Poker News

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.

Poland Limits Gambling, Poker to Brick and Mortar Casinos

Poland’s Senate approved a measure limiting gambling to casinos, stunting access to poker and other games outside of a structured establishment. The bill cleared the Senate by a 48 to 3 margin, with 30 lawmakers not voting.

The Krakow Post noted that the new crackdown on gambling outside of licensed casinos may also spell trouble for internet gambling and online poker: “The legislation also affects Internet gambling, which will no longer be allowed under Polish law. However, the enforcement of this aspect of the bill will inevitably prove much more difficult than even the removal of thousands of slot machines.” Around 50,000 slot machines, which can be found in places like bars and restaurants around the country, will be removed as a result of the new law.

Polish President Lech Kaczynski must still apply his John Hancock to the piece of legislation in order for it to become official. The Post quoted Poland’s Prime Minister as saying that he expects Kaczynski to sign by the end of the month. In addition to ridding the European country of 50,000 slot machines and potentially slowing the growth of internet gambling, the bill passed by Polish lawmakers also sets a legal gambling age of 18.

The Agence France Presse, or AFP news service, shed some light into this month’s vote: “The decision by parliament comes nearly a month and a half after [Prime Minister] Tusk was forced to sack several key ministers and political allies over allegations of influence peddling within his cabinet regarding the gambling legislation.” World Bulletin explained what a portion of the funds raised will be used for: “Tusk has said the restrictions will prevent young people from becoming addicted to gambling. The government will funnel tax revenues raised under the bill into foundations promoting physical education and culture.”

No general election is scheduled in Poland until 2011 and the scandal in question involved casino owners. The new bill also increases the tax rate on casinos, helping raise additional money for Poland’s government. On the TwoPlusTwo forums, a translated article that originally appeared on Bankier.pl revealed that the tax rate on tournament poker would also increase as part of the new measure, although this component was not reported by the AFP or World Bulletin. TwoPlusTwo poster “novahunterpa” commented, “Looks like every country is either trying to ban online poker and gambling or restrict it to state monopolies.”

One month ago, Poland saw the invasion of the PokerStars-sponsored European Poker Tour (EPT), which made its annual stop in Warsaw. The 25,000 PLN buy-in event was held at the Casinos Poland Hyatt Regency and French businessman Christophe Benzimra emerged victorious from the 203 player field. The online poker site claimed that EPT Warsaw was one of the largest poker tournaments ever held in Poland. No indication has been given as to whether the new law will affect the EPT’s Season 7 Warsaw stop.

Among those keeping a watchful eye on the situation in the European country was Interactive Media Entertainment and Gaming Association (iMEGA) Chairman Joe Brennan, who told Poker News Daily, “The genie is out of the bottle when it comes to online gambling. Whether it’s restricting it for consumer protection or guaranteeing the franchise for Poland’s brick and mortar casinos, the fact is that the Polish people have already voted with their feet, their wallets, and their computers by seeking out online gambling. Poland is going to have a hard time putting the genie back in the bottle, as would any country.”

Notable poker personalities hailing from Poland include Poker Hall of Fame member Henry Orenstein, a WSOP bracelet winner who also invented the hole card camera. Orenstein was born in Hrubieszów and currently lives in the United States. Michael Gracz was born in Warsaw and, like Orenstein, now calls the USA home.

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.

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.

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.

Joe Cada wins the 2009 WSOP Main Event

Defeating 46-year-old Maryland logger Darvin Moon to become the youngest Main Event winner in history appeared to be an overwhelming moment for Cada, as tears filled his eyes when the final river card fell.

"I don't know; it still hasn't hit me," Cada said moments after the win. "I don't know what to think."

"I put a lot of time into poker. Poker has been my life for some time now. Doing this the first year out (at the WSOP) is unbelievable. I got really lucky, I ran well and I am very fortunate."

Cada started the heads-up match late Monday night with a better than 2:1 chip lead after a more-than-14-hour first day at the final table on Saturday.

But beating Moon was no easy task for the college student turned online poker pro from Shelby Township, Michigan.

In fact, Moon started to climb back into the match in the very first hand heads-up, dragging a 45 million chip pot with queens over nines.

Over the next hour Moon would win most of the largest pots the two played to draw even and eventually take over, building up an almost 3:1 chip lead without showing down a hand as his many supporters in the crowd grew increasingly vocal.

"I knew Darvin wanted to play some bigger pots and I wanted them smaller," Cada said. "He applied a lot of pressure and did a great job. He put me in some tough spots. He's definitely a hard player to get a read or a line on. He did a great job."

'He did a great job.'

Cada finally took a stand when Moon three-bet him pre-flop and he four-bet shoved for 50 million, forcing a fold to gain back some ground.

Then he doubled through Moon to take the lead back, making a massive call with second pair on the turn and two tens on the board after Moon pushed all in.

Moon had an open-ended straight draw that failed to get there and Cada was suddenly in control again.

"By me checking the flop it's obvious I don't have top pair, so he knows that," Cada said. "I kind of bet smallish, like three million, to entice a raise and there was a lot of draws out there, jack-queens, seven-eight, clubs, and I don't think he's going to ship a ten, not the way he's been playing. He doesn't just ship a big hand like that.

"In the end I thought it was the right call and I had to make it."

A few hands later, the two got into a pre-flop raising war that saw Cada push in with nines and Moon make the call for his tournament life with Q♦ J♦.

The flop came 8♣ 7♠ 2♣ as chants of "Joey" filled the Rio's Penn & Teller Theater.

The turn brought the K♥ and after the river came the 7♣, the 2009 WSOP Main Event title and $8.5 million first-place prize was Cada's.

Cada's supporters, the loudest group in the room right from the outset of the final nine, roared in approval as he had become the 2009 Main Event champion and Moon was forced to settle for the $5.1 million reserved for second.

The champ at work.

"They meant everything to me," Cada said of the crowd of friends and family there to cheer him on.

"They cheered me on when I had no chips. I had two million and they were standing out of their chairs. I got down to 40 million here and I heard them go crazy and that helped me get back in this.

"Momentum is a big thing in poker."

Cada, who said he was put in the tournament by famed online backers Cliff Josephy and Eric Haber in a fifty-fifty deal, said he has no remorse about having to share his winnings.

"I have no regrets," he said. "I knew what I could win when I came in to the tournament and I am very happy they put me in it."

Now comes a year under poker's brightest spotlight.

But the mature-beyond-his-years Cada appears more than prepared for it.

"I definitely plan on playing all the big tournaments, travelling and playing cash games on the side," he said. "I'll definitely embrace it. I want to see poker grow."

For a full recap of all the big hands in the heads-up match and throughout the entire 2009 WSOP Main Event, click through to PokerListings' Live Coverage.

Bump in the Road for Online Poker

Bump in the the Road for Online Poker

Cada vs. Moon: The Main Event goes heads up

And when play reconvenes at 10 p.m. PT Monday, it will be 21-year-old online poker pro Joe Cada looking to become the Main Event's youngest champion versus Maryland logger Darvin Moon, with an opportunity to shock the poker world to its core.

After a four month delay, the Main Event final table started slowly, but it wasn't long before a crowd of thousands in attendance at the Rio's Penn & Teller Theatre in Las Vegas were treated to a plethora of action.

Although he came in short, things appeared to be looking up for James Akenhead, when he tripled up, sucking out with king-queen against Eric Buchman's ace-king on a miraculous river card.

However, he was cooled out of those chips doubling up short stack Kevin Schaffel with kings against aces soon after.

A few hands later, he got it in with threes against Schaffel's nines and went out ninth.

"I feel like I played my best; I didn't make any mistakes," he said. "Obviously I'm very disappointed, but I went in as the short stack and I had to get it in and gamble."

Soon after, Schaffel though he had found some more good fortune, getting it in with aces again - this time against Buchman's kings.

"(When you see you have aces over kings) you think this is your time," said Schaffel. "It had just happened three or four hands earlier, so you think this might be it. This might be my day."

And then a king appeared in the window.

'I wanted to throw up.'

"I wanted to throw up," joked Schaffel. "Good thing I didn't eat a big breakfast."

A forth king came on the turn and suddenly Schaffel was out eighth.

Start-of-day leader Darvin Moon then gifted Steven Begleiter almost 18 million chips, folding to his shove on a four-high flop with two spades for just six million more and handing Buchman the chip lead.

The players went for a two-hour dinner break and returned to see Cada fall into a very short stacked position after doubling up Shulman.

Antoine Saout then moved into the lead when he doubled through Begleiter getting it in with two overs and flush draw against Begleiter's second pair and finding his flush on the turn.

Cada then doubled through Buchman to get some breathing room before winning a huge coin flip against Phil Ivey to leave Ivey as the short stack.

Soon after, Ivey open-shoved from under the gun with ace-king and Moon made the call with a dominated ace-queen only to flop a queen and send the consensus best player on the planet out seventh.

"I lost that pot (to Cada) and then I just got grinded down," Ivey said. "I held off and stayed even for a little bit and then I got it in with ace-king and lost it. There was not really much I could do."

Overall, the Team Full Tilt Pro said he was satisfied with the way he played.

'It was an amazing experience.'

"It is definitely just about winning, so it's disappointing I did not win," Ivey said.  "But I am happy with the way I played.  I think I made pretty good decisions with the amount of chips that I had. And, I think I gave myself as much possibility of winning it as I could."

In the end, Ivey said he was amazed at the energy coming from the thousands of poker fans that filled the Rio's Penn & Teller Theatre.

"It was an amazing experience," he said. "Poker has come so far. I mean, when I first started playing I would tell people I play poker for a living and they would look at me like I was crazy. So, to see this; it's really mind-boggling."

Left with a mid-sized stack after doubling up Saout, Begleiter was the next player at risk when he called all in with pocket queens facing a massive over-shove from Moon.

He was well ahead of Moon's ace-queen, but an ace on the river sent him home sixth.

"I'm a little numb obviously," said Begleiter. "I obviously would have liked to win that pot, but I have a smile on my face. What else can I do? I got my money in really good and I was one card away from being right back in the thick of it."

Soon after, Cada doubled through Shulman in a massive hand, flopping a set of threes against Shulman's jacks to leave the CardPlayer editor considerably short stacked.

Cada then doubled up again when Moon inexplicably ran king-nine into his aces before play tightened up.

After more than an hour without much action, Shulman pushed all in with sevens and got looked up by Saout holding ace-nine.

'I don't regret anything I did.'

The Frenchman hit a nine and faded a gutshot redraw to send Shulman out fifth.

"I played pretty well; tight," said Shulman. "I play differently than most people, but I don't regret anything I did.

"I still won like a million or two million or so. How can you not be pleased with it?"

Four handed, Buchman inched his way into the chip lead, but dumped most of it in a huge hand with Saout, running ace-queen into Saout's ace-king.

Suddenly, the Frenchman found himself with close to 90 million in chips and control over the table while Buchman was left short stacked.

Buchman doubled up once through Moon to stay alive, but was drawn out on the very next hand with ace-five against Moon's king-jack to bust fourth.

"I thought I played well," Buchman said. "The big hand was ace-queen versus ace-king and I don't know, four handed, I didn't think there was really anything I could do about that. Antoine was reraising me a lot all day and I thought it was the right hand to push, and whatever, it didn't work out. I had a good shot that last hand, if I doubled through Moon I would have had like 45 million, but that didn't work out either.

"I'm disappointed, but it's OK. There's only going to be one winner."

After a lengthy delay, Cada returned to ship it with deuces facing a Saout reraise and the Frenchman made the call with queens.

Moon: Heads up for the gold.

It appeared the heads-up match was as good as set, until Cada spiked a miracle deuce to double up.

With Cada suddenly in the chip leader's chair, he got in a classic race holding ace-king over Saout's eights with the Frenchman's tournament life hanging in the balance.

It took until the river, but a king came down just before 6 a.m. PT, busting Saout third and setting up the heads-up match between Cada and Moon.

Play will resume at 10 p.m. Monday with an $8.5 million first place prize up for grabs and Cada holding a 2:5:1 chip lead over Moon.

To catch all the action Monday and see a full recap of the play down to heads-up, click through to PokerListings 2009 Main Event Live Coverage.

Berman and Lakes Entertainment to Invest in Ohio Casinos

Tueday’s state election in Ohio brought good news for Lakes Entertainment and its Chairman Lyle Berman. A ballot initiative to bring casinos to four major Ohio cities passed by a 53% margin on Tuesday and Berman and Lakes Entertainment stand to profit from all four of the newly approved Ohio casino projects.

The casino initiative, known as Issue 3 on this year’s Ohio ballot, was a polarizing issue within the Midwestern state, with those opposing the initiative suggesting that it stands to benefit casinos, but not the people of Ohio. Those in favor of the bill pointed to the presence of casinos in the neighboring state of Indiana and suggested that Ohio is missing out on a viable revenue source during this economic recession.

In the end, casino supporters won out and new casinos are scheduled to be built in Cincinnati, Toledo, Cleveland, and Columbus. The two groups behind the new gaming establishments are Penn Ventures and Rock Gambling Ventures, but Lakes Entertainment has a stake in all four of the properties as well. Berman and Lakes tried to spearhead a failed effort to bring gaming to Ohio in 2008 and recently cut a deal with both Rock Gambling and Penn shortly before Election Day to ensure they would be involved in this latest attempt. The deal stipulates that Lakes will fund 10% of the cost of the ballot initiative and, in turn, will have the option to own a 10% share in each of the new casinos.

According to a report from the Associated Press (AP), Lakes filed the deal with the Securities and Exchanges Commission (SEC) on October 29th, just days before the November 4th election. The AP also reported that campaign finance documents of Issue 3 show that the campaign cost $35 million. The SEC filing indicated that Lakes already made an initial payment of $1.9 million to Penn Ventures and $2.4 million to Rock Gambling. Penn will oversee the construction and operation of the Columbus and Toledo casinos, while Rock will handle the Cincinnati and Cleveland sites.

Bob Tenenbaum of the Ohio Jobs and Growth Committee spoke with the AP about Berman’s involvement in the campaign. “At the time this was raised as a campaign issue, which was Oct. 6, Berman had no role in any of this,” he explained. “He never became involved in the campaign, but he did reach out to both Penn National and Rock Ohio Ventures in the last week of the campaign and asked if he could become involved.”

The union between Berman and Penn is an unexpected one considering the two were bitter rivals during the previous campaign to bring gambling to a single destination in Clinton County. The campaign turned so ugly that Berman and Lakes filed a defamation lawsuit against Penn, which counter-sued for defamation, libel, and slander. The AP reported that both suits have since been dropped, but that does not mean Berman and Lakes will have extensive involvement in the day-to-day operations of the new casinos.

A spokesperson for Rock, the business development company of Cleveland Cavaliers owner Dan Gilbert told the AP that Lakes would be playing a purely financial role in the casino projects. Berman and Lakes are not new to gaming in the Midwest and South. They currently own and operate several properties, including the Vicksburg Casino in Mississippi, the Four Winds Casino outside of Chicago, and the Cimarron and Ioway City Casinos in Oklahoma.

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.

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.

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.

Amazing Race: Tiffany Michelle and Maria Ho Finish Sixth in Dubai

Fresh off being spared elimination last week in Cambodia after a rival team lost their passports, poker players Tiffany Michelle and Maria Ho finished sixth in the Dubai leg of the CBS reality series “Amazing Race.”

Teams began in Cambodia, where brothers Sam and Dan departed at 12:25pm. The clue instructed the “Amazing Race” competitors to fly to the Persian Gulf to find the world’s tallest building. Teams had to figure out on their own that the clue meant traveling to Dubai, United Arab Emirates to find the Burj Dubai, a building that is twice the height of New York City’s Empire State Building. Once there, they had to sign up for one of two elevator rides to the top. Michelle and Ho were the final squad to leave the Cambodia Pit Stop, departing at 12:55pm.

On the fate of the racers who misplaced their passports last week, Michelle noted, “It’s unfortunate what happened to Zev and Justin, but the rules are the rules. We’re appreciative for the lucky chances and we think we can be contenders.” All teams traveled to Dubai on the same flight and, once there, Michelle and Ho quickly righted the ship and left the airport in second place. They were the first team to arrive at the Burj Dubai and signed up for the 5:30am elevator ride, which carried four teams. The second lift departed at 5:45am.

Once at the top, the clue instructed teams to go to a parking structure at the nearby Dubai Mall, find a marked car, drive to the Dubai Desert Conservation Reserve, and ride 4×4s to their next clue. They also received information about the only Fast Forward on this installment of “Amazing Race.” The first team that completed the Fast Forward would be able to skip all tasks on the leg and head straight for the Pit Stop. However, dating couple Meghan and Cheyne were the only team to attempt the task, which was to head to the Dubai Autodrome and drive an F3 racecar through a course in less than 45 seconds.

Michelle and Ho elected not to go for the Fast Forward and instead headed for the Conservation Center. On the way, Ho remarked, “Lots of sand in Dubai. Aside from the heat, this is an amazing place.” Once they arrived, a Roadblock, which is a task that only one team member can perform, was waiting for them. The challenge featured teams grabbing a traditional water bag and searching for water than had been placed in urns and buried in the sand. Several dry urns were also scattered, making the challenge tougher. Upon finding water, the team member had to fill their bag. Michelle performed the Roadblock, but came up dry on her first attempts.

Meanwhile, Cheyne registered 40 seconds on his F3 lap and received a clue to head to the Pit Stop, the amphitheater at Souk Madinat Jumeirah. Back in the desert, Brian, one-half of married couple Brian and Ericka, told Michelle where to find water, which allowed the last woman standing in the 2008 World Series of Poker (WSOP) Main Event to complete the task. Upon leaving the Roadblock, Ho ran over a stake in the ground, which punctured her car’s radiator. A replacement car was provided and Ho remarked, “I have an excuse because I’m an Asian female driver.”

Teams then made their way to Ski Dubai, a massive indoor ski resort in the middle of the urban metropolis. There, they encountered the leg’s Detour, a choice between two tasks, each with its own pros and cons. The first option was “Build a Snowman,” in which teams had to carry snow from the wintry inside of Ski Dubai to the 120 degree heat outside and build a traditional snowman before Mother Nature melted their creation. Teams could also select “Find a Snowman,” in which they took a chairlift to the top of the massive Ski Dubai slope and then sledded down to the bottom, where they had to search through a giant pile of snow for a tiny snowman.

Michelle and Ho elected to find a snowman; however, the duo quickly grew frustrated and switched. Meanwhile, after not being able to find their way out of Dubai to the Conservation Reserve, engaged couple Lance and Keri were the last to leave the Roadblock, could not catch up, and were eliminated this week. After building their snowman, Michelle and Ho checked into the Pit Stop on Dubai in sixth place, ensuring another week on “Amazing Race.”

Next week, the seven teams still in contention for the $1 million first place prize remain in Dubai and head to the Atlantis Resort, which is similar to its counterpart in the Bahamas that hosts the annual Ultimate Bet Aruba Poker Classic. “Amazing Race” airs at 8:00pm ET on CBS on Sunday nights.

Harrah’s Earns Seven Awards for Sustainability

The continued greening efforts by Harrah’s have paid off, as the resort company recently earned seven gold medals from Travelife, an organization that promotes sustainability in tourism.  Gold medals were doled out to several of Harrah’s Las Vegas properties, including the Rio, Caesars Palace, and Bill’s Gambling Saloon.

The medals are designed to reward properties that make an effort to minimize negative impact on the environment, take advantage of locally-based companies when selecting vendors, and make a concerted effort to hire locally based individuals to better the social lives of people within the community.

Travelife is an organization set up by the European Union through the Federation of Tour Operations to advise travelers on companies and hotels that make efforts towards greening their company.  Harrah’s was the only gambling-related company to receive accreditation for multiple Las Vegas resorts, taking home eight total medals.  The gold medals went to the Rio, Caesars Palace, Bill’s Gambling Saloon, Flamingo, Paris, Bally’s, and Harrah’s, while Imperial Palace received a silver medal.

Gary Loveman, the Chairman and Chief Executive Officer of Harrah’s, commented on the honor in an official press release from the company: “I’m proud that each of our resorts in Las Vegas achieved this distinction. We’ve invested heavily in sustainability at Harrah’s and made it a core business principle that drives business strategy and operations.”

According to numbers found in Harrah’s press release, the company has launched more than 110 conservation projects across its numerous properties.  These efforts have resulted in the reduction of 77,850 tons of carbon dioxide emissions.  Some of the projects include the installation of water filtration systems in Harrah’s restaurants to cut down on bottled water use and the implementation of a new Las Vegas laundry facility that severely cuts down on the number of gallons of water used each year.

Even the Harrah’s-owned World Series of Poker (WSOP) is taking part in sustainability efforts.  An eco-friendly poker table designed by EGM Green was put on display as part of the 2008 WSOP festivities.  The table was made of 98% sustainable materials and was awarded to that year’s Main Event Champion, Peter Eastgate.  The table was auctioned off for charity this past July at the Friends of Eastgate fundraiser.  Casinos that install the EGM table can earn Leadership in Energy and Environmental Design (LEED) credits.

Harrah’s has also received several other green honors over the past year, including an Environmental Quality Award, which is the highest level of recognition bestowed by the Environmental Protection Agency (EPA).  Harrah’s partnered with the EPA last year to take part in the Climate Leaders project and recently teamed up with the organization again for the Water Wise project.

In September, the casino conglomerate announced it would be joining forces with Dell, SC Johnson, Starbucks, and Wrigley to form “Team Earth.”  Run by Conservationists International, the team is designed to bring together corporations, non-profit organizations, scientists, and educators to discuss environmental issues.

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.

Online Poker Industry Nearing December 1st UIGEA Compliance Deadline

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). Working to delay the deadline is the Poker Players Alliance (PPA).

In May, Congressman Barney Frank (D-MA) introduced HR 2266, more commonly known as the Reasonable Prudence in Regulation Act. Frank’s piece of legislation pushes back the looming compliance date from December 1st, 2009 to December 1st, 2010, essentially extending the status quo by one year. In the interim, lawmakers on Capitol Hill could, in theory, devise a lucrative method for taxing and regulating the internet gambling industry in the United States, potentially reaping over $60 billion in revenue in the process.

HR 2266 currently boasts 48 cosponsors, including Andre Carson (D-IN), Jerrold Nadler (D-NY), Bennie Thompson (D-MS), and Melvin Watt (D-NC), who signed on to open the month of October. Despite the outpouring of support, PPA Executive Director John Pappas told Poker News Daily that other avenues besides the legislative process are being pursued since the December 1st deadline is rapidly approaching: “We are working with Barney Frank and others for a non-legislative solution to clarifying or delaying the UIGEA regulations. Given everything on the Chairman’s plate, one thing off of it is a good thing. We’re hoping to see a delay.”

One strategy the PPA is potentially pursuing is utilizing the Administrative Procedure Act. According to About.com, the law is typically used by federal agencies to create regulations to enforce laws passed by Congress. The Administrative Procedure Act was passed in 1946 and Pappas noted that the measure “allows for individuals and organizations like the PPA to weigh in with the Department of the Treasury and ask for a delay of a proposed rule.” As many poker players remember, the regulations of the UIGEA were rubber-stamped as “midnight rules” by the outgoing Bush Administration. They were officially adopted on January 19th, one day before U.S. President Barack Obama assumed office.

Working against the industry as the December 1st deadline approaches is the precarious state of the U.S. economy, which saw unemployment rise to 9.8% in September. In addition, Obama and others on Capitol Hill have been steadfastly pushing health care reform, which has also taken center stage. Consequently, issues like internet gambling have fallen by the wayside. Pappas explained, “The reality is that our country is facing a lot of challenges. From a poker player’s perspective, the UIGEA may be the top priority, but it’s not the top priority of Congress. Until Barney Frank can solve the issues facing his Committee, ours is not going to take precedence.” Frank chairs the Financial Services Committee.

Also expected is a letter authored by Frank and two-dozen other politicians to Treasury Secretary Timothy Geithner calling for a delay of the UIGEA regulations. As of the time of writing, no such letter has come to fruition. Others, including gambling law expert Nelson Rose, question whether the industry will see any changes after the December 1st deadline passes. In a July interview, Rose told Poker News Daily, “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.”

Frank has also introduced HR 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act. The measure has attracted 60 cosponsors, including Shelley Berkley (D-NV), Steve Cohen (D-TN), Ron Paul (R-TX), and Robert Wexler (D-FL). HR 2267 was introduced on the same day as HR 2266 and establishes a complete licensing and regulatory framework for the internet gambling industry in the United States.

Stay tuned to Poker News Daily for the latest poker legislation headlines.

Poker Law — Barney Frank Urges Regulators to Delay UIGEA

Linda Johnson Goes to Camp

I recently returned from a 10-day trip to Indiana. The first part of the trip was spent at the Hollywood Casino (formerly Argosy Casino) in Lawrenceburg, Indiana.  The new $336 million facility is more than twice the size of its former vessel. The two decks, each wider than an aircraft carrier and nearly as long as a football field, make it the largest riverboat in the country. It gives one the feel of being in a luxurious casino with all of the bells and whistles.

Hollywood Casino has more than 270,000 square feet of space, including 150,000 square feet for gaming with 88 tables, 3,200 slots, and electronic table games. The Hollywood décor and theme is flawlessly executed throughout. The casino brings classic Hollywood to life with a 60-foot serpentine video wall, nine large billboards, and more than 300 flat screen displays featuring first-run movie trailers, video shorts, entertainment programming, and sporting events. Among the casino’s major attractions is an exclusive VIP Producer’s Lounge and an expanded high-limit gaming area.

I’d been to Argosy a few times in the past three years and had always enjoyed the gaming and hospitality there, so decided that the opening of its brand new 41-table poker room (the largest in the Midwest) and the Indiana State Poker Championship would be two great reasons to return. My first mistake was booking a flight into Indianapolis instead of Cincinnati. This error resulted in a two-hour drive to the casino instead of 10 minutes. On the bright side, however, I got to spend the two hours getting to know the Hollywood Casino cardroom manager Thom “TK” Krauss and Tournament Director Kevin Dawn. TK is very much a hands-on manager and knows all of his regular patrons by name. He told me that he loves his job, which was obvious since I saw him there at all hours of the day and night. The poker staff and players were very hospitable and made me feel very welcome.

The poker room is very comfortable, with lots of space between tables, great chairs, and good lighting. Players’ hours are tracked so they can earn comps. By the way, the buffet at Hollywood Casino is as good as the best buffets in Las Vegas. The poker room is so impressive that it recently was selected to host a stop on the World Poker Tour.

Jan Fisher and I gave a poker seminar at the Hollywood on the Roof, a performance area with a panoramic screen resembling the Hollywood Bowl, where bands can entertain guests and video content can be projected in grand scale. Hollywood on the Roof features a high-energy circular bar that looks out onto the casino atrium. The seminar was well-attended and I thoroughly enjoyed meeting the locals.

After five days at Hollywood Casino, I went to Indianapolis to participate in Mickey’s Camp, a charity event held annually in a campground called Bradford Woods. There is a separate men’s camp and women’s camp and the attendees actually attend summer camp for adults. They sleep in the same bunks, 12 to a cabin, that kids sleep in during their camp. Each camper gets to choose 10 activities from about 35, including flyfishing, police training, backgammon, Alpine tower, pistol and rifle shooting, gourmet cooking, raft building, canoeing, wine tasting, billiards, table tennis, beer tasting, boxing, jewelry making, photography, yoga, painting, hiking, darts, orienteering, and swimming. I teach the poker class and then run a tournament for the men and women. After my classes, I get to be a camper. This year I chose the following activities: massage, magic, bridge, grilling, backgammon, medical myths, self-defense, sports dialogue, badminton, economics, rifle/pistol, and CPR.

From the $1,500 fee to attend the camp, at least two-thirds of it goes to Indiana charities. This can be done because most of the food is donated by local restaurants and the instructors donate their time as well. The founder, Mickey Maurer, is a great ambassador and philanthropist and has raised more than $1 million for charity through his camp.

Although the attendees are extremely successful in the business world (during the first evening of each camp, we sit under a tent, everyone introduces themselves and tells what they do, and I am always blown away by how accomplished they are), most of them are not the caliber of player I usually encounter in my classes. They sure do have fun though! I had to chuckle when I saw two of the players get up in the middle of the tournament and say, “Thanks, I think I’ve had enough.” Then, they just quit and left their chips on the table.

This was my fourth year at Mickey’s Camp. I love attending charity events and this is one of my favorites.

Emilio Gomez Steps Down from Party Gaming Board of Directors

Party Gaming lost a member of its Board of Directors last week, when Non-Executive Directors Emilio Gomez stepped down from his post for personal reasons.  The official statement from Party Gaming announcing his resignation made no mention of a future replacement and noted a balance between Executive and Non-Executive members of the Board in the wake of Gomez’s departure.

Now that Gomez has moved on, the Board consists of seven members, including Chief Executive Officer Jim Ryan, Non-Executive Chairman Rod Perry, and Finance Director Martin Weigold.  Gomez first began his tenure as one of the group’s Non-Executive Directors in December of 2007 and served as the representative for Party Gaming co-founder Anurag Dikshit.

In December of 2008, Dikshit became the first online gambling mogul to face legal action in a U.S. Court when he agreed to forfeit $300 million in earnings from the company after admitting to breaking laws related to the Wire Act in conjunction with Party Gaming.  In exchange for the monetary settlement, Dikshit avoided jail time until at least December of 2010 and continues to reside in Gibraltar, where Party Gaming is based.  Dikshit stepped down from the Board of Directors in 2006 to serve as the company’s Head of Research and Special Projects.  There has been no announcement as of yet as to how Gomez’s departure will influence Dikshit’s influence on the Board.  Party Gaming can be found on the London Stock Exchange under the symbol “PRTY.”  It is the parent company of the popular online poker site PartyPoker.

Gomez’s resignation is just the latest in a long list of changes for Party Gaming this year.  The company’s purchase of World Poker Tour Enterprises (WPTE) in August as well as numerous business-to-business ventures like the purchase of the online bingo company Cashcade and the launch of an Italian online poker site in tandem with Intralot have headlined a busy 2009 for Party Gaming.  In its mid-year financial report, Ryan said the company would continue to pursue these profitable business-to-business deals and invest more time and effort in Party Casino, its online casino business.

In the week following Gomez’s announcement, PRTY shares have seen a slight drop in value, falling from a high of $282 on September 23rd to a low of $263.80 towards the end of day on the 24th.  At the close of the business day on Friday, shares were trading at $267.60. Despite the slight drop this week, Party Gaming stocks have been on a rise as a whole in 2009, increasing in value from $195 in January to a high of $283 in May to its current trading price of $267.60.

Senator Wyden Withdraws Proposal to Use Internet Gambling to Fund Health Care

The debate on Capitol Hill rages on over health care reform, which, according to Senator Orrin Hatch (R-UT), will likely come with a nearly $1 trillion price tag. Senator Ron Wyden (D-OR) proposed using internet gambling revenue to defray some of the cost, but withdrew his amendment this week.

In a column that appeared in the Deseret News, Hatch noted, “At a time when we have trillion-dollar-plus deficits and an unemployment rate reaching double digits, [this health care reform] is a colossal mistake I cannot support.” With the massive cost turning many off, Wyden suggested using tax revenue from Congressman Barney Frank’s (D-MA) Internet Gambling Regulation, Consumer Protection, and Enforcement Act (HR 2267). The bill establishes a full licensing and regulatory framework for the internet gambling industry in the United States.

Michael Waxman, spokesperson for the Safe and Secure Internet Gambling Initiative, commented in a press release shortly after the amendment was introduced, “We applaud Senator Wyden’s proposal to collect and put to good use tens of billions in internet gambling revenue that would otherwise be lost in the underground marketplace. The Senate Finance Committee should approve this resolution, finally putting to an end a failed prohibition on Internet gambling that leaves Americans unprotected and unlicensed offshore operators as the only beneficiary in a thriving marketplace.”

HR 2267 was introduced in May and has attracted 58 cosponsors, the newest of which are William Lacy Clay (D-MO), Christopher Murphy (D-CT), and Adam Schiff (D-CA). Interactive Media Entertainment and Gaming Association (iMEGA) Chairman Joe Brennan told Poker News Daily, “There are not many places you can go to find ‘free money’ right now. Internet gambling is one of them. You’re not going to have many industries wanting to be taxed.” Also in Congress is HR 2268, the Internet Gambling Regulation and Tax Enforcement Act. The measure, introduced by Congressman Jim McDermott (D-WA), assesses a tax of 2% of deposits on licensed internet gambling outfits in the United States. HR 2268 was introduced on the same day as HR 2267 and has attracted four cosponsors.

A recent study by PricewaterhouseCoopers indicated that over $60 billion could be generated from taxing the internet gambling industry over a 10 year period. However, that figure includes legalized online wagering on sports. On Wednesday, “The Hill” published an article noting that Wyden had withdrawn his proposed amendment. The Senator’s Communications Director told the publication, “The last thing Senator Wyden wants to do is make it more difficult to expand subsidies for working families by introducing a new contentious issue to the debate. So when he offers the amendment, he will do it with other funding mechanisms.”

Wyden’s attempt to demonstrate tangible uses for internet gambling revenue comes on the heels of McDermott’s introduction of HR 6501 in July of 2008. McDermott’s bill, dubbed the Investing in Our Human Resources Act, provided up to $40 billion in assistance for those currently or formerly in foster care and those in declining job markets. HR 6501 was not acted on during the 110th Congress. McDermott’s proposal was not well-received, as Congresswoman Shelley Berkley (D-NV) labeled it “a classic case of putting the cart before the horse.” Former Congressman Jon Porter (R-NV) piled on, saying that HR 6501 marked “a frivolous attack on the gaming community to pay for services that local governments, states, and the federal government should already be providing.”

Last month, Senator Robert Menendez (D-NJ) introduced S 1597, the Internet Poker and Games of Skill Regulation, Consumer Protection, and Enforcement Act. The bill, as its name implies, focuses on licensing games such as poker, bridge, chess, mahjong, and backgammon “in which success is predominantly determined by the skill of the players.” Menendez’s measure has not attracted any cosponsors.

Congress is targeting October 30th as its adjournment date for the 2009 calendar year.

NEOVIA Reports H1 2009 Revenue Loss of 9%

Global payments processor NEOVIA Financial PLC reported a 9% fall in revenue for the half-year ending on June 30th, 2009. The company, which owns the popular e-wallet Neteller, posted group revenue of $32.6 million, down from $35.9 million at the same time last year. Net loss for the first-half was $6.7 million, or $0.06 per diluted share, compared to net profit of $1.15 million, or $0.01 per share, a year ago. The company is traded on the London Stock Exchange under the symbol NEO.

“The first half’s trading results were in line with management’s expectations given the continuing difficult market conditions that prevailed throughout the period,” said Dale Johnson, Chairman of NEOVIA. “We expect trading conditions to remain tough in the second half, with the Company delivering revenue similar to the first half, with prospects for 2010 looking promising.”

NEOVIA’s focus for improvement is centered on adding more consumer and merchant scale to its business and rolling out a new e-wallet business platform called NewTeller, which is scheduled for completion next year.

“The NewTeller platform will launch fully in early 2010 as anticipated, creating much needed flexibility for developing functionality to meet evolving market needs,” Johnson added. “During this period, the Group faces both challenges and opportunities, but remains focused on maximizing revenues, controlling costs, and preserving cash to deliver value for shareholders.”

On a positive note, revenues from the NETBANX Europe and Asia businesses performed better in 2009, up 12% compared to the same period in 2008. Revenues from the Asian business alone grew 40% to $6.9 million. Active e-wallet users were up 3% to 95,492 by June 30th. Average daily deposit volume was up 20% to $475,266 from last year’s mark of $396,413.

NEOVIA CEO Mark Mayhew, who took over the position on September 1st, isn’t worried by the decrease in revenue. “I am very pleased to have joined NEOVIA and am reassured by these results, which demonstrate the resilience of the Company’s business model even in the toughest of economic environments,” said Mayhew. “I shall be concentrating on creating substantial shareholder wealth in the future and the board is fully supportive of this aim. Over the next few months, one of my prime objectives is to focus the Group’s efforts on re-energizing our offering in order to grow revenues demonstrably.”

NEOVIA also announced completion of the investigation by the United States Department of Justice and the handing over of a copy of the Notice of Dismissal of the complaint filed against Neteller. The company received notice that it no longer faced the possibility of legal prosecution after the expiration of its Deferred Prosecution Agreement from the U.S. Attorney’s Office. In such an agreement, proceedings in a criminal case are put off for a period of time, subject to certain conditions. At the end of the time period, if all conditions have been met, the charges are dismissed. Neteller was forced to surrender $136 million in July of 2007 after admitting to operating an “unlicensed money transmitting business” and participating in the promotion of “unlawful transactions” between gaming operators and their customers in the United States.

Kentucky Supreme Court to Hear Internet Gambling Case

In January, the Kentucky Court of Appeals ruled by a 2:1 margin that the Kentucky Justice and Public Safety Cabinet did not have jurisdiction to seize 141 internet gambling domain names. In October, the Kentucky Supreme Court will hear the case.

The Cabinet appealed immediately following the Court of Appeals decision, which kicked off the 2009 calendar year in the online poker world. Now, attorneys for the Interactive Media Entertainment and Gaming Association (iMEGA) and Commonwealth of Kentucky will take to the floor of the state’s Supreme Court on Thursday, October 22nd at 11:00am local time. On the 10-month turnaround, iMEGA Chairman Joe Brennan told Poker News Daily, “My understanding is that the October 22nd date is fairly expeditious when it comes to the Kentucky Supreme Court. Usually, appellate courts don’t hear things that quickly when there’s nothing driving it. The fact that the court is going to hear oral arguments so soon confirms that it has an interest in the subject matter.”

A bevy of organizations have submitted documents supporting iMEGA’s challenge against the Commonwealth of Kentucky, including the Poker Players Alliance (PPA), eBay, and the American Civil Liberties Union (ACLU). iMEGA is represented by Jon Fleischaker of Dinsmore and Shohl, which is based in Louisville, Kentucky. Brennan forecasted, “We saw the briefings that the Governor’s attorneys brought to the table and they don’t have a lot they can hang their heads on other than making a claim for a Federal ban on internet gambling that doesn’t exist. There’s no Federal law against gambling on the internet and no law in Kentucky. I’m pretty sure we’re going to beat them again.”

Last September, the Commonwealth seized the 141 internet gambling domain names in question, including those belonging to PokerStars, Full Tilt Poker, and Ultimate Bet, on the grounds that they constituted “gambling devices,” a term traditionally reserved for physical objects like dice and slot machines that you’d find in an illegal casino. In October, Judge Thomas Wingate upheld the Commonwealth’s actions, which were prompted by Governor Steve Beshear. iMEGA then sought the intervention of the Court of Appeals, which agreed with the trade association by a 2:1 vote in January.

The news comes on the heels of iMEGA falling short in its constitutional challenge of the Unlawful Internet Gambling Enforcement Act (UIGEA). A three-judge panel in the Third Circuit Court of Appeals disagreed with many of the organization’s basic arguments, but ruled that internet gambling may be legal in the U.S. dependent upon state law. On the UIGEA, the Court declared, “The Act itself does not make any gambling activity illegal. Whether the transaction… constitutes unlawful internet gambling turns on how the law of the state from which the bettor initiates the bet would treat that bet, i.e., if it is illegal under that state’s law, it constitutes ‘unlawful internet gambling’ under the Act.” IMEGA claims the decision could pave the way for legal internet gambling in 44 states.

iMEGA can appeal the Third Circuit’s ruling, although no decision has been made as to whether the organization will pursue that course of action. Brennan explained, “If we were to do something, it’d be applying to the Supreme Court or starting a new challenge against the UIGEA regulations. At this point, I wonder what the best use of our resources is. The Government managed to get the UIGEA upheld in a way that the states have a right to determine what kind of gambling is allowed within their borders.” The Third Circuit dismissed iMEGA’s claims that the UIGEA should be “void for vagueness” and that the 2006 law tramples on privacy rights, among other arguments.

Kentucky’s economy thrives on the presence of horse racing, whose premier event is the annual Kentucky Derby, held each May in Louisville. The parent company of Churchill Downs, the venue of the Derby, also owns and operates TwinSpires.com, which accepts real money wagers from Kentucky residents. Moreover, the state’s lottery offers an online second chance option.

Stay tuned to Poker News Daily for the latest from the Kentucky internet gambling case.