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Americans for Tax Reform Sides with Internet Gambling in Minnesota

The Americans for Tax Reform (ATR) has come out in support of the internet gaming industry in Minnesota. The state’s Department of Public Safety has served written notice to 11 major internet service providers (ISPs) calling for blocking access to 200 internet gambling websites.

Written notice was served on Monday. However, it was made public on Wednesday in a press release issued by the State. Siding with the internet gambling industry shortly thereafter was the ATR, which is based in Washington, D.C. and headed by Grover Norquist. The organization has been intricately involved in the battle for control of 141 internet gambling and online poker domain names in Kentucky and is one of the first to support the industry in Minnesota.

Norquist told Poker News Daily that the actions by the Department of Public Safety parallel a growing nationwide trend for control of the internet: “The State of New York wants to tax people who download movies. There is an effort throughout the states to tax internet sales on sites like eBay. One of the reasons that the internet is so helpful is that it allows competition. The best way to keep taxes low is to allow people to be able to access other jurisdictions.” If successful, 200 websites would be completely inaccessible by Minnesota residents. The affected ISPs, which have up to three weeks to respond, include AT&T, Charter, Comcast, and Qwest.

Poker players in Minnesota may be left with legal card rooms at racetracks and the state’s tribal casinos as the only options if the action to block 200 websites is successful. Norquist explained, “You can’t always pick up and move, but on the internet, you can buy things in other states and other countries. That’s one of the reasons why the internet is so helpful. It’s none of the government’s business what you do online. We just went through this in Kentucky.” In the Bluegrass State, the Kentucky Court of Appeals overturned the seizure of 141 internet gambling domain names, including those belonging to massive industry staples like PokerStars and Full Tilt Poker. The case now moves on to the Kentucky Supreme Court.

Norquist explained his ideal vision for the future of the internet: “We want to keep the internet deregulated and untaxed because it’s so important in terms of protecting individual liberties. It’s not helpful to have politicians pushing people around.” The ATR was founded in 1985 at the request of President Ronald Reagan. It has pioneered the Taxpayer Protection Pledge, which it describes as “a written promise by legislators and candidates for office that commits them to oppose any effort to increase income taxes on individuals and businesses.” In the current Congress, which convened in January, a total of 172 Representatives and 34 Senators have subscribed to it. Last year, the ATR created the Center for Fiscal Accountability. It also organizes an annual Cost of Government Day.

The ATR may now work hand in hand with industry organizations like the Interactive Media Entertainment and Gaming Association (iMEGA) and the Poker Players Alliance (PPA), which have already dispatched legal teams to Minnesota. In Kentucky, a broad coalition was formed to counter the Justice and Public Safety Cabinet. Rich Muny, the PPA’s State Director for Kentucky and member of the organization’s Board of Directors, told Poker News Daily, “Poker players throughout America should be very concerned, as should internet freedom lovers regardless of where they stand on gambling. Once we establish a process of government regulating the internet, where does it stop?”

Other organizations that stood by the internet gambling industry in Kentucky included the Center for Democracy and Technology, eBay, the Bluegrass Institute, and the American Civil Liberties Union. Stay tuned to Poker News Daily for the latest from Minnesota.

Minnesota attacks online gambling

The State's Department of Public Safety served notice on 11 national and regional telephone and Internet service providers this week telling them to prohibit access of all Minnesota-based computers to those gambling sites.

The DPS contends that online gambling is illegal in all U.S. states.

Under a federal statute enacted in 1961 that recognized the states' need to control illegal gambling, the state has the authority to use its law enforcement agencies to stop illegal online gambling activity.

The DPS said it believes this is the first attempt by a state to employ the federal statute to restrict access to online gambling sites.

"In Minnesota, and for Minnesotans, the primary issues are legality, state self-governance and accountability," said John Willems, director of the DPS Alcohol and Gambling Enforcement Division.

"In broader context, the long-running debate on online gambling continues to raise significant issues, including absence of policy and regulation, individual rights, societal impact, international fair-trade practices, and funding for criminal and terrorist organizations."

Not only will Internet Service Providers be asked to block computers in Minnesota from the list of online gambling sites, the written notice also provides the sites' telephone numbers so Minnesotans can't call those numbers either.

"We are putting site operators and Minnesota online gamblers on notice," Willems said

"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."

According to the DPS, a response from the notified ISPs is expected within two to three weeks, at which time issues of non-compliance will be referred to the Federal Communications Commission.

The list of specific online gambling sites isn't being made available until the DPS confirms it is legal to release it.

However, Willems told PokerListings the list is not defined by type of gambling.

"Staff prepared a sample list at my request, so it may or may not include poker," Willems said. "Please keep in mind this is about 200 sites, which is a small representation of the larger number that operate."

Willems anticipates the program will expand to address thousands of online gambling sites depending on the compliance of the telephone companies and ISPs. He said the required technology to restrict geographic access to particular sites is a relatively straightforward procedure for service providers.

"The state of Minnesota has not to this point explored regulating this business. Perhaps that will happen in the future," Willems said.

"However, as of now, this form of gambling is unlawful in our state."

Matt Werden, the Minnesota state director of the Poker Player Alliance, has already stepped up to defend online poker.

"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," Werden said.

"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."

Werden claims online poker isn't illegal, is not criminal, and can't be forcibly blocked by "a state authority looking to score some political points."

"We see headlines like this coming from communist China but never expect that it could happen here in Minnesota," Werden said. "The good news is groups like the Poker Players Alliance are here to protect the rights of poker players and set the record straight when government reaches too far."

Werden said the issue is more than just about protecting poker. It is about keeping the Internet free of censorship and ensuring that law-abiding citizens can enjoy a game of Texas Hold'em in the comfort of their own home, either online or with a group of friends.

"The PPA will take any action necessary to make sure our members and the general public are aware of these oppressive and illegal actions, and to make sure the game of poker - in all it's forms - is protected in the state of Minnesota," he said.

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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.

Online Poker Clients No Longer Welcome on PRWeb

In a change that took effect this week, PRWeb, a major press release distributor, announced that it would no longer accept news from “online gambling or related websites.” The service was previously used by some of the world’s largest online poker rooms, including Ultimate Bet, Ladbrokes, and Titan Poker.

An e-mail sent to PRWeb’s editorial staff from its management mandated, “Moving forward, PRWeb will no longer be publishing releases that promote or link to online gambling or related websites. This shift in editorial has been prompted by legal considerations and brings us in line with the stance that other notable organizations such as Google and Yahoo are currently taking with regard to promotion of online gambling in the U.S.”

A representative from Ultimate Bet told Poker News Daily that the company received notification that an editorial hold had been placed on a release that was scheduled to go out this week. An e-mail sent from PRWeb offered the Tokwiro-owned online poker site a full refund. In response, the spokesperson stated, “We expressed our disappointment that they have chosen to place all gaming-related content in the same category rather than considering poker as a game of skill. We requested that they reconsider the details of their policy and look to exempt poker-related content from this blanket ban on all gaming-based editorial.” Ultimate Bet has not received correspondence from PRWeb to its request.

The change applies to the U.S. and non-U.S. versions of the company’s services. The most recent press release related to online poker that appeared on PRWeb is from Devilfish Poker and is dated April 11th. The feature is entitled “Devilfishpoker.com Players Get Their Chance to Play Dave ‘Devilfish’ Ulliott on the Final Table from Hell.” It is unknown whether online poker affiliate sites or poker news sites will be affected.

A member of PokerSource.com's editorial staff received a letter that explained, "[PRWeb] received a Cease and Desist letter from the Washington State Online Gambling Commission requiring that we immediately halt the distribution of press releases promoting online gambling sites and content." PRWeb is owned by Vocus and based in Ferndale, Washington. The state has one of the harshest online gaming laws anywhere in the country. Playing online poker is a Class C felony, which is punishable by up to five years in prison and a $10,000 fine. In addition, a player’s house, car, or other possessions can be seized in the event of a conviction.

PRWeb’s services range between $80 and $360 per press release. The company takes advantage of longstanding relationships with Google and Yahoo in order to increase the visibility of its clients’ news releases. PRWeb was founded in 1997 and purchased by Vocus on 2006. After opening trading on Tuesday below $16, Vocus’ stock ballooned to $16.88 on Thursday. It is traded on the NASDAQ Stock Exchange under the symbol “VOCS” and is currently fetching $16.32, down $0.07 on the day.

Refunds were being given to internet gambling-related companies that requested them from PRWeb. The company expected refunds to be processed within two business days. PRWeb partners with a bevy of industry giants including AOL, Billboard, Business Wire, LexisNexis, Pheedo, and Topix. Other internet gambling companies that have utilized the popular service include ThisIsTheNuts.com, Carbon Poker, Boyle Poker, Everest Poker, Absolute Poker, Tower Gaming, Poker Heaven, and Paddy Power. Poker News Daily also distributes releases using PRWeb.

The law making playing online poker a Class C felony in Washington was passed in 2006. Last Month, a Court of Appeals upheld a challenge to the law from Poker Players Alliance (PPA) Washington State Director Lee Rousso. The case may now head to the Washington State Supreme Court. The law does not differentiate between skill games and games of chance; rather, all card games are frowned upon.

Jason Alexander Hosts Poker Tournament Benefiting Family Crisis Center

Former “Seinfeld” actor Jason Alexander, who is a familiar sight at some of the world’s largest poker events, will lend his high-profile name to a special charity tournament benefiting the 1736 Family Crisis Center in Los Angeles. The festivities take place at Hollywood Park Casino on May 9th at 2:00pm local time.

Alexander took tenth place in the Ante Up for Africa charity poker tournament held during the 2007 World Series of Poker (WSOP). Next month, he’ll be joined by Dianna Donofrio, the Nevada State Director for the Poker Players Alliance (PPA), and Leyna Nguyen, an Emmy Award winning news anchor for KCBS and KCAL in Los Angeles. Poker players scheduled to partake in the May 9th event include 2004 WSOP Main Event Champion and Team PokerStars Pro member Greg Raymer, 2006 WSOP Main Event Champion and ACED Poker pro Jamie Gold, and WSOP veteran Chip Jett.

The charity poker tournament’s sponsors include Toyota Financial Services, All In Magazine, and Webexposure.com. A press release announcing the event explains that it presents a unique opportunity “for a fun-filled day of poker, laughter, food and celebration - and victory over domestic violence. Each hand played will be a strong step towards ending domestic violence and helping youth who have been abused and abandoned.”

1736 Family Crisis Center has been benefiting the community for the last 36 years and operates a total of five shelters. In addition, it also runs three outpatient clinics throughout the metro area and five around-the-clock emergency treatment centers. The press release explains, “The Center relies 100% on grants and donations to provide much-needed services to victims of abuse and abandoned youth. In this uncertain economic climate, non-profits have been hit the hardest and sadly, an unstable economy statistically fuels domestic violence. Please help us by joining in to play poker with Jason and his friends as we become part of the solution to end domestic violence.”

The tournament boasts a buy-in of $250 with $100 rebuys. For those who would rather catch a glimpse of the Hollywood and poker worlds colliding rather than actually play, spectator passes are available for $75. First place comes with a $10,000 cash prize, the runner up will receive an “eco-friendly” poker table, third place takes home a WSOP Boot Camp package donated by “Celebrity Apprentice” candidate and Ultimate Bet pro Annie Duke, and fourth place will receive a cruise for two. In total, the top ten finishers will receive prizes.

Interested poker players can purchase tickets through the 1736 Family Crisis Center’s website or by calling 310-543-9900, Extension 210. Alternately, donations and buy-ins can be mailed directly to the facility. Other opportunities available include an All-In Sponsor for $25,000, a Royal Flush sponsor for $10,000, a Straight Flush sponsor for $5,000, and a Table Sponsor for $3,000. Program advertising ranges from $100 for a quarter page ad to $500 for a full page spread.

On April 20th, 2008, “Everybody Loves Raymond” actor Brad Garrett hosted a charity Texas Hold’em tournament benefiting the Crisis Center, which helped over 25,000 domestic violence victims last year. Hollywood Park runs a variety of poker tournaments that coincide with its horse racing offering, including weekday "Poker and Ponies" tournaments with a $30 buy-in and $4,000 in guaranteed prize money. On Saturdays and Sundays, the price of poker increases to $70. The card room spreads Limit and No Limit Texas Hold’em, Omaha High-Low, Seven Card Stud, and even a $20-$40 half Seven Card Stud High-Low half Omaha High-Low game. Hollywood Park also runs a full Bingo operation and casino.

Online poker loses again in Washington

On Monday, the Division I Court of Appeals in the state ruled against Rousso's appeal to remove the law that makes it illegal to play online poker in Washington.

It was a unanimous decision from judges Stephen Dwyer, Ronald Cox and J. Robert Leach.

"Yes, I was surprised by the ruling," Rousso told PokerListings.

"I thought I had briefed the issues well and presented them well at oral argument. I also thought I had the law right. So I was surprised, but hardly shocked, as it is hard to get a law overturned."

Rousso, a lawyer in Washington as well as the Poker Players Alliance state director, first filed his case against the online gambling laws on the first day of the World Series of Poker in 2007.

His argument is that the state's law, which makes it a felony for people to play online poker, fails to comply with the federal government's Wire Act. The Wire Act has never extended criminal liability to the players.

Rousso also believes the law is in direct violation of the U.S. Constitution's Commerce Clause, which forbids individual states from passing protectionist laws against other states' business.

The three Appeals Court judges ruled that the state's interest in regulating gambling outweighs the burdens on interstate commerce.

"Ultimately, given the importance of the State's interests in protecting its citizens from the ills associated with gambling, and the relatively small cost imposed on out-of-state businesses by complying with the Gambling Act, Rousso has failed to meet his burden of showing that the Gambling Act is 'clearly excessive,'" wrote the judges in their decision.

However, Rousso did find a silver lining in the ruling.

"I was encouraged that the court accepted my argument that Congress has not given the states unambiguous authority to regulate Internet gambling," Rousso said.

"That was a big point of dispute in this case. Instead, the court found that although Congress has not granted this authority, the state's interest still outweighs the burden on interstate and international commerce. So the decision was not a total rejection of my opinion."

Although Rousso has spent nearly two years battling Washington's online gambling ban in the courts, he's not ready to give up yet.

"When I filed my case, I thought it would take about two years to get to the Washington State Supreme Court, so I'm right on schedule," he said.

Rousso is already planning to take that next step of submitting the issue to the state supreme court. He said his sense is that the court would probably accept review of the case since it involves constitutional issues.

At this point, with all the work that has gone into the case, Rousso said another appeal doesn't involve much more work. There isn't much he can add to the case either.

"Instead, as cases go higher, the issues get narrower. I will focus like a laser beam on those points where I think the court of appeals got it wrong," Rousso said.

"In particular, I think the court of appeals erred by failing to contrast what is illegal with what is legal. If one does so, the protectionist nature of the Washington statute becomes much more apparent."

Rousso is referring to the fact that other forms of gambling are legal in the state. Washington has legal casinos and a state lottery.

With respect to the constitutional issue, Rousso said everyone should be concerned about state efforts to control and regulate the Internet. The Commerce Clause was enacted to prevent exactly that type of state action.

"Personally, I think the issue is important because it reflects a willingness of the government to unreasonably intrude in our personal lives," Rousso said. "Nonplayers should be equally concerned about the Nanny State and should be objecting as loudly as I am."

That's why Rousso will keep taking the case as far as he can.

"I'll keep going until they close the courthouse doors in my face," Rousso said. "I really think this is an issue for the Supreme Court of the United States, so I'm hoping that court will accept review after the Washington Supreme Court rules on the case."

Related Articles:

• Washington court rules against Lee Rousso
• Lee Rousso on collision course with Washington state
• Hearing date set for Rousso case
• Rousso gives update on online gambling case
• Net gambling fight heads to governor race
• Net gambling lawsuit hits snag in Washington

 

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