Pursuant to the other discussion, I'm working on writing my own federal bill. Don't know if it will be put to use, but it's an interesting exercise (for me) and who knows, maybe it will go somewhere sometime.

Generally, I'm merging the provisions of the latest King and Barton bills, keeping it poker-only licensing, adding a smattering of Reid/Kyl, McDermott, etc., and throwing in everything including the kitchen sink in regards to what is good for poker players (imo) and what would potentially make it passable in today's political climate (imo).

I'll throw up bits and pieces of it as I complete a worthy draft. Happy to have any feedback. It's very hard to retain document format when posting here, so i'm just going to use links for download instead.

Here is the first bit, my draft of the Definitions section:

doc file: http://pokerloversunion.org/IWCPA.doc
pdf file: http://pokerloversunion.org/IWCPA.pdf

Great work

Chances of this passing?

Thanks.

I'll have to ask the ancient alien astronaut experts.

GL PX!!

TY!

Drafts of a couple more sections done (with some changes/additions to the definitions section):

doc file: http://pokerloversunion.org/IWCPA.doc
pdf file: http://pokerloversunion.org/IWCPA.pdf

More sections done. See linked documents.

Bill cliffs?

If you make it like 3 thousand pages, they won't read it and instead just pass it anyways.

PokerXandu,

I have a question for you:

Is it possible to add something that would be part of the protection of the integrity of the game, in the same section like cheating, rules of the game etc. that would state something like:

"Poker and any skill game must be beatable and rake/fees may not exceed 30% of money won over a significant sample size."

This would make the game perfect from a player perspective as it would ensure that there would be a large amount of winners at each level.

I think it would also be good if we could add regulation that "money won" and "money raked" must be reported overall and for different stakes and games.

I think it would be very valuable if we could draft such language and we could submit to any jurisdiction as a requirements from players (i.e. DE atm) even if ur bill does not make it.

You might want to replace "Citizens" with "Patrons". That's how casinos refer to their gamblers.

This, for example:


Lawmaker wants Ohio casinos to keep patron photos

Associated Press
June 10, 2013

CINCINNATI (AP) -- An Ohio lawmaker wants the state's four casinos to collect and save photos of customers for five years in an effort to crack down on money laundering.

The proposal calls for the casinos in Cincinnati, Columbus, Cleveland and Toledo to implement facial-recognition technology and keep photos of customers redeeming winnings for five years. Such a requirement would make it easier for law enforcement to track and clamp down on money laundering, Sen. Bill Coley said Monday.

The Senate approved a budget measure last week inserted by Coley that says the Ohio Casino Control Commission would be allowed to make casinos retain photos of customers for five years.

The commission already has broad powers to approve new rules but is not currently considering instituting Coley's idea, commission Director Matt Schuler said.

"It would take a significant amount of due diligence on the part of the commission," Schuler said.

Coley, a Republican from Liberty Township in southwestern Ohio, said he wrote the budget amendment to make clear lawmakers' desire for facial-recognition technology at the casinos and that they would want photos retained for five years to better help investigators.

No one has been arrested or prosecuted for money laundering at Ohio's casinos, but Schuler said there were an unspecified number of ongoing investigations tied to the crime.

A federal law requires detailed documentation of any casino transactions of more than $10,000, but criminals can get around that by laundering money in lower amounts.

That's a tough one. It's really market competition that will take care of rake levels. The more entities that are eligible to be licensed the better, and my bill will open the door for many potential licensees.

The main thing from a legislative stance is to prevent excessive government site taxes on wagers and excessive income taxes on winnings. I'm working on including language for both of those.

Do you mean for individual players or overall for the site? Not sure what you are getting at here. Just that you want to know how much of your money is raked away?

I've already sent my Guideline for Online Poker Regulations to DE for their publice comment period this month on their Internet gaming regulations draft. The Guideline doesn't include these points, but covers a lot of territory.

I do appreciate the suggestions. It's a little difficult to work in provisions that are specifically targeted for poker players as, although the bill licenses only Internet poker, it is structured such that any other game could be added by changing just one paragraph. This acts as a double-edged advantage. It will make the pro-gambling crowd happy as they see a path to expansion, and it will make the anti-gambling crowd happy as it will make all other Internet gambling operators (with the usual exceptions) strictly and expressly illegal.

Note though that I have this in under the definition of "bet or wager" for skill games:
The effect of this proviso is that charging more than 20 percent rake/fee on a skill game classifies it as a game which requires a license under the bill, i.e., it's Internet wagering rather than a skill game. That won't change the status of poker under the bill at all (which requires a license, regardless), but it does put in writing the concept that excessive rake/fees make a skill game no longer a skill game, i.e. unbeatable. Eventually I'll include something in the Findings section of the bill along this line.

The change wouldn't be appropriate for the title. The bill will be written to protect citizens in two ways:

1. License and regulate online poker.
2. Make other forms of Internet wagering expressly illegal, with new enforcement mechanisms.

So for the title of the bill, "citizens" is more appropriate than "patrons".

However, I might change "customers" to "patrons" in the text of the provisions of the bill, although I have to take a look a closer look at the definitions and legal implications of the two words to make sure it will fly. For instance, the bill is designed to license much more than just casinos, so "patron" might not be the better choice.

Thanks for the suggestion.

Checked it out. "Patron" has some other definitions that could create legal ambiguity. Have to stick with "customer".

Definitions are going to be a constant issue depending on locale. You're not creating new legislation in a vacuum, there are already definitions of most of the terms you are going to use in existing statutes, and to change those definitions would require specific language to amend the existing definitions. This was an issue I ran into with I-582.

Also, I would replace Citizens with Consumers in the title. Is US citizenship a requirement to participate in your proposal? That leaves all legal (and illegal) residents out of the game, as well as foreign visitors.

This seems to be taken from some EU money laundering proposals that British bookmakers are a bit upset about right now.

http://www.content-factory.co.uk/abb...ing-proposals/

This is the UKGC guidance
http://www.gamblingcommission.gov.uk...ril%202013.pdf

Proof of ID, including photo being retained has been pretty standard for UK casino membership for at least a decade. Your photo comes up on their screen on entry when you show your membership card.

The EU directives on over €2000 betting transactions hit bookies not casinos. Judging by the demo at that awful hearing they may become pretty standard for online too.

Don't know why but I am less fussed about this than geolocation tracking. If you think about it you get your photo taken pretty much every time you use an ATM.........

The bill I am writing is for federal legislation, not state, so state definitions are not of concern. Besides which, most legislative definitions apply strictly to the statutory titles which contain them, and not other titles unless specifically stated so. I purposely avoided the use of "Consumers" because I am trying to portray the bill as a wider issue.

The use of "Citizens" in the title of the act carries no lawful force. I could replace it with "Dogs" and the provisions would still apply to people.

Have to finish writing it first.

Made lots of progress; see links:
doc file: http://pokerloversunion.org/IWCPA.doc
pdf file: http://pokerloversunion.org/IWCPA.pdf

Have to do some double-checking for correct grammar, references, etc., but got just about everything covered.

Just two major areas left:
1. Site revenue taxes.
2. Gambling loss deductions for income taxes.

For #1, I'm thinking along the lines to grant the state and tribal regulatory authorities the right to assess a revenue tax of up to 3% on their licensees (which is in addition to fees they charge to cover operating costs); opt-in states the right to assess a revenue tax of up to 12% on all revenue generated from players who reside in their state and are located within any opt-in state at the time of play; and opt-in tribes the right to assess up to 12% on all revenue generated from players who are located within their tribal land at the time of play.

This sets a max revenue tax of 15% on sites, which I think is viable while still giving enough incentives for states to opt in. (Note: Tribes and state lotteries will be eligible to run licensed poker sites, so they will have additional incentive to opt in.)

There will also be the issue of how to attribute revenue collected to raked players for the state/tribal split (probably equal share among all players dealt in - doesn't need to match how rake is attributed for rake-based rewards).

Another possibility: Let regulatory bodies charge up to 3% and states charge a revenue tax of up to the same percentage as their state sales taxes, based on the jurisdiction of the player at the time of play (tribes would get the same percentage as the state they are in, for players located within tribal lands at the time of play).

For #2, the easiest path is pushing poker over into treatment as a skill game under the US Tax Code. I need some input on the implications for this. Would this fix it for both pro and recreational players? Are there specific tax code provisions that have to be addressed, or is redefining poker as a skill game enough to take winnings and losses out of treatment as gambling and into treatment as a hobby (and still a business for a pro)?

Cliffs of my bill so far:

License required for Internet wagering except for:
Skill games (but not poker).
Lottery ticket sales.
Horse race wagering legal under Interstate horseracing Act.
Intrastate Internet gaming authorized prior to 30 days before enactment.

Licenses only available for poker.

Secretary of Commerce (and his new Office of Internet Wagering Oversight) authorizes and oversees state regulatory bodies.
National Indian Gaming Commission authorizes and oversees tribal regulatory bodies.

Eligible to be a regulatory body:
Any state or tribal regulatory body that meet the minimum standards to be capable (enough staff, experience, authority, etc.).

Eligible for license:
Any state- or tribal-licensed gambling facility with 500 or more licensed slots.
Any cardroom with 75 or more licensed tables.
Any state lottery.
Any licensed slot manufacturer that supplied 500 or more slots under 1 license during the past five years.
Any licensed race track that has had at least $50M in all-source gross wagering during 3 of the last 5 years from live racing.

Significant vendors to obtain a certificate of suitability must meet same eligibility standards as licensees.

Bad actors (applies to licenses and certificates of suitability):
1. Knowingly operated in violation of Federal or State law that demonstrates a disregard for complying with laws: not eligible at discretion of regulatory body.
2. Felony conviction of 1+ years prior to enactment for illegally operating Internet wagering for US players: not eligible for 5 years after enactment.
3. Felony conviction of 1+ years after enactment for illegally operating Internet wagering for US players before enactment: not eligible for 5 years after conviction.
4. Felony conviction of 1+ years after enactment for illegally operating Internet wagering for US players after enactment: not eligible for 5 years after conviction.
5. Bought assets of #2 - not eligible for 5 years after enactment.
6. Bought assets of #3 or #4 after conviction - not eligible for 5 years after conviction.

Licensees pay user fees to cover costs of regulatory bodies and federal oversight.

Two years and five months after enactment, Secretary will expand licensing to other entities as long as it doesn't compromise the standards for regulatory bodies and licensees.

Licensees have to implement safeguards for:
No players under 21 years.
Player in allowed location.
Player taxes collected or reported as required by law.
Detect and prevent fraud, money laundering, and terrorist financing.
Protect player privacy and security.
Detect and prevent cheating, use of cheating devices, anomalous play, collusion, multi-accounting, compromised deal, failure of randomness, theft of player funds or account info.
Implement specific randomness standards.
Player funds have to be segregated and protected.
Publish on website all terms and conditions for accounts, play, promotions, privacy, etc.
Jackpot drop has to be returned players as jackpot and prize awards, w/o deductions for fees or costs.
Reimburse missing, stolen or cheated player funds.

Gaming equipment must be located in U.S. Regulatory body can require it be in their jurisdiction.

International player pooling allowed under reciprocal agreements between regulatory body and foreign jurisdictions.

License terms is 5 years, renewable at regulatory body's discretion.

Any licensee which loses license or closes must return all player funds, and turn over any funds that can't be refunded to the Secretary.

Licensees can't keep player funds upon account closure - have to be returned to player (except where account under investigation, etc.).

Problem gaming protections including self-limits and self-exclusions, plus monitoring player accounts and wagering for indicators.

State and tribal options:
Each state or tribe may opt-in or out per the laws and constitution of the state/tribe.
Mechanism for opt in or out is by governor/leader written notice, taking effect in 60 days.
Default opt-in for any state or tribe which doesn't opt out within 5 months of enactment.

Licensed Internet wagering is not Class II or Class III wagering under IGRA, preserving the status, etc. of all state-tribal gambling compacts and the sovereignty of the tribes.

Prohibitions:
Unlicensed sites.
Use of credit cards.
Public wagering parlors or membership clubs.

Cheating and fraud:
Regulatory bodies require and approve Rules of Fair Play.
Sites may request approval of a rule as a Rule of Fair Play.
Sites must publish their Rules of Fair Play on their website, including those required by the regulatory body and those additional rules approved by the regulatory.
Regulatory body will require or approve only rules as Rules of Fair Play which prohibit or prevent cheating, use of cheating devices, collusion or fraud.
Violating a Rule of Fair Play, or using a cheating device to violate a Rule of Fair Play, in order to gain an advantage, as well as using a cheating device to cheat or defraud, is a criminal offense.
Certain software aids are cheating devices (bots, certain other types of aids), but sites will just give a warning on first use.
Software aids and other cheating devices can be used by licensees, regulatory bodies and testing labs as long as its just for testing, not in live play and is not capable of showing hidden cards during play.

(Note: This doesn't mean sites can't have other rules that aren't "required or approved", just that their Rules of Fair Play are the ones that define what are criminal acts of cheating.)

Updates other Federal laws (UIGEA, IGBA, Wire Act) to make unlicensed sites expressly illegal.

Adds forfeiture of property and funds of illegal sites, but not players.

Establishes two lists for enforcement: list of licensed sites and list of illegal sites. Under UIGEA, payment processors have to block sites on the list of illegal sites and any site it knows to be for Internet wagering which isn't on the list of licensed sites.

First licenses go live 8 months after enactment. Unlicensed sites have to cease US-facing operations on same day, and return all US player funds (and turn over unreturned funds to the Secretary after another 8 1/2 months).

That about covers it. The basis I used was the two existing bills (King & Barton), which are very similar in their wording. (Barton obv took King's bill word-for-word and then changed it to poker only and modified some other stuff, or maybe it was the other way around.)

There are lots of provisions in these bills which have ambiguities in the wording. Once I dug into the nitty-gritty, I found tons of stuff which just wouldn't stand up to scrutiny. Hopefully I've weeded it all out so my bill doesn't carry any of it over (or add any such deficiencies), but I'll probably find some more before all is said and done. If any of you guys detect some, please chime in!

PX,

I regret that I haven't had a chance to read through your entire bill yet. But for this point, pushing for poker as a skill game under the tax code is definitely NOT what we want to do. Skill games, at least for amateurs, are taxed a la sweepstakes, and tax is owed purely on gross wins with absolutely no deduction for losses.

The best solutions I can think of would be:

1) Work within the existing ambiguous "session" framework and just define a poker session to be an entire year of play, justified by the mechanics of the game (frequent winning/losing days independent of long-term gain, even amateur poker players taking a long-term bankroll-based approach to the game as demanded by the structure of the game, removing very frequent >100% effective tax rates for amateur poker players, aligning with common sense). Assuming any political viability here may or may not be reasonable, however.

2) Push for poker as a skill game, but not a sweepstakes, sort of a unique and appropriate classification that allows annual netting of wins/losses. This would require new treatment under the tax code AFAIK.

Thanks. That's the input I needed. Can you point me to code or rulings that put skill games in the category of sweepstakes for tax purposes?

As you say, #1 may not be politically viable. My bill already has a definition of skill games which encompasses poker, so there may be a way to justifiably finagle #2.

I'm afraid I don't know the exact code or rulings in play here. I'm only aware of it because of how it works for Magic: the Gathering tournaments through a handful of personal sources including one tax preparer, and I think I've heard people say it's similar in chess. There doesn't seem to be anything written about it, though.

OK. I can probably use that handy-dandy interweb thing to find some info about it.

After extensive research into the tax code and IRS regulations, I think I've gone as far as I can in correcting the inequities for online poker in the provisions of my bill. Although I haven't resolved the whole issue, I've left the door wide open for further corrections at the point of regulations development by including provisions in my bill which:

1. Define wins and losses in online poker as based on a calendar day (rather than session-based), for the purpose of #3.

2. Require a site to do backup withholding (if any required by law) at the time of account withdrawals by a player, based on netted wins.

3. Require sites to do annual tax reports on players which include:
Gross wins and gross losses, based on #1.
Gross wagers.
Amounts of withholding in #2, and the corresponding amounts of netted wins.

4. Require sites to apply any tax withholding on nonresident aliens based on netted wins.

I also plan to include some statements in the Findings section to clarify the issue.

You can see these provisions in my latest docs. (See links above.) In fact, you can see all provisions for my bill now, except Findings. I have to review for nitty-gritty corrections, but it's basically done.

How I handled taxes on sites:

Opt-in states and tribes can assess a revenue tax up to 12%, based on wager by players located in their state/lands at the time of play.
For raked pots, the rake is split evenly among all players for purposes of assessing this tax.
Regulatory authorities of sites can assess a revenue tax on their licensees of up to 3%.
Taxed site revenue is net of cash incentives to players (bonuses, cash awards, tournament overlays, etc.).
No other taxes on sites allowed (other than individual and corporate income taxes, and the fees sites pay to cover the regulators' and federal oversight costs of operation.)

I spoke too soon. I found a way to make a simple amendment to the tax code to solve the whole income tax issue for poker players. See the latest Section 307 in my bill.