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03-22-2011 , 05:28 PM

#26

PokerXanadu

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Quote:

Originally Posted by TeflonDawg

So they care more about seizing money rather than upholding the law? Again I ask, why can't they just ask Congress to update the Wire Act so that it is clear to ALL parties who is in the wrong so all parties can move forward from there? Why is this area of question still so murky when all that has to be done is a simple clarification? Do they (DoJ) really want their resources used in this fashion when they could be focused on an issue much more pertinent?

My guess is that it is more about an agenda to shut down US facing Igambling despite the law (and about seizing money). It is pretty obvious that the Wire Act was written to apply only to sports wagering, and both the Congressional record and the Federal 5th Circuit Court agrees. As we saw with the Reid bill, the conservative right wants the Wire Act to be amended to apply to all Igambling, but right now they probably can't get that as a stand alone. Hopefully we can get a license and regulate bill through Congress before they find a way to sneak it in as an attachment to something.

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03-22-2011 , 08:11 PM

#27

MauiPunter

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Quote:

Originally Posted by PokerXanadu

I like the effort, but not the bill itself.

Are changes to any of these provisions in the works?

Yes, it's a great basic concept - take peer-to-peer poker out of the definition of gambling, and license live poker and Ipoker. But the bill needs some fixing.

Yes. This is the first draft for the senate bill. Its a starting point. Thats why EVERYONE should be submitting testimony on the link on the OP. You need to specify these kind of things there. There is a section where you can submit changes to the bill. Please visit the link where testimony is accepted.

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03-22-2011 , 08:12 PM

#28

MauiPunter

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Quote:

Originally Posted by LetsGambool

Any changes to play on unlicensed sites or for offering unlicensed play? Its probably pretty likely illegal to offer play anyways given Hawaii's current stance on gambling.

Maui, its quite possible for a bill to pass with the state's cut being too high, I wouldnt assume this will be cut during negotiations. Usually that number would go up to get opponents on board.

This exactly. The numbers are outrageous to help get support from some of those who think only fiscally rather than about poker itself.

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03-22-2011 , 08:45 PM

#29

LetsGambool

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So why does this bill deserve player support if the numbers are nuts? I agree with submitting testimony to lower the take, but not to support the bill.

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03-22-2011 , 08:46 PM

#30

oldbookguy

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Wow, what I have promoted over and over for states, declare poker a skill game, exempted from gambling statues.

All can follow suit, no UIGEA or Wire Act violations, it is not gambling.

obg

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03-22-2011 , 08:51 PM

#31

LetsGambool

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Im not sure you advocated the state taking 20% of gross.

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03-22-2011 , 11:33 PM

#32

Lottery Larry

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Quote:

Originally Posted by LetsGambool

So why does this bill deserve player support if the numbers are nuts? I agree with submitting testimony to lower the take, but not to support the bill.

This:

Quote:

Originally Posted by oldbookguy

Wow, what I have promoted over and over for states, declare poker a skill game, exempted from gambling statues.

All can follow suit, no UIGEA or Wire Act violations, it is not gambling.

obg

What, you think the bill is all or nothing, LG? C'mon now. Take a shot- the only thing it can cost us is some wasted time.

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03-22-2011 , 11:39 PM

#33

Lottery Larry

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Quote:

Originally Posted by MauiPunter

Please, everyone, submit testimony here:

http://www.capitol.hawaii.gov/emailt...?measure=SB755

Done, sir. Good luck!

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03-23-2011 , 12:03 AM

#34

LetsGambool

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Quote:

Originally Posted by Lottery Larry

This:

What, you think the bill is all or nothing, LG? C'mon now. Take a shot- the only thing it can cost us is some wasted time.

Well, its why I asked earlier what it does to current sites. If this isnt going to effect current offerings, then your point is valid. If it drives out existing sites, not sure Hawaii players would be happy with a choice between two sites working to cover an exhorbant take by the state.

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03-23-2011 , 04:15 AM

#35

MauiPunter

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Quote:

Originally Posted by LetsGambool

This bill is a starting point. A conversation opener within the state government. This bill is going to go through a minimum of 4 revisions before it gets to the governor to be signed into law. NOW is the time to send in testimony and suggest changes. There is a part of the website link that allows you suggest changes.

The hearing is tomorrow (Wednesday) at 11:25AM (HST).

Please submit testimony NOW!!

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03-23-2011 , 07:36 AM

#36

PokerXanadu

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Quote:

Originally Posted by MauiPunter

I submitted this testimony:

Quote:

TESTIMONY ON HAWAII SB755

SB755 has great merit as a way to bring economic development to Hawaii through the licensing and regulation of the game of poker, our great American pastime, in both live play and Internet peer-to-peer gaming. However, several of the provisions of the bill need to be fixed to accomplish the bill’s goals.

1. The definition of peer-to-peer gaming needs to be expanded to include all forms of the game of poker.

While Texas Hold’em and Omaha are certainly the prevalent games today in the poker playing community, there are many other popular games of peer-to-peer poker that are equally games of skill. In addition, trends in poker change over time and the popularity of older or newer games may overtake the current player preferences.

By limiting the statutory definition of peer-to-peer gaming to just the two games of poker, you will be dating the law before it is even implemented, alienating a current sector of players who prefer other poker games and risking a loss of revenue at a later time as players find other venues that provide the gaming they now prefer.

A better statutory definition should cover all games of peer-to-peer poker, as in this comprehensive definition:

"Peer to peer gaming" means any of various card games known as poker in which the players in turn make tactical bets or drop out, the bets forming a pool to be taken either by the sole remaining player or by those remaining players who hold a superior hand according to a standard ranking of hand values for the game, conducted in a manner by which:

(1) Each player receives the player's personal winnings from the game;

(2) No other person or entity derives any proceeds based on the outcome of the game; and

(3) Play by licensees, directly or indirectly, or by computer or computer software, is prohibited.

2. More than two peer-to-peer Internet gaming licenses should be available.

If Hawaii offered Internet gaming licenses to all qualified applicants, instead of just two applicants, Hawaii could become both the national and the international preeminent hub for all Internet poker. This will bring much greater economic growth to Hawaii in the form of construction and permanent jobs, in addition to revenues from taxation of the licensees.

It would also create a much more competitive marketplace for licensed and regulated Internet poker, which would bring benefits to the players in the form of better gaming software, more competitive pricing and more player incentives. These are the main factors which attract players, and would thereby result in greater player participation in Hawaii-licensed Internet gaming.

3. Taxation of the licensees must be at a rate which does not deter player participation.

When government taxation of Internet poker licensees is excessive, this cost is passed on to the players in the form of higher game rake and lower player incentives. Both will have the effect of lessening player participation and therefore lessening government revenues as well. This is the same economic principle which is evidenced in state sales tax rates – there is a limit to the acceptable taxation percentage beyond which sales drop and therefore tax revenues suffer.

In this case of SB755, two forms of taxation are proposed – a $100M minimum annual fee on licensees, and a 20% wager tax. Both are excessive, but in different ways.

The annual fee, under my #2 above where multiple licenses are awarded, would become a fixed annual fee instead of determined by a competitive process. I am not familiar with the industry financials and therefore will not go beyond remarking that the amount of the annual fee must be set at a reasonable level to prevent over-taxation that will be detrimental to the competitiveness of the licensees in the marketplace.

The 20% wager tax is for certain an excessive tax that will kill any interest by Internet poker enterprises in becoming licensed in Hawaii. I think this tax, as proposed in the bill, comes from a misunderstanding of how revenues are generated from peer-to-peer poker play.

Unlike forms of casino gambling, where the house take is 100% of any losing wagers, in peer-to-peer poker, the house is only charging a small fee out of each game pot – usually a maximum of 5% of the total wagers, but also capped at $3-$5 per pot.

For example, you might have a poker game pot that reaches $250 in total player wagers, but the house collects just their $5 rake cap which is only 2% of the total pot. Under the 20% wager tax, the hosting site would owe a government tax of 20% of the total wager, or $50 in taxes on the $250 pot from which the site only collected $5.

This obviously is not the correct form of wager taxation for peer-to-peer Internet gaming. This percentage tax must be changed to be a tax on gross revenues of the licensees, rather than on total wagers. A 20% revenue tax, combined with a reasonable yearly licensing fee, would be an acceptable level of licensee taxation that would not cause the problems that would result under the taxation in the current proposed bill.

I believe that if Hawaii passes and implements SB755, with the changes I have outlined, Hawaii will become the world leader in the licensing and regulation of Internet poker, and garner benefits as a destination resort for poker players, as a vital hub for Internet poker businesses and through continuing tax revenues that do not burden the state residents.

Martin Shapiro
Florida State Director
Poker Players Alliance

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03-23-2011 , 08:00 AM

#37

PokerXanadu

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I also submitted these proposed amendments (red is deletions, blue is insertions):

Quote:

SB755 Proposed Amendments

AMENDMENT 1:
§ -2 Definitions. As used in this chapter, unless the context clearly requires otherwise:
"Chairperson" means the member of the Hawaii peer to peer gaming commission selected by the other members of the Hawaii peer to peer gaming commission.
"Commission" means the Hawaii peer to peer gaming commission.
"Department" means the department of business, economic development, and tourism.
"Executive director" means the executive director of the commission.
"Peer to peer gaming" means any of various card games known as poker in which the players in turn make tactical bets or drop out, the bets forming a pool to be taken either by the sole remaining player or by those remaining players who hold a superior hand according to a standard ranking of hand values for the game, the games of poker known as "Texas Hold 'em" and "Omaha" conducted in a manner by which:
(1) Each player receives the player's personal winnings from the game;
(2) No other person or entity derives any proceeds based on the outcome of the game; and
(3) Play by licensees, directly or indirectly, or by computer or computer software, is prohibited.

AMENDMENT 2:
[SIZE=3][FONT=Calibri]§ -9 License amount; disposition. The commission shall award a license to operate a peer to peer internet gaming operation pursuant to chapter 103D to any applicants who are deemed eligible by the commission to receive such license under this chapter. the two applicants who are the highest bidders for a license; provided that the minimum bid shall be $100,000,000. All licensee fees shall be deposited into the general fund.[/FONT][/SIZE]

AMENDMENT 3:
§ -10 Rules. The commission shall adopt rules pursuant to chapter 91 necessary for the purpose of this chapter."
SECTION 6. (a) The peer-to-peer gaming commission established under part I of this Act shall adopt rules pursuant to chapter 91 necessary to provide for the infrastructure necessary to operate internet-based peer-to-peer gaming from Hawaii.
(b) The rules established under subsection (a) shall provide, at a minimum, for the following:
(1) Issuance of licenses to not more than two operators of the infrastructure necessary to host the games pursuant to chapter 103D, Hawaii Revised Statutes, for a minimuman annual fee of one hundredfive million dollars per year and twenty per cent of total wagersgross revenues of licensees from player wagers;

-Martin Shapiro
Florida State Director
Poker Players Alliance

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03-23-2011 , 09:48 AM

#38

LetsGambool

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Quote:

Originally Posted by MauiPunter

Of course, I said as much, but if I lived in the state I would not be calling my reps telling them to pass this bill. I wouldn't want it to pass as is.

Thanks for writing and submitting that PX

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03-23-2011 , 01:16 PM

#39

Grasshopp3r

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If the taxation is too high for the business to work, guess what, there will not be any licenses issued. It is that simple.

It is also easier to negotiate the taxation and # of licenses after the rest of the framework is passed. The key is to get approval, then negotiate the price. Just like hookers, or so I hear.

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03-23-2011 , 01:26 PM

#40

PokerXanadu

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Quote:

Originally Posted by Grasshopp3r

If the bill passes as currently proposed, there won't be any negotiation later as the fees/taxes will be specified as law. Now, during the mark-up process, is the time to get the bill amended.

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03-23-2011 , 02:41 PM

#41

MauiPunter

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Quote:

Originally Posted by Grasshopp3r

THIS exactly! Thats how it works. 3 hours till meeting.

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03-23-2011 , 02:44 PM

#42

MauiPunter

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Quote:

Originally Posted by PokerXanadu

If the bill passes as currently proposed, there won't be any negotiation later as the fees/taxes will be specified as law. Now, during the mark-up process, is the time to get the bill amended.

We are VERY far from that stage. This is the judiciary committee for this hearing. Changes are made here and then, its voted on, then its passed to the Economic Development Committee which then makes changes and then votes and then its passed to the House which then makes changes and then is voted on and then its back to the senate which makes changes and votes on it, and then finally its onto the governor to be signed.

This whole process is going to take MOST of this year to get to the final stages. There are going to chances to give testimony and submit changes at EVERY step in this process except after it goes to the Governor.

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03-23-2011 , 02:50 PM

#43

tangled

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Quote:

Originally Posted by PokerXanadu

If the bill passes as currently proposed, there won't be any negotiation later as the fees/taxes will be specified as law. Now, during the mark-up process, is the time to get the bill amended.

+1

Whatever state goes first is going to set the precedent for fees. It is going to be tough to get a better revenue-sharing scheme in another state. Trusting that it will all work out is an idea I thought we gave up on in 2006.

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03-23-2011 , 05:35 PM

#44

MauiPunter

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Thanks for ALL the testimony!!

http://www.capitol.hawaii.gov/sessio..._03-23-11_.PDF

(this isnt the complete list)

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03-23-2011 , 06:26 PM

#45

oldbookguy

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Quote:

Originally Posted by LetsGambool

Im not sure you advocated the state taking 20% of gross.

Cheep!

Really. Consider here in WV, we has Racinos and more "mini" slot parlors than you can count (my town if 4K residents has 8-9 with 3-10 machines each!).

Each "mini" machine has a licenses of 10-15 thousand before the state takes 43% off the top profit and no, the 15G is not deducted from the gross first, it is in addition to.

This then is split between the license holder and the host bar.

Each then pays state and federal taxes on the remaining cut PLUS all upkeep, cameras, phones, ect from their cut.

Same goes for the racinos here in WV.

These are B&M costs, much more then an IGaming site.

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03-23-2011 , 08:00 PM

#46

PokerXanadu

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Originally Posted by MauiPunter

Thanks for ALL the testimony!!

http://www.capitol.hawaii.gov/sessio..._03-23-11_.PDF
(this isnt the complete list)

Except for the testimony of the poker players submitted online, the testimony for SB755 was about a bill (also SB755) to create an annual sales tax holiday.

There seems to be some confusion on the Hawaii govt web site as to the bill number for the poker bill. Doing a bills search on the govt web site for "Poker" turns up SB4 with the digest description of the poker bill, but with links to SB755 the poker bill. Then searching for SB4, it's about lottery & sweepstakes. Searching for and looking at SB755, it's about the sales tax holiday.

Very confusing. Was the hearing today really about the poker bill, or was it about the sales tax holiday bill?!

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03-23-2011 , 08:14 PM

#47

MauiPunter

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Quote:

Originally Posted by PokerXanadu

On this webpage:
http://www.capitol.hawaii.gov/sessio...billnumber=755

If you click on "View All Versions of the Measure":
http://www.capitol.hawaii.gov/sessio...=on&currpage=1

You will see the original bill was completely over written (on purpose). There are some political things going on, and this is a technique to "get things passed". I dont fully understand it, but it happens all the time.

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03-23-2011 , 08:16 PM

#48

Lottery Larry

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Quote:

Originally Posted by PokerXanadu

I submitted this testimony:

Questions:

"(2) No other person or entity derives any proceeds based on the outcome of the game; and"

Does this preclude rakeback?

"The definition of peer-to-peer gaming needs to be expanded to include all forms of the game of poker"

Eh, do you really think it's a requirement? Won't they most likely expand the offerings, once they get started, based on demand?
Or do you fear it would lock in, somehow, only the two listed games?

Good post overall, of course.
/nit

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03-23-2011 , 09:12 PM

#49

LetsGambool

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Quote:

Originally Posted by oldbookguy

Sort of confused what you are advocating or why you quoted my post? PX posted why the economics make no sense.

EDIT: Also I hate comparisons to slot machines and racinos as they aren't beatable games. Sure the economics might work as long as the game isn't beatable, but not really helpful to us.