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The Poker Legislation Forum, Brought to You by the PPA Discussions of various poker-related laws and steps players can take to push for better laws.

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Old 12-21-2010, 09:53 PM   #1
Rich Muny - PPA VP
 
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Arrow Expectations from federal legislation

In the aftermath of the Reid bill discussion, it seems time for a discussion on what we can reasonably expect to get through Congress.

I've had the honor of working for our rights over the past four years. During that time, I've had a chance to analyze quite deeply the broader situation of which we poker players are a part. Data for the analysis came from stated goals of B&M interests, lawmakers, our opponents, and others.

My conclusion is that we're not going to get 100% of what we want. No one stakeholder will, in fact. PPA can put our opinions forth, but cannot run over everyone else.

Additionally, IMO the fall of the status quo has started. WA is gone. FL, CA, NJ, WV, and other states are looking into offering intrastate only poker. We can be sure these states will criminalize offering of unlicensed poker if they pass such licensing legislation. Most importantly, U.S. based interests have publicly declared their interest in being licensed to offer services, even earning the support of the Senate Majority Leader. It's hard to imagine Congress saying, "no....let the current reverse protectionism of offshore sites only continue."

Meanwhile, the DoJ continues its attacks on payment processors unabated. There are also troubling signs for future enforcement. The DoJ and the Dept. of Homeland Security have seized over 80 websites for selling counterfeit goods (http://www.foxnews.com/politics/2010...t-goods-raises). I'm not saying they'll go after online poker sites, but surely the fact that there is now precedent ought to be of some concern. After all, it appears they now have all the tools they'll need.

With that, what can we expect?

A firm, solid foundation on which to build the industry: The status quo is built on quicksand. Seriously, who in Congress would opt for a market that prohibits U.S. based interests while allowing offshore ones? It's very hard to lobby for continuation of this.

OTOH, a system that allows U.S. and offshore sites to participate in the market gives us a firm, solid foundation upon which to grow and prosper. Rather than worrying if we'll have poker in six months, we'll be able to plan on this existing years down the road. We'll see more advertising and more recreational players who are attracted by U.S. branding and accountability.

Steps to address the competitive playing field: The current sites have built brand loyalty by offering services in a market where U.S. based interests have not been allowed to operate. It should come as no surprise that some lawmakers and business interests would like to take steps to even this out. Possible steps include blackouts for all sites (where everyone starts on the same date, leaving players only the sites that choose to operate in defiance of new laws during this time period), penalty boxes for sites currently offering services (to give others a chance to catch up), and other possible mitigation steps. While we'd wish for Congress just to let us play, unfortunately it doesn't work that way.

PPA will work to minimize or eliminate blackouts, as these seem to be the least effective means of addressing the issue, but we could certainly see a repeat of a blackout provision in future legislation. Again, we're just one stakeholder of many.

Criminalization and other penalization of players: To address unlicensed sites, any bill will have some enforcement measures. PPA succeeded in keeping player penalties out of the Reid bill and will endeavor to keep them out of all future bills. We believe players ought not be targets of enforcement efforts. I am hopeful we'll continue to be successful here, but anything is possible.

State opt-outs/opt-ins: Congress will not force online poker on states that don't want it. IMO, the long-term solution here is to create a system that states will wish to opt into. As new business interests will lobby states to participate, our letters asking for states to opt in will be that much more effective.

Not every state will join. OTOH, we've already seen one state -- WA -- opt out, and they did so without a poker bill's permission.

Player pools: Congress may or may not allow international players. This is due to concerns over enforcement of rules pertaining to players, but is also due to the potential of U.S. sites finding themselves competing against sites with large player bases. PPA is working to address such concerns, of course.

Enforcement provisions:
Congress will likely add enforcement measures to any bill that provides for licensing. While I'm obviously no fan of this, I believe it will happen with or without us. I'd rather have it happen with provisions to allow for licensed play than as a ban.

So, that's my take. We'll win some battles on specific provisions, but not all. Our choices seem to be to get the best federal bill we can support, to go for intrastate bills, or to ride the status quo for as long as it holds up (and to press ahead with litigation once the status quo begins to falter).

Last edited by TheEngineer; 12-22-2010 at 01:29 PM. Reason: Expanded last paragraph
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Old 12-21-2010, 09:56 PM   #2
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Re: Expectations from federal legislation

BTW, the Reid bill could have been much worse:

Player penalties: Player penalties would be very bad. Not only would they limit competition in opt-in states, but they'd help create a federally-enforced ban in opt-out states. In other words, states opting out of poker would be opting into a ban.

Taxation: We could get stuck with high taxes on the game itself, as France has.

Permanent banning of companies currently serving the U.S. market: This one is self-explanatory.

Limited licenses: One could easily conceive of plans where only two or three licenses are awarded.

States opt-in rather than opt-out: We fought hard for the Frank bill to be opt-out, and fought hard to do the same in the Reid bill. We got a compromise in that it's a hybrid, but even many of our Congressional allies wanted opt-in only from the outset.

Bans on advertising, promotions, and other player inducements: These have been floated in other gaming.

It's important to remember that we have real opponents. It's also important to remember that there are other real stakeholders.
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Old 12-21-2010, 09:56 PM   #3
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Re: Expectations from federal legislation

Watch the Republicans slip in a ban on online Poker in the next 2 years and then we're all screwed.
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Old 12-21-2010, 10:15 PM   #4
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Re: Expectations from federal legislation

This deserves a longer response and discussion, but I do think its fair to note that the state that opted out did so in a manner that would be unlikely to succeed today. MA players killed a similar provision.

Its a very good summary of what to expect out of a Federal bull. However, setting this as Federal legislaiton under these parameters vs. the status quo also limits our opportunity set unnecessarily.

First, there is the intrastate and pooling route. While many state bills have been terrible, the NJ bill does not appear too bad. Going the state route also minimizes risk in some ways....if it sucks, we've only ruined an individual state, and its easier to move to PA or NY to keep playing than moving to Thailand or Canada.

Second, we're ignoring litigation. While litigation is not a permanent solution, and is high risk, it changes the leverage in Federal legislative negotiations. There's an argument if the status quo continues, there is no need to litigate. Well, OK, but if the status quo continues then there's no need to give in quite as much on the legislative front.

If the status quo becomes untenable and we lose litigation...well that sucks, Harry Reid is going to be in power for six years. It probably hurts existing sites long-term, which is too bad, but Vegas casino interests still want in. We might have reduced access to poker for awhile, but Reid 3.0x did that for an indefinite period of time anyways. I don't see how its 100% clear we get a worse deal here anyways. Which of the ways a Federal bill could get worse would likely return to a bill after we lose litigation?

If we win...well, now offering online poker is not illegal. What's to stop US interests from offering poker at that point? Why would Harrah's and company push for legislation with a long blackout period and unfavorable opt-out opt-in provisions? Harry Reid now is in the drivers seat, blocking legislation is a positive for us, and the bill becomes much better.

Its not clear to me which one of these options are best, but I do think its more complex than simply taking the best bill we can get and being happy about it.
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Old 12-21-2010, 10:21 PM   #5
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Re: Expectations from federal legislation

Regarding the PPA's lobbying for federal legislation, something I expect from them is lobbying to NOT strengthen the UIGEA, but to weaken it.

It seems completely absurd and counter productive to me to support legislation that strengthens the UIGEA.
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Old 12-21-2010, 10:22 PM   #6
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Re: Expectations from federal legislation

I believe if Republicans continue to grasp control of both sides of Congress, they may try to enact even more crude enforcement on players. Reading this makes it seem that the interests of the United States is only to let the states handle iPoker and we all know what states interests are when it comes to this. Players would rather have Inter-state and international player pools but that is HIGHLY unlikely in this point and time.
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Old 12-21-2010, 10:26 PM   #7
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Re: Expectations from federal legislation

From reviewing the many posts made since the Reid bill was introduced, the blackout is clearly the main problem for supporters and opponents alike. As someone who makes my living by playing the game (the PPA stuff is all as a volunteer), I can obviously understand that. While my blackout backup plan was to play sites that chose not to get licensed and chose instead to continue offering services to U.S. customers, I'd certainly have preferred not to see a blackout at all (though I'd have been willing to pay that price in exchange for the long-term benefits of a federal bill).

PPA fought the good fight on this issue in the Reid bill. Be assured that we'll keep up the push in 2011, just as we did to get penalties for players on unlicensed sites removed. I'm preparing a position paper on reasons lawmakers should oppose a blackout. This will include the fact that a blackout would drive players to sites operating outside the licensed market, making enforcement more difficult and expensive while weakening the licensed market.
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Old 12-21-2010, 10:28 PM   #8
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Re: Expectations from federal legislation

Quote:
Originally Posted by TheEngineer View Post
States opt-in rather than opt-out: We fought hard for the Frank bill to be opt-out, and fought hard to do the same in the Reid bill. We got a compromise in that it's a hybrid, but even many of our Congressional allies wanted opt-in only from the outset.
TheEngineer, if we have to have opt out States then can't we try to lessen that number. Buy their opt in with cold hard cash for their "start up cost". At least the bill will say for "start up cost". But leave it to the States to spend it on whatever they want to. A couple hundred million for each State that opts in for 2 years should get a lot more opt-in's if it is offered to them up front.
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Old 12-21-2010, 10:32 PM   #9
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Re: Expectations from federal legislation

A couple of points from the top of my head, without going into much deeper thought that this deserves:

1.) Re the blackout period. I can't understand why there is a blackout period for US casino sites, or at least why the period isn't smaller. Given US casino interests are driving the legislation, and their politician is writing the legislation, why are they subjecting themselves to 15 months or longer without getting any business. The bill just doesn't seem to be achieving what one would think they would want. If My Kyl can block the removal or shortening of the blackout period then he could surely lengthen it if it was subject to stipulations as in Reid 3.0. Surely if a bill is worth passing then it is worth fighting for a more immediate starting point.

2.) If the PPA goes down the litgation route then what is the status of ipoker during the inevitably lengthy court proceedings? If the PPA or other ally made the court challenge, does it restrict the DOJ whilst court proceedings are taking place?

Last edited by FreetoplayUK; 12-21-2010 at 10:38 PM.
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Old 12-21-2010, 10:34 PM   #10
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Re: Expectations from federal legislation

Quote:
Originally Posted by LirvA View Post
Regarding the PPA's lobbying for federal legislation, something I expect from them is lobbying to NOT strengthen the UIGEA, but to weaken it.

It seems completely absurd and counter productive to me to support legislation that strengthens the UIGEA.
I can't think of a way that Congress would license online poker and simultaneously make it easier for unlicensed sites to offer services in competition with them. Even more unfortunate is the fact that a straight-up repeal of the Wire Act and UIGEA would have no chance at all. I doubt we could even get one introduced. Rep. Ron Paul is likely the only one there who would (but note that he hasn't), and that would be strictly on principle.

I like that we all want to weaken UIGEA. I don't like that Congress is not aligned with us there at all.
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Old 12-21-2010, 10:48 PM   #11
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Re: Expectations from federal legislation

I don't like it either. The United States Congress is a complete ****ing joke, and I'm not even just talking about the issue of online poker.

Biggest. ****ing. joke. ever.

Last edited by TheEngineer; 06-03-2011 at 12:32 PM.
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Old 12-21-2010, 10:51 PM   #12
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Re: Expectations from federal legislation

6 year old children shouldn't aspire to be doctors or race car drivers or fire fighters. They should aspire to be congress men and women. They could actually get paid a handsome salary for crying, throwing temper tantrums, and not doing a ****ing thing other than being an embarrassment to the American public.
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Old 12-21-2010, 11:04 PM   #13
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Re: Expectations from federal legislation

Quote:
Originally Posted by LetsGambool View Post
This deserves a longer response and discussion, but I do think its fair to note that the state that opted out did so in a manner that would be unlikely to succeed today. MA players killed a similar provision.
Yes, we succeeded in MA, but that doesn't mean we'll win all of these. I certainly hope we will, of course.

Quote:
Its a very good summary of what to expect out of a Federal bull. However, setting this as Federal legislaiton under these parameters vs. the status quo also limits our opportunity set unnecessarily.

First, there is the intrastate and pooling route. While many state bills have been terrible, the NJ bill does not appear too bad. Going the state route also minimizes risk in some ways....if it sucks, we've only ruined an individual state, and its easier to move to PA or NY to keep playing than moving to Thailand or Canada.
I expanded the final paragraph a bit to include these other options. Thanks.

Quote:
Second, we're ignoring litigation. While litigation is not a permanent solution, and is high risk, it changes the leverage in Federal legislative negotiations. There's an argument if the status quo continues, there is no need to litigate. Well, OK, but if the status quo continues then there's no need to give in quite as much on the legislative front.
I didn't include it because, as you note, it wouldn't occur until the status quo failed. However, to clarify it I did expand the final paragraph to include this.

Quote:
If the status quo becomes untenable and we lose litigation...well that sucks, Harry Reid is going to be in power for six years. It probably hurts existing sites long-term, which is too bad, but Vegas casino interests still want in. We might have reduced access to poker for awhile, but Reid 3.0x did that for an indefinite period of time anyways. I don't see how its 100% clear we get a worse deal here anyways. Which of the ways a Federal bill could get worse would likely return to a bill after we lose litigation?
That's one reason I didn't mind saying I'd have opposed Reid 3.0 if it weren't dead on arrival. On that topic, it seems like that bill was a last-ditch effort to try to gain support of some key senators. I don't see that as the starting point for 2011 at all.

Quote:
If we win...well, now offering online poker is not illegal. What's to stop US interests from offering poker at that point? Why would Harrah's and company push for legislation with a long blackout period and unfavorable opt-out opt-in provisions? Harry Reid now is in the drivers seat, blocking legislation is a positive for us, and the bill becomes much better.
If winning were easy, Caesars would have sued already, as they'd have nothing to lose. If it's found unlawful, they'd knock out competitors. If they won, they'd be able to jump into the market. The fact that no one is taking this shot is telling. "Follow the money" is still a great adage.

Quote:
Its not clear to me which one of these options are best, but I do think its more complex than simply taking the best bill we can get and being happy about it.
Again, Reid 3.0 was not acceptable IMO. We ought not settle for whatever we get, but we need to understand that we're not going to get everything.
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Old 12-21-2010, 11:07 PM   #14
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Re: Expectations from federal legislation

Quote:
Originally Posted by LirvA View Post
Regarding the PPA's lobbying for federal legislation, something I expect from them is lobbying to NOT strengthen the UIGEA, but to weaken it.
PPA is certainly not lobbying to strengthen UIGEA. Enforcement measures are finding their way into the bills, but we're surely not proposing or endorsing them.
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Old 12-21-2010, 11:08 PM   #15
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Re: Expectations from federal legislation

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Originally Posted by RiverAnAce View Post
TheEngineer, if we have to have opt out States then can't we try to lessen that number. Buy their opt in with cold hard cash for their "start up cost". At least the bill will say for "start up cost". But leave it to the States to spend it on whatever they want to. A couple hundred million for each State that opts in for 2 years should get a lot more opt-in's if it is offered to them up front.
We've lobbied for various improvements in the opt-out provisions and will continue to do so.
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