Poker News

UIGEA Regulations Officially Delayed Six Months

Online poker players in the United States have a lot to be thankful for this holiday season. On Friday, CNBC and the Associated Press confirmed that U.S. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke had granted requests to delay the mandatory compliance date of the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) by six months to June 1st, 2010.

Word of a potential delay first broke on Wednesday from Interactive Media Entertainment and Gaming Association (iMEGA) Executive Director Joe Brennan. However, no official comment had been handed down from Geithner, Bernanke, the Poker Players Alliance (PPA), or the office of Congressman Barney Frank (D-MA). Around 12:15pm ET on Friday, cable station CNBC ran a segment touting the successful six-month delay and an Associated Press article had hit cyberspace 15 minutes earlier.

The six-month delay will take the internet gambling industry to June 1st, 2010. In the interim, the theory goes that sensible legislation governing the industry in the United States will be passed. Frank introduced HR 2267 back in May. The bill, which has attracted 63 co-sponsors, establishes a full licensing and regulatory framework for online gaming outfits to solicit U.S. customers.

An Associated Press article sourced both the Treasury and Federal Reserve as saying that the UIGEA’s regulations would indeed be pushed off until mid-2010. The news service explained, “The delayed rules would curb online gambling by prohibiting financial institutions from accepting payments from credit cards, checks or electronic fund transfers to settle online wagers. The financial industry complained that the new rules would be difficult to enforce because they did not offer a clear definition of what constitutes internet gambling.” Since the UIGEA was approved in 2006, a Third Circuit Court of Appeals ruling stated that the legality of internet gambling may depend on state law, similar to the way that the brick-and-mortar version is governed.

Next Thursday, December 3rd, the House Financial Services Committee will hold a hearing discussing the merits of HR 2266 and HR 2267. The former bill delays mandatory industry compliance with the UIGEA regulations by one year to December 1st, 2010. Its relevance given Friday’s confirmation that the regulations would be pushed back six months is up in the air. The hearing kicks off at 10:00am ET in Room 2128 of the Rayburn House Office Building. Witnesses for the informational hearing have not yet been announced and the proceedings can be followed via a live webcast accessible from the Committee’s website.

Potential overblocking by credit card companies like Visa and MasterCard led the PPA, two horse racing organizations, and members of Kentucky’s Congressional delegation to petition Geithner and Bernanke, urging that the regulations of the UIGEA be shuttled back to December 1st of next year. PPA Executive Director John Pappas told Poker News Daily, “Many believe what you’ll see is overblocking of legitimate transactions. It’s not a good thing for players. It won’t just affect poker; it’ll affect horse racing, lotteries, and other online entities.”

Around 1:00pm ET, the PPA confirmed the news. The organization’s Chairman, Alfonse D’Amato, commented in a press release, “The PPA is extremely pleased with the decision by the Federal Reserve and Treasury to grant the six month extension. This is a great victory for poker, but an even greater victory for advocates of good and fair public policy.”

Stay tuned to Poker News Daily for the latest news and events from Capitol Hill.

UIGEA Delayed

Report: UIGEA Regulations Postponed Six Months

The regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) have been delayed six months from December 1st, according to Interactive Media Entertainment and Gaming Association (iMEGA) Chairman Joe Brennan.

Neither U.S. Treasury Secretary Timothy Geithner nor Federal Reserve Chairman Ben Bernanke had made any official comment regarding a six-month delay at press time. The two government officials received petitions to stay the UIGEA’s regulations by one year in letters filed by the Poker Players Alliance (PPA), National Thoroughbred Racing Association, the American Greyhound Track Operators Association, and members of Kentucky’s Congressional delegation. Congressman Spencer Bachus (R-AL) and Senator Jon Kyl (R-AZ) asked the two officials to uphold the original December 1st industry compliance deadline in a dissenting opinion.

The news comes one week ahead of a hearing in the House Financial Services Committee regarding two internet gambling bills introduced by Congressman Barney Frank (D-MA) in May that would alter the landscape of the industry in the United States. The first, HR 2266, would have postponed the regulations of the UIGEA by one year to December 1st, 2010. Its viability given today’s news of a likely six-month postponement is up in the air. The measure had attracted 53 co-sponsors on both sides of the aisle.

HR 2267, claiming 63 co-sponsors, creates a full licensing and regulatory framework for the internet gambling industry in the United States. It marks Frank’s latest attempt to undo the UIGEA, which was passed in 2006 after being attached to an unrelated port security measure at the prompting of then-Senate Majority Leader Bill Frist (R-TN). In the Senate, the SAFE Port Act was passed by unanimous consent.

On the hearing next week, which will be held at 10:00am ET in Room 2128 of the Rayburn House Office Building on Thursday, Safe and Secure Internet Gambling Initiative spokesperson Michael Waxman told Poker News Daily, “Chairman Frank is clearly indicating his commitment to switch the government’s position on Internet gambling, replacing attempts to prohibit the activity with a regulatory framework where consumers are protected. Chairman Frank’s commitment is further reinforced by scheduling this hearing and taking up this issue on the heals of the push for financial industry reform, which has been the committee’s exclusive focus the last six months.”

The six-month window will take the internet gambling industry to June 1st, right before election season in the United States in 2010. While issues like health care and a sagging economy have taken center stage since late 2008, internet gambling may finally see its day in the sun. Brennan explained his thoughts on the breaking news: “It’s encouraging that you’ve had this stay on the compliance, but it’s unfortunate that it took this long. We should all hope that in the next six months, a bill that already has 63 co-sponsors can be heard.”

To be clear, no official comment from the Treasury or Federal Reserve was available at the time of writing. With December 1st occurring next Tuesday, a stay likely had to be granted today or Monday, November 30th given the Thanksgiving holiday in the United States. Word breaking on Black Friday was also a possibility.

Stay tuned to Poker News Daily for the latest on this developing story.

No Markup Planned for December 3rd Internet Gambling Hearing

On Tuesday night, it was revealed that a hearing will occur next Thursday, December 3rd in the House Financial Services Committee. Taking center stage are two bills related to the Unlawful Internet Gambling Enforcement Act (UIGEA).

Poker Players Alliance (PPA) Executive Director John Pappas told Poker News Daily that no markup will occur at the hearing, which will be purely informational in nature: “It’s just an informational hearing. I don’t think the witnesses have been set yet and we’ve been in touch with the Committee about that. The PPA has been building the groundwork for this hearing for some time now. We look forward to it.” A representative from the House Financial Services Committee confirmed that no markup will occur. The hearing will take place in Room 2128 of the Rayburn House Office Building at 10:00am ET.

Depending upon the outcome of the internet gambling hearing next Thursday, either HR 2266 or HR 2267 could be scheduled for markup, potentially within a week. Congressman Barney Frank (D-MA) introduced both bills back in May. HR 2266 delays mandatory financial services industry compliance with the regulations of the UIGEA by one year to December 1st, 2010. It has attracted 53 co-sponsors on both sides of the aisle and is dubbed the Reasonable Prudence in Regulation Act. As it stands now, the financial services industry must fall into line with the UIGEA by Tuesday, December 1st.

When asked if the December 1st compliance date passing makes HR 2266 moot, Safe and Secure Internet Gambling Initiative (SSIGI) spokesperson Michael Waxman told Poker News Daily, “It could be unless Frank decides that the financial services sector needs a reprieve. Many companies have already expressed concern that the implementation of the law will be burdensome. I believe we’ll hear back from them again as they are forced to abide by the rules.”

HR 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act, establishes a full licensing and regulatory framework for the internet gambling industry in the United States. It boasts 63 co-sponsors and, when coupled with a tax bill introduced by Congressman Jim McDermott (D-WA), could bring in as much as $42 billion over a 10-year period, according to a study by the Joint Committee on Taxation.

Many in the industry have pondered the status of the internet gambling and online poker industries in the United States after December 1st. Interactive Media Entertainment and Gaming Association (iMEGA) Chairman Joe Brennan told Poker News Daily, “Poker players are going to have to get used to the kind of speed of deposit and withdrawal that online sports betters have had to get used to. To my knowledge, all of the top sports books have moved their processing offshore. I don’t expect there to be the wealth of electronic transfer methods and you’re probably going to see an increased use of checks drawn on international banks.”

One possible outcome in the post-December 1st internet gambling industry is overblocking by credit card companies like Visa and MasterCard. The 12-letter term began popping up earlier this year, when legal online lottery purchases in North Dakota and New Hampshire were denied. In essence, credit card companies could disallow any transaction that appears to look remotely like internet gambling in an effort to comply with the 2006 law. Overblocking also led several members of the Kentucky Congressional delegation to petition U.S. Treasury Secretary Timothy Geithner seeking the delay of UIGEA regulation enforcement. The group fears that legal online wagering on horseracing could come to a screeching halt as a result.

The PPA, National Thoroughbred Racing Association, and the American Greyhound Track Operators Association issued a letter to Geithner and Federal Reserve Chairman Ben Bernanke seeking delay of the UIGEA’s regulations. As of the time of writing, the request had not yet been acted on.

Stay tuned for the latest from Capitol Hill right here on Poker News Daily.

UIGEA Hearing Scheduled for December 3rd in Financial Services Committee

In breaking news from the House Financial Services Committee, a hearing to discuss two pieces of legislation related to the Unlawful Internet Gambling Enforcement Act (UIGEA) will be held on Thursday, December 3rd at 10:00am ET.

Interested online poker players can check out the hearing via a webcast found on the official website of the Committee. The hearing, which will be held in Room 2128 of the Rayburn House Office Building, will cover two pieces of legislation introduced by Committee Chairman Barney Frank (D-MA), HR 2266 (Reasonable Prudence in Regulation Act) and HR 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act. The longtime Massachusetts Congressman introduced the measures on the same day in May.

On December 1st, two days prior to the hearing, the financial services industry in the United States must come into full compliance with the regulations of the UIGEA, which were officially approved as midnight rules by the outgoing Bush administration back in January. Several days ago, Poker Players Alliance (PPA) Executive Director John Pappas told Poker News Daily that he expected a hearing to come soon: “Chairman Frank has told us that he intends to have a hearing and mark up HR 2267 as soon as he’s done with financial regulation reform bills. We think it might be in January, but there’s a good chance we could have a hearing in December. It depends on the Congressional schedule.”

Christmas has come early for the PPA, which has lobbied on several fronts for HR 2266 and HR 2267 to be marked up. It is unclear at the time of writing as to whether any markup will occur, as the proceedings next Thursday appear to be purely informational in nature. HR 2266 delays the regulations of the UIGEA by one year to December 1st, 2010. As it stands now, the industry has merely a week to brace for their effects on payment processors. HR 2266 has 53 co-sponsors on both sides of the aisle, including Steve Cohen (D-TN), Jim McDermott (D-WA), Ron Paul (R-TX), and Robert Wexler (D-FL).

Frank’s other bill, HR 2267, has 63 co-sponsors and creates a full licensing and regulatory framework for internet gambling and online poker outfits to solicit real money customers from the United States. A companion bill introduced by McDermott in May, HR 2268, taxes online gaming operators 2% of deposits. Although several estimates have been made as to how much revenue internet gambling could bring to the United States Government, the most recent study, which came from the Joint Committee on Taxation, pinned the figure at $42 billion over a ten-year period.

Witnesses for the December 3rd hearing and their prepared testimony were not given on the House Financial Services Committee website at the time of writing. Next Thursday will mark the first major movement on the internet gambling front in the Financial Services Committee since September of 2008, when Frank’s HR 6870 was approved by a 30-19 margin. The bill sought to clarify what activities were permissible under the UIGEA. It was not acted on during the 110th Congress and therefore was declared dead entering 2009.

A total of 41 Democrats and 29 Republicans make up the Financial Services Committee. The latter are headed by Spencer Bachus (R-AL), who, along with Senator Jon Kyl (R-AZ) recently authored a letter to U.S. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke urging that the regulations of the UIGEA be enforced on December 1st as scheduled. Recently, members of the Kentucky House delegation implored Geithner and company to delay UIGEA regulation enforcement due to overblocking by credit card companies, potentially stunting legal online horseracing wagers.

We’ll have more information on the December 3rd hearing as it unfolds right here on Poker News Daily.

Six Kentucky Congressmen Support Pushing UIGEA Deadline Back One Year

Spencer Bachus, Jon Kyl Issue Letter to Timothy Geithner, Ben Bernanke

Recently, two high-powered, longtime opponents of internet gambling issued a letter to Federal Reserve Chairman Ben Bernanke and U.S. Treasury Secretary Timothy Geithner calling for the compliance date of the Unlawful Internet Gambling Enforcement Act (UIGEA) regulations (December 1st) to be enforced.

The date is now 10 days away and approaching rapidly. Last month, the Poker Players Alliance (PPA) teamed up with the National Thoroughbred Racing Association and American Greyhound Track Operators Association to issue a letter to the same two government officials. Following the letter by the PPA was one authored by 19 Congressmen belonging to the House Financial Services Committee, of which Barney Frank (D-MA) is the Chair.

Congressman Spencer Bachus (R-AL) and Senator Jon Kyl (R-AZ) explained in their own letter, “We strongly oppose this request and believe there is no justification for delaying the compliance deadline of the UIGEA regulations.”

The letter, dated earlier this month, outlines the passage of the UIGEA and the approval of its regulations, which went into effect on January 19th as so-called “midnight rules” by the outgoing Bush administration. The Republican duo notes, “If the Final Rule represented an ‘unreasonable burden on regulators and the financial services industry,’ as certain other Members have claimed, then the Treasury Department and the Federal Reserve could have reconsidered the regulations.” The letter adds that the Truth in Lending Act, whose regulations were issued in August, accommodated the UIGEA.

All told, Kyl and Bachus, staunch opponents of internet gambling, give their stance on the letter writing campaign by the PPA and Financial Services Committee members: “This is a blatant attempt to circumvent the democratic process by influencing the Treasury Department and the Federal Reserve to take action that cannot possibly be enacted by Congress.” On Capitol Hill, the United States legislative body is in the midst of a debate about massive health care expansion.

Two bills, both introduced by Frank, have the potential to change the landscape of the internet gambling industry in the United States as December approaches. The first, HR 2267, establishes a full licensing and regulatory framework for the online gaming outfits in the United States. The measure received its 63rd co-sponsor last week after its introduction in May. The second piece of legislation, HR 2266, delays mandatory compliance with UIGEA regulations by one year to December 1st, 2010. HR 2266 is up to 53 co-sponsors on both sides of the aisle. The House Financial Services Committee has scheduled neither HR 2266 nor HR 2267 for markup.

The letter from the two lawmakers concludes, “Simply delaying the compliance date serves no interest except that of the internet gambling enterprises that have long evaded American gambling laws and will continue to do so until effective enforcement is in place.” Kyl is a third term Senator from Arizona and the current Senate Minority Whip. His counterpart in the Western state is also a Republican, former Presidential candidate John McCain. Bachus was elected to the House of Representatives in 1992 and is the Ranking Member of the Financial Services Committee, which includes 30 Republicans and 42 Democrats.

Neither Geithner nor Bernanke has responded to any of the three letters as of the time of writing. John Pappas, Executive Director of the PPA, told Poker News Daily that a January markup of HR 2267 is a possibility, although no timetable has been set in stone. Blocking of legal online gambling transactions led the two horse racing organizations to become involved. Similarly, in North Dakota and New Hampshire, major credit card companies denied legal online lottery purchases due to “overblocking.”

The effect that the December 1st deadline will have on the industry is not yet known. Stay tuned to Poker News Daily for the latest poker legislation headlines.

CNBC Closing Bell Tackles Internet Gambling

The Global Gaming Expo is currently unfolding from Las Vegas and, as part of its coverage of the event, CNBC’s “Closing Bell” aired a four-minute segment entitled, “Odds Favor Online Gambling?”

Two industry experts joined CNBC “Closing Bell” host Melissa Francis on Thursday, Andrew Parmentire of Height Analytics and David Katz, an Oppenheimer gaming analyst. The former began the discussion, which did not take in a debate form, but rather featured both parties agreeing that legalized internet gambling in the United States is inevitable. Parmentire explained, “Barney Frank has put a bill out there and the stars are lining up in a lot of ways. Harrah’s has shown that they have an online strategy, Congress and states are in desperate need for money, and $50 billion can offset a lot of social programs that Democrats are pushing these days.” The proposed health care initiative, for example, could come with a price tag approaching $1 trillion.

Katz told CNBC viewers, “Gambling in the U.S. has become a far more acceptable consumer product than it was five or ten years ago. That said, we really are much more focused on the publicly traded companies and that would be the brick-and-mortars like Harrah’s as well as the game providers and the technology companies that support those industries.” Katz added that Harrah’s has become a major proponent of licensing online gaming. The Las Vegas-based private company recently launched Harrah’s Interactive Entertainment (HIE), based on Montreal, to oversee its online brand, with former Party Gaming CEO Mitch Garber as its lead figure.

Harrah’s inked an agreement with 888, the parent company of Pacific Poker, to fill its online gaming needs. 888 is a publicly traded company in London, where it can be found under the same three-number acronym. Katz explained that with casinos slowly reaching their limits in the live space, the switch to the Web is inevitable: “If you go to the Bellagio, they have a couple of hundred seats to sit in, so there’s a physical constraint. If you look at the number of states out there that are considering legalizing gaming, they’re going down every year. There’s a finite opportunity for the brick-and-mortar guys to expand in the United States and at some point, they have to start thinking globally.”

The CNBC spot occurred about two weeks prior to December 1st, the date by which the financial services industry in the United States must fall into line with the Unlawful Internet Gambling Enforcement Act (UIGEA). The Poker Players Alliance (PPA), the industry’s main lobbying voice, issued a letter to Federal Reserve Chairman Ben Bernanke and U.S. Treasury Secretary Timothy Geithner to postpone the date by one year while effective legislation can be crafted. However, the two government officials have not yet responded.

The UIGEA was passed during the waning moments of the 2006 Congressional session at the direction of former Senate Majority Leader Bill Frist (D-TN). It was approved by a 3:1 margin in the House of Representatives and by unanimous consent in the Senate after being attached to the SAFE Port Act. The Third Circuit Court of Appeals recently ruled that the UIGEA did not in and of itself make any sort of internet gambling activity illegal. Instead, the legality of an online activity depends on a player’s jurisdiction. Parmentire candidly explained, “There is a lot of anger as to how this happened in 2006.” The PPA has expanded its membership from 50,000 in 2006 to over 1.2 million today.

Concurrently with the Global Gaming Expo, 2009 World Series of Poker (WSOP) Main Event champion Joe Cada, who represents the online poker room PokerStars, has spread goodwill by appearing on mainstream outlets like the “Late Show with David Letterman,” ESPN’s “SportsCenter,” and USA Today. Cada, an online poker pro, became the youngest winner of the $10,000 buy-in tournament ever at age 21, breaking Peter Eastgate’s record of 22 years-old set in 2008.

Online Poker May Be Coming to Quebec, British Columbia

Quebec, British Columbia, and the four Atlantic provinces of Canada may soon see legalized and regulated online poker headed their way, according to an article that appeared in the Montreal Gazette newspaper.

Loto-Québec has submitted a proposal to the province’s government “for an internet wagering initiative in partnership with British Columbia and the four Atlantic provinces, which already have limited online gaming,” according to the Canadian news outlet. Loto-Québec claims that Canadians are currently placating more than 2,000 offshore internet gambling outfits, sending nearly $700 million in wagers away from the country each year, a number that will likely top $1 billion in three years.

Quebec plays home to the Kahnawake Gaming Commission (KGC), which is located on the Indian reservation of the same name outside of the city. Although the KGC is not currently linked to Loto-Québec’s endeavors, the organization’s Chairman, Dean Montour, told the Montreal Gazette, “The fact that Quebec is now entering the online gaming business in partnership with the Atlantic provinces and British Columbia is an indication that the industry is thriving and is gaining wider acceptance. For over 10 years, the Kahnawake Gaming Commission has had a positive working relationship with online gaming regulators throughout the world and looks forward to sharing its knowledge and experience with the Régie des alcools des courses et des jeux.”

The KGC is fresh off completing the investigating surrounding Ultimate Bet, an online poker site that recently changed its name to UB.com. In a September report, the KGC continued to finger former World Series of Poker (WSOP) Main Event champion Russ Hamilton as the mastermind behind the scandal and noted that 31 other individuals were involved, but would not identify who they were. The KGC also issued over 100 screen names associated with the misgivings, a list that included “nvtease,” “Sleeplesss,” and the infamous “NioNio.”

Given the seemingly “Wild West” atmosphere of the internet, Canadian control of the online poker industry will likely bring a considerable amount of validity: “The integrity of the online games often is dubious, as it was for some lotteries and VLTs before Loto-Québec was mandated by the government to funnel them into controlled circuits and oversee them,” noted Loto-Québec President and CEO Alain Cousineau. Loto-Québec added $1.4 billion to the bottom line of the province during the last fiscal year.

Potentially adding to the pressure of Loto-Québec to legalize and regulate the internet version of the age-old card game is a move towards licensing in the United States, spearheaded by Congressman Barney Frank (D-MA). Back in May, the lawmaker introduced HR 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act, which establishes a full framework for legalized internet gambling in the USA. The measure is up to 63 co-sponsors, including Anthony Weiner (D-NY), who signed on four days ago. The Poker Players Alliance (PPA) expects HR 2267 to be marked up in the House Financial Services Committee, of which Frank is the Chair, in January. Other reports signal that markup is coming in December.

On December 1st, the financial services industry in the United States must fall into full compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA), which was passed three years ago. The PPA and other organizations have been feverishly working to delay the compliance date by one year, but so far, pleas to Federal Reserve Chairman Ben Bernanke, Treasury Secretary Timothy Geithner, and the U.S. Congress have not been heeded.

Earlier this year, it was revealed that the newly-created Harrah’s Interactive Entertainment (HIE), headed by former Party Gaming CEO Mitch Garber, would be based in Montreal. Former WSOP Commissioner Jeffrey Pollack was originally slated to be HIE’s President, but recently parted ways with the Las Vegas-based gambling giant.

2009 WSOP Main Event Champ Joe Cada Appears on Late Show with David Letterman

On Tuesday night, 2009 World Series of Poker (WSOP) Main Event Champion Joe Cada appeared in an abbreviated segment of the “Late Show with David Letterman” on CBS. Also taking to the stage were actress Penelope Cruz and musical guests The Script.

Cada appeared after Cruz as Letterman’s second guest around 12:25am ET for a four-minute stint. The 2009 WSOP Main Event winner came out to a rendition of Lady Gaga’s hit song “Poker Face” donning a black collared shirt and a pair of blue jeans. No PokerStars logo was visible and Cada wore his bracelet on his left hand. Letterman asked the 21 year-old to show it to the camera and called it a “watch.”

Letterman began the informal interview by noting that he remembered the WSOP being at Binion’s, where it was housed until 2005, when the festivities picked up and moved across town to the Rio. Cada plugged PokerStars, where he is a sponsored pro, when Letterman asked how he got started in the game and the “Late Show” host then candidly asked what the largest sum of money that Cada had lost in a day was. His response was $100,000, which made Letterman cringe “Oh my God.”

Letterman called Cada a “professional gambler” multiple times, but Cada responded, “It’s not like I’m in over my head. It sucks losing that money, but you don’t want to play anything really big.” Letterman then joked that Cada should “get a real job” and the $8.5 million winner retorted, “That sounds like my mother.” Cada lamented that several players fell ill during the 2009 WSOP and that play at the Rio was exhausting.

The CBS talk show host recalled how poker players used to be treated: “In my mind, the winner of a big pot, they found dead in a rental car.” Cada, however, explained that poker exploded after Chris Moneymaker took down the 2003 WSOP Main Event: “It’s a fun thing to do socially. I grew up playing with my friends at the table.” Letterman inquired about the camaraderie at the Penn and Teller Theater at the Rio for the final table of this year’s feature tournament. On the mood at the marathon final table, Cada noted, “It was very friendly.”

Curiously, Letterman brought up Cada’s backing arrangement, asking if other professional players bought him into the $10,000 tournament. With a smile across his face, Cada explained, “Something along those lines.” He did not mention Cliff “JohnnyBax” Josephy or Eric “sheets” Haber by name, but Letterman asked, “So you have to split [the $8.5 million prize] up with those guys?” Cada responded, “Yeah.” Letterman then quipped, “Or that’s where the rental car comes in.” It appeared to be a fairly uncomfortable exchange given that the interview only lasted four minutes overall.

On Cada’s motivation to repeat as champion when the 2010 WSOP Main Event plays out, Letterman explained, “It’s like an Academy Award. Once you’ve won it, what do you care? You’re the World Champion of Poker.”

Some in the online poker community speculated that Cada would plug the Poker Players Alliance (PPA), the 1.2 million member strong lobbying organization that he is a proponent of, but that failed to materialize. In addition, none of the other eight November Nine members was mentioned by name and a short clip of the moment Cada won aired prior to his appearance.

The “Late Show with David Letterman” airs Monday through Friday at 11:35pm ET.

The Nightly Turbo: Ladies Poker, a Poker Movie, and More

Kentucky Cabinet Secretary Discusses Internet Gambling Battle

One month ago, the Kentucky Supreme Court heard arguments in a case that pits the state’s Justice and Public Safety Cabinet against the owners of 141 internet gambling domain names, including those belonging to industry titans like PokerStars and Fill Tilt Poker.

Heading the Cabinet is J. Michael Brown, who was present during oral arguments in the Frankfort courtroom and brought the legal action against the domain names in question one year ago. Brown told Poker News Daily that nothing discussed during the October 22nd hearing caught him off-guard. He added, “In discussing some of the procedural background, members of the court touched on some of the underlying issues, everything from whether a domain name is a device and how a device is defined to what measures the Commonwealth can employ to defend itself against unregulated internet gambling.”

Representing the internet gambling sites were a consortium of lawyers, including those from the Interactive Media Entertainment and Gaming Association (iMEGA), the Interactive Gaming Council (IGC), and several of the targeted sites. Despite the large presence of trade organizations during the proceedings, Brown and company questioned why no domain owners had come forth to defend themselves. The Secretary told Poker News Daily, “Who were the stakeholders on the other side? There didn’t seem to be anyone standing up saying that they represent these innocent owners. Their arguments were all over the map, from the First Amendment to likening it to a criminal proceeding. I was pleased that the court spent time looking at the underlying issues.”

Many in the industry have cautioned that the outcome of the Kentucky internet gambling case may set a precedent worldwide. More light could be shed on where domain names are located and who has rights to seize or regulate them as a result of the seven-member Kentucky Supreme Court’s decision. On the global implications of the Commonwealth’s actions, Brown frankly stated, “I’m only focusing on Kentucky. Our interest is in the unregulated gambling that we believe has been going on. I don’t know that our Supreme Court is ready to look at it as a worldwide precedent because a lot of the underlying facts haven’t been completely developed.”

Influencing the Commonwealth is the presence of a booming horse racing industry in Kentucky, headlined every May by the running of the Kentucky Derby. The spectacle, which unfolds from Churchill Downs in Louisville, generates a considerable amount of revenue for the State, bringing in high rollers, celebrities, politicians, and horse racing fans from around the globe.

The 141 internet gambling domain names are owned by companies located in places like Costa Rica, Gibraltar, Canada, and Isle of Man. Brown explained, “You have people who own and operate domain names. In order to regulate them, you have to go to the registrars because the actual owners are all offshore.” Registrars include giants like GoDaddy.com, which features Team PokerStars Pro member Vanessa Rousso as one if its spokesmen.

When the Kentucky Supreme Court will hand down a decision in the case is not yet known. Joe Brennan, Chairman of iMEGA, told Poker News Daily that he would set an over/under of March, 2010. Rich Muny, Kentucky State Director for the Poker Players Alliance (PPA), contrastingly, expected a decision to be rendered by Christmas.

The 141 internet gambling domain names were seized in September of 2008 on the grounds that they were illegal “gambling devices,” a term that traditionally refers to tangible objects like slot machines and roulette wheels that you’d find in an underground casino. Judge Thomas Wingate upheld the Commonwealth’s actions one month later before the industry sought the intervention of the Kentucky Court of Appeals. The judicial body ruled against the State by a two-to-one margin in January, setting up October’s showdown in the Kentucky Supreme Court.

Stay tuned to Poker News Daily for the latest from the Commonwealth of Kentucky.

Poker Players Alliance Still Confident in Geithner

Joe Cada Comments on WSOP Main Event Victory

Poker News Daily: Congratulations on the big win in the 2009 World Series of Poker (WSOP) Main Event. How are you feeling after the victory?

Joe Cada: It hasn’t quite hit me yet, but I’m feeling really good.

Check out the audio:

PND: How were you able to handle the busy schedule prior to taking to the felts?

Cada: Before the final table took place, there was a long gap in between and I tried to not think about it too much. Instead, I tried to continue my normal lifestyle. Fortunately, I ran really well and, going into heads-up play, went from a big underdog to a big favorite.

Darvin was playing great poker and took over the chip lead relatively quickly. I came in with a game plan of playing a lot of hands in position and playing a lot of small ball poker waiting for him to make mistakes. It blew up in my face. He just wanted to play big ball poker, put me in a lot of tough spots, and played really well. It was rough at the start, but I tried to remain focused and turned it around.

PND: Darvin Moon took a 3:1 chip lead heads-up after re-raising on a board of A-5-3 and you folded. Tell us about that hand.

Cada: It’s one of those things that heads-up, you’re playing a lot of hands. More times than not, you’re not going to make a lot of hands. Darvin likes to trap a lot and check-raise a lot. I never played back at Darvin during the course of the heads-up match. I raised pre-flop, the flop came A-5-3, he decided to lead out, and I took a shot. I made a raise, but every time I tried to raise or bluff, it backfired. That was another example of that happening.

PND: You doubled heads-up after calling all-in with J-9 on a board of 10-5-9-10. Tell us about your thought process there.

Cada: I raised pre-flop to the standard two and a half big blinds and he called. The flop came 10-9-5 and he loves to check-raise, so I checked behind for pot control. The turn brought a ten. The board was 10-9-5-10 with two clubs and he decided to check again. A lot of the hands weren’t checked down to the river. I bet three million into a six million pot and then he jammed all-in. I took a lot of time to make decision and didn’t see him open-jamming the way he had been playing with a ten. There were hands like 7-8, J-Q, and clubs – random hands I could see him jamming with – and I opted to go with the correct call even though I wasn’t happy about it, but it worked out.

PND: What went through your mind when you realized you had become the 2009 WSOP Main Event Champion?

Cada: I was glad it was all over. I knew how important it was, but was happy to get the match over with. I gave as many props as I could to Darvin because he played great poker.

PND: Your father told us that he wasn’t completely behind your poker career to start with. Tell us about your relationship with him and how it’s evolved.

Cada: My parents weren’t totally against it, but they weren’t 100% supportive. I worked for a long time and had a job for four years, but decided to quit since I had made a significant amount in poker over a long period of time. Once I quit my job to do poker full-time, I continued to have a lot of success. Then, I traveled to tournaments in places I could play like the Bahamas, Costa Rica, and Aruba. College interfered and I had to go one way, so I put money aside in case poker didn’t work out and decided to play full-time.

PND: How big was the crowd support at the Penn and Teller Theater?

Cada: Having the support of these guys was great. Some of them missed school and work and none of them have voices left. They cheered me on the whole time, whether I was down or had chips. It was great having all of that support.

PND: Tell us about signing with PokerStars and wearing a Poker Players Alliance (PPA) logo.

Cada: PokerStars is a great website. They’re the biggest known site out there. I was very grateful for the opportunity they gave me. I’m very supportive of the PPA being an online player. The least I can do is support the PPA.

Joe Cada Praised by National Media for WSOP Main Event Win

Following his victory in the 2009 World Series of Poker (WSOP) Main Event, which aired on ESPN on Tuesday night, Joe Cada received an overwhelming amount of praise from U.S. media outlets.

The Detroit Free Press, Cada’s hometown paper, reported on their hero’s run through the 2009 WSOP Main Event, which ended with a heads-up showdown against Darvin Moon. The newspaper cautioned against other Michigan natives looking to strike it rich in the world of poker: “Cada wants anyone thinking about making a living at playing cards to be warned: For every high, he has experienced the lowest of lows.” Cada told the media outlet, “It definitely can be a living, but it’s one of those things: You have to be very careful when you decide to make it a living. More people lose than win.” Cada became the youngest WSOP Main Event winner ever late Monday night and earned $8.5 million.

The Detroit News was also on-hand in Las Vegas to cover the local participant. The youngster told the paper, which noted that Cada was a severe underdog in chips at the final table, “It helped being down before and having no chips earlier at the final table. I thought about that and I continued to stay focused and tried not to make any mistakes. I just remained calm and it worked out well.” After doubling up CardPlayer Magazine Editor Jeff Shulman with A-J against A-K, Cada’s stack sank to 2.3 million, or less than five big blinds.

TIME Magazine candidly explained, “This time last year, Joseph Cada couldn’t legally order a cocktail. But today, the Shelby Township, Mich., native sits on top of the poker world as the champion of the World Series of Poker’s Main Event.” Playing online, as well as trips to Canada and Costa Rica, helped fund the underage Cada’s bankroll before he turned 21.

Even the Poker Players Alliance (PPA) chimed in on Cada’s win, noting that the PokerStars-sponsored player wore the lobbying organization’s patch throughout the Main Event final table. A press release distributed by the PPA on Tuesday featured Chairman Alfonse D’Amato praising the Michigan native: “On behalf of PPA members, I congratulate Joe on his historic WSOP win and thank him for being such a strong advocate for the game, especially online poker.” Cada added, “Poker is not gambling. There is decision-making, there’s logic, there’s math, and I think that taking away online poker takes away peoples’ rights. I am very supportive of the Poker Players Alliance.”

On the PocketFives.com online poker forum, poster “illinicubs23” weighed in on a debate as to whether Cada’s victory will improve or deride poker’s reputation as a skill game given his improbable run: “cada will at least continue to be seen around the tournament circuit – something moon wouldnt have done – and help promote pokerstars. hopefully he will inspire a lot more young 20 somethings to take up the game and help feed the poker economy for years.”

While online poker players salivated at the thought of new blood entering the game, the Michigan media continued to caution against those expecting the same success as Cada. Dennis Martell, Coordinator of Health Education at Michigan State University, told the Free Press, “What worries me more is that we’ve got a perfect storm going with this Michigan economy, and a point-and-click generation that wants instant gratification, that thinks they can get lucky and, in many cases, really needs the money.” In September, Michigan’s unemployment rate topped 15%, which the Free Press noted was the highest in the United States.

Prior to play beginning on Monday, Cada told Poker News Daily what it was like seeing his image plastered across Detroit newspapers: “It’s a lot different seeing the newspaper and actually seeing you in it. It’s been fun.”

ESPN.com Poker Editor Andrew Feldman, who spent a week in Las Vegas covering the finale of the 2009 WSOP Main Event, summed up his thoughts on the industry’s new face: “Last week, Cada was just another player from Michigan. On ESPN’s WSOP coverage, he said, ‘I’m just a kid with a dream.’ Now, he is ‘The Kid’ and a poker superstar. Congratulations on your run to WSOP gold, Joe. We’re looking forward to seeing what you have to offer as your poker career truly begins now.”

Joe Cada Dons PPA Logo for 2009 WSOP Main Event Final Table

When viewers tune into tonight’s broadcast of the 2009 World Series of Poker (WSOP) Main Event on ESPN, they’ll see eventual winner Joe Cada don a logo for the Poker Players Alliance (PPA), the industry’s grassroots lobbying force.

Over one million members of the PPA comprise its rank and file and the organization is based in Washington, D.C. On the level of exposure that Cada will bring the PPA when tonight’s two-hour plus broadcast airs, PPA Executive Director John Pappas told Poker News Daily, “We’re very excited that he wore our logo. Not only did he wear it, but he’s also expressed an interest in supporting the PPA and our mission. He’d bee an ideal spokesperson to reach out to the younger demographic, the young internet player who may be skeptical as to what the PPA is and what we’re trying to accomplish.”

The PPA has been working feverishly to delay the implementation of the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA). As it currently stands, the financial services industry in the United States must fall into full compliance with the muddled 2006 law by December 1st, which is now just three weeks away. Pappas noted that Cada’s presence might help bolster the organization’s legitimacy: “Someone with his poker skills and reputation is helpful to have promoting our cause.”

PPA Membership Director Bryan Spadaro roved the halls of the Rio on Saturday morning when play saw the November Nine become only two. Spadaro came armed with a handful of PPA patches, telling players and agents alike why they should be worn. In the end, Cada, Kevin Schaffel, James Akenhead, and Eric Buchman all wore PPA patches. Curiously, Akenhead obliged even though he’s British and Pappas explained, “The game itself isn’t an American game. Even in Europe, they’re starting to see some of the ideas of monopolies and protectionism. We’d like to see us being a global force at some point.”

About 1,500 fans turned out for Monday’s finale at the Penn and Teller Theater at the Rio, which saw the cards hit the air shortly after 10:00pm local time. The action from the green felt was broadcasted on two large video projection screens in the venue, meaning that all 1,500 fans were exposed to the PPA logo for hours on end. Heads-up play lasted for two hours and 21 minutes and the final table’s time of 17:16 marked the longest in WSOP Main Event history by nearly three hours. The longest WSOP table on record belongs to the 2008 WSOP Europe Main Event, which lasted 19 hours.

The PPA teamed up with the National Thoroughbred Racing Association and the American Greyhound Track Operators to author a letter to Federal Reserve Chairman Ben Bernanke and U.S. Treasury Secretary Timothy Geithner urging the delay of UIGEA regulations until December 1st, 2010. A similar outcome is the goal of Congressman Barney Frank’s (D-MA) HR 2266, the Reasonable Prudence in Regulation Act.

The industry will take a wait-and-see approach with the effects of the UIGEA’s regulations. One thing is for sure, however. The PPA is likely to receive a sizable membership boost as a result of the extended exposure on ESPN this evening. Free memberships to the lobbying organization are available.

The action begins at 9:00pm ET tonight on ESPN and will run for at least two hours. The network did not institute a “cutoff” time for programming, but the episode is not expected to last more than two and a half hours.

2009 WSOP Main Event Final Table Set to Kick Off

It’s 11:08am at the Rio All-Suite Hotel and Casino in Las Vegas. The gates to the spacious Penn and Teller Theater open, admitting a throng of screaming fans. The Rio is bustling, as the nine remaining World Series of Poker (WSOP) Main Event participants play down to two.

Among the first in the lobby were Steve Begleiter and Jeff Shulman, the latter escorted through the melee by WSOP Media Director Nolan Dalla. Meanwhile, supporters of Michigan poker player Joe Cada have donned neon yellow shirts and hats, which will surely create a memorable scene for fans and media in the audience alike. Cada’s agent told Poker News Daily that 150 friends and family are expected, while Eric Buchman will see 100 troops rally around him this afternoon.

Rock memorabilia lines the hallway of the Rio from its casino to the theater and, among those chatting with fans is ESPN announcer Lon McEachern, who will flank Norman Chad on an elevated platform set up to the right of the stage. Media inside are seated on couches with tables usually reserved for VIP guests of Penn and Teller and other acts inside the auditorium and two massive television screens relay the action from the green felt. ESPN “Inside Deal” hosts Bernard Lee and Laura Lane are also perusing the crowd, the latter taking a bundle of pictures on her iPhone.

The Poker Players Alliance’s (PPA) Bryan Spadaro is armed with patches for the one million member strong lobbying organization, soliciting each player to wear one during the broadcast, which will officially air on Tuesday night on ESPN. Cada, Kevin Schaffel, and Buchman are confirmed to be wearing them, while James Akenhead, a Brit, also walked away from Spadaro with one in his hand. The PPA is holding a function at 2:00pm down the hallway to spread goodwill about Congressman Barney Frank’s (D-MA) internet gambling legislation.

Upon arrival, Cada had online poker star Cliff “JohnnyBax” Josephy in tow, as ESPN cameras roved the hallway catching any memorable moments, including a group shot of Cada’s supporters. We headed to the front of the general admittance line, which stretches from the Penn and Teller Theater towards the Amazon Room, where Jack Watkins from Bozeman, Montana was the first to be found. He arrived at 6:00am and was quickly approached by Antoine Saout supporters, who offered him guaranteed tickets for the start of play in exchange for wearing shirts and hats touting the French poker player. Watkins and company happily obliged.

In the yellow wristband line, which was for friends and family, was David Prochik, who hails from Orlando, Florida. One of the fans supporting Cada, Prochik told Poker News Daily, “He’s a good online player. He’s good friends with my friend, Brad, and I hope he wins.” Across the hallway, Ylon Schwartz is seated at the Rio’s Starbucks in a scene reminiscent of his experience in 2008 as a member of the November Nine.

Poker pro David Singer will be rooting on Phil Ivey this afternoon. On his show of support, Singer explained, “I’ve been friends with him for a long time and he’s a good guy. I’d like to see him win; he deserves it.” Ivey holds the seventh largest chip stack entering play today and despite being on the short stack, Singer was confident: “If anyone will know what to do in that situation, Ivey will know what to do. He’s the best player at the table and I have a lot of faith in him.” If Ivey failed to emerge victorious on Monday night when play concludes, Singer commented that he’d pull for Jeff Shulman.

Stay tuned to Poker News Daily for the latest from the 2009 WSOP Main Event final table.

Online Poker Discussed in Massachusetts Committee Hearing

On Thursday, the Massachusetts Joint Committee on Economic Development and Emerging Technologies held a hearing to review proposals to expand gambling within the Commonwealth. Speaking on behalf of the online poker industry was Poker Players Alliance (PPA) Massachusetts State Director Randy Castonguay.

The PPA representative traveled to Boston to speak at the Gardner Auditorium. The goal was to include language in any casino bill that licensed and regulated online poker, which will likely bring in over $40 million per year in revenues to the Commonwealth of Massachusetts, according to figures released by the PPA. Castonguay told Poker News Daily prior to Thursday’s hearing, “Initially, we tried getting internet poker put on this year’s ballot. We were going to have the voters decide whether it should be regulated and taxed to protect the consumer.”

The Boston Globe newspaper noted that 17 bills focused on gambling would be heard on Thursday and that lawmakers were expected to remain in the city “well into the night” listening to proposals. The PPA has 25,000 members in Massachusetts out of more than one million total.

When the Commonwealth took up the issue of gambling, a provision in the proposed casino bill made playing online poker a crime. Castonguay explained in his testimony, “While the game as evolved, the way politicians think about it has not. It is hard to believe that when gaming expansion legislation was introduced two years ago and again this year, the bills included provisions that make poker on the internet a crime punishable by two years in prison and a $25,000 fine.”

On this year’s version of the casino gambling bill, Castonguay told Poker News Daily, “We want to get the language criminalizing online poker out of the current casino bill. Essentially, they took last year’s bill, made a few changes, and put it back in. They didn’t take out the language that criminalizes internet poker. We think that’s ridiculous.” Massachusetts’ inclusion is similar to the Washington State’s stance on internet gambling. There, playing online poker constitutes a Class C felony.

Castonguay tried to submit a copy of a petition backed by the PPA that calls for the regulation of online poker in Massachusetts. He explained, “Unfortunately, our petition was not certified by the Attorney General’s office due to a disagreement with our language. Fortunately, however, this Committee and our State legislature can regulate internet gambling through the formal lawmaking process.” PPA Executive Director John Pappas explained that the disagreement was with “how the petition was drafted and whether it could be put into a sensible ballot initiative.”

Castonguay’s focus was on advocating online poker as opposed to broader initiatives like internet gambling or online wagering on sports. The Massachusetts State Director explained, “We are advocating regulation of internet poker, not internet craps or roulette. And as every member of this Committee knows, unlike craps or roulette, poker is a game of skill that has been played in the home since the dawn of the game.”

A separate Globe article noted that a new casino bill is expected in January. Proponents have argued that allowing casino gambling in Massachusetts will bring badly-needed jobs and revenue to the Commonwealth, while adversaries argue that addiction and other societal ills will increase.

Congressman Barney Frank (D-MA) has introduced a similar measure on the national level. HR 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act, was introduced in May and has attracted 62 cosponsors. The measure outlines a complete licensing and regulatory framework for the internet gambling industry in the United States.

Read Castonguay’s online poker testimony.

Internet Gambling Revenue Analysis Released by Joint Committee on Taxation

Today, Congressman Jim McDermott (D-WA) released a study by the Joint Committee on Taxation (JCT) revealing that up to $41 billion could be generated by regulating and taxing the internet gambling industry over a 10-year period.

This is one of several studies to be released by various outfits, but is the first to be handed down by an agency of the United States Government. On the importance of the JCT’s findings, McDermott commented in a press release distributed on Thursday, “I suspect that many of my colleagues… will take more interest in this issue once they see $41 billion available that they can match up with any number of worthy programs.” Being debated on Capitol Hill is major health care reform, one social program that could conceivably be funded through internet gambling.

McDermott continued, “I would suspect it’s only a matter of time before Congress appropriately moves to regulate the industry in order to protect consumers and reverse the flow of billions of dollars currently lost offshore as Americans gamble billions online despite attempts to prohibit the activity.” In May, the Washington Congressman unveiled HR 2268, the Internet Gambling Regulation and Tax Enforcement Act. The measure imposes a fee of 2% of deposits on licensed internet gambling operators.

HR 2268 is a companion bill to Congressman Barney Frank’s HR 2267, which establishes a comprehensive framework for companies to solicit U.S. customers. The two bills were introduced on the same day and HR 2267 is up to 62 cosponsors on both sides of the political spectrum. Safe and Secure Internet Gambling Initiative (SSIGI) spokesperson Michael Waxman told Poker News Daily, “This is a very significant development in support of the push to regulate the industry. We would expect that there will be more conversation and more interest in internet gambling regulations as Congress is attempting to figure out funding for health care and other various programs.”

Today, Democrats in Congress unleashed health care reform that comes with a price tag of nearly $900 billion. While not able to cover the full amount, legalizing internet gambling could, in theory, put a dent in the price tag. The JCT’s analysis does not include online sports betting, which is barred in Frank’s legislation. Moreover, the findings assume that states will not opt out of HR 2267. A February study by the U.S.-based firm PricewaterhouseCoopers revealed that up to $52 billion could be raised by taxing internet gambling companies over a 10-year period.

On the significance of a $4 billion per year revenue stream when programs like health care run over 200 times that total, Interactive Media Entertainment and Gaming Association (iMEGA) Chairman Joe Brennan explained, “It’s realistic to see it packaged with a number of revenue enhancers. As a standalone, in my opinion, it’s not enough money to be able to get people off the mark who have been against this in the near-term.”

Information released today by the SSIGI noted that Frank planned to hold a markup hearing on HR 2267, but the House Financial Services Committee has released no official information. For the balance of the week, Frank’s committee will be bogged down in discussion of systematic regulation, overdraft protection, and investor protection. The grizzly state of the U.S. economy has been the committee’s main focus since September of 2008.

Frank has also introduced HR 2266, the Reasonable Prudence in Regulation Act. The measure delays industry compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) by one year. As it stands, the financial services industry in the United States must come into full compliance with the 2006 law by December 1st, which is just five weeks away. The Poker Players Alliance (PPA), the industry’s main lobbying force, has been working feverishly to delay the deadline through other means, including appealing directly to U.S. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke.

The JCT study assumes that wagering taxes will be levied and that HR 2267 will be amended so that internet gambling companies doing business in the United States must also be incorporated in the United States. Read the full internet gambling study.

Stay tuned to Poker News Daily for the latest news from Capitol Hill.

Amazing Race: Tiffany Michelle, Maria Ho Finish Second at Atlantis Dubai

Poker players Tiffany Michelle and Maria Ho posted their highest finish to date in the CBS reality series “Amazing Race.” The duo arrived at the Pit Stop in second place at the Atlantis Hotel in Dubai, United Arab Emirates.

Dating couple Meghan and Cheyne set out on the leg in first place, leaving at 8:17am, well ahead of the other teams as a result of completing the Fast Forward last week. Their clue instructed them to grab a briefcase and travel to the Dubai Creek Golf and Yacht Club, where they had to search the marina’s boardwalk for their next clue. There, teams encountered the leg’s Roadblock, a task that only one person can perform. In it, racers had to row inflatable boats to a yacht anchored offshore and find a sheik, who would present them with a watch. Then, they had to return to the dock and unlock their briefcase by cracking its three-digit code. What teams had to discern for themselves was that the time frozen on the watch, 8:35, represented the three-digit code to their briefcase.

Michelle and Ho departed in sixth place out of seven teams remaining at 11:47am and did not appear on “Amazing Race” until 15 minutes into the episode. Ho told Michelle at the Roadblock, “It might be physical. You’re faster.” Tiffany powered out to the parked boat and back, telling “Amazing Race” cameras, “Every time I accomplish something all of the other guys did, it’s definitely very rewarding.” Ho and Michelle are the only all-female team this season and Michelle was the only woman to perform the Roadblock.

Michelle quickly figured out the code to the briefcase and lapped Flight Time and Big Easy, members of the Harlem Globetrotters, who struggled with the lock after leaving the Pit Stop in third place. The next clue prompted teams to head to the Abra water taxi station, where the leg’s Detour awaited. The Detour, which is a choice between two tasks, asked teams to complete Gold or Glass. In Gold, teams had to find a jewelry store and use a precision scale to weigh out $500,000 worth of the commodity. The exchange rate to use changed every minute, making the task complicated. In Glass, teams had to visit to a local spice market and assemble a dozen hookahs.

Ho and Michelle elected to put their thinking caps on to complete Gold, with the latter noting, “Maria and I know how handle money, so this should be good for us.” Brothers Sam and Dan, who had been in a loose alliance with the poker pros, also elected to do Gold and told “Amazing Race” cameras that they purchased a $2 calculator at Wal-Mart before leaving to film the show. Ho and Michelle borrowed the device and shouted out the correct weight in gold to put on the scale before the exchange rate changed. The quartet appeared to breeze through the task as a result of the teamwork, while racers performing Glass struggled with the intricacies of the hookahs.

The next clue instructed teams to head to the Atlantis water park, similar to its sister site in the Bahamas that plays host to the annual PokerStars Caribbean Adventure, and look for the Leap of Faith, a six-story speed slide that takes riders through a shark tank. At the bottom, teams were told to look for Dolphin Bay Beach, the Pit Stop for this leg of the race. Ho and Michelle quickly completed the plunge and checked in second, their highest finish so far. Sam and Dan arrived right behind them and upon seeing the siblings run down the beach in their swimsuits, Michelle commented, “Sam and Dan had a ‘Baywatch’ moment today. They were looking kind of cute in their matching red shorts.”

Meanwhile, at the top of the slide, Mika and Canaan raged war over Mika’s fear of heights. In the end, she could not bring herself to complete the task, walked down the steps to the bottom, and the Globetrotters checked in sixth. Mika and Canaan were eliminated and the former commented, “I feel like I let [Canaan] down.”

Next week, the six teams remaining in the hunt for the $1 million first place prize head to the Netherlands. “Amazing Race” airs at 8:00pm ET on Sundays on CBS.

Anurag Dikshit’s Sale of Party Gaming Stock Receives Mixed Reaction

One of the major poker headlines this week was the news that Party Gaming Cofounder Anurag Dikshit would divest himself of nearly 114 million shares of the company’s stock, which is traded in London under the symbol “PRTY.” Now, the industry has had a chance to react.

The internet gambling think tank sported mixed reactions to the news, as Dikshit’s departure meant that a man who admitted to violating U.S. law in a New York courtroom one year ago would no longer hold any interest in the company. Interactive Media Entertainment and Gaming Association (iMEGA) Chairman Joe Brennan told Poker News Daily, “The thing to take away is that this is probably good overall for Party Gaming. When you have one of their founders pleading guilty, if and when things start to get normalized in the U.S. and Party Gaming comes into the market, they need to clear it off the books. The fact that he’s exiting the company is good for its future.”

When internet gambling will be legalized and regulated in the United States is anyone’s guess. Congressman Barney Frank (D-MA) introduced HR 2267 in May as one solution. The bill outlines a framework for the explicit legalization of the industry and, although the measure is up to 62 cosponsors, it has not yet been scheduled for markup in the House Financial Services Committee.

On how members of Congress and others outside of the industry would react to Dikshit’s exit, Brennan explained, “If Dikshit leaving Party Gaming can be a benefit to that company, I would say that it does the same broadly for the industry.” Financial analyst Nick Batram told Bloomberg that Dikshit’s departure meant that Party Gaming “may also find it easier to raise funds from institutional investors rather than the founders for large sports gambling acquisitions.” The Wire Act of 1961 has historically been interpreted to mean that online wagering on sports is not permitted in the U.S.

Dikshit will purportedly turn over the proceeds of his sale, which will likely total more than ?188 million, to his charitable foundation. On the TwoPlusTwo online poker forums, posters questioned Dikshit’s charitable motives: “If he donated to an established charity that could not be mistaken for a front, then that would be impressive,” one skeptic noted. Some have speculated that tax benefits are the real reason behind his actions. Brennan told Poker News Daily, “He wants to get out of the business and focus on his charitable endeavors.”

The sale of two-thirds of Dikshit’s stake sent shares of Party Gaming plummeting. Trading above 284 pence on October 19th, the stock dove to 240 pence in 24 hours, a dip of 15%. PRTY closed trading on Friday on the London Stock Exchange fetching 243 pence, 135 pence above its asking price one year ago.

An article in the Financial Times summed up the reaction from most of the industry: “The truth, however, is that while the distancing of Mr Dikshit can’t be bad for Party Gaming, it is still frustratingly unclear what the odds are on a successful return to the U.S. market.” In five weeks, the financial services industry in the United States must fall into full compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA). The impact of the December 1st deadline remains to be seen, but the Poker Players Alliance (PPA) recently authored a letter to U.S. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke asking for the UIGEA’s regulations to be delayed by one year.

Party Gaming Cofounders Ruth Parasol and Russ DeLeon, a husband and wife team, have not yet announced their intentions to sell stock or formulate a plea agreement with the U.S. Government.

Poker Industry Reacts to Kentucky Internet Gambling Hearing

On Thursday, attorneys representing the owners of 141 internet gambling domain names took to the floor of the Kentucky Supreme Court. Their goal: prevent the forfeiture of URLs belonging to industry giants like PokerStars, Ultimate Bet, and Full Tilt Poker.

Twenty-four hours later, the online poker industry has had an opportunity to digest the proceedings, which played out in Frankfort. Among those looking on via a live webcast of the 90-minute oral arguments was Poker Players Alliance (PPA) Executive Director John Pappas, who told Poker News Daily from Washington, D.C., “Aside from wishing I could be down there, I think the presentation of the prosecution was extremely weak and there were a lot of holes in it in that the Supreme Court justices pointed out. The attorneys for the side of the online sites did a very good job of presenting compelling, reasonable reasons for dismissing this case.”

Word of the seizure broke last September and sent shockwaves throughout the internet gambling industry. If successful, the action by the Commonwealth would render the 141 domain names inaccessible not just in Kentucky, but also worldwide. Interactive Gaming Council (IGC) attorney Ian Ramsey told Poker News Daily, “We felt very good about the arguments we presented. We felt we had the opportunity to present the material issues for this court to consider and welcome a well-reasoned decision.” When the Kentucky Supreme Court will hand down a decision is anyone’s guess; timelines have ranged from 60 days to four months.

Present in the courtroom on Thursday with Ramsey was PPA Kentucky State Director Rich Muny, who has been intricately involved at the local level in the case. Muny took time out from lunch shortly after the hearing and noted, “I thought it went really well. The justices heard from both sides and asked informed questions of everyone. We had great legal counsel in the case and it seemed like questions were targeted more at the Commonwealth than at us, which may indicate which way they’re leaning. It would be worse if we got peppered with difficult questions.” Ramsey added that the six justices present asked considerably more questions than they have in past hearings.

Interactive Media Entertainment and Gaming Association (iMEGA) counsel Jon Fleischaker was the third attorney to take to the podium on Thursday. His animated testimony seemed to speak volumes about the frustrated nature of the industry, which has several of its most well-known domain names at risk. iMEGA Chairman Joe Brennan told Poker News Daily, “John brought the passion today that a lot of people in the industry have felt. This is something that’s just plain wrong and it was great to see that today in court.” Fleischaker called the prosecution’s arguments “unheard of” and “wrong.”

On whether anything in Thursday’s hearing took Brennan and company by surprise, the iMEGA executive commented, “I thought everything went according to plan. We knew the cards that the Governor and the Secretary’s attorneys had with their briefs. They came out of the gate with a weak hand. They continue to make assertions and misrepresent the law and the status of internet gambling.”

In the process, Commonwealth attorney Eric Lycan labeled iMEGA and the IGC “illegal gambling trade associations.” Lycan added that the confiscated domain names would be put up for public auction, following similar action undertaken in the past by the IRS.

A two-to-one ruling by the Kentucky Court of Appeals in January in favor of the internet gambling industry prompted the Justice and Public Safety Cabinet to appeal.

Kentucky Supreme Court Hears iMEGA Internet Gambling Case

Playing out on the floor of the Kentucky Supreme Court this morning were oral arguments in a case pitting the state’s Justice and Public Safety Cabinet, headed by J. Michael Brown, against the Interactive Media Entertainment and Gaming Association (iMEGA), among other parties.

The hearing will determine the fate of 141 internet gambling domain names, including those belonging to industry giants like PokerStars and Full Tilt Poker. Commonwealth attorney Eric Lycan took to the podium shortly after 11:00am local time and noted that the lower court ruling ordering the sites in question to halt operations in Kentucky or risk losing their domains altogether has yet to bear fruit: “None of these domain names has been stopped from operating… When this action was filed, many of them attempted to take their domain names registered with registrars in the U.S. and transfer them to another overseas registrar.”

Lengthy comparisons were made to drug seizures and pornography throughout the proceedings. In terms of whether iMEGA and the Interactive Gaming Council (IGC) had standing to sue in the case, Lycan explained, “There is not a single person in this room who will claim to operate a domain name. You have illegal gambling trade associations.” One of the six justices in attendance retorted, “This is not like cocaine, which is inherently illegal.” The Kentucky Supreme Court grilled both sides with questions.

If successful, the domains would be inaccessible not only in Kentucky, but also around the world. On why the Commonwealth would remove access to the URLs for the rest of the world, Lycan explained, “That’s how Judge Wingate’s order was tailored and it’s only if they refuse to cease operations in Kentucky. It’s only those who continue to defy the Commonwealth that will be forfeited.” Lycan revealed that the domains would be put up for public auction if they were successfully forfeited.

Up for debate is whether the domain names were properly seized under the grounds that they were “gambling devices,” a term traditionally reserved for tangible objects like slot machines and roulette wheels that you’d find in an underground casino. Also argued were whether due process was violated and whether the Commonwealth had jurisdiction to act in the first place. Lycan noted that there have been instances of URLs being seized before: “They have been seized by the IRS and auctioned off. This is not a new thing that the Commonwealth has undertaken. It’s complicated by the fact that it’s not tangible property, but it’s still property.”

Lycan’s testimony lasted for 30 minutes and was followed by Bill Johnson’s oral arguments. Johnson, who represents a contingent that includes Sportsbook.com, argued that the case should not have proceeded as far as it has. He then noted that the State should have pursued a criminal case against domain name owners, not a “hybrid” civil forfeiture proceeding. Johnson also called out the Kentucky State Legislature for not clarifying the Commonwealth’s gambling laws: “Sometimes it’s necessary for the legislature to spell out what the law is. If the legislature had amended the statute, which it’s had the opportunity to do since 1974… our situation would be different.” Legal online wagering on horse racing appears to be legal in Kentucky, as TwinSpires.com, which allows such bets, is owned by the parent company of the Churchill Downs racetrack.

Jon Fleischaker, attorney for iMEGA, gave an animated argument that began with the following statement: “What the Commonwealth and what the Secretary are doing is really unheard of. They have taken a statute that has been repealed… and have tried to make it a hybrid with a criminal process for forfeiture. That is really wrong.” Fleischaker also blasted the State’s lack of due process, noting, “There has been no process. There has been no attempt at process. It was a secret proceeding. Nobody had standing at the proceedings in front of Judge Wingate.” Word spread of the seizure last September and Wingate upheld the Commonwealth’s actions in a decision released nearly one year ago to the day.

Finally, John Tate, attorney for VicsBingo.com and the IGC, asserted that the Commonwealth’s actions violated the 14th Amendment of the United States Constitution. He explained, “The internet did not arrive yesterday. We’ve wrestled with internet-based jurisdiction for some number of years now… The only jurisdictional bases for the assertion of in rem were manufactured by the Secretary.” Tate argued that the Commonwealth’s agents had to use an internet search to find VicsBingo.com, which should be frowned upon. Lycan countered that the appellate admitted 13,000 online poker players made their home in Kentucky as members of the Poker Players Alliance (PPA).

The proceedings lasted about 90 minutes and iMEGA expects a decision to be handed down within four months. Rich Muny, Kentucky State Director for the PPA, said the organization, which filed an amicus brief in the case, thought a decision would be rendered within 60 days.

Internet Gambling Proponents Prepare for Kentucky Supreme Court Hearing

On Thursday, lawyers from the Interactive Media Entertainment and Gaming Association (iMEGA) will lead a contingent into Frankfort, Kentucky in a case involving the seizure and potential forfeiture of 141 internet gambling domain names. Among those prepping is Ian Ramsey from Stites and Harbison, local counsel for the Interactive Gaming Council (IGC).

Oral arguments in the case will begin at 11:00am local time. The case is the final one on the docket for the week, leaving many in the industry speculating that the proceedings could last for longer than the scheduled 15 minutes per side. Ramsey told Poker News Daily what he’s expecting to unfold: “I expect that we’re going to have a lot of questions from the bench. The parties have raised many issues and the Supreme Court is going to have to sort through them.”

Among those factors that will contribute to the Supreme Court’s decision is whether the Commonwealth of Kentucky had jurisdiction to seize the domain names on the grounds that they were “gambling devices” and whether the State bringing a criminal gambling charge to a civil forfeiture hearing will hold weight. On the question of jurisdiction, Ramsey cited a ruling by the Arizona Supreme Court on October 16th, which the IGC submitted as supplemental authority in its Kentucky case. The Arizona legal battle ended with the state’s highest judicial body ruling, “However noble the State’s purpose is, in rem jurisdiction requires presence of the subject property in the state.”

The question remains as to where a domain name is located. Is it located on a bettor’s computer? Is it located on a server? Is it located overseas where the internet gambling site is based? Is it located somewhere in cyberspace? The Commonwealth of Kentucky, under the direction of Governor Steve Beshear and Justice and Public Safety Cabinet Secretary J. Michael Brown, charged that domain names were “gambling devices,” a term typically reserved for objects like roulette wheels and slot machines that you’d find in an underground casino.

Ramsey explained the far-reaching impact of the case, which has garnered worldwide attention: “The citizens of the Commonwealth of Kentucky are interested, the citizens of the United States are interested, and anyone around the world on the internet is interested in this case. We look forward to a well-reasoned, thoughtful opinion by our Supreme Court.” In January, the Kentucky Court of Appeals in Louisville ruled by a two to one margin that the State did not have jurisdiction to act. The lone dissenting opinion noted that the domain names were part of a larger gambling device.

The URLs in jeopardy belong to some of the behemoths of the industry like PokerStars, Full Tilt Poker, and Ultimate Bet. Full Tilt Poker sought a backup plan by purchasing FullTilt.com last September, shortly after word broke that FullTiltPoker.com was among those domain names seized. Poker News Daily also learned that Ultimate Bet and Absolute Poker, both members of the USA-friendly CEREUS Network, had contingency plans in the event that their primary domain names were held hostage. If successful, the 141 domain names under fire would be unavailable not only in Kentucky, but also around the world.

Besides iMEGA and IGC, other organizations involved in the legal squabble include the American Civil Liberties Union (ACLU), the Electronic Frontier Foundation, eBay, Network Solutions, the Poker Players Alliance (PPA), and the Center for Democracy and Technology. In its amicus brief, the PPA argued that its one million members will suffer “immediate and irreparable harm” if the domain names are inaccessible and that poker is a game of skill and therefore not illegal gambling.

ESPN Inside Deal Welcomes Joe Cada

This week’s installment of the ESPN.com poker franchise “Inside Deal” featured 2009 World Series of Poker (WSOP) Main Event November Nine member Joe Cada. Laura Lane and Poker News Daily Guest Columnist Bernard Lee host the show.

The news segment of ESPN “Inside Deal” began with Lee praising World Poker Tour (WPT) Host Mike Sexton for his election to the Poker Hall of Fame: “I think it’s tremendously well-deserved. Mike has had a phenomenal career. A lot of people think of him from the WPT, but remember, he is a very well-accomplished player.” Sexton is the lone representative of the Poker Hall of Fame Class of 2009. Others who were up for consideration included Tom McEvoy, Dan Harrington, Daniel Negranu, Phil Ivey, Erik Seidel, Barry Greenstein, Scotty Nguyen, and Men “The Master” Nguyen.

Attention then turned to the letter authored by the Poker Players Alliance (PPA) to U.S. Treasury Secretary Timothy Geithner petitioning for the delay of the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) by one year to December 1st, 2010. Lee explained what would happen if the current deadline stood: “The impact would be devastating. We’re fearful that the banks will err on the side of caution and ultimately block payments that the online sites would give.”

Making headlines this week was the news that the GSN staple “High Stakes Poker” had dropped host A.J. Benza for Season 6, allegedly replacing him with a female correspondent. Lee explained, “I’m a little surprised. For five years, A.J. and Gabe Kaplan have seemed to have a good rapport, so I’m surprised they’re making this switch.” Poker News Daily broke the news that Vanessa Rousso, the presumed frontrunner for the job, would not be Benza’s replacement. Other possible fill-ins include former WPT hostess Shana Hiatt, Kara Scott, Absolute Poker pro Lacey Jones, and Shannon Elizabeth.

Cada, who could become the youngest Main Event winner ever if he takes down the feature tournament next month, then joined the show. He noted how his life has changed as a result of the increased exposure as a member of the November Nine: “I’ve been playing poker my whole life, so the only thing that’s changed for me is the media.” Cada is primarily a cash game player, only hitting up the tournament scene online on Sundays. He purchased a 2,400 square foot house at age 19 as a gift to himself and is a sponsored pro of PokerStars, the world’s largest online poker room.

Heading into the 2009 WSOP, Cada found himself on a $150,000 downswing. He sought the aid of two longtime cornerstones of the poker industry, Cliff “JohnnyBax” Josephy and Eric “sheets” Haber. Cada recalled, “I was lucky enough to have them back me and I’m very grateful for that. I knew I could win before I came in.” Josephy, a former Ultimate Bet pro, and Sheets will receive 50% of Cada’s earnings. The top prize in Las Vegas is $8.5 million.

ESPN.com Poker Editor Andrew Feldman joined the show to discuss a series of dream teams. News broke last week that Dream Team Poker would return with tournaments at the Bicycle Casino in Los Angeles coinciding with Monday Night Football. Feldman’s “Dream Team Young Guns” consisted of Tom “durrrr” Dwan, Bertrand “Elky” Grospellier, and 2008 WSOP Main Event Champion Peter Eastgate. “Dream Team Lady Luck” was comprised of Shannon Elizabeth, Annette “Annette_15” Obrestad, and Jones. Finally, Feldman unveiled “Dream Team Old Guard:” Negreanu, Phil Hellmuth, and Mike Matusow. Cada added that his ultimate Dream Team would be Ivey, Patrick Antonius, and Dwan.

Finally, Cada revealed that on Day 8 of the 2009 WSOP Main Event, his stack had dropped to 20% of the average before he clawed back. He knocked out between 10 and 15 players en route to the final table and, upon heading to Connecticut to film ESPN “Inside Deal,” dropped some dough at the Foxwoods blackjack tables.

“Inside Deal” is released every Tuesday on ESPN.com.

Barney Frank, 18 Others Issue Letter to Geithner, Bernanke about UIGEA Rules

The fight to delay the implementation of the Unlawful Internet Gambling Enforcement Act (UIGEA) rules continues. Recently, 19 Congressmen, including Barney Frank (D-MA), issued a letter to Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke.

The news comes on the heels of a letter sent by the Poker Players Alliance (PPA) in conjunction with the National Thoroughbred Racing Association and the American Greyhound Track Operators Association to the same two government individuals. In fact, the letter sent by the Congressmen alludes to the PPA’s petition directly, encouraging Geithner and Bernanke to use the Administrative Procedure Act to delay the implementation of the UIGEA rules by one year to December 1st, 2010. As it currently stands, the financial services industry must fall into line with the 2006 law six weeks from now.

Frank’s letter explains that the UIGEA rules were officially approved on January 19th, one day before current U.S. President Barack Obama took office. It implores, “We realize this is not a task you requested. We also believe this is an unreasonable burden on regulators and the financial services industry at a time of economic crisis, and it contradicts the stated intent of the Financial Services Committee.” Last year, Frank pushed HR 6870, which would seek to clarify what activities were permissible under the UIGEA, through the Financial Services Committee. However, any action on the bill was halted, as the crisis on Wall Street began shortly thereafter. Frank has been the Chairman of the Financial Services Committee since 2007.

The letter notes, “At our hearing in April 2008, the testimony of regulators and the industry indicated that it would be particularly difficult to craft workable regulations to effectively enforce the statute without having a substantial adverse effect on the payments system.” Instead of creating a “laundry list” of activities that are allowed online, the UIGEA instead defers to a muddled web of federal, state, and local laws. As a result, credit card companies like Visa and MasterCard began “overblocking” in an attempt to comply with the measure, leading to legal online lottery purchases being denied in states like New Hampshire and North Dakota.

The letter is signed by 19 Congressmen, all of whom are members of the Financial Services Committee: Frank, Peter King (R-NY), Luis Gutierrez (D-IL), Ron Paul (R-TX), Melvin Watt (D-NC), Judy Biggert (R-IL), Gary Ackerman (D-NY), Leonard Lance (R-NJ), Michael Capuano (D-MA), William Lacy Clay (D-MO), Paul Hodes (D-NH), Ron Klein (D-FL), Ed Perlmutter (D-CO), Bill Foster (D-IL), André Carson (D-IN), Walt Minnick (D-ID), Steve Driehaus (D-OH), Jim Himes (D-CT), and Dan Maffei (D-NY). Four Republicans are among the signers, who also include two Subcommittee Chairmen.

Frank introduced HR 2266 in May. The measure, affectionately dubbed the Reasonable Prudence in Regulation Act, would delay financial services industry compliance with the rules and regulations of the UIGEA by one year until December 1st, 2010. The measure was introduced in May and has generated 51 cosponsors. However, while the letter explains that HR 2266 is “likely to move,” Frank’s committee has been bogged down with the struggling U.S. economy, which boasts near-double-digit unemployment. As of the time of writing, no discussion of the bill is scheduled.

Frank also introduced HR 2267 in May, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act. The bill establishes a complete licensing and regulatory framework for the internet gambling industry in the United States. HR 2267 blocks wagers on sports under the Professional and Amateur Sports Protection Act (PASPA) and has attracted 62 cosponsors. As its name implies, HR 2267 places a considerable amount of emphasis on providing consumer protection in an effort to placate to those in Congress who are fearful of underage and problem gambling.

Barney Frank, 18 Others Issue Letter to Geithner, Bernanke about UIGEA Rules

The fight to delay the implementation of the Unlawful Internet Gambling Enforcement Act (UIGEA) rules continues. Recently, 19 Congressmen, including Barney Frank (D-MA), issued a letter to Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke.

The news comes on the heels of a letter sent by the Poker Players Alliance (PPA) in conjunction with the National Thoroughbred Racing Association and the American Greyhound Track Operators Association to the same two government individuals. In fact, the letter sent by the Congressmen alludes to the PPA’s petition, encouraging Geithner and Bernanke to use the Administrative Procedure Act to delay the implementation of the UIGEA rules by one year to December 1st, 2010. As it currently stands, the financial services industry must fall into line with the 2006 law six weeks from now.

Frank’s letter explains that the UIGEA rules were officially approved on January 19th, one day before current U.S. President Barack Obama took office. It implores, “We realize this is not a task you requested. We also believe this is an unreasonable burden on regulators and the financial services industry at a time of economic crisis, and it contradicts the stated intent of the Financial Services Committee.” Last year, Frank pushed HR 6870, which sought to clarify what activities were permissible under the UIGEA, through the Financial Services Committee. However, any action on the bill was halted, as the crisis on Wall Street began shortly thereafter. Frank has been the Chairman of the Financial Services Committee since 2007.

The letter notes, “At our hearing in April 2008, the testimony of regulators and the industry indicated that it would be particularly difficult to craft workable regulations to effectively enforce the statute without having a substantial adverse effect on the payments system.” Instead of creating a “laundry list” of activities that are allowed online, the UIGEA instead defers to a muddled web of federal, state, and local laws. As a result, credit card companies like Visa and MasterCard began “overblocking” in an attempt to comply with the measure, leading to legal online lottery purchases being denied in states like New Hampshire and North Dakota.

The letter is signed by 19 Congressmen, all of whom are members of the Financial Services Committee: Frank, Peter King (R-NY), Luis Gutierrez (D-IL), Ron Paul (R-TX), Melvin Watt (D-NC), Judy Biggert (R-IL), Gary Ackerman (D-NY), Leonard Lance (R-NJ), Michael Capuano (D-MA), William Lacy Clay (D-MO), Paul Hodes (D-NH), Ron Klein (D-FL), Ed Perlmutter (D-CO), Bill Foster (D-IL), André Carson (D-IN), Walt Minnick (D-ID), Steve Driehaus (D-OH), Jim Himes (D-CT), and Dan Maffei (D-NY). Four Republicans are among the signers, who also include two Subcommittee Chairmen.

Frank introduced HR 2266 in May. The measure, affectionately dubbed the Reasonable Prudence in Regulation Act, would delay financial services industry compliance with the rules and regulations of the UIGEA by one year until December 1st, 2010. The measure was introduced in May and has generated 51 cosponsors. However, while the letter explains that HR 2266 is “likely to move,” Frank’s committee has been bogged down with the struggling U.S. economy, which boasts near-double-digit unemployment. As of the time of writing, no discussion of the bill has been scheduled.

Frank also introduced HR 2267 in May, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act. The bill establishes a complete licensing and regulatory framework for the internet gambling industry in the United States. HR 2267 blocks wagers on sports under the Professional and Amateur Sports Protection Act (PASPA) and has attracted 62 cosponsors. As its name implies, HR 2267 places a considerable amount of emphasis on providing consumer protection in an effort to placate to those in Congress who are fearful of underage and problem gambling.

Poker Players Alliance Issues Letter to Timothy Geithner, Ben Bernanke

With the December 1st deadline rapidly approaching for industry compliance with the Unlawful Internet Gambling Enforcement Act (UIGEA), the Poker Players Alliance (PPA) has coauthored a letter to prominent members of the Treasury and Federal Reserve.

The PPA letter is dated in September and addressed to Secretary of the Treasury Timothy Geithner and Federal Reserve Chairman Ben Bernanke. Its purpose is straightforward: encourage the postponement of the UIGEA’s regulations by one year. The letter explains, “An extension of the compliance date is necessary because a significant number of institutions subject to the Final Rule will not have in place the necessary policies and procedures mandated by the Final Rule on December 1, 2009, the current compliance date.”

In May, Congressman Barney Frank (D-MA) introduced HR 2266, the Reasonable Prudence in Regulation Act. The measure pushes back mandatory UIGEA compliance by one year to December 1st, 2010 and has generated 51 cosponsors. However, with Frank’s committee bogged down in financial reform and near double-digit unemployment, HR 2266 has not yet seen the light of day. Rich Muny, PPA State Director for Kentucky, told Poker News Daily, “The hope is that we would pass legislation or would work with the Treasury to get them to accept something like an administrative law judge to determine what is legal and illegal under the UIGEA. The judge, for example, could include the fact that the Wire Act doesn’t apply to online poker.”

The PPA authored its letter in conjunction with the National Thoroughbred Racing Association and American Greyhound Track Operators Association. The letter concludes by explaining what the three groups have in common: “Given a choice between subjecting themselves to liability under the Act for processing transactions involving unlawful internet gambling and subjecting themselves to no liability for overblocking, regulated institutions have indicated to our members that they intend to overblock.” In New Hampshire and North Dakota, overblocking by credit card companies like Visa and MasterCard of legal online lottery transactions occurred as financial institutions rushed to comply with the UIGEA.

The letter comes as the PPA scrambles to delay the UIGEA regulations by any means necessary and takes advantage of the Administrative Procedure Act, which governs the way regulations are implemented. Muny explained, “There are two laws that give the Treasury the right to make sure that regulations it implements are understandable. The UIGEA rules were a last-minute decision by the Bush Administration, so they could make a feasible case that they were created in haste.” The regulations of the UIGEA were passed as “midnight rules” by the Bush Administration and took effect on January 19th, one day before U.S. President Barack Obama took office.

The two horse racing outfits express concern in the letter over legal transactions being prohibited. It notes, “The UIGEA regulations could result in confusion among members of the financial services community, leading to a devastating impact on electronic wagering as authorized by the [Interstate Horseracing Act], which produces some $100 million in prize money for horsemen and millions of dollars of state and local tax revenue.”

Whether the UIGEA’s regulations will have any impact on the internet gambling and online poker industries in the United States after December 1st is not yet known. Noted online gambling expert Nelson Rose told Poker News Daily in a July interview, “Basically, the whole program focuses on due diligence on new accounts. If you’re crazy enough to set up a bank account with an American bank, they’ll ask if you’re involved in illegal internet gambling.” He added that payment processors have already devised ways to skirt the 2006 law.

Stay tuned to Poker News Daily for the latest PPA news.

iMEGA Readies for Kentucky Supreme Court Internet Gambling Hearing

In one week, attorneys for the Interactive Media Entertainment and Gaming Association (iMEGA) will take to the floor of the Kentucky Supreme Court to argue why the Commonwealth did not have jurisdiction to seize 141 internet gambling domain names, including those belonging to PokerStars and Full Tilt Poker.

Next Thursday marks an important day for the internet gambling industry in Kentucky and around the world. One year ago, the Kentucky Justice and Public Safety Cabinet, under the leadership of J. Michael Brown and the direction of Governor Steve Beshear, seized domain names belonging to some of the online poker industry’s giants. Arguments are scheduled for 11:00am on Thursday, October 22nd. Each side has 15 minutes to state its case and the proceedings are the final order of business on the docket for next week, leading iMEGA officials to believe that arguments may run longer than the scheduled time.

iMEGA Chairman Joe Brennan told Poker News Daily, “Since there’s no law as to how to approach this, the Governor and his attorneys went out and came up with a process on their own. They never named who was being served and basically asked people to come to court and identify themselves.” A total of 141 internet gambling domain names were seized under the grounds that they were “gambling devices,” a term that commonly refers to roulette wheels, dice, and other tangible items found in an underground casino.

In January, the Kentucky Court of Appeals ruled by a 2:1 margin that the Commonwealth did not have jurisdiction to act, while the lone dissenting judge argued that a domain name was part of a larger “gambling device.” Brennan explained, “Appellate Courts tend to take a conservative, narrow, statutory look. The gambling device statute is one thing, but there is ample case law regarding due process. I am absolutely certain that you’re going to see the Governor’s attorneys get up and talk about what crooked operators we’re dealing with.”

The trade organization argues that the Commonwealth violated due process by seizing the 141 domain names in question. Its brief to the Kentucky Supreme Court explains, “No real defendants were named, no process was issued, and no owner of any domain names was notified. In short, this was an action by the Commonwealth to seize property without the slightest pretext of complying with the fundamental dictates of due process.” Judge Thomas Wingate upheld the Commonwealth’s actions in a court ruling submitted last October.

Kentucky law describes a “gambling device” as “a machine or mechanical device… designed and manufactured primarily for use in conjunction with gambling.” iMEGA added in its brief that if Kentucky does not wish to permit internet gambling within its borders, then it should pass laws through the General Assembly. Brennan expects a decision by the Kentucky Supreme Court to be handed down in “a matter of months” following Thursday’s hearing, which will take place in Frankfort. A diverse group of organizations have submitted amicus briefs, including the Poker Players Alliance (PPA), American Civil Liberties Union (ACLU), the Center for Democracy and Technology, the Electronic Frontier Foundation, the Internet Commerce Association, eBay, and Network Solutions.

iMEGA is fresh off a mostly positive ruling in the Third Circuit Court of Appeals, which clarified the Unlawful Internet Gambling Enforcement Act (UIGEA) by noting that internet gambling’s legality depends on the laws of individual states. iMEGA claims that legal internet gambling is possible in 44 states, while its brief to the Kentucky Supreme Court explains that eight criminalize the industry to some degree: Illinois, Indiana, Washington, Louisiana, Oregon, Nevada, Montana, and South Dakota.

The Third Circuit disagreed with iMEGA’s assertions that the UIGEA trampled on First Amendment and privacy rights and dismissed the notion that it should be void for vagueness. Neither the Federal Government nor the trade organization has announced an appeal to the U.S. Supreme Court.

We’ll have a full recap of the iMEGA Kentucky Supreme Court hearing right here on Poker News Daily.

PPA drafts letter to President Obama