, 09:19 PM   #6
Berge20
Carpal \'Tunnel
 
Join Date: Jun 2004
Location: Angering the Poker Gods
Posts: 9,233
Re: Cliffs on Reid's Plan to License U.S. Online Poker

Wed evening notes:

Really not a whole lot to add from today, other than it appears that things are moving towards consideration of the tax package Thursday at some point in the Senate. See Politico article although nothing was locked in before the Senate adjourned for the evening.

It doesn't appear that legislative text has been finalized and/or released, given the public comments available. Although most would expect that to be closely held until the end.

According to the WSJ article here, Reid is still making a push after earlier reports/statement/comments indicated otherwise.
Berge20 is offline  
Old 12-08-2010, 09:49 PM   #7
Karak
ELIte
 
Karak's Avatar
 
Join Date: May 2004
Location: Washington, DC
Posts: 62,503
Re: Cliffs on Reid's Plan to License U.S. Online Poker

Another Wednesday evening note:

Multiple people, myself included, have been told by Reid staffers that the poker legislation is NOT attached to the tax bill currently. I was told, "We took a vote to add it, and it failed." What vote this could be or who was voting was not specified. When I asked if the bill was dead, I was not given an answer. He just kept repeating, "As of this time, it is not attached to the bill." (Worth noting I'm just a random who called Reid's office and have no sort of insider access to them).

Kevmath, via twitter, and others tell us to expect some sort of announcement tomorrow. No details available.

ZBTHorton makes a great post with some insider information on how the poker sites may feel about this. Definitely a must read for anyone following the bill: http://forumserver.twoplustwo.com/sh...postcount=5980

Edit -

@Berge below,

Yeah I too found that very odd. My only thought was that it could be party whips or some sort of caucus polling to see if it had the steam to get through. They have very definitively said it's not CURRENTLY (key word, obv) attached, but it's also true that no final deal has been reached.

Last edited by Karak; 12-08-2010 at 09:59 PM.
Karak is offline  
Old 12-08-2010, 09:55 PM   #8
Berge20
Carpal \'Tunnel
 
Join Date: Jun 2004
Location: Angering the Poker Gods
Posts: 9,233
Re: Cliffs on Reid's Plan to License U.S. Online Poker

And I'd just add to the above comment from whoever answered the phone the following:

No votes happened in relation to add it, so not sure what that means. Cause it sounds like an intern making up something to get you off the phone.
Berge20 is offline  
Old 12-09-2010, 09:10 PM   #9
Berge20
Carpal \'Tunnel
 
Join Date: Jun 2004
Location: Angering the Poker Gods
Posts: 9,233
Re: Cliffs on Reid's Plan to License U.S. Online Poker

Reid's tax bill compromise does not contain any IG related language.
Berge20 is offline  
Old 12-14-2010, 06:44 AM   #10
PokerXanadu
Commander X-2
 
PokerXanadu's Avatar
 
Join Date: Oct 2006
Location: Florida
Posts: 10,351
Cliffs on Reid's Plan to License U.S. Online Poker

Note: These answers are based on the most recently publicly available draft of the Reid bill. The final bill may contain some differences.

When will this bill be voted on?

We don't know yet when, or even if, this bill will be up for a vote. Senator Reid has been expected to attach this bill to some other must-pass bill during the lame-duck session of Congress this month. It takes a lot of political maneuvering to accomplish this and it is unclear yet whether or not he will be able to do so. The three likely bills that might be used are the Bush tax-cut extensions, the omnibus spending and the defense budget bills. The attachment and vote is likely to take place in a very short period ot time, making it likely that we will have only hours warning, if any, to know the final wording of the bill before it is passed.

How will licensing work?

Many current state gaming regulatory bodies will be eligible to become a "Qualified Body" that is authorized to license and regulate US iPoker sites. Those that currently regulate 5% of the total US gaming revenue (NV & NJ) are automatically designated as a QB upon notice to the Secretary of Commerce of their intent to do so. Those that regulate at least 0.5% of total US gaming revenue (IN, IL, CT, MI, MO, MS, LA, CO, NY and IA, plus maybe some others I haven't noted) will be eligible to apply to become a QB once the federal regulations for iPoker are issued (6 months after enactment of the bill).

NV & NJ will be able to license and regulate iPoker sites whether or not the federal government issues iPoker regulations in a timely manner. They are also the only QBs that will be authorized to license sites which offered iPoker in the US prior to enactment of this bill, or any site which buys such or uses such as a supplier of software, hardware or services.

Who is eligible to apply for and receive a license?

Initially, any US casino or racino that has at least 500 slot machines, any US race track that has run at least 250 days of live racing over the past 5 years, and any slot machine manufacturer who supplied the qualified casinos or racinos are eligible to apply for an iPoker license. After two years, the Secretary of Commerce can open licensing to other appropriate companies, including foreign sites, subject to the normal regulation development process of public notice and comment.

When will the initial sites be issued a licensed?

The QBs are instructed to issue as many licenses as possible simultaneously 15 months after the bill is enacted. The intention is to make a simultaneous launch of licensed sites to create a multi-site competitive market to the benefit of consumers (the players). Sites can become operational for play-money games and advance promotions before the launch date.

Who can provide the software, hardware and services for licensed sites?

Any provider, including current offshore sites and current play-money sites (like Zynga Poker), can apply for a Certificate of Suitability to become a vendor to licensed sites. Licensed sites can also purchase such companies, or some of their assets, and remain licensed.

What happens during the period prior to the launch?

Current sites must cease US operations within 30 days of enactment of the bill, or they will become ineligibile to ever receive a US iPoker license or Certificate of Suitability. The bill does not enact until 30 days after it is signed into law, so the sites effectively have 60 days total to cease their US operations. US player account balances will remain available for withdrawal for two years, after which the funds are placed into escrow in the US for safe-keeping and dispositon by the Secretary of Commerce.

Can US players play on offshore sites during this 14-month blackout period?

It will not be illegal for US players to play on such sites. It will be illegal under US law for such sites to offer play to US players. Since such sites will be ineligible to ever receive a US license, many of the current offshore sites will become unavailable to US players. Those that remain will have difficulties providing deposit and withdrawal methods to US players, probably more so than currently. But, some play will no doubt be available as long as there is a market for it.

Who will be able to play on US licensed sites?

Initially, anyone physically located anywhere in the US, except in an opt-out state (see below), will be able play on any US licensed site. After 3 years, the Secretary of Commerce can open the market to additional foreign jurisdictions, including combined player pools at the sites. There will no doubt be much lobbying pressure from the sites and players to do so. The Secretary needs to ensure that such additions of foreign players takes place only in locations where it is legal for the foreign players and only if doing so does not endanger the consumer protections of the US iPoker regulations. Therefore, it is likely to include only jurisdictions where there is existing government licensing and regulation, under mutual agreement between the US and such governments (imo).

What states will opt out?

Initially, these states will automatically be opted in: California, Colorado, Delaware, Florida, Iowa, Kansas, Michigan, Mississippi, Missouri, Nevada, New Jersey, New Mexico, Ohio, Pennsylvania, and West Virginia. All other states will initially be opted out.

Until December 31st, 2011, any state may change their option status immediately by notice to the Secretary of Commerce. Such changes must be in accordance with state law, and cannot be determined by any state law that is already in existence prior to enactment of this bill. In most, if not all, states this means that a new law or public referendum must be passed to change the state's option status. After December 31st, 2011, changes to state option status work the same way except the change doesn't take effect until 60 days after notice to the Secretary or the date the new state law enacts, whichever is later.

Also, any state that enacts its own intrastate iPoker or iGambling legislation is automatically and immediately an opt-in state, with no further option to opt out.

There is much debate on which states will, in the end, be opt in states. Hopefully the easy revenue stream from licensed iPoker will encourage many states to be opt in, especially in these times of budget crises. Note that the only two choices any state will have is either to be opted in or to have a complete ban on all iGambling including intrastate (excepting interstate Horseracing wagering under the Interstate Horse Racing Act of 1978).

It is significant that any state that wants to offer any form of intrastate casino iGambling (like NJ is in the process of passing) must be an opt in to the federal iPoker system under the Reid bill. Any state with casinos are likely to receive pressure from these enterprises who do not want to miss this golden egg. Similarly, many state lotteries are looking to expand to iPoker and/or iGambling.

Can residents of opt-out states or foreign countries play in the US while traveling?

Yes. Play is only restricted by location of the player at the time of play, not by residence. In fact, there are no restrictions in the bill against opening accounts or making deposits or withdrawals based on either residence or location. US licensed sites can open accounts for, take deposits and send withdrawals to anyone anywhere in the world, including opt out states. The only thing these sites have to restrict is play based on location of the player at the time of play, which must be within the US and excluding opt-out states.

What is the government taxation under this bill?

Sites will be taxed at a rate of 20% of their gross gaming revenues (total rakes and fees). Current offshore sites consider this completely acceptable, and less costly than their current situation of high payment processing fees and funds seizures. With many licensed sites going live at the same time, open market competition is likely to keep rake low and player incentives high.

Of the 20%, 6% will go to the federal government, 9.8% will be distributed to the states according to the location of the players and the remaining 4.2% will go to the state where the site is licensed.

This tax is on the sites, not the players. States will not be allowed to levy any additional taxation on the licensed sites.

Will players have to pay income taxes?

Yes, players will be liable to pay income taxes on their winnings just as they are now. There is no additional income tax added by this bill, but sites will be reporting player gambling wins (and losses) at the end of the year. The sites do not have to do any tax withholding for US players as long as you provide them with a standard IRS W-9 Form, providing your Taxpayer ID Number and statement that you are not subject to tax backup withholding. Foreign players will be subject to 30% income tax withholding on winnings, unless exempted by tax treaty (and the player provides the site with the proper tax form).

Some states currently have income tax rules that don't allow players to deduct losses against their wins. Any such state that is an opt in will no doubt act to change this rule as they will want players to participate from their state. It will be self-defeating to state revenues from iPoker to be an opt-in state and keep such a tax rule.

What player aids, such as HUDs, will be allowed at licensed sites?

Any such software that is allowed according to the Terms of Service of the licensed site is fine. If it is prohibited by the TOS of the site, it will be against the law and anyone convicted of such cheating will be subject to fines and imprisonment, as well as permanently banned from iPoker at all licensed sites. Similarly, any cheating behaviour such as collusion which is against the TOS of the site will be a criminal offense under federal law. Bots will be against the law.

What is the age limit?

Players at licensed sites must be at least 21 years of age.

Are there any buy-in, stake or wagering limits?

No. The only such limits are those available for self-exclusion under protections for problem gaming. Any player can choose to impose such limits on their play, and to remove such self-imposed limits at any time.

What games are allowed to be offered by the licensed sites?

Any game of poker that is not house-banked is allowed. As long as the game is considered a poker game, and involves some application of skill, it is legal.
PokerXanadu is offline  
Old 12-22-2010, 11:39 PM   #11
Rich Muny
Poker Players Alliance VP
 
Rich Muny's Avatar
 
Join Date: Apr 2005
Location: ***Only a PPA post if so stated***
Posts: 26,204
Re: Cliffs on Reid's Plan to License U.S. Online Poker

The Reid bill failed to pass. We'll be working hard in 2011 to move legislation.
Rich Muny is offline  
Old 02-03-2012, 05:25 PM   #12
Rich Muny
Poker Players Alliance VP
 
Rich Muny's Avatar
 
Join Date: Apr 2005
Location: ***Only a PPA post if so stated***
Posts: 26,204
Re: Cliffs on Reid's Plan to License U.S. Online Poker

administrative bump
Rich Muny is offline  

Closed Thread
      

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off


Forum Jump


All times are GMT -4. The time now is 10:28 AM.


Powered by vBulletin®
Copyright ©2000 - 2017, Jelsoft Enterprises Ltd.
Search Engine Optimisation provided by DragonByte SEO v2.0.33 (Pro) - vBulletin Mods & Addons Copyright © 2017 DragonByte Technologies Ltd.
Copyright ę 2008-2010, Two Plus Two Interactive
 
 
Poker Players - Streaming Live Online