For those who fear HR 2267 because they believe that their state will opt out, I suggest that you read this article. http://www.majorwager.com/frontline-808.html

Note the paragraph which reads: "Without question the difficulty of getting money to and from offshore sites will increase since the amendment requires the identification and blocking of all accounts related to offshore gambling but that identification is happening now and the sites seem to be operating without issue. Moreover, there are plans in the works now which will allow Americans to fund and withdraw from offshore sites without using American banks at all. I won't get into it here to tip off the Feds but a reliable source has informed me that at some point in the near future, transactions will be done seamlessly which bypasses the U.S. banking system altogether, thereby making the UIGEA absolutely meaningless. In addition, PokerStars, which to date has tried to be as transparent with their accounting as possible to appease the U.S. will no doubt give the Feds the middle finger when they are essentially told that Party Poker, iPoker etc. are ok to operate in the U.S. but PokerStars are pariahs."

If this becomes reality, then many unlicensed sites will spring up to service opt out states. I wish I knew how it would operate.

Also, the author opines that PS and FTP are not very likely to obey US law if the US bans online poker or they can't get a license if the US licenses online poker.

Good article. I don't think PStars or FTP will get licenses, but I hope I'm wrong about that. It sounds like they aren't too worried about it either. I'm not a banker/financial guru, but is there any speculation what this non-bank transaction source will be? This sounds too good to be true!

Mail Cash, Money Orders or Traveler's Checks I guess?

very interesting read

can someone explain what the 25% witholding tax is that they speak of in the article?

Other than that, a very interesting article. Hope he's right

If you don't provide a casino with your Taxpayer ID Number (= social security number), they will withhold taxes on your $5K+ tournament wins. Same will apply to online poker under federal licensing and regulation.

why is sports betting not going to be allowed?


imo it's silly not to allow it. the government shouldn't be telling people that they can't gamble with their money so we're going to allow it ... except for sports betting.

???

so it's basically just to make sure that people pay their taxes essentially?

Doesnt have the votes to get out of committee with sports gambling attached, we found that out in 2008.

Yes.

Very interesting

It has nothing to do with logic and everything to do with the strength of those opposed to sports betting. For better or worse, that's democracy in action.

JP:

Thanks for posting this very interesting article. His comment about American players having to submit their Social Security Number to "Harrah's.com" and automatically have 25 percent deducted from any "major wins" points to a real possibility with legalized internet poker: In their zeal to generate revenue for Government coffers, the politicians grievously overtax the games making them virtually unbeatable for 95 percent of the players. It won't take long for most players to figure out that "these games really suck" and start looking to take their business elsewhere.

As for his contention that players will choose to play on overseas sites like Poker Stars and Full Tilt instead of Harrah's.com, won't players be exposing themselves to legal jeopardy since the United States will have made playing on an unlicensed overseas site a crime? If the Government and the IRS really want to get nasty about this, I could see them going after individual (American) poker players who are flaunting the law - especially if they think they can "make an example" out of a player who has substantial winnings. (I believe Professor I. Nelson Rose has it correct when he states that the politicians only interest in "legalizing" online poker is to get the taxes.) My fear is that the games will be so over-taxed and over-raked that nobody (with the exception of clueless idiots) will want to play them. (Hey, maybe that's the real reason why Stars and Tilt support these bills - they know our politicians will screw it up [by overtaxing] and drive more American players right into their arms. Brilliant!)

Former DJ

Here we go again. You again took one small, semi-related fact and exaggerated it into impending doom. The only difference is that you now have taken it to another level, where ALL federal legislation is somehow bad for us.

Fortunately, the rest of us know that the way forward is for us to stand up for ourselves.

How many times do we have to tell you that nothing in the legislation makes playing poker on unlicensed sites a crime?

Do you ever take off that tinfoil hat?

It really is interesting to see someone snatch onto any slightest hint of an issue and immediately ratchet it up to a full-blown "sky is falling" fear.

Current tax law for live poker tournaments DOES NOT automatically deduct 25% from every major win, nor would it to online play. What current tax law does say is that IF you fail to provide a SS or Tax ID number after winning more than $5K at a poker tournament, 25% is withheld in anticipation of your income tax bill. When you file your return, maybe you owe that 25% (in which case you have paid it), maybe you owe less (in which case you get a refund), maybe you owe more (in which case you owe more).

God that will surely kill the game, except that it hasn't.

Skallagrim

DJ, you are awfully pessimistic. I'm pessimistic too, but not that extreme. Yes, it is possible that your fears could be realized. However, I have more faith in the PPA.

Also, you miss the real optimistic part of the article that I quoted about a money transfer system that is fast and evades the US banking system. My guess is that he means that it does not use the US banking system except when the money departs or enters your banking account. This is a good sign that PS and FTP are not prepared to leave the US market under any circumstance.

IMO, PS and FTP view HR 2267 as mostly a defensive measure that they can follow if it becomes law. Unlike Skall and TE, IMO, these two companies will not abandon the US market if Congress prohibits online poker or passes a law that makes obeying the law unprofitable or impossible. Thus, they are developing money transfer methods that the DOJ cannot interrupt. This is a very optimistic sign, so have some faith and hope for the future of online poker.

I think Stars and Tilt are gone if they don't get licensed or are found explicitly unlawful. All evidence in other countries indicates they follow local laws.

The money transfer system would be awesome, but I'd like to hear more than rumor before I get too excited. We've heard about debit cards, new payment methods, etc since 2006 and none have panned out.

Something direct to your bank account may also lead to more player account closures over the long-term if my recollection of the UIGEA are correct. Isn't the first bank where money touches the US banking system responsible for determining if its from "unlawful internet gambling"? Wouldnt banks start shutting down customers if the system was making them the first bank? Maybe not, but some things to consider.

Well, TE, enough with the half-told tale. It takes both players and a service provider to make a game. Prosecuting every potential service provider without a license clearly would interfere with folks ability to play at unlicensed sites. If you think it only takes one to tango, then keep spouting that canard.

At last be as upfront about it as Skall once was when he opined he would through offshore sites under the bus if it meant passing a federal bill.

Nothing in the UIGEA makes playing poker on unlicensed sites a crime. Nothing in the Wire Act makes playing poker on unlicensed sites a crime. Gvoernment interference under both those Acts has hurt players' ability to get the best services the market could prrovide.

Yet, some "problem". whether shadey offshore sites or the need to "head off Prohibition", convinces both Harrahs and the PPA respectively that the situation requires government regulation.

EDIT: Or I guess you could be saying that the current status quo is viable.

Do you really think that winning a case in court is a permanent solution? It may be a long term one depending on how you define long term, but Congress isnt going to just say "Oh poker is legal now, cool".

It may end up being the best strategy at some point, but its just buying time.

You mean like how there are no offshore sports betting sites today?

I don't want them to fail. In fact, I'm counting on those sites to prosper. I want unlicensed online poker to bloom in the opt-out states, because that will help get those states to opt in while giving players a place to play during the opt-out period.

That's right.

Yep.

JP, you could be right and major sites like PS/FT still serve the US if they don't get a US license or if (unlikely) the US bans online poker at some point. IMO they would leave the US market, if not immediately then at some pint down the road.

All over the world countries are regulating or in some cases banning online poker/gaming. IG sites have to decide, either, they're going to operate according to laws/regulation or operate illegally, they can't do both.

As more and more jurisdictions regulate/license IG, international agreements or treaties between regulated jurisdictions will have to be set up. Counties will have to make sure licensed sites in there jurisdiction don't violate the law in another, and vice versa. It's the only way, otherwise whats the point of each country/region setting up their own IG regulation, if it can't be enforced.

If that happens, sites will find it difficult to move funds around the world and it wont be just the DOJ and US financial institutions that are after them. The major sites are licensed in many places now and IMO they wont jeopardize that and risk becoming "outlaws" around the world.

i see

Ok, then some firm, like Bodog, will risk becoming an outlaw in many countries. Such firm can operate from Antigua, or some other small nation, and bank from that locale. It is impossible to shut down international banking over Internet poker or gambling. Eventually, Internet poker or gambling firms will find a way to use the international banking system to move funds in contravention of nation's Internet gambling laws.

Yeah, Bodog or reasonable facsimile isnt going anywhere, but Stars and Tilt specifically would be gone. Nova is right, they are too far down the licensing road to start picking and choosing where they will or wont serve customers. As you have pointed out in the past as well JP (I think), at some point owners will want to IPO and exit. Cant really do that serving the US while unlicensed.

For the record, Skall has never said he would be willing to "through offshore sites under the bus if it meant passing a federal bill." Nor did I ever say I would be willing to "throw" them under a bus, assuming that is what you meant.

Skallagrim has said, and continues to believe, that while he would not like it, nor does he favor it, IF it takes excluding existing sites from getting a license to pass a Federal bill that otherwise provides for 1) open competition among sites both foreign and domestic 2) international player pools 3) reasonable, affordable taxation and rake and 4) comprehensive and effective consumer protection for players, THEN he would be willing under those circumstances to accept that result.

Skallagrim