Here's Sen. Kyl and Rep. Bachus' letter to Congress concerning HR 5767:

April 22, 2008

Dear Colleague:

For the past year, the Internet gambling lobby and its congressional supporters have worked hard to gut the Unlawful Internet Gambling Enforcement Act of 2006 (“UIGEA”). Most recently, Representatives Barney Frank and Ron Paul introduced H.R. 5767, which would prohibit federal agencies from issuing any regulations that would give effect to UGIEA.

The Frank-Paul bill’s prohibition on issuing Internet gambling regulations would eliminate the most effective enforcement tool available for stopping illegal online gambling. The bill would result in the de facto repeal of federal and state gambling control laws and would likely result in a massive expansion of gambling on the Internet.

We urge you not to be deceived by the claims of the Internet gambling interests. During this Congress alone, offshore Internet gambling enterprises have paid millions of dollars to lobbyists in an effort to overturn UIGEA. For example, according to a recent Roll Call article, those trying to thwart UIGEA are “shelling out eye-popping sums for K Street’s top talent” (3/31/08, “Internet Gambling Ban Back on Table”).

The Internet gambling industry, which was making billions of dollars a year taking illegal bets from Americans, was furious when UIGEA was enacted into law after a decade of congressional debate and development. To enforce existing federal and state laws banning Internet gambling, UIGEA required the government agencies with the relevant knowledge and expertise — the Federal Reserve and the Department of Treasury, in consultation with the Department of Justice — to issue regulations to enforce existing federal and state laws that make Internet gambling illegal. Immediately after Congress passed UIGEA, many online gambling outfits closed their doors because of the prospect that existing laws would finally be strongly enforced.

Now, in an effort to recapture billions of dollars in illicit profits, Internet gambling interests are trying to convince Congress that the regulations will be ineffective. But, if the regulations mandated by UIGEA will be ineffective against illegal online gambling, why are Internet gambling interests spending millions of dollars to effectively repeal UIGEA?

The reason: UIGEA is already beginning to cripple them. The Annenberg Public Policy Center, which conducts the annual National Annenberg Survey of Youth, found that weekly Internet gambling among college-aged youth declined nearly 75% between 2006 and 2007, falling from 5.8% to 1.5% just one year after the enactment of UIGEA. Internet gambling is highly addictive, as it brings the casino into the home and office, and it is particularly attractive to minors and young adults. While no law enforcement is perfectly effective, the Annenberg data shows that passage of UIGEA, which called for financial regulations to enforce Internet gambling prohibitions, has already significantly reduced the prevalence of Internet gambling in the United States, even though regulations required to fully implement the law have not been finalized.

Please oppose any efforts to rollback UIGEA or to delay finalization of the regulations.

Jon Kyl
Ranking Member
Senate Judiciary Committee

Spencer Bachus
Ranking Member
House Financial Services Committee Subcommittee on Terrorism, Technology and Homeland Security

That's the best they could do?!?!?!? LOL at our opponents for pointing out the solid lobbying (this letter) and the fact that banks don't want to do this (FoF/FRC).

Just an incredible level of delusion those two have...

Caffeine's addictive too. Should we expect the Unlawful Starbuck's Drinking Enforcement Act next Congress? Legislating morality is comical.

Looks like we hurt them pretty bad.

"result in a massive expansion of gambling on the Internet."

Please let this eventually come to pass. I would celebrate like nothing I've ever celebrated.

The religious right has ruined the Republican Party. Now they sound like Democrats.

The religious right IS the Republican party. They are the ones who control it and who have all the power.

They love to quote Annenburg studies, and in the past they've shown to slanted heavily in favor of the religious right. Their statistics take numbers totally out of context, such as their connection that 15 million americans have a gambling problem due to the fact that 15 million americans had gambled on SOMETHING in the last year or 2. (Forgive me on the exact facts/numbers as I'm quoting from memory, but I am materially correct).

Most officials and the general public do not however know how slanted the Annenburg institute is. I think it may prove highly beneficial to highlight this fact in a very public forum so that this tool is eliminated from their arsenal. Without the ability to quote constructive studies and statistics, they begin to sound even more like the lunatics that they actually are.

If there is a way to discredit or illuminate the Annenburg institute for what it actually is, I'd love to hear it.

they did get 2 things right and raise one good question.

1) I don't think there's any question the UIGEA has slowed things down. Matter of fact, I'm 100% positive the flow of money has significantly slowed down.

2) "young adults" are the people most effected. You don't see millions of 40 year olds (who aren't in the gambling business) out in the street protesting because they can't gamble online. Most adults have kids, careers, etc that make this a non issue.

the good question....

- If the UIGEA is so ineffective, why are millions being spent to overturn it? that doesn't intuitively make sense. If it was truly ineffective, just let it be.

That's a good question. Anyone got a good answer?

Wow it is amazing that in all of that, they never once mentioned the impact on the banking industry. It almost would have been better if they said nothing than put out this statement, which will have anyone who has any knowledge of the issue easily identifying the utter weaknesses in their position.

Sure. One issue is that the legal status of online poker is ambiguous. While federal case law holds that the Wire Act applies only to sports betting, the Justice Dept. says it applies to all Internet gaming, including poker and even horse racing (despite the Interstate Horse Racing Act). As a result, the DoJ threatens anyone and everyone associated with offering online poker.

As UIGEA doesn't define unlawful Internet gambling, the concern is that banks will "overblock" and not permit transactions related to online poker. After all, banks are fairly risk averse, and have little desire to run afoul of the DoJ.

The other issue is that we lost the HR 4411 vote 317-93 (and HR 4411 was watered down before it became UIGEA -- it was worse). Following this, Goodlatte promised to finish in 2007 what he started in 2006. This was a wake-up call that we have to fight for our rights if we're going to keep them. Keep in mind that Kyl and Bachus aren't only talking about sites in their letter. They were also referring to PPA, and PPA is strongly focused on repealing/amending UIGEA and updating the Wire Act.

http://www.annenbergpublicpolicycenter.org/

I doubt playing the man not the ball will help much though they do a good line of research suggesting that labelling condoms that they can be effective against HIV transmission would make little or no difference to use which is a bit suss - set up as it was to get this result rather than assess say whether the information is helpful or truthful.

The ball: The survey quoted is of just 900 young people covering 14-22 in all states. Frankly the sample size is pathetic. The methodology is dialling numbers randomly until they hit someone in the age group which sounds OK in some ways but consider that they are surveying college age Internet usage. Skype? What Skype? Twitter? Social networking? I suspect there has been as big a change in communications technology used by this age group in the past 2 years as there was a change in gambling habits.

This guess is supported by the selective data chosen, they chose Weekly Internet gambling and weekly card playing for cash to highlight. The monthly showed an insignificant drop and they don't even mention the daily or potential problem gambler which suggests to me again no change. Interestingly the weekly card playing for cash dropped more than the Internet weekly number, suggesting it is fashion or sample change not the effects of UIGEA, after all the kitchen table was not covered by the act and dropped more. Why?

There is also the possibility that those refusing the survey or horror of horrors the proportion of young people under reporting their usage at a period where there has been increased ambiguity about legality might have changed.

My other problem with the survey is that they have gender and age breakdown but nothing else, they have nothing on income, family background employment or study status. There has been no assessment or weighting for these factors so it is impossible to tell if the small sample is consistent with last years. Last year had about 35 18-22 yr olds reporting weekly gambling usage this year about 10, the drop is about half a person per state covered.

Now IF what happened was that their sample picked up significantly less students living on campus/halls because say many have moved from fixed lines/mobiles to skype and social networking we would not know but their social environment would be far less conducsive to weekly gambling either on or off line.

Having said that I suspect UIGEA has had some effect, also fashions change in this age group, hey they may be spending less time gambling and more time on social networks, that would account for the change at the weekly level but a non significant change in other frequencies. The trouble is with 900 surveyed and no data on who/types interviewed we cannot tell.

The contrast with the far more thorough, larger and more expensive UK Gambling prevalence survey is stark. My response to this type of mini potentially misleading survey would be to call for real research and the funding it needs. There probably has been a drop (though not in overall numbers of players online incl foreigners) but this research is just not reliable enough for big claims re this age group.

i really believe even the person who writes that letter knows it is bullsheit. how else are they be able to so closely skirt the line that separates sounding even-handed from using omission, straw mans, and bad stats to make a case?

the real reason imo for congress not to repeal uigea is if they do it now, then a bunch of offshore companies will get a firm grip on the american poker business. or they can wait until the day they want to allow harrahspoker.com and bellagiopoker.com, and leave online gambling in the doldrums until then.

More people are playing online poker than ever. FT and PS have more players than they ever have. If the UIGEA was effective, it was only at first. Prohibition does not work, even watered-down-that-really-isn't prohibition.

Not sure what the numbers were pre-UIGEA but FT and Stars both got traffic from Party and other sites that closed their doors to the US.

It would be nice to see some real industry stats to guage the state of the industry.

Numbers of cash game players daily peaks:Stars-Tilt-Party

Prior to UIGEA (Oct. 8, 2006 - Oct. 12, 2006) 9,713 4,623 10,746
Prior to Neteller closing (Jan. 13, - 17 - 2007) 14,781 7,480 8,595
Neteller closed to US ( Jan. 19 - 23'07) 12,636 5,797 8,320
March 1st - 5th, 2007 Average 13,300 6,239 10,894
April 1st - 5th, 2007 Average 12,154 6,720 10,963
June 1st - 5th, 2007 Average 13,458 7,969 8,971
2007 WSOP TV (July 16-20 ) 13,209 8,981 8,232
August 15-19, 2007 Average 13,279 8,292 7,433
WSOP ME on TV (Sept 1-5, 2007) 14,087 6,266 9,392
1 year UIGEA (Oct 1-5 of 2007) 14264 7682 8391
November 1st-5th, 2007 16310 8109 7865
February 1st - 7th, 2008 22161 11857 9092
March 1st - 7th, 2008 22406 11129 9159

Stars is 2x as big pre UIEGA, and recovered from NT closing in 8 months and is stronger than ever. Tilt is 3x bigger and recovered from NT faster. Party is almost back to pre UIEGA strength. This isn't counting tourney players. (Stars is having record turnouts for their Sunday MTTs though)

Epassporte pullout:
Pokerstars 22,613 prior pullout & 22,843 after = 1% increase
Fulltiltpoker 9982 prior pullout & 9975 after pullout = ~ 0% change
UlB 2912 prior pullout & 2204 after pullout = 24% decrease
Absolutepoker 1941 prior pullout & 1952 after pullout = .5% increase
Micro 1802 prior pullout & 1434 after pullout = 20% decrease
Cake Network 1927 prior pullout & 1809 after pullout = 6% decrease

Oh, cash game numbers are from PokerScout and the chart I got them from is on Compatible Poker's USA page. Bottom part is from Comp as well

im drunk and read this as homerun 5757 ab wonder who the **** just hit 4800 hmrs

Post of the Year! Now go back to sleep.

Wouldn't the relevant statistics be how many Americans were playing?

How are those numbers based? Is it players or players at the table( a person 8 tabling counts 8 times)?

I don't really care how many people from the US are at my table. But I hope if someone from the US wants to play, they can.

In the cases of that list, it's the average daily peak during the time frame. 20K-22K-24K over a weekend would be 22K. And yes, a multitable is counted as many times as they are on. Private/Beginner tables do not count.

Obviously. But what we wee discussing was using these numbers to determine how effective the UIGEA was in reducing the number of American's playing. I don't think these numbers mean much. If they are growing it is likely due to growth in other countries.

Pokersitescout explains its methodology if youre that interested.