Poker News

ESPN Inside Deal Airs First Show of 2010

The ESPN poker franchise “Inside Deal” returned on Tuesday with the first episode of 2010. Joining the series, which emanated from a new set, were Poker Players Alliance (PPA) Executive Director John Pappas and 2009 World Series of Poker (WSOP) Main Event Champion Joe Cada.

The show began with a discussion of the CardPlayer and Bluff Player of the Year awards for 2009. CardPlayer named UB.com pro Eric “basebaldy” Baldwin as its winner, while Bluff crowned PokerStars’ Jason Mercier. On which publication was more accurate, “Inside Deal” host Bernard Lee explained, “Understand that this is not apples to apples. These are two completely different Player of the Year formulas. If you had to look at it, I think CardPlayer has it a little more open for most players.”

Lee noted that poker pro Amnon Filippi bumped him from the 2010 PokerStars Caribbean Adventure (PCA) Main Event, while Cada staked co-host Laura Lane into the ladies’ event. Now, Lee and the rest of the poker world have their sights set on the PokerStars-backed North American Poker Tour (NAPT), which resumes on February 20th at the Venetian: “I’ve said from the beginning that being able to qualify online is going to increase registration, prize pools, and interest in any tournaments. So far, over 160 players have qualified for the Venetian event. That’s more than some of the WSOP Circuit Events had all last year.”

Pappas joined “Inside Deal” via phone to catch listeners up on the good word from Capitol Hill. The Executive Director of the one-million member lobbying group explained the biggest challenge of 2010: “There is this continuing cloud of grayness as to what is legal and what is not legal. We have a six-month reprieve to get that Congressional clarification to make sure that it is clear that playing poker over the internet is not an unlawful internet gambling transaction.” The PPA is pushing for a markup of Congressman Barney Frank’s (D-MA) HR 2267 in February.

Cada, donning a festive array of PokerStars logos, told “Inside Deal” viewers that the pressure for him to perform has ramped up dramatically: “There is definitely more pressure now, especially because of the way I won my final table.” Cada hit the deck hard during the final table of the 2009 WSOP Main Event and defeated Maryland logger Darvin Moon heads-up.

One of the rumors flying around the poker world during the PokerStars Caribbean Adventure was that Cada was dating former Playboy Playmate of the Year Jayde Nicole. The rumors ultimately proved false, but Cada is still trying to wrap his head around his celebrity status: “I am still trying to get used to everything. The rumors are not so great. All my friends back home asked me about it and there are so many rumors going on.”

A comprehensive breakdown of a hand between Moon and Cada heads-up aired featuring Lee and ESPN.com Poker Editor Andrew Feldman dishing out strategy. The crew then asked Cada to reveal his mentality headed into heads-up play in poker tournaments: “I start off slow when I start heads-up because I don’t know how they play. A lot is their frequency of calls pre-flop and stack sizes. If the stack sizes are deeper, then you’re able to raise more from the button.” Cada was an online heads-up specialist prior to his win last November to become the youngest WSOP Main Event champion ever.

A new segment called “Snap Calls” featured discussion of Huck Seed’s chances to make it eight cashes in a row in the National Heads-Up Poker Championship, the number of new girlfriends Cada will have this year (Cada said under 1.5), the future of online poker legalization, whether Bernard Lee would claim a title in 2010, and whether Cada would win another bracelet in this year’s WSOP.

Poker Players Alliance Pushing for February Markup of HR 2267

The Poker Players Alliance (PPA), the industry’s one-million member strong lobbying organization, is ramping up for what could be a monumental 2010 legislative year. At stake is the future of online poker in the United States.

As the industry treks into the new decade, Congressman Barney Frank’s (D-MA) HR 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act, is up to 65 co-sponsors. In the first two weeks of January, the measure saw two new lawmakers lend their names in support, Congressmen Eliot Engel (D-NY) and Charlie Melancon (D-LA). HR 2267 was introduced in May and, in the beginning of December, was discussed in the House Financial Services Committee.

No markup of HR 2267 occurred during the December 3rd hearing, which took place one week following officials from the U.S. Treasury and Federal Reserve delaying mandatory compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) by six months to June 1st, 2010. However, according to PPA Executive Director John Pappas, a markup may be in the offing: “The big next step for us is the markup. We’ve built out who our targets are for that committee and are pursuing them. We think it might happen in February, but there are no guarantees.”

According to Pappas, Frank expressed his desire to hold a markup hearing next month, which could lead to discussion of HR 2267 on the floor of the House of Representatives later this year. From there, Frank and the PPA could elect to attach the measure to another piece of legislation, similar to how the UIGEA became a part of an unrelated port security bill in 2006. Pappas noted, “One of our biggest challenges will be to make the vote in the committee bipartisan. That’s going to be our challenge and I think we can do it. Winning big in the Financial Services Committee will help us advance the bill in any other capacity.”

In the next month, the PPA also expects information to be released concerning the amount of money that could be raised should Senator Robert Menendez’s (D-NJ) S 1597 be approved. The bill, dubbed the Internet Poker and Game of Skill Regulation, Consumer Protection, and Enforcement Act, regulates online skill games. S 1597 was introduced in August, but has yet to garner any co-sponsors.

On the difficult road that lies ahead in the U.S. Senate, Pappas commented, “The Senate has been a tougher ground for us to plow so far, so we’re trying to do what we can there. It’s not because the topic isn’t of interest or important, but rather because they operate differently. The House operates quickly, whereas the Senate is more deliberate.”

The UIGEA was not discussed in the Senate four years ago; instead, it was approved by unanimous consent. Then, the PPA was in its infancy, boasting around 50,000 members during the 2006 World Series of Poker (WSOP). Now, it has grown into the seven-figures and seen players like UB.com pro Annie Duke and 2004 WSOP Main Event winner Greg Raymer champion its cause. In 2010, the PPA expects to work with a variety of organizations in the industry for membership drives, following the blueprint of its recent promotion with Card Player Cruises that awarded one player a trip for two to the Caribbean.

Finally, Pappas gave his take on the proposed intrastate internet gambling bill introduced in New Jersey by State Senator Raymond Lesniak. On the model for other states to follow to legalize online wagering, Pappas told Poker News Daily, “For poker players in New Jersey, it presents an interesting opportunity to play on a licensed site. The issue is what sites they’ll be able to play on. Will it be on the brands they know? Having Atlantic City casinos undertake building their own software and player bases will take quite a long time.” According to PokerScout.com, PokerStars, the largest online poker site in the industry, boasts a seven-day running average of 33,200 real money ring game players.

Stay tuned for the latest news from the PPA right here on Poker News Daily.

Sen. John Kyl Makes Power Play

Internet Gambling Bill Introduced in New Jersey

Legalized internet gambling and online poker may be coming to New Jersey. State Senator Raymond Lesniak introduced S 3167, which specifically legalizes the internet version of popular brick and mortar games like poker, roulette, baccarat, blackjack, craps, the big six wheel, slot machines, mini baccarat, red dog, pai gow, and sic bo.

Servers and monitoring offices for internet gaming companies created under the bill must be located in Atlantic County, New Jersey. The State is charged with protecting consumers under the bill, which explains that a government division would develop “technical standards for approval of software, computers and other gaming equipment used to conduct internet wagering, including mechanical, electrical or program reliability, security against tampering, the comprehensibility of wagering, and noise and light levels, as it may deem necessary to protect the player from fraud or deception and to insure the integrity of gaming.” Online accounts would only be open to players age 21 or older, mirroring the standards of the brick and mortar casino world.

Online poker is mentioned by name several times, mitigating any doubt that the game may not be legal if Lesniak’s bill were enacted into law. Internet gambling outfits would be subject to a 20% tax paid to the state’s casino revenue fund. An additional tax will see a portion of its proceeds go to the New Jersey Racing Commission “to be used for the benefit of the horse racing, including but not limited to the augmentation of purses.”

The act would take effect immediately upon future Governor Chris Christie signing it into law, setting up a model for intrastate online gaming that other jurisdictions could soon mimic. The New Jersey Casino Control Commission would establish a Division of Internet Wagering to oversee operations and licensing. Permit holders would be required to pay an up-front licensing fee of $200,000, with renewals running $100,000. In addition, operators would be required to fork over a $100,000 non-refundable deposit and $100,000 annual fee that would go towards treating compulsive gambling.

The Interactive Media Entertainment and Gaming Association (iMEGA) has been one of the leading forces pushing for legislation in New Jersey. Its Chairman, Joe Brennan, commented in a press release distributed by the trade organization, “We’re happy that New Jersey has taken this issue into their own hands. New Jersey is recognized as having the toughest gaming regulators in the U.S., but as a leading gaming state with a long track record of doing things the right way, internet gambling will have a great home here and the opportunity to begin normalizing the industry.”

Legal online wagering on horse racing is available to New Jersey residents on 4NJBets.com. Those placing wagers must be 18 years of age and have completed a form W9 for tax purposes. An automated phone betting system supplements the website, allowing multiple avenues for New Jersey residents to place wagers on their favorite ponies. Popular New Jersey tracks include Monmouth, Meadowlands, and Freehold.

On a national level, New Jersey Senator Robert Menendez has introduced S 1597, the Internet Poker and Game of Skill Regulation, Consumer Protection, and Enforcement Act. As its name implies, the measure legalizes skill games like online poker in a similar fashion to Congressman Barney Frank’s (D-MA) HR 2267 in the House. S 1597 was introduced in August, but has not yet picked up any co-sponsors. Menendez’s bill defines “skill game” simply as “an Internet-based game in which success is predominantly determined by the skill of the players, including poker, chess, bridge, mah-jong, and backgammon.”

In the meantime, iMEGA anxiously awaits a decision from the Kentucky Supreme Court on the future of 141 internet gambling domain names, including those belonging to PokerStars and Full Tilt Poker, that face potential forfeiture. A decision may be handed down as soon as January 21st.

David Carruthers Gets 33 Months Jail Time in BetOnSports Case

In April, former BetOnSports CEO David Carruthers pled guilty to racketeering charges stemming from his operation of the popular online sports book. He faced up to 33 months in prison and a maximum sentence was handed down on Friday.

U.S. District Court Judge Carol E. Jackson sentenced Carruthers on Friday after he was indicted by a grand jury four years ago, according to an article that appeared in Business Week authored by Bloomberg. In court late last week, Carruthers expressed remorse for his actions: “I understand now that the business was operating outside the laws of the United States. I realize I made the biggest mistake of my life. I am sorry for the actions of BetOnSports and the trouble it caused.” The company purportedly raked in over $1 billion in 2004 alone, with Bloomberg noting that a whopping 98% of wagers came from customers in the United States.

Carruthers had been under house arrest in St. Louis since 2006, but found time to get out and stretch his legs as part of the St. Louis Marathon. BetOnSports had been traded in London on the city’s stock exchange and Bloomberg added that Judge Jackson fined BetOnSports $28.2 million. However, the firm owes creditors in the United Kingdom and would likely not be able to make good on the $28.2 million penalty. Attorney Jeffrey Demerath told the financial news outlet, “We won’t be able to pay the $28 million. We have an obligation under the laws of the United Kingdom to pay the creditors first.”

A bevy of guilty pleas were entered in the BetOnSports case. In August, the company’s founder, Gary Kaplan, pled guilty to violating RICO in a Missouri courtroom. Kaplan received more than four years behind bars for his role in the company as well as a $43 million fine, according to the AFP news service. Assistant U.S. Attorney Steven Holtshouser commented in a press release distributed by the U.S. Department of Justice, “The prosecution and conviction of Carruthers is significant to the government's efforts at enforcement of U.S. laws against offshore Internet and telephone sports wagering businesses, because Carruthers was both a foreign national and a top executive of BetOnSports.” Kaplan was arrested in 2007.

In June, Neil Scott Kaplan, Lori Kaplan-Multz, and Penelope Tucker all entered guilty pleas in front of Judge Jackson in the BetOnSports case. Each agreed to hand over money in Swiss bank accounts, but would not face any jail time. Scott Kaplan and Kaplan-Multz also received time in a halfway house. An article that appeared in the St. Louis Post-Dispatch explained why the trio received significantly lighter sentences than Kaplan and Carruthers: “Assistant U.S. Attorney Steve Holtshouser said the sentences reflect the minimal roles that Neil Kaplan and Kaplan-Multz played, their lack of decision-making power there, and their willingness to surrender their BetOnSports money.”

The USA-facing online poker site Bodog, founded by Calvin Ayre, continues to accept wagers on sporting events. The site is in the midst of the National Football League (NFL) playoffs, which kicked off over the weekend. Carruthers assumed the head role at BetOnSports in 2004 after joining the company in 2000. Both the Internal Revenue Service (IRS) and Federal Bureau of Investigation (FBI) participated in the investigation of the former CEO. Besides Holtshouser, Steven Muchnick and Special Assistant U.S. Attorney Charles Birmingham led the case on behalf of the United States Government.

On Capitol Hill, the Poker Players Alliance (PPA) is carrying the flag for explicitly legal online poker in the United States. Financial services industry compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) was delayed six months to June 1st. The delay came after a November decision by U.S. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke. Congressman Barney Frank (D-MA) is championing the cause on the Hill with HR 2267, which establishes a full licensing and regulatory framework for internet gambling outfits to solicit U.S. customers. The measure is up to 63 co-sponsors on both sides of the aisle, but would not permit online sports betting.

Stay tuned to Poker News Daily for the latest from the BetOnSports case.

Poker2Nite Welcomes Poker Tournament Director Matt Savage

This week, the UB.com-sponsored poker news franchise “Poker2Nite” welcomed acclaimed tournament director Matt Savage. The creator of the Iron Man tournament and former director of the World Series of Poker (WSOP), Savage assessed the industry entering 2010.

First up on “Poker2Nite,” which airs on Wednesday at 11:00pm ET, was an evaluation of several of the high-stakes world’s top names. On Isildur1, who has been largely absent from the virtual felts of Full Tilt Poker following a run-in with CardRunners instructor Brian Hastings, “Poker2Nite” co-host Scott Huff noted, “He’s won huge amounts for sure, but he’s lost a lot of it back and that, to me, just means it’s on the level.” According to PokerTableRatings.com, Isildur1 is out $2.6 million since November after being up as much as $5 million.

Then, “Phil’s Best Blowups” took center stage. The segment recaps some of the top escapades of UB.com poker pro Phil Hellmuth. This week’s was “an oldie, but a goodie,” as it panned out at the World Poker Tour (WPT) stop at Foxwoods in 2005. Hellmuth explained, in G-rated terms, “This lucky son of a gun hit running sevens on me after starting completely dead and then raised me on the flop with nothing.”

Hellmuth held J-9 against Hoyt Corkins’ J-7 and the flop came nine-high, giving the 11-time WSOP bracelet winner top pair. Hellmuth bet 25,000, Corkins raised it to 70,000 with air, and Hellmuth called. The turn brought a seven, giving Corkins second pair, and the action went check-check. The river was another seven, improving the DoylesRoom pro to trips, and Hellmuth led out for 80,000. Corkins min-raised to 160,000, Hellmuth called, and jumped out of his chair when he saw the bad news. WPT commentator Vince Van Patten observed, “It looks like his pants are on fire.” The odds of Corkins hitting running sevens were 314:1.

Savage succinctly explained the role of a tournament director to Huff and show co-host Joe Sebok: “My job is to keep order in tournaments.” One of his recent creations is the Iron Man format, a no-break tournament with three meals served at the table and a $10,000 seat added to the prize pool. Its first running clocked in at 19 hours and 20 minutes. Savage recalled, “The camaraderie at the table was great. I stayed up for the whole event and will again in February.” Next month, a $2,100 buy-in Iron Man tournament will play out during the annual L.A. Poker Classic.

The Unlawful Internet Gambling Enforcement Act (UIGEA), passed in the final moments of the 2006 Congressional session, led to several of the world’s top online poker sites fleeing the U.S. market. Accordingly, Savage revealed where he’d like to see the game headed as we enter 2010: “We’d like to see the UIGEA overturned and that’d be a big difference for us. We’ve [leveled] a little bit in the U.S., but it’s growing globally.”

A feature on Credit Card Roulette aired featuring former Bodog pro Justin “ZeeJustin” Bonomo, Isaac Haxton, Stephen “MrTimCaum” O’Dwyer, UB.com’s Adam “Roothlus” Levy, and Scott Seiver, with a $1,500 bill up for grabs. If you’ve never played the game, everyone seated tosses their credit cards into a hat and, one by one, the strips of plastic are drawn. The last person to have their credit card selected foots the bill for the entire meal. This time, Haxton was the poor, unfortunate soul and told “Poker2Nite” cameras, “Defeat is always painful.”

“Poker2Nite” closed with Absolute Poker pro and show correspondent Lacey Jones interviewing Shaun Deeb about his future in poker. Deeb commented, “I expect to take six months to a year, if not longer, to stay away from playing tournaments in general. I decided that, looking at what I was doing, I was spending too much time playing poker [tournaments]. So, I decided to quit them and play cash games with more flexible hours so I can do a lot more things with my time.” Deeb is a former number one player on the PocketFives.com Online Poker Rankings.

Catch “Poker2Nite” every Wednesday at 11:00pm ET on Fox Sports Net.

A Look Back at Online Poker’s Political Battles of 2009

Online Poker’s Newest Supporter

Top Ten Poker Events of the Decade: Part 2

We’ve reviewed half of the top ten poker events of the soon-to-be-completed decade. Now, let’s take a look at the top five events that have shaped the game as we know it during the past ten years.

5. Taking America’s Game to the World

As the middle of the decade approached, poker, and more particularly tournament poker, was still primarily an American pastime. With the introduction of the European Poker Tour (EPT) in 2004, the rest of the world increased its awareness of the game. Like its predecessors in the United States in the World Series of Poker (WSOP) and World Poker Tour (WPT), the EPT brought the game to a new audience and further heightened the “poker boom.”

The EPT, developed by the online poker giant PokerStars, started small in 2004 with only seven events on its schedule. By the time it was in its fourth year, the EPT had grown to 11 tournaments with buy-ins that rivaled its brethren in the U.S. and had proved that a poker tournament schedule outside of the United States could be tremendously successful. It also led to the creation of many of the international tournament schedules that exist today, including the Asia Pacific Poker Tour (APPT), Latin American Poker Tour (LAPT), and Grosvenor U.K. Poker Tour (GUKPT).

4. Poker Faces its Strongest Challenge, the UIGEA

The steamroller that online poker had become would, in 2006, face its strongest challenge ever. Passed through the halls of Congress in the United States as a rider to a key port security bill, the Unlawful Internet Gambling Enforcement Act (UIGEA) threatened to kill the growth of online poker just as it was reaching its pinnacle. Since that time, the poker world has, at the minimum, reached a plateau.

While many inaccurately suggest that the UIGEA makes online poker illegal in the United States, the bill successfully scared many people who would either enter into the game or who had played it. It also had a significant effect on many poker tournaments in the United States; the WSOP Main Event has never returned to its peak numbers of 2006 and other poker tours have either seen a drop in the number of entrants or no growth.

3. Lights, Camera, Action… Poker Comes to Television

Turning on the television at the start of the decade to watch poker was literally impossible. The 2000 and 2001 WSOP Main Events were filmed as documentary-style broadcasts instead of an actual sporting event and appeared on the Discovery Channel. There were no other poker television broadcasts that could be found.

Perhaps sensing the coming wave, ESPN bought the rights to the television broadcasts of the WSOP and, in 2002, presented a more sports-friendly coverage of the tournament series. In 2003, ESPN expanded even further, covering preliminary events and dedicating extensive coverage to the Main Event. After the “Moneymaker Effect” of that year and the ensuing “poker boom,” ESPN has stuck with the WSOP and, in 2009, signed an extension of its broadcast contract with Harrah’s that ensures the WSOP will be on ESPN airwaves well into the next decade.

Add into the mix the wealth of celebrity poker shows, the debut of “High Stakes Poker” on GSN, and network television’s continued dalliance with the game and there is now poker on the “idiot box” at all hours of the day.

2. World Poker Tour Comes into Existence

In 2002, the entrepreneurial minds of Steve Lipscomb and Lyle Berman convinced the Travel Channel to sign on to an innovative idea of a worldwide poker tour, much like what professional golf has. Their creation, the WPT, took viewers to exotic locales that people might never have a chance to experience. In coordination with these picturesque areas, the broadcast of high-stakes poker tournaments captivated audiences. When it hit the airwaves, the WPT forever changed what had once been the exclusive world of high-stakes gambling.

In the eight years since it first was broadcast, the WPT has not only made poker players household names, but also created the first exposure to poker that many people had experienced. The WPT has also created many new millionaires from previously unknown poker players and pointedly exposed the strategy of the game through the innovative “hole card” camera. Without the creation of the camera, it is entirely likely that the WPT would have never seen the light of day.

1. The Birth of Online Poker

In 2000, there were literally only a handful of poker rooms in existence and, with a few exceptions, none of them made an impact on the world of poker. As more poker rooms opened, more people became accepting of a virtual “poker world.” As internet connections became more reliable, the online poker world was the major impetus for many to enter into any involvement with the sport.

As of 2009, there are hundreds of online poker rooms with tentacles that reach every corner of the globe. Poker enthusiasts can now hook into the internet and play with millions of like-minded people at any time, day or night. Add into the online poker room explosion the wealth of poker training sites, forums, and news outlets and it is easy to see that, without the internet and online poker, we may never have seen the renaissance in the first decade of the 21st century.

Party Gaming 2009 Revenue in Line with Management Expectations

In a trading update released to the London Stock Exchange on Friday, Party Gaming, the parent company of PartyPoker, announced that its revenue was in line with Board expectations, while Clean EBITDA would likely surpass estimates.

Party Gaming is now anxiously awaiting legislative developments in three key markets: France, Italy, and the United States. On the latter country, which has been effectively shut off for the publicly traded company since 2006, the statement released by Party Gaming concludes, “Combining the strength of the PartyPoker brand with the trade and assets of the World Poker Tour that we acquired in November 2009, we believe we are well-positioned should the U.S. government elect to regulate online poker.”

As it stands now in the United States, the primary hope for legalization and regulation of the game is Congressman Barney Frank’s (D-MA) Internet Gambling Regulation, Consumer Protection, and Enforcement Act, HR 2267. The measure outlines a framework whereby licensed online gaming companies can solicit real money action from U.S. customers. A companion bill introduced by Congressman Jim McDermott (D-WA), HR 2268, taxes companies 2% of deposits and could raise as much as $40 billion in revenue over a ten-year period. HR 2267 boasts 63 co-sponsors, while HR 2268 has four.

Party Gaming’s attention seems to be focused squarely on poker given its recent acquisition of the World Poker Tour (WPT), a longtime industry staple. Party Gaming CEO Jim Ryan commented, "Returning poker to growth has been a key focus for us. We are pleased to see that the initiatives introduced throughout the year are now feeding through into both operational and financial performance with increased player numbers and average net daily revenues versus the previous quarter, despite continued competition from illegal U.S.-facing sites and the difficult macroeconomic climate.”

PartyPoker introduced its Monthly Million poker tournament earlier this year, a $640 buy-in event held on the first Sunday of every month. In December, PartyPoker member “ireadursoul” took down the Monthly Million to the tune of $200,000.

Also announced in Friday’s trading update was that Party Gaming had taken out a £35 million three-year loan to be applied towards mergers and acquisitions. Discussion of a possible merger between Party Gaming and bwin has dominated poker news headlines this week, although the company has not confirmed that any deal is imminent. bwin is also a publicly traded company and can be found on the Vienna Stock Exchange.

Shares of Party Gaming closed the week trading at 254 pence in London, down 4.6 pence on the day, or 1.8%. In the beginning of November, shares of Party Gaming’s stock (PRTY) had sunk as low as 214 pence before rebounding. In January, amid the worldwide economic doom and gloom, Party Gaming was fetching a lowly 157 pence a share.

Also helping to keep revenues afloat in recent months has been Party Gaming’s Bingo and Casino arms. PartyBingo’s business was boosted by the acquisition of Cashcade back in July, while a $5 million jackpot payout in the casino earlier this month drew a considerable amount of attention.

Ryan remained optimistic that a strong 2010 would be in store for the company’s investors: "Despite the challenges presented by the prevailing macroeconomic environment, we have not been distracted from the execution of our strategic plan. With the prospect of a number of new and large regulated markets in front of us, an expanding portfolio of B2B customers, and a return to growth in our core business, we remain confident about the Group's prospects."

Read the entire Party Gaming Trading Statement to the London Stock Exchange.

CNBC Investigates Illegal Gambling, Online Poker

A one-hour CNBC program entitled “The Big Business of Illegal Gambling” aired on Wednesday night, featuring discussion of “illegal” land- and internet-based operations. “The Call” anchor Melissa Francis hosted.

The show began with Francis telling viewers, “The same computer used to connect with work or friends can be used to wager outside the law.” In 2005, when the Chicago White Sox won baseball’s World Series, a man simply named “Vegas Runner” bet $4,000 on 50:1 odds that the team would take down the sport’s most coveted title. He told CNBC cameras, “It’s a gray line. Sports betting is the one topic no one wants to talk about, but everybody does it.”

R.J. Bell, founder of PreGame.com, told CNBC that just 1% of wagering on sports comes from Las Vegas, meaning that the other 99% is purportedly illegal. Meanwhile, a man known solely as “Paul,” whose face was not shown on camera, runs his own online sports betting website in Nevada as part of a conglomerate based in Costa Rica. He revealed that he makes between $80,000 and $100,000 per year and that collecting on bets is the most difficult part of the job.

CNBC’s attention then turned to the Chicago Mob, including Nick Sarillo, whose van was blown up because of illegal gambling, but he survived. Francis narrated, “Illegal gambling is the Mob’s number one moneymaker, the grease that keeps the wheels turning.” Meanwhile, Scott Damiani, the Executive Director of the Outreach Foundation, relayed his tale of excessive gambling, eventually losing his house and business. Upon owing members of a football league $50,000 at the end of 1994, Damiani attempted to drive his car off of a bridge, but hit a guardrail and was unsuccessful.

Attention then turned to Jay Cohen, the first American prosecuted for running an online bookmaking operation under the Wire Act of 1961. From his home in Antigua, Cohen told CNBC cameras, “We didn’t feel we were doing anything illegal. We were not hiding from anyone. We were using our real names and operating in plain daylight.” The site in question, World Sports Exchange, booked more than $200 million in wagers at its peak and received favorable press in publications like the Wall Street Journal and Washington Post.

In 1998, the U.S. Attorney’s Office indicted Cohen, who faced up to five years in prison. Cohen voluntarily traveled to the United States to fight his case, claiming that the Wire Act did not apply to the internet. However, a jury disagreed and he found himself behind bars for 21 months.

Upon passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006, Antigua lodged a complaint with the World Trade Organization (WTO) alleging unfair gaming practices by the United States. The tiny island nation was successful, but the U.S. ignored the decision. Cohen remarked, “The last administration was so intellectually dishonest about all of this that even when Antigua won, they put out press releases claiming victory.”

Attention then turned to the cheating scandals at the online poker sites Ultimate Bet and Absolute Poker. Todd “Dan Druff” Witteles, who appeared on the CBS news program “60 Minutes” in November of 2008, discussed his encounter with “Graycat” on Absolute Poker: “This was someone who seemed that he had no clue what he was doing. He was playing all the wrong strategy to be able to win.” Then, David Paredes battled “NioNio” on the virtual felts of Ultimate Bet, telling CNBC, “This player was playing a wide variety of hands. It’s so hard to play profitably playing so many hands.”

CNBC claimed that UB.com was “operating in violation of U.S. law” and then the COO of the site’s parent company, Paul Leggett, explained who Russ Hamilton was. Hamilton declined to talk to CNBC despite being fingered as the main person responsible for the multi-million dollar cheating scandal on Ultimate Bet. The now-infamous RawVegas.tv footage of Hamilton leaving a Las Vegas golf course also aired. To date, no one has been prosecuted in either cheating incident.

Finally, two Congressmen took to the airwaves, Jim McDermott (D-WA) and Bob Goodlatte (R-VA). McDermott candidly explained, “Usually, when we talk about putting a tax on people, we get all kinds of [pushback]. They’re saying, ‘Legalize it, please, and tax it.’” Goodlatte, one of the brains behind the UIGEA, evaluated the law: “It certainly hasn’t eliminated all internet gambling by any means, but surveys that I’ve seen indicate that fewer than half as many online gambling operators are offering their services in the U.S. than before this law was passed.”

Recognized in the credits were a variety of industry veterans, including World Series of Poker Media Director Nolan Dalla, Poker Players Alliance Executive Director John Pappas, Sue Schneider, and iGamingNews.com.

CNBC Illegal Gambling Feature to Air on Wednesday

On Wednesday night at 9:00pm ET, CNBC will air a one-hour exposé entitled, “The Big Business of Illegal Gambling.” The report from CNBC’s Melissa Francis will put the multi-billion dollar industry into focus and include a segment on internet gambling.

Wednesday’s show marks one of the most high-profile television programs about internet gambling since “60 Minutes” aired a feature on the cheating scandals at the online poker rooms Ultimate Bet and Absolute Poker one year ago. According to a preview found on CNBC’s website, the show will “take viewers inside this high-stakes business that brings some people immense wealth, while others pay the ultimate price.” Francis is co-anchor of the CNBC show “The Call,” which airs for one hour beginning at 11:00am ET during the week.

The CNBC description begins, “The one-hour program delivers an in-depth look at just how mainstream illegal gambling has become.” Francis will speak with a bevy of industry representatives, including a bookmaker simply named “Paul” and a professional gambler named "Vegas Runner." Among those CNBC will speak to with a first and last name is Nick Sarillo, whom the show describes as “a restaurant owner who freelances as a bookie [and] crosses the Mob and pays a heavy price.” These three will likely be offline gamblers.

Then, Francis and company will explore the world of internet gambling. The preview of the CNBC special explains, “Technology has made illegal gambling much more accessible and the same computer used for work or to connect with family and friends can also be used to wager outside the law.” Among those to be interviewed is Jay Cohen, the co-founder of the World Sports Exchange who was found guilty of violating the Wire Act of 1961. He was sentenced to 21 months in jail and fined $5,000; World Sports Exchange boasted revenues of $200 million and he was freed in 2004.

Also featured is Scott Damiani, the Executive Director of the Outreach Foundation. The show’s website explains, “Illegal gambling costs Scott Damiani is home, business family... and almost cost him his life. After hitting rock bottom, he picked his life back up and now devotes his time to helping other gambling addicts as the Executive Director of the Outreach Foundation.”

Poker News Daily has also learned that Tokwiro Chief Operating Officer Paul Leggett filmed an interview for the CNBC program. The two Tokwiro-owned online poker rooms, Ultimate Bet and Absolute Poker, were at the heart of a ten-minute feature by the CBS news program “60 Minutes” over Thanksgiving weekend in 2008. The report questioned why no one had been prosecuted in the case and ended with segment reporter Steve Kroft calling Russ Hamilton’s home in Las Vegas. Hamilton, who won the 1994 World Series of Poker (WSOP) Main Event, was fingered as the main man responsible in the Ultimate Bet cheating scandal. To date, no one has been convicted.

Finally, Francis will dive into a high-spirited internet gambling debate featuring Congressmen Jim McDermott (D-WA) and Bob Goodlatte (R-VA). Online poker players can thank the latter for helping to bring the Unlawful Internet Gambling Enforcement Act (UIGEA) to life back in 2006. McDermott, meanwhile, has authored legislation seeking to extract 2% of deposits from licensed internet gambling companies in the United States under legislation proposed by Congressman Barney Frank (D-MA). Curiously, Frank’s name does not appear on the preview for the CNBC program despite being legalized internet gambling’s number one proponent on Capitol Hill. Also absent is the Poker Players Alliance (PPA), the industry’s main lobbying group.

Poker News Daily will have a recap of the show after it airs on Wednesday night. Video clips, slideshows, and even an illegal gambling quiz can be found on CNBC’s website.

Joe Cada Meets with More than 10 Lawmakers on Capitol Hill Visit

As the newest ambassador of the game, 2009 World Series of Poker (WSOP) Main Event champion Joe Cada met with more than 10 Congressmen on Capitol Hill on Monday in a visit sponsored by the Poker Players Alliance (PPA).

Cada could be found speaking with Representative Linda Sanchez (D-CA), Senator Debbie Stabenow (D-MI), Representative Allen Boyd (D-FL), Representative Kendrick Meek (D-FL), Representative Steve Cohen (D-TN), Representative Candice Miller (R-MI), Representative Joe Barton (R-TX), Representative Dean Heller (R-NV), Representative Gary Peters (D-MI), Representative Shelley Berkley (D-NV), and Senator Carl Levin (D-MI). Cada hails from Michigan and met with his two Senators and local Representative throughout the whirlwind one-day affair.

PPA Executive Director John Pappas told Poker News Daily, “There were a number of really good visits with lawmakers like Joe Barton and Linda Sanchez, who are avid poker players, so they got to talk a little poker and a little policy. Throughout the day, he probably met another half-dozen members of Congress.” Congressman Heller brought Cada onto the floor of the House of Representatives during a vote, giving the youngster a unique opportunity to witness the democratic process first-hand.

On Capitol Hill, Cada and his entourage bumped into Senator John Ensign (R-NV) and had a five-minute long conversation. Ensign serves as the counterpart to Harry Reid (D-NV), the current Senate Majority Leader. On Cada’s parade around Washington, D.C. on Tuesday, Pappas commented, “He doesn’t have the recognition that other pros we bring do, but he's just becoming a face on the scene. He was great from our perspective. He wasn't here to do the hard sell on public policy; he was here to give a good face to poker and tell his story.”

Cada became the youngest WSOP Main Event winner ever at age 21 in November, eclipsing Peter Eastgate’s standing record by one year. Cada and Eastgate are both card-carrying members of Team PokerStars Pro, which also includes other World Champions like Chris Moneymaker (2003), Greg Raymer (2004), and Australian Joe Hachem (2005). A bevy of news outlets met with Cada during the day, including Politico, The Hill, and Roll Call, popular Capitol Hill publications.

On the future of Cada’s relationship with the PPA, Pappas told Poker News Daily, “When we do fly-ins and other events, we want to be able to work with him and have him be a face for us in Washington, D.C. We'd love for him to continue to promote the PPA to the poker playing community, particularly to the younger online players who look up to Joe. He recognizes the importance of what we’re doing.” Cada’s post-WSOP Main Event media appearances have included the “Late Show with David Letterman” and ESPN’s “SportsCenter.” He’s also featured on the current cover of Bluff Magazine.

Next up for Cada is a trip to Las Vegas, where he will donate a two-hour training session to the prize pool of the All In For CP charity poker tournament, which will be held at the Hard Rock. Cada told Poker News Daily, "The PPA really treated me like a champion and made my stay very enjoyable. It was awesome meeting various politicians, especially the ones from Michigan. I placed third in John Pappas' home game, which was a huge cash for me of $110. I'm looking forward to supporting the PPA in the fight. Next stop: Bellagio."

Next up for the PPA is a push to pass legislation to legalize and regulate online poker in the United States. Pappas revealed, “We've built a lot of momentum at the end of the year and anticipate a Committee vote on HR 2267 in late January or early February. Right now, we're focusing on the targets we need to get this legislation through.” HR 2267, proposed by Congressman Barney Frank (D-MA), provides a framework for online gaming companies to solicit U.S. customers. It boasts 63 co-sponsors.

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

WSOP Champ Joe Cada Heads to Capitol Hill

Tuesday will mark a busy day in the life of 2009 World Series of Poker (WSOP) Main Event Champion Joe Cada. The youngest winner of the $10,000 buy-in tournament ever, Cada will travel to Capitol Hill flanked by the Poker Players Alliance (PPA).

The PPA has seen its own string of victories as of late, including achieving a six-month delay of the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA). Now, the 1.2 million member strong lobbying organization will bring the current face of the game to Capitol Hill. Cada told Poker News Daily in an exclusive interview, “I’m meeting with Congressmen for the PPA. I’m still trying to get used to all of this.” PPA officials will accompany Cada around Capitol Hill and the youngster, who is now 22 years-old, will join the Sports Junkies radio show at 10:15am ET on WJFK.

Cada will visit with several lawmakers in pre-planned meetings, including Congresswoman Linda Sanchez (D-CA), who, according to the PPA, plays poker herself and is a friend of UB.com pro Annie Duke. Cada will also spend time with Senator Debbie Stabenow (D-MI), who hails from the Main Event winner’s home state. He’ll be brought to the members’ dining room on Capitol Hill for lunch, where Cada will be introduced to those in attendance.

After lunch, Cada will meet with Congresswoman Candice Miller (R-MI), who represents Michigan’s 10th Congressional District. According to Cada’s agent, Miller will introduce him to entire House of Representatives on the chamber’s floor in a once-in-a-lifetime experience. He’ll then head to the offices of another Republican, Joe Barton (R-TX), the Ranking Member of the Committee on Energy and Commerce and a poker player. Finally, Cada will meet with members of the Nevada delegation in Washington, D.C. and the PPA will escort the $8.5 million winner around town before he heads for the airport.

On Cada’s itinerary, PPA Executive Director John Pappas told Poker News Daily, “We know that these members are interested in poker. They’re poker players themselves. This is to tell the story of the World Champion, the youngest winner in Main Event history.” Cada warmed up for the whirlwind of meetings by playing in Pappas’ home game on Monday night, a $40 rebuy tournament that saw him fade J-Q multiple times. About 10 players could be found at the game last night.

Local media and press on Capitol Hill were expected to join Cada during the day. He recently flew cross-country from Los Angeles to Washington, D.C. after filming the “PokerStars.net Million Dollar Challenge.” Cada was one of the poker pros scheduled to appear on the show, but did not play against a PokerStars qualifier. Cada told Poker News Daily, “It was good, but I didn’t get to play at all because the qualifiers couldn’t get past the celebrities. I was supposed to play after that. I got to meet a few celebrities like Joanna Krupa and a lot more.”

The PPA saw several members of the WSOP Main Event final table don patches for the tournament’s conclusion, which aired on ESPN in mid-November. On the organization’s fight for the rights of poker players in both the online and offline versions of the game, Cada explained, “I’m all for what they’re doing. I haven’t had too much contact with them, but hopefully that can change very soon. It would be good to meet a bunch of Congressmen and speak with the PPA a lot more. It’s something I hope I can help with.”

In addition to his forthcoming appearances on Capitol Hill, Cada has made waves throughout mainstream media, including guest spots on the “Late Show with David Letterman” and the ESPN news franchise “SportsCenter.” He’s also become a hometown hero of sorts in Michigan, covered by nearly every local news outlet.

FBI Issues Online Poker Findings; PPA Responds

Online poker players tuned into last week’s House Financial Services Committee on internet gambling can recall a letter cited by Congressman Spencer Bachus (R-AL) that claimed online poker games could be compromised.

The memo, dated November 13th and written by FBI Cyber Division Assistant Director Shawn Henry, addresses six questions put forth by Bachus regarding the current state of affairs in the online poker world. The report states, “The technology exists to manipulate online poker games in that it would only take two or three players working in unison to defeat the other players who are not part of the team.” Henry’s analysis speculates as to whether online poker sites would spend the time and money needed to combat these tag team maneuvers: “It really comes down to a cost analysis for the vendor. How much money will I make or lose by detecting cheating and implementing safeguards?”

The letter from Henry then addresses money laundering possibilities in private online poker tournaments before Bachus asked if “qualified personnel” existed to regulate the game should it be legalized. Henry responded, “FBI investigative resources are focused on our highest priorities, that being counterterrirosm, counterintelligence, and cyber threats to critical infrastructure.” No mention of online poker or internet gambling is given in Henry’s response to this question.

Henry questions the age and location verification mechanisms that online poker sites currently have in place. Henry responds, “For age verification, the possession of a credit card is usually the only validation these sites require. Credit card numbers are easily compromised and can be bought by the hundreds on several ‘underground’ websites.” On the question of location verification, Henry asserts, “While geolocation can be accurate when used to determine the physical country of residence, it becomes exponentially less accurate when determining the city or zip code.”

Also discussed in the letter from the FBI Cyber Division official are bots, programs against the Terms of Service of most major sites. In addition, Bachus asks whether U.S. law enforcement officials have had any conversations with their counterparts overseas where internet gambling is regulated about “potential vulnerabilities.” Henry emphatically claims, “The FBI has not engaged in this discussion with our foreign partners.” On casino bot programs manipulating online games, Henry admits, “While casino software could very easily be employed to manipulate games, the FBI has no data in this area.”

The Poker Players Alliance (PPA) was quick to point out the pitfalls of Henry’s letter. Its Executive Director, John Pappas, charged, “Every concern the letter raises is better addressed by licensing and regulation than by prohibition. The letter misconstrues much about the current state of online poker, but it does so in a way that clearly makes the case for why federal oversight is necessary. Licensing and regulation is the most protective measure we can take to ensure the online community can be properly monitored while maintaining our internet freedom.”

The PPA added that Congressman Peter King (R-NY), the current Ranking Member and former Chairman of the Committee on Homeland Security, conveyed that money laundering and terrorism financing were not taking place through internet gambling. The PPA explains that online poker sites use credit databases to address age and location and that the Department of Justice has never found evidence that organized crime benefited from internet gambling. In total, the lobbying group notes, “In defense of Mr. Henry’s letter, it is intended to address the status quo, not the internet poker landscape under HR 2267.”

Age verification was one of the many issues discussed at last week’s hearing, which focused on HR 2267. The bill, proposed by Congressman Barney Frank (D-MA) crafts a complete licensing and regulatory framework for the internet gambling industry in the United States.

Internet Gambling Expert Reacts to UIGEA Regulations Delay

Over Thanksgiving, mandatory compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) was postponed six months to June 1st, 2010. Poker News Daily sat down with internet gambling expert Nelson Rose to get his take.

Poker News Daily: What were your thoughts on the postponement of mandatory financial services industry compliance with the regulations of the UIGEA?

Rose: When powerful Congressmen like Barney Frank (D-MA) and Harry Reid (D-NV) tell administrative agencies to do something, they’re going to pay a lot more attention to it than when out of power members of Congress like Jon Kyl (R-AZ) weigh in. They also know that the UIGEA is a piece of garbage that was dropped on their heads. That happens to administrators: Congress passes something undoable and makes agencies figure it out.

PND: Talk about some of the pressures put on the Federal Reserve and Treasury to make this decision.

Rose: It was the Federal Reserve and Treasury, but they made a big point of saying that they consulted the Department of Justice, which they were required to do. That means that the Attorney General of the United States signed off on this.

Under President George W. Bush, we had some right-wing religious fanatics who were anti-gambling in charge, but we also had the Department of Justice that understood there were higher priorities. They knew they didn’t have a lot of good law on their side, so they were running a war of intimidation. Now, we have a sane Department of Justice led by people who understand priorities and that internet gambling isn’t a big deal compared with all of the other criminal problems in the world. Yet, there are still offices that have gone further than they did during the Bush administration by seizing the money of online poker players.

PND: Do you foresee sensible internet gambling legislation being passed in the next six months?

Rose: I think that this is the start of the process. The Democrats won’t do what Bill Frist (R-TN) did and try to ram this through when no one is looking by attaching it to a must-pass bill. They’ll have hearings, but unfortunately for everyone who is interested in it, it’s still a very low priority.

PND: What would have happened if the December 1st UIGEA compliance deadline stood?

Rose: I think nothing would have happened. I’ve talked to some banks and payment processors. They’re taking it very seriously, but they understand that the UIGEA rules specifically say don’t look at individual transactions, so they’re not going to do that. They’re concerned with setting up new accounts and no one is setting up illegal gambling operations in the United States.

PND: Give us your thoughts on overblocking, which crept up when legal online lottery transactions in North Dakota and New Hampshire were being denied.

Rose: The regulations make it clear not to look at individual transactions, but there are a lot of operators involved in things like horse racing, skill games, and free entry games that they would not do business with if they didn’t have legal opinions like the ones I’ve been writing. That’s the reason I think the regulations are actually helpful: they create a safe harbor that the banks can use to say that they’re in compliance with the UIGEA because they’ve sought out legal opinions.

Poker Industry Reacts to House Financial Services Committee Hearing

On Thursday, the House Financial Services Committee, Chaired by Congressman Barney Frank (D-MA), hosted a hearing on two internet gambling bills. Twenty-four hours later, the online poker industry has had a chance to respond.

In one portion of Thursday’s hearing, Congressman Spencer Bachus (R-AL) referenced a letter he received from the FBI noting that the integrity of online poker games could be compromised. On the letter sent by Shawn Henry, the Poker Players Alliance (PPA) retorted, “The PPA takes issue with certain representations made by Mr. Henry, but believes that the larger point is the more important one: Mr. Henry’s letter makes a compelling case for licensing and regulation of internet poker as proposed in HR 2267.” Bachus is the Ranking Member of the House Financial Services Committee and a staunch opponent of internet gambling interests.

Safe and Secure Internet Gambling Initiative (SSIGI) spokesperson Michael Waxman gave Poker News Daily his two cents on the 90-minute long hearing that took place on Thursday morning in one of Congress’ most powerful committees: “The hearing and witness testimony clearly portrayed why Congress should scrap an unrealistic attempt to ban internet gambling and regulate the burgeoning underground marketplace since it is the only effective way to protect consumers.” Witnesses covered the gamut, ranging from the banking industry to problem gambling interests.

Early on in the proceedings, Bachus questioned Frank as to why no representatives from the U.S. Treasury or Federal Reserve were present at the hearing. Frank responded that he had not received any such request. However, the Committee’s Chairman later recanted his statement after producing an e-mail dated 40 hours before the hearing began from Bachus’ staff calling for the Treasury or Fed to be present. The awkward exchange ultimately led to agreement that an additional hearing should take place featuring members of the two government organizations, setting up more debate on the internet gambling issue in 2010. The Treasury and Fed granted a six-month delay in compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA).

On the proceedings, Interactive Media Entertainment and Gaming Association (iMEGA) Chairman Joe Brennan told Poker News Daily, “It’s good to see that the ball is rolling again. The trick is going to be if things are sustained beyond the hearing. The industry has this pace of getting a public hearing every six months, but there seems to be little follow-up. Seeing that the minority wanted to hear from the Treasury and Fed, it may be the opposition who keeps the ball rolling.” No hearing has been scheduled, although PPA Executive Director John Pappas expected swift movement to mark up HR 2267.

Bachus’ generalizations about millions of young Americans becoming addicted to online gaming if legalization were to occur rubbed many in the industry the wrong way. On some of the claims made by the high-ranking Alabama Congressman, PocketFives.com poster “RI Tony” commented, “This Bachus guy is a classic example of why I hate politicians. There would be no way to change this guy’s mind. He’s simple minded and arrogant, thinking he can legislate morality. Oh yeah, and like I’m going to play poker on my Blackberry as I’m driving or waiting in line at the supermarket as he suggested people would. Idiot.” Online sites like Cake Poker already offer a mobile client.

Bachus asserted, “If Congress repeals the law, online casinos will proliferate. In the next five years, I feel that if [we] are successful in creating a federal right to gamble on the internet, we will create a generation of millions of Americans who from their youth will be addicted to internet gambling and, therefore, life-long problem gamblers.” Frank labeled Bachus’ comments “hyperbole” and “based on no factual basis whatsoever.”

In June of 2008 during a separate committee hearing, Bachus relayed a study from McGill University claiming that one-third of college students who gambled on the internet attempted suicide. In fact, no such study had ever taken place. A representative for the university quipped, “I am confident the Congressman doesn’t read research – he could not misinterpret this.”

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

Poker2Nite Recaps UIGEA Compliance Delay

The six-month delay in compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) was featured on Wednesday night’s episode of the UB-sponsored poker news show Poker2Nite.

The series, hosted by PokerRoad’s Joe Sebok and Scott Huff, opened with a discussion of the reprieve until June 1st, with the former explaining, “I don’t think we should start lying to ourselves and telling ourselves that all of the sites are going to start popping up. All this did is maintain the status quo.” Huff added, “The only way this was going to occur was if the message was being heard by more and more people.” Horse racing interests, members of Congress, and banking associations joined forces with the Poker Players Alliance (PPA) to petition U.S. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke for a delay, which was granted last week.

A trip to a poker home game in Los Angeles revealed that few people understood what the PPA or UIGEA were. The segment served as a lead-in to an appearance via Skype by PPA Executive Director John Pappas, who told Huff and Sebok, “It gives us six months to work with Congress to try to clarify the law so it won’t affect people who want to play poker in the internet… What we’ve done is put the onus back on Congress. We’ll be pushing Congress to move quickly.” He ardently told Poker2Nite viewers who question the legality of online poker, “There is no Federal law that says playing online poker is illegal.”

Dana Workman’s “Weekly Misdeal” came with a sponsorship from Bluff Magazine this week. Her satirical news segment focused on the arrests of 75 to 85 year-old women in Cypress for playing poker as well as a new Irishman signing with PokerStars. She also took a shot at California State Senator Margarita Prentice, who is considering proposing a new video keno bill after serving as a major proponent of a law that made playing online poker in the Northwest state a Class C felony. Finally, Workman recapped the ESPN: The Magazine Body Issue featuring four nude poker players, including UB.com’s Phil Hellmuth.

A new segment called “All in Blind” featured six topics sealed in white envelopes. Both Sebok and Huff had no idea what they were and the duo selected three to discuss. Up for debate first was whether 2009 World Series of Poker (WSOP) Main Event runner-up Darvin Moon’s appearance on ESPN’s Monday Night Football or the 16-0 New England Patriots team was better. Huff chose Moon because “he actually got something,” while Sebok selected the Pats because “they got a little bit of history.” The Patriots lost to the New York Giants in Super Bowl XLII.

The second topic discussed on the Poker2Nite “All in Blind” segment was innerpsy’s short-lived online poker record of 40,088 hands played in a 24-hour period. Finally, Huff and Sebok debated whether they preferred James McManus’ poker history tale “Cowboys Full” or Doyle Brunson’s new autobiography “The Godfather of Poker.” Huff resoundingly selected McManus: “The New York Times says it’s good, so it’s good enough for me.” Contrastingly, Sebok emphatically chose Brunson, the figurehead for the poker industry..

Finally, the Poker2Nite Dictionary came to life. The show’s hosts discussed the meaning of “stacks ‘em off,” which translates to “to bust someone, or knock them out,” and “button,” which originally used to be called the “buck.” Huff claimed that phrases like “Pass the buck” President Harry Truman’s “The buck stops here” originated in poker.

Poker2Nite’s air time varies by market, but according to UB.com, the series begins at 11:00pm ET each Wednesday. When Poker News Daily caught the show, it was scheduled for 1:00am ET. Repeats are available on Fox Sports Net on Thursdays at 4:00pm ET and Fridays at 11:00am ET and 6:00pm ET.

Visit UB.com for more information and to view online clips.

House Financial Services Committee Holds First Hearing

Internet Gambling Discussed in House Financial Services Committee

On Thursday morning, the subject of internet gambling took center stage in an informative hearing in the House Financial Services Committee, Chaired by Congressman Barney Frank (D-MA). Seven witnesses participated.

The hearing began with Frank candidly stating, “It is nice to be able to think legislatively about other things besides the financial crisis, which has consumed this Committee since September of 2008.” It was over one year ago, just before the world’s economy crumbled, that internet gambling was last discussed in the Committee. Frank added, “There are a whole range of things on the internet that we would not like underage people to use. The notion that because some people abuse something, you prevent everyone from doing it is as great of a threat to the individual as any cause I have ever seen.” He went on to cite smoking, video games, and dieting as activities that people abuse.

The Committee’s Ranking Member, Congressman Spencer Bachus (R-AL), summed up many of the opposing arguments for legislation like HR 2266 and HR 2267. The former delays compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) by one year, while the latter establishes a comprehensive framework for licensing and regulating the industry in the United States. Bachus asserted, “I believe that internet gambling is, has been, and will continue to be a substantial threat to our youth. Any economic benefits from taxing internet gambling would be more than offset by the harm it causes young people.” He then sourced a New York Times Letter to the Editor from a mother lamenting her son’s turn to internet gambling.

Bachus expressed remorse that the regulations of the UIGEA had not been fully implemented, citing last week’s six-month delay of their compliance: “These regulations should have been finalized and implemented more than two years ago. The House voted by an overwhelming number to stop illegal internet gambling. Chairman [Frank], it’s time for you, the Treasury, and the Fed to stop delaying the will of the great majority of this Congress and the American people.

Bachus noted that the Treasury and Federal Reserve, who granted the six-month compliance reprieve, should have been a part of Thursday’s witness panel. The Alabama Congressman quoted a letter from the FBI he received in November stating, “The FBI warns that technology exists to manipulate online poker games. The FBI rejects claims from vendors that they can validate age and location.” Frank retorted that he had not received a request from Bachus for the Treasury or Federal Reserve to be present, but later recanted his statement, referencing an e-mail from the Ranking Member’s staff late Tuesday afternoon. Both agreed that the Federal Reserve and Treasury should testify at a future hearing.

Seven witnesses each spoke for about five minutes, offering different viewpoints on the issue. Robert Martin, Tribal Chairman of the Morongo Band of Mission Indians, noted that tribes were not consulted in the extension of the UIGEA deadline and “By following the law, we are now facing unfair competition because of these bills. Allow the regulatory scheme [currently in place] to protect what we have built.”

Parry Aftab, Executive Director of Wired Safety, candidly explained, “It’s ironic that I am sitting here today saying that the only way to protect consumers is by legalizing it. If we don’t legalize it, we can’t regulate it.” She referenced a study by Professor Malcolm Sparrow from the John F. Kennedy School of Government at Harvard University, who explained, “Legalization with regulation would provide U.S. authorities the power to grant or deny licenses.” He added that HR 2267 is an “adequate framework” in which to operate.

Keith Whyte, Executive Director for the National Council on Problem Gambling, remarked, “While participation in internet gambling by U.S. residents appeared to decline after the passage of the UIEGA, we did not see a decrease in indicators of gambling problems, such as help line calls.” A chart submitted by Whyte showed that help line calls instead gradually increased every year since 2006, when the UIGEA was approved.

Jim Dowling from the Dowling Advisory Group lent his insight into fraud, money laundering, and terrorism, while Mike Brodsky, Executive Chairman of YouBet.com, discussed the presumably legal online horse racing market. The legality of online horse racing was discussed at length, with Frank noting that the Department of Justice said it was against the law in 2006. Brodsky added that 88% of online horse racing wagers are transmitted across state lines electronically, which Frank also questioned the legality of.

Also speaking was Samuel Vallandingham, Chief Information Officer and Vice President for The First State Bank in West Virginia. Interestingly, Vallandingham was the only financial services industry representative present and explained, “The added burden [of enforcing the UIGEA] would drain our resources… The law doesn’t define unlawful internet gambling. As a result, the burden rests solely on financial institutions.”

After 90 minutes, the hearing adjourned, with Frank noting that the Committee would take up the issue again in 2010. No markup vote on HR 2266 or HR 2267 was scheduled.

Internet Gambling to be Discussed in House Financial Services Committee

On Thursday, internet gambling will take center stage in the House Financial Services Committee. A hearing to be held at 10:00am ET in Room 2128 of the Rayburn House Office Building will discuss two bills that could change the landscape of the industry in the United States.

Although an official list of witnesses has not yet been announced at press time, Poker News Daily can confirm that National Council on Problem Gambling Executive Director Keith Whyte will speak during the proceedings. Whyte told us that he received his formal invitation Wednesday morning and is looking forward to discussing the issue in front of the Committee tomorrow. A press release distributed by the Safe and Secure Internet Gambling Initiative (SSIGI) on Wednesday added, “Top experts are expected to describe how existing systems and technologies have proven successful in blocking minors from gambling online, combating compulsive gambling, and protecting consumers against money laundering, fraud, and identity theft.”

SSIGI spokesperson Michael Waxman commented that his organization is looking forward to a well-rounded discussion that could lead to one of two internet gambling bills being marked up and passed: “This hearing will provide further evidence on the ability to effectively regulate internet gambling and require licensed operators to utilize already-proven technologies to protect consumers. It’s expected this hearing will answer any outstanding questions and pave the way for a vote in the committee on Chairman Frank’s legislation.” Thursday’s hearing marks the first major discussion of internet gambling in the House Financial Services Committee in over a year and is expected to last around two hours.

At issue will be HR 2266 and HR 2267, both introduced by Congressman Barney Frank (D-MA). The former, dubbed the Reasonable Prudence in Regulation Act, delays mandatory compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) by one year. Despite compliance being delayed by six months last week, a Committee spokesperson told Poker News Daily that HR 2266 would still be discussed on Thursday. The bill claims 53 co-sponsors.

Also to be discussed is HR 2267, Frank’s Internet Gambling Regulation, Consumer Protection, and Enforcement Act. The measure, which was introduced on the same day in May as HR 2266, establishes a full licensing and regulatory framework for internet gambling companies to accept real money wagers from U.S. customers. It boasts 63 co-sponsors on both sides of the aisle and is Frank’s latest attempt to undo the effects of the UIGEA, which was passed into law in 2006.

Poker Players Alliance (PPA) Executive Director John Pappas told Poker News Daily that markup of HR 2266 or HR 2267 could be scheduled within one week of the hearing, although it would be contingent on the Committee’s calendar. Lawmakers on Capitol Hill have been focusing their efforts on a faltering economy and major health care reform, the latter of which could come with a $1 trillion price tag. A study by the Joint Committee on Taxation revealed that up to $42 billion over a 10-year period could be reaped by taxing the internet gambling industry at a rate of 2% of deposits pursuant to Congressman Jim McDermott’s (D-WA) HR 2268.

Waxman put the hearing in perspective: “Coupled with last week’s decision by the Treasury Department and Federal Reserve to delay UIGEA implementation, this hearing further builds the case for Congress to rewrite U.S. gambling laws. It’s simply common sense to override the UIGEA, a poorly conceived law that is doomed to fail, and replace it with a framework that regulates a thriving underground marketplace to protect consumers and collect billions in otherwise lost revenue.” Despite the UIGEA, traffic on the USA-facing site Full Tilt Poker, according to a recent report released by PokerScout.com, is up 127% year over year.

We’ll have a complete recap of the hearing right here on Poker News Daily.

National Council on Problem Gambling Head Discusses Internet Research

Given that compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) has been delayed six months to June 1st, 2010, research on the effects of online gaming may now take center stage as lawmakers craft sensible legislation. At the helm of the National Council on Problem Gambling is Keith Whyte, who sat down with Poker News Daily to discuss the internet side of problem gambling research.

In June, Congressmen Jim Moran (D-VA), Lee Terry (R-NE), and Frank Wolf (R-VA) introduced HR 2906, the Comprehensive Problem Gambling Act. The bill boasts 26 co-sponsors on both sides of the aisle and allocates $71 million over five years for problem gambling awareness, research, and treatment. Its language was incorporated into Senator Robert Menendez’s (D-NJ) S 1597, the Internet Poker and Game of Skill Regulation, Consumer Protection, and Enforcement Act.

Poker News Daily: Thank you for joining us. Talk a little bit about the differences between live and online problem gambling research.

Whyte: A lot of the research we have is not online and there may be some significant differences between online and live players. When we think about online players, one of the ways I try to break it down is to look at the risk factors for gambling problems: high speed of play, social isolation, use of credit cards, higher limits, and easy access. Those can all be found in the online arena. All of the studies have found that internet gambling users tend to be younger and male. Also cited is that online gamblers are not necessarily losing a lot of money; they are just on there 14 hours a day to the detriment of their work and family life. Problem gambling is not just about the money.

PND: Online gamblers have access to a wide variety of options like poker, blackjack, sports, and casino carnival games. Does that increase, decrease, or not affect the propensity for problem gambling to occur?

Whyte: It’s a pretty robust finding that the more types of things you gamble on, the more likely you are to have a gambling problem. The fact that online gamblers tend to play more types of games means that they are more likely to develop a gambling problem.

PND: Is an online problem gambling study in the works?

Whyte: As we work on Capitol Hill, there are a lot of people asking questions about the online environment. One of the reasons we haven’t done the research is funding and resources. As an advocacy organization for programs that assist problem gamblers, a lot of our focus is on prevention and treatment. For example, we’re still trying to build a safety net for problem gamblers at the state level. We are keen on trying to understand this better and I’d like to see the National Council in a position to support that research.

PND: Have any online poker or internet gambling sites come to you looking for research or offering assistance?

Whyte: bwin has collaborated with Harvard University. Other examples have included the involvement of eCOGRA, but it’s nothing that we’ve done directly.

PND: Will regulation of the industry through a bill like Congressman Barney Frank’s (D-MA) HR 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act, deter problem gambling?

Whyte: That’s one of the concerns we have at the state level right now. We have no confirmation that regulated gambling is more responsible; it’s how that regulation is done. We’ve had problems with state governments not collecting and releasing information, which makes it much more difficult for us to act.

Inside the Treasury and Federal Reserve UIGEA Regulations Delay

Last week, the U.S. Treasury and Federal Reserve announced that mandatory compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) had been delayed until June 1st, 2010. Let’s take a look at the agencies’ reasoning.

The seven-page document issued by the Treasury and Federal Reserve on Wednesday begins with an overview of the UIGEA and states that the two government agencies consulted with the U.S. Department of Justice prior to delaying the compliance date. The final regulations of the UIGEA were published on January 19th as so-called “midnight rules” by the outgoing Bush administration. One day later, sitting President Barack Obama assumed office.

The document gives a brief timeline of events since then, noting that on September 18th, the Poker Players Alliance (PPA), National Thoroughbred Racing Association, and American Greyhound Track Owners Association submitted a joint letter calling for compliance with the UIGEA regulations to be delayed by one year to December 1st, 2010. The two agencies explained, “Petitioners assert that many small regulated entities do not have the resources necessary to develop and implement appropriate policies and procedures by the December 1, 2009 compliance date and cite the possibility of confusion regarding the term unlawful internet gambling.” The latter three-word phrase was not defined in the UIGEA, which instead deferred to a muddled slate of state, federal, and tribal laws.

In October and November, members of Congress led by Barney Frank (D-MA) also asked for a delay, as did several organizations, including the American Bankers Association, Wells Fargo, the Credit Union National Association, and the National Association of Federal Credit Unions. On November 9th, other lawmakers including Senate Majority Leader Harry Reid (D-NV), whose home state serves as the epicenter for brick-and-mortar gambling in the United States, authored a letter purportedly expressing “an intent to consider legislation that would allow problematic aspects of the Act to be addressed.”

Meanwhile, Senator Jon Kyl (R-AZ) and Congressman Spencer Bachus (R-AL) weighed in, calling the reasons for a delay “speculative” in a November 3rd plea to the Treasury and Federal Reserve. Many of the groups clamoring for an extension feared overblocking, which could result in the denial of legal online wagering. In New Hampshire and North Dakota, credit card companies like Visa and MasterCard disallowed online lottery transactions, which received a carve out from the UIGEA. In Kentucky, horse racing outfits feared that internet bets on the sport would come to a screeching halt. Several weeks ago, Churchill Downs Incorporated purchased YouBet, further complicating the matter.

In the end, the two government entities asserted, “Neither petitioners nor commenters supporting the petition have provided the Agencies with sufficient data or documentation to justify a twelve-month extension of the compliance date. The Agencies believe that a six-month extension is sufficient for regulated entities to address issues related to the definition of unlawful internet gambling.” The agencies added that documentation provided by merchants to banks and other financial institutions should be sufficient to comply with the UIGEA.

The Treasury and Federal Reserve ultimately settled on using the Administrative Procedure Act to serve the delay on the grounds that the existing UIGEA rules are “impracticable, unnecessary, or contrary to the public interest.” Other pieces of law addressed were Executive Order 12866, the Regulatory Flexibility Act, and the Unfunded Mandates Reform Act. The document added, “The Agencies also believe that regulated entities need to be informed as soon as possible of the extension and its length in order to plan and adjust their implementation process accordingly.”

On Thursday, the House Financial Services Committee will discuss HR 2266 and HR 2267. No markup will occur during the informational hearing, which will be held in Room 2128 of the Rayburn House Office Building at 10:00am ET. HR 2267 establishes a comprehensive framework for regulating the internet gambling industry in the United States and, if passed, may mark the beginning of explicitly legal online poker in the North American country.

Poker Industry Reacts to UIGEA Regulations Delay

Twenty-four hours after it was revealed that mandatory financial services industry compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) would be delayed by six months, the poker industry has had a chance to react.

The Poker Players Alliance (PPA) was one of several organizations that successfully petitioned U.S. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke to push back conformity with the UIGEA rules until June 1st, 2010. The 1.2 million member strong lobbying organization’s Chairman, Alfonse D’Amato, commented in a press release distributed on Friday, “We are thankful to our co-petitioners, the National Thoroughbred Racing Association and the American Greyhound Track Operators Association, and for the dozens of members of Congress who voiced their support for this petition through letters to Secretary Geithner and Chairman Bernanke. The PPA looks forward to working with regulators and legislators to pass legislation that protects consumers and the great game of poker.” News of the extension originally broke on Wednesday.

The two horse racing outfits co-authored a letter with the PPA to Geithner and Bernanke outlining the potential for overblocking by financial institutions, which could have led to legal online wagers being denied by companies like Visa and MasterCard. According to the PPA, the possibility of an extension beyond the current six-month time frame exists. Ideally, Congress would formulate proper internet gambling legislation before June 1st.

To that end, Safe and Secure Internet Gambling Initiative (SSIGI) spokesperson Michael Waxman commented, “This decision is the latest evidence that momentum is building for a shift in policy and a rewrite of U.S. internet gambling laws to provide for regulation and taxation instead of prohibition. Over the next six months, Congress should act to create a framework that regulates internet gambling to protect consumers and collect billions in much-needed revenue for critical federal and state government programs.”

Congressman Barney Frank (D-MA), whose House Financial Services Committee will host a hearing on two internet gambling bills next Thursday, gave his two cents on the UIGEA compliance date being postponed: “The Department of the Treasury and the Federal Reserve Board of Governors deserve a great deal of credit for suspending these midnight regulations promulgated by the Bush administration which would curtail the freedom of Americans to use the internet as they choose and which would pose unrealistic burdens on the entire financial community. This will give us a chance to act in an unhurried manner on my legislation to undo this regulatory excess by the Bush administration and to undo this ill-advised law.”

On the PocketFives.com online poker forum, Rich “TheEngineer” Muny, who serves as the Kentucky State Director for the PPA, broke the news early on Black Friday. While many online poker players were out hunting for deep holiday discounts, PocketFives.com member “mordan” was on the message boards candidly responding, “Everyone in the poker community just won a 30/70 with this development. Although this doesn’t guarantee regulation in the future, our odds have significantly increased with the U.S. Treasury recognizing problems with this bill.”

The future of the legality of games like online poker remains up in the air. In the PPA forum on TwoPlusTwo, poster “Distajo” questioned, “Was the delay granted more for the clarity of the UIGEA rules? Thus, being more beneficial for banks? Like don’t fund poker accounts, but allow horseracing wagers?” Past attempts to clarify the UIGEA have mandated that “laundry lists” of legal activities be created. If a bill like Frank’s HR 2267 is passed, much of the industry seems likely to be legalized and regulated in the United States.

Stay tuned to Poker News Daily for the latest UIGEA headlines.

UIGEA Regulations Officially Delayed Six Months

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

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

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

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

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

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

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

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

Report: UIGEA Regulations Postponed Six Months

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

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

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

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

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

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

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

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

No Markup Planned for December 3rd Internet Gambling Hearing

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

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

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

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

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

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

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

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

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

UIGEA Hearing Scheduled for December 3rd in Financial Services Committee

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

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

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

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

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

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

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

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

Six Kentucky Congressmen Support Pushing UIGEA Deadline Back One Year

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

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

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

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

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

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

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

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

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

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