Poker News

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.

Kentucky Cabinet Secretary Discusses Internet Gambling Battle

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

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

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

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

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

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

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

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

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

Poker News in Brief: Oct. 19-25, 2009

As usual, there were several stories that didn't quite make the front page of PokerListings.com and as part of our ongoing Poker News in Brief feature, we've posted them below.

This week, Kentucky's attempt to seize 141 online gaming domain names went to the State's Supreme Court, Full Tilt took Kentucky to court in the UK, Zynga's popular Facebook poker found a competitor and the Scandinavian poker world continued to square off on Titan Poker.

Supreme Court hears online gaming domain name seizure appeal

Kentucky's Supreme Court heard arguments this week in the State's appeal of a decision by the Kentucky Court of Appeals blocking the seizure of 141 domain names belonging to online gambling sites.

In a 2-to-1 decision, the Appeals Court rejected Kentucky Governor Steve Beshear's claim that Kentucky players and the Internet gambling sites were acting in violation of state law. The decision held that a lower court had wrongly applied the state's "gambling devices" statute to justify the seizure of the domain names.

Interactive Media Entertainment & Gaming Association attorney Jon L. Fleischaker, along with attorneys representing Sportsbook.com and the Interactive Gaming Council, asked the Supreme Court to uphold the decision, calling Gov. Beshear's efforts "intellectually dishonest."

"They made up a process that is totally lacking in due process," Fleischaker said.

A decision is not expected before the end of the year.

The Scandinavian Titan Championship

Titan Poker continues to gear up for the 2009 Scandinavian Titan Championship final set for December.

The Championship is a league that runs exclusively for Titan Poker players from Sweden, Norway, Denmark, Finland and Iceland including weekly battles leading up to the finals in December.

The winner of each weekly tournament receives a seat in the Dec. 20 final featuring a $2,500 guaranteed prize.

Twelve players have already qualified for the final and Sweden leads the overall standings.

For more information check out Titan's Scandinavian Titan Championship page.

((Full Tilt Poker)) defeats Kentucky in UK court

In a case directly related to the Kentucky Supreme Court online gaming domain name seizure appeal, Full Tilt poker has defeated the State of Kentucky.

Despite the Kentucky Court of Appeals decision blocking the seizure of 141 domain names belonging to online gambling sites, Full Tilt took Kentucky to court in the United Kingdom, claiming the State did not have the jurisdiction to block its domain.

This week, the UK High Court issued a judgment in favor of the site, claiming Kentucky cannot enforce its seizure order against the Full Tilt Poker domain names throughout the UK.

Play poker for prizes on Facebook

Zynga's Texas Hold'em Facebook application, one of the most popular games on the social networking site with more than 15 million monthly users, now has a little competition.

Poker 4 Prizes is a brand new Facebook poker application with a twist.

Instead of players competing merely for points, Poker 4 Prizes players can exchange the points for real prizes, ranging from Apple IPods to GPS systems and even an all-expenses paid cruise.

The application is also running a number of promotions including giving away a flash drive to players who submit screenshots of certain poker hands and IPod Shuffles to anyone spotted playing 3 days in a row.

For more information check out the Facebook application page.

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European Commission: US in Violation of WTO over Internet Gambling

As a result of a complaint filed by the Remote Gambling Association (RGA), the European Commission has found the United States to be in violation of its World Trade Organization (WTO) obligations due to its stance on internet gambling.

According to a statement posted on the European Commission’s website, “The report concludes that the U.S. measures constitute an obstacle to trade that is inconsistent with WTO rules. As a result, WTO proceedings would be justified.” However, the Commission may elect to forge an agreement with the Obama Administration rather than pursue WTO action. The RGA represents a bevy of European internet gambling companies, many of which are traded on major stock exchanges in London and Vienna. Its member roster includes Party Gaming, 888, Ladbrokes, Sportingbet, and Playtech, which owns and operates the popular iPoker Network.

The 2006 Unlawful Internet Gambling Enforcement Act (UIGEA) drove publicly traded internet gambling sites out of the U.S. market in deference to shareholder interests. However, U.S.-based sites that permit online wagering on horse racing were allowed to flourish. In addition, sites like PokerStars and Bodog, which are not publicly traded, continued to solicit customers from the North American nation. The Commission’s final report assessed, “There are serious adverse effects for the E.U. They include revenue and stock market value lost by affected companies as a result of their absence from the U.S. market and also the threat of serious sanctions hanging over them that affect their normal operation outside of the U.S.”

The European Commission’s investigation was launched in March of 2008. In the end, its report outlines many of the ambiguities and shortcomings of the UIGEA, including the lack of a definition of “unlawful internet gambling” and the propensity of credit card companies and other payment processing companies to “overblock.” The latter has taken center stage in North Dakota and New Hampshire, where legal online lottery purchases have been stunted by UIGEA regulations. Moreover, the report dives into the specifics of the Professional and Amateur Sports Protection Act (PASPA), which allows sports betting in several U.S. states, including Delaware and Nevada. In total, the European Commission report spends countless pages assessing convoluted U.S. gambling laws.

As a result of withdrawing from the U.S. market, the stock price of publicly traded internet gambling companies took a nosedive. Party Gaming, 888, and Sportingbet lost 75% of their value for a sum of ?5.7 billion between January of 2006 and October of 2006. In addition, bwin, which is traded in Vienna, lost €120 million as a result of exiting the U.S. market. In December of 2008, Party Gaming Co-Founder Anurag Dikshit admitted to violating the Wire Act of 1961 in a New York courtroom. On the same day as Dikshit’s agreement was struck, shares of Party Gaming shot up 27%. According to the Commission, the increase is evidence of how “uncertainty created by the [Department of Justice] investigations is affecting the business prospects of E.U. remote gambling and betting companies.”

Safe and Secure Internet Gambling Initiative spokesperson Michael Waxman told Poker News Daily, “We hope that members of Congress are paying attention to all of these very compelling arguments about why regulation is needed. We hope that, following Congressman Barney Frank’s leadership, members of Congress will start paying attention and move in support of regulation.” Frank’s Internet Gambling Regulation, Consumer Protection, and Enforcement Act (HR 2267) outlines a comprehensive regulatory environment for the internet gambling industry in the United States. It was introduced on May 6th and is up to 30 co-sponsors.

On the future of the European Commission’s activities, a recent Wall Street Journal article noted, “The E.U. said Wednesday it would hold off on filing a formal complaint in hopes of negotiating some sort of solution with the Obama Administration.”

Focus on the Family Reacts to Barney Frank Internet Gambling Bills

Dr. James Dobson founded Focus on the Family in 1977, an organization that works to strengthen family bonds. Recently, it has come out against Congressman Barney Frank’s (D-MA) Internet Gambling Regulation Consumer Protection and Enforcement Act, HR 2267. The bill outlines a comprehensive framework to license regulate the internet gambling industry in the United States. Poker News Daily sat down with Focus on the Family’s gambling spokesperson Chad Hills to discuss the new measure.

Poker News Daily: Explain the general response of Focus on the Family to Frank’s comprehensive internet gambling legislation.

Hills: We see gambling as something that causes addiction and it’s an industry that seeks to exploit the weaknesses of people in order to gain money. What we see from our perspective is an estimated 15 million people who are either problem or pathological gamblers in the U.S.; that’s no small number to ignore. What concerns us is that addiction is followed by bankruptcy. When someone goes bankrupt and they hit the bottom of the barrel, they get desperate. They have nothing else to lose and so turn criminal to keep feeding the addiction or to pay off their debts.

From our perspective, internet gambling represents one of the most invasive and highly addictive forms of gambling. You have availability 24/7 and most gamblers online play on three to five sites at a time. Add those things together and then put that in the privacy and secrecy of your home and you have a perfect storm for gambling addiction. If you walk into a casino, people know the addicts and kick them out. There is public accountability. Online, it’s the click of a mouse.

PND: Does Focus on the Family subscribe to the notion that regulation of an industry ultimately means better protection against underage and problem users?

Hills: We’ve been doing a lot of research on countries conducting legal internet gambling and can pull up three to eight different headlines almost every day where one of them is being hit up for corruption or being investigated. I haven’t seen a system yet that is childproof. I haven’t seen a system that can stop white collar crime from going on.

The Unlawful Internet Gambling Enforcement Act (UIGEA) has effectively dropped the number of internet gambling sites in the U.S. by about 50%. The prevalence of problem gambling is three to five times higher in internet gambling than in land-based gambling. You bring 2,000 casinos into someone’s home and you’re going to have huge addiction troubles. If we legalize this, we’re only going to open Pandora’s Box.

The Poker Players Alliance (PPA) says they have one million members. That’s nice, but for every member they have, there are 15 to 20 people estimated to have a pathological or problem gambling addiction. Each of them affects another 10 to 17 people negatively. One PPA member means that we have 15 to 20 addicted folks and another 250 people affected in total. There are a small number of people that want to play poker online. There is no choice in the matter.

PND: Respond to critics who say that the UIGEA is vague and consequently places unnecessary burdens on the financial services industry.

Hills: It’s not any more of a burden than it would be to verify that someone is of a certain age to purchase something else online. The banks will have to verify that an entity is a licensed gambling industry. Right now, none of those offshore foreign entities are licensed in the U.S. These groups could be funding terrorism. All you have to do is have a couple of techies, a warehouse, and some software and you have an online casino.

PND: What about legal forms of online gambling, like state lotteries, which have experienced a blockage of funding as a result of the UIGEA?

Hills: In terms of blocking legal entities, it’s going to be a process that the industry will have to go through. Once the UIGEA is truly implemented in December, things like online lotteries will have an effective verification certificate that they can show financial institutions. Barney Frank introducing HR 2266 (Reasonable Prudence in Regulation Act) is only going to delay the process.

PND: Talk about the background of Focus on the Family for those who are not familiar with it.

Hills: Focus on the Family is an organization that was founded by James Dobson. It is classified as a Christian ministry and we have a two-pronged approach: To strengthen and nurture families and defend them from dangerous policy. We try to preserve traditional family values and beliefs as they pertain to law, policy, and human conduct. We have different analysts who look at the incoming research, media headlines, and reports.

Poker News in Brief: May 4-10, 2009

As an ongoing feature every Sunday, PokerListings compiles a list of interesting stories from around the poker world that didn't quite make the front page.

This week we're looking at some more Tom Dwan and Fullflush1 insults, a surprisingly resilient poker market and the ongoing battle to legalize online poker.

Tom "durrrr" Dwan and __FullFlush1__ trade blows on Poker Show

It was quite a week for Poker Show on Boylesport.com. The show, hosted by Jesse May, was fortunate enough to get both Tom Dwan and arch-nemesis Luke" __FullFlush1__" Schwartz in the same week.

Dwan was the first one to appear on the show and when asked what he thought about __FullFlush1__ he responded by saying, "Who?"

Other than that Dwan was fairly casual about Schwartz in the interview saying he really hadn't played him that much.

The next day Schwartz was the opposite. Schwartz implied durrrr only wins against him when he hits two outers and gets incredibly lucky. Dwan wasn't the only target either as Schwartz also talked trash about Andrew Feldman, Greeks, Italians and even Phil Ivey.

Dwan and Schwartz appear destined for a 50,000 hand battle royale.

You can listen to the shows by going here

New Orleans a bright spot for the WSOPC

Although it's been a slow year for the WSOPC the New Orleans event is off to a spectacular start. The first event of the series drew 572 entries which is the biggest turn out in more than two years for the New Orleans circuit stop.

The eventual winner, Casey Lang Chiasson, won nearly $50,000 for taking part in the $300 buy-in event. The main event of WSOPC New Orleans starts on May 21.

Debate continues to rage over online gambling legislation

It's been anything but dull since Rep. Barney Frank introduced his pro-online gambling bill earlier this week that would essentially repeal the Unlawful Internet Gambling Enforcement Act.

Now the author of UIGEA, Rep. Spencer Bachus, is speaking out against Frank's bill, suggesting it will lead to children becoming addicted to online gambling.

"Illegal off-shore Internet gambling sites are a criminal enterprise and allowing them to operate unfettered in the United States would present a clear danger to our youth, who are subject to becoming addicted to gambling at an early age," wrote Bachus on his website.

Earlier in the week, Jeffrey Sandman mentioned that despite the online gambling prohibition there were still millions Americans gambling online. A large part of Barney Frank's Internet Gambling Regulation Consumer Protection and Enforcement Act (H.R. 2267) is dedicated to limiting underage online gambling.

Florida approves gaming bill

Floridians looking to play some No-Limit Hold'em have finally had their prayers answered.

Earlier this week the legislature for the state of Florida approved the expansion of poker in the state and that includes a removal of the maximum buy-in for No-Limit Hold'em.

The bill was the source of serious debate between the Floriday State Senate and House but they were finally able to reach consensus this week.

The 15-year agreement is subject to approval by the Seminole tribal nation and is estimated to generate at least $150 million in annual payments from the Seminoles to the state.

The legislation also allows all cardrooms located at horse tracks and jai alai frontons to offer expanded No-Limit Hold'em without the buy-in limitations.

Click here to learn more.

Complications for legal poker in Texas

Amazingly Texans are still not legally allowed to play Texas No-Limit Hold'em in their home state and the group looking to legalize it was dealt a major blow this week.

Apparently Texas Gov. Rick Perry changed his position once again and assuming Perry plans to veto it, Rep. Jose Menendez said he has no intentions of bringing a dead bill to the floor.

The two biggest threats to legal poker in Texas, Texans Against Gambling and the Christian Life Association, put out memos regarding the bill this week and the House Committee seems to have taken notice.

It's worth checking out here. as they've been doing extensive coverage on the fight for legal poker in Texas. If you're interested you can also get more information here.

Players sue L.A. casinos over bad beat jackpots

L.A.-area casinos took a bad beat of their own this week as two players filed a lawsuit against them.

Dennis Chae and Jeff Kim are suing the Bicycle Club, Commerce, Hustler, Hollywood Park and Hawaiian Garden Casinos because floor managers would not let them compete in bad beat jackpots unless they played at tables that collected the $1 per pot fees, even though ads said no purchase was required.

It's not exactly a new issue. In 2005, Attorney General Bill Lockyer cautioned casinos that the promotions violated State Law unless players were allowed to win jackpots without paying the fee.

To learn more check out the L.A. Times story here

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Spencer Bachus Responds To Frank Bill

After the announcement on Wednesday of Massachusetts’ Democratic Representative Barney Frank’s bill to curb the Unlawful Internet Gaming Enforcement Act (UIGEA) of 2006, reaction has been quick. The ranking member of the House Financial Services Committee - of which Frank is the Chairman – has issued a negative response that should come as no surprise as he was one of the key players in the creation of the UIGEA.

Republican Representative Spencer Bachus of Alabama issued a statement after Rep. Frank’s announcement yesterday that insinuates that he will fight any legislation that Frank attempts to put into law. Rep. Bachus’ website trumpets proudly that he, “…is an author of the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006, which banned the use of credit cards and other financial instruments from being used for illegal on-line gambling.”

Rep. Bachus’ statement touches on many of the reasons that the Republican-led Congress used in 2006 for pushing the UIGEA through. “Illegal off-shore Internet gambling sites are a criminal enterprise and allowing them to operate unfettered in the United States would present a clear danger to our youth, who are subject to becoming addicted to gambling at an early age”, he states. He also offers that the passage of the UIGEA in 2006 was, “…commonsense, bipartisan legislation aimed at combating criminals from preying upon American’s youth. That legislation was supported by a broad coalition that included college presidents, the American Bankers Association, the American Psychiatric Association, and major sports organizations.”

Rep. Bachus does not comment, however, on how the UIGEA was tacked on to a piece of legislation that was viewed as a “must pass” portion of national security, the Port Act. He also fails to address that there was no debate over the UIGEA, either in committee or on either floor of Congress; in an important difference, Rep. Frank’s bill is being put to committee for discussion on its own merits and freely debated in the halls of Congress.

The bill that Rep. Frank is proposing is the H.R. 2267 - the Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2009 - and it would be a significant change to current views of Washington regarding the regulation of online gaming and poker. Language of the bill states, “Internet gambling in the United States should be controlled by a strict Federal licensing and regulatory framework to protect underage and otherwise vulnerable individuals, to ensure the games are fair, to address the concerns of law enforcement, and to enforce any limitations on the activity established by the States and Indian tribes.”

The federal government – and in particular the Secretary of the Treasury – would be in charge of licensing and regulating the online gaming industry under the Frank proposal. Companies that pursue licensing would have to provide in-depth detail as to their personal backgrounds and the solidity of their companies. It also includes a proviso that ensures the potential licensee would vigorously work against, “fraud, money laundering, and terrorist finance.” The licenses would last for a five year period and would not allow the holder of the license to partake of any actions that are covered by the Professional and Amateur Sports Protection Act, which explicitly prohibits sports betting.

With Rep. Frank finally proposing his bill to curb the UIGEA, the debate can now begin. It is thought, with a Democratic-controlled Congress as well as the current Obama Administration in the White House, that the possibilities for change regarding the online gaming and poker industry can be achieved. Poker News Daily will continue to monitor the situation in Washington and report on any new developments.

Barney Frank to Introduce Internet Gambling Legislation on Wednesday

According to a statement released by the office of Congressman Barney Frank (D-MA), legislation to exempt licensed internet gaming companies from the Unlawful Internet Gambling Enforcement Act (UIGEA) will be introduced on Wednesday.

The legislation is expected to establish a comprehensive licensing and regulatory framework for the internet gambling industry in the United States. In essence, it will likely be similar in scope to last session’s HR 2046, the Internet Gambling Regulation and Enforcement Act. The press statement sent out on Tuesday morning reads, “Tomorrow, Financial Services Committee Chairman Barney Frank (D-MA) will hold a press conference to unveil legislation that will enable Americans to bet online and put an end to an inappropriate interference with their personal freedom.” The bill would “create an exemption to the UIGEA for operators that are licensed and regulated. UIGEA, which was enacted in 2006, restricts the use of the payments system for Americans who seek the freedom to gamble online.”

The new legislation does not repeal the UIGEA. Also, according to the Safe and Secure Internet Gambling Initiative, it may not include a provision to tax the industry. During the last Congress, which concluded in December, Congressman Jim McDermott (D-WA) introduced HR 2607, which called for the taxation of 2% of all funds deposited onto regulated internet gambling sites by U.S. customers. The money would then be “deposited in the general fund of the Treasury and treated as revenue,” according to the legislation’s text. Similar companion legislation may be needed once again. A study released by PricewaterhouseCoopers revealed that similar legislation to McDermott’s combined with Frank’s HR 2046 could generate up to $52 billion in revenue over a 10 year period.

The press conference is scheduled for 10:00am ET on Wednesday morning in Room 2220 of the Rayburn House Office Building. The Safe and Secure Internet Gambling Initiative added, “The legislation is expected to include a number of significant consumer protections, including safeguards against compulsive and underage gambling, money laundering, fraud, and identity theft.” HR 2046 was officially introduced to the world on April 30th, 2007 and attracted 48 co-sponsors. However, it was not passed into law during the 110th Congress, leading to Wednesday’s re-introduction of what appears to be similar legislation.

The UIGEA was passed during the waning moments of the 2006 Congressional session and was attached to an unrelated security measure called the SAFE Port Act. Then-Senate Majority Leader Bill Frist (R-TN) was instrumental in its passage. The UIGEA deemed financial transactions between U.S. customers and illegal online gambling operations to be against the law, although no clarification was given as to what constituted “illegal gambling.” The UIGEA’s vagueness has led to a lawsuit by the Interactive Media Entertainment and Gaming Association (iMEGA) to declare it unconstitutional. The Third Circuit Court of Appeals will hear the case on July 6th following a decision by District Court Judge Mary L. Cooper last March, who granted iMEGA standing, but disagreed with many of the organization’s core arguments.

Last week, internet gambling came under fire in Minnesota, where the state’s Department of Public Safety issued written notice to 11 internet service providers (ISPs) calling for blocking access to 200 websites. The list of sites affected by the order includes USA-friendly rooms Bodog, Full Tilt Poker, and Players Only. It also features a bevy of sites that do not accept players from the United States, including World Series of Poker presenting sponsor Everest Poker, iPoker Network flagship site Titan Poker, and Party Gaming’s casino arm, Party Casino. Party Gaming, a publicly traded company on the London Stock Exchange, pulled out of the U.S. market after passage of the UIGEA in 2006. Its online poker room, Party Poker, is not among the 200 sites.

We’ll have a full breakdown of the bill when it is released on Wednesday right here on Poker News Daily.

List of 200 Banned Internet Gambling Sites in Minnesota Released

The list of 200 internet gambling sites that have come under fire by the Minnesota Department of Public Safety has been released. Many of the websites identified do not accept players from the United States, leaving leaders in the industry scratching their heads.

Headlining the contingent of targeted sites is Party Casino, which is owned by the same publicly traded parent company as its online poker room counterpart, Party Poker. Neither accepts U.S. players and to complicate matters further, Party Gaming, which can be found on the London Stock Exchange under the symbol “PRTY,” recently reached an agreement with the U.S. Department of Justice admitting to Wire Act violations similar to one struck by company co-founder Anurag Dikshit in December. Party Poker is not on the list. Also appearing is PokerRoom, which shut its doors earlier this month along with sister site CasinoRoom (which is also on the list) and funneled customers to bwin.

Bodog appears on the list as “BoDog.com,” but the corresponding URL points to its casino arm. Bodog accepts players from the United States, as does Full Tilt Poker, whose domain is officially under fire by the Minnesota Department of Public Safety. Cake Poker Network site Players Only also is part of the group of 200 affected sites. Notably absent are PokerStars, Ultimate Bet, Absolute Poker, Lock Poker, Carbon Poker, Doyle’s Room, and Cake Poker. No informational or forum sites appear to be targeted at the moment. The list spans genres such as online poker, online casinos, and online sports books.

The Action Poker Network’s flagship site appears on the list, as does Titan Poker, one of the largest sites on the massive iPoker Network. Neither site accepts U.S. players. Fellow iPoker Network site Betfred’s future may now be in jeopardy, as is the longevity of Microgaming site Betway. iPoker Network sites CD Poker, Mansion Poker, and Noble Poker all appear on the list of 200 sites. One of the most visible rooms to find itself in hot water is Everest Poker, which is the official sponsor of the 2009 World Series of Poker (WSOP), which kicks off next month from the Rio in Las Vegas. This is Everest Poker’s second year as the spectacle’s presenting sponsor. Its logo will don WSOP felts and also appear in signage at the Rio.

Other websites that have been flagged by the Minnesota Department of Public Safety include Gnuf, Golden Palace, Hollywood Poker, and InterTops Casino, which actually appears twice on the list. Publicly traded company Ladbrokes’ online poker site, despite not accepting U.S. players, is on the list, as are PokerRoom School, River Belle, and Spin Palace. Crazy Poker’s dot com and U.K. domain names are both listed. According to Alcohol and Gambling Enforcement Division Director John Willems, the list of 200 sites was drawn “randomly” without regard to the type of internet gambling employed.

The Interactive Media Entertainment and Gaming Association (iMEGA), which has been at the forefront of the fight for the industry in Minnesota, was puzzled by the final list distributed by the Department of Public Safety. Joe Brennan, its Chairman, commented in a press release on the organization’s website, “We question how much thought was put into the selection of these sites. To propose censoring Minnesota residents’ Web access and not to know which sites are even in the U.S. market makes me wonder just how seriously the Department of Public Safety is taking this action. It comes off as a half-baked attempt at intimidation rather than thoughtful enforcement.”

The ISPs that received notice have up to three weeks to respond. They include some of the largest telecommunications corporations on the planet: Verizon, AT&T, Qwest, and Direct TV, just to name a few. The letter sent to each ISP reads, “We are therefore requesting these enterprises not be allowed to transmit gambling information to your Minnesota customers.” The letter also states that the Federal Communications Commission (incorrectly labeled as “Federal Communication Commission”) received a copy. Each gambling site is listed alongside its IP address and telephone number, although the latter is not present for every site on the list. The Department of Public Safety is also calling for telephone access to be blocked where appropriate.

View the entire list of 200 internet gambling sites in jeopardy in Minnesota.

Minnesota Seeks to Block Internet Gambling Sites

Fresh off a similar incident that has been appealed to the Kentucky Supreme Court, the Minnesota Department of Public Safety has notified internet service providers (ISPs) that they must prevent access by the state’s residents to 200 internet gambling sites.

The total number of sites to be blocked currently stands at 200. However, at press time, the affected domain names are not yet known. According to the internet gaming press release, Written notice was given by the Minnesota Department of Public Safety’s Alcohol and Gambling Enforcement Division to AT&T, Charter, Comcast, Direct TV, Dish Network, Embarq, Sprint, Frontier Communications, Qwest, Verizon, and Wildblue Communications. John Willems, Director of the Division, commented in a press release distributed on Wednesday, “We are putting site operators and Minnesota online gamblers on notice and in advance. Disruption of these sites’ cash flow will negatively impact their business models. State residents with online escrow accounts should be aware that access to their accounts may be jeopardized and their funds in peril.”

The press release cites the Wire Act of 1961 and overtly charges, “Online gambling is illegal in all U.S. states.” The Interactive Media Entertainment and Gaming Association (iMEGA) has already dispatched a legal team specializing in First Amendment rights to Minnesota to combat the Department of Public Safety. Its Chairman, Joe Brennan, told Poker News Daily, “I'm somewhat troubled by the shaky legal premise on which Minnesota has based this order. They are asserting that there is some blanket Federal prohibition against gambling on the internet, when in fact none exists. In a similar fashion to Kentucky, you have the aggressor citing assertions that are not supported by the laws that are on the books.”

The letters to ISPs were delivered on Monday. The companies have “two to three” weeks to respond. Then, the Department of Public Safety has pledged to take the complaint to the Federal Communications Commission. In addition to the 200 sites whose access may be at risk in the immediate future, the Division expects further expansion: “Willems anticipates the program expanding to address thousands of sites, depending on compliance.” In Kentucky, a total of 141 domain names are in limbo as part of a forfeiture hearing that may be heard by the Kentucky Supreme Court. In Minnesota, no such seizure occurred. Instead, the Department of Public Safety is merely seeking that ISPs block access. Internet gambling is identified specifically.

In addition to their websites being inaccessible, the Department of Public Safety is also calling for the 200 companies’ phone numbers to be blocked. It explained, “For more than two decades, telecoms have shut down telephone numbers at the request of law enforcement agencies when believed to be involved in illegal activities, such as sports book-making telephone numbers.” iMEGA and the 1.2 million member strong Poker Players Alliance (PPA) are among those seeking to prevent the blockage from becoming a reality. In Kentucky, the American Civil Liberties Union (ACLU) and Bluegrass Institute rallied behind the internet gambling industry. In January, the Kentucky Court of Appeals in Louisville overturned a lower court ruling that upheld the seizure order by a two to one margin. The Commonwealth, led by Justice and Public Safety Cabinet J. Michael Brown, immediately appealed.

Matt Werden, the PPA’s State Director for Minnesota, commented in a press release on Wednesday, “This isn’t simply a heavy-handed tactic by the government; this is a clear misrepresentation of Federal law, as well as Minnesota law, used in an unprecedented way to try and censor the Internet. I don’t know what U.S. Code they’re reading, but it is not illegal to play this great American pastime online and we’re calling their bluff.”

Grover Norquist, President of the Americans for Tax Reform, added, “This is nanny-statism at its worst – the government barging into a private matter because people are supposedly too stupid to make decisions and take care of themselves. Individual liberty should not be supplanted by the whims of politicians looking to soak even more money from an over-taxed, over-regulated population while feigning concern over safety issues.” Brennan told Poker News Daily that early speculation revealed that pressure from Indian casinos may be behind the move, although this was not verified. PokerXFactor.com instructor and Minnesota resident Chris “Fox” Wallace speculated that fledgling legal card rooms at racetracks may be to blame.

Willems admitted to the Minneapolis Star Tribune that he did not know how many Minnesota residents gambled online nor provided an estimate. Instead, he stated that he has had gamblers claim they lost $200,000 and needed to borrow money. The Department of Public Safety’s press releases closes by asserting that the internet gambling industry may provide “funding for criminal and terrorist organizations.”

A call placed to press release author Dennis Smith of the Minnesota Department of Public Safety was not returned as of press time. Stay tuned to Poker News Daily for the latest on this developing story.

888 Operating Income Grows 21% in 2008

In its 2008 end of year results released this week, 888, the parent company of Pacific Poker, revealed that its operating income grew by 21% last year to $262.5 million. In 2007, it reported operating income of $216.9 million.

888's casino arm saw its revenue balloon by 14% to $135.1 million in 2008, up from $118.1 in 2007. However, Pacific Poker's revenues dropped by 4% from $80.8 million in 2007 to $77.2 million last year. All told, 888 posted a profit before tax of $48.6 million during the 2008 calendar year, up 6% from 2007. This resulted in a final dividend of 2.9 cents per share.

Operational highlights for the brand in 2008 included 14 new business customers, including an arrangement with Sportech PLC, which was forged back in June. The addition of two new Bingo customers brought its total stable to nine and, on the same day as its earnings were released, 888 announced a partnership with the Racing Post, which it describes as “the pre-eminent horse-racing industry publication.” Also during 2008, the company launched 888sport.com and 888ladies.com.

888's Chief Executive Officer, Gigi Levy, commented in the company's earnings release, “We believe that this successful model, offering both B2B and B2C businesses, is key to growth in the online gaming market in the coming years. Despite the difficult economic circumstances during the last few months of 2008, our underlying business remained strong.” The company warned that its first quarter revenues in 2009 will likely be lower than its fourth quarter revenues in 2008, reflecting the downswing in the global economy.

In 2008, Pacific Poker became available in 11 languages: Russian, Polish, Czech, Bulgarian, Hungarian, Romanian, Lithuanian, Latvian, Estonian, Greek, and Japanese. The report by 888 also revealed that Pacific Poker may receive a makeover in 2009: “The Pacific Poker site will be given a new look and feel, with additional products and poker side bets enhancing the customer experience of the poker room.” Pacific Poker, like other online poker sites owned by publicly traded companies, does not accept customers from the United States. The decision came after the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006.

The number of active customers on Pacific Poker sank from 170,988 during the first quarter of 2008 to just 158,557 during the fourth quarter. Consequently, its average revenue per customer fell from $128 to $107. On its lackluster close to the 2008 calendar year, 888 officials explained, “Due to the prolonged and deepening economic downturn, unprecedented challenging trading conditions were experienced following the end of the summer holiday season. Active customers played slightly less and volatile adverse foreign exchange movements exacerbated the effect on US$ denominated revenues.”

Nearly a quarter of a million new players deposited for the first time on 888's poker or casino platforms last year. It inked poker agreements with Poker Dome, Littlewoods, and Lucky Ace in 2008, further growing its presence in the marketplace. Similar to other internet gambling sites that do not accept U.S. players, 888 is keeping close tabs on the developments between the European Commission and World Trade Organization. Last week, the Commission's preliminary findings revealed the U.S. is in violation of its trade obligations due to its stance on internet gambling. A final report is due this month.

According to traffic ranking site PokerScout.com, Pacific Poker boasts the 13th busiest network worldwide in terms of cash game volume with a seven day running average of 1,100 players. Its 24 hour peak is nearly double that number, 2,174. At the time of writing, which is late afternoon throughout Europe, nearly 1,400 ring game players are seated at its virtual felts.