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Poker News | Gambling and the Law

Poker Industry Comments on 60 Minutes Broadcast

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The poker community did not take long to react to the airing of the 60 Minutes episode on CBS on November 30th. As it pertained to the online poker industry, the television show focused on the 2007 Absolute Poker scandal and the 2008 UltimateBet scandal, and in the end, there was no mention of the need for regulation in the United States for the good of the multi-billion dollar industry. Within 24 hours of the show’s airing, several pertinent parties made statements about it, including the Poker Players Alliance (PPA) and the Safe and Secure Internet Gambling Initiative (SSIGI).

The first statement released came early on the morning of December 1st from SSIGI, a lobbying organization that works toward the regulation of online gambling in the halls of the U.S. Congress. The release focused on the need for regulation and protection for consumers as demonstrated by the 60 Minutes piece. Jeffrey Sandman, spokesperson for SSIGI, stated:

“The 60 Minutes and Washington Post stories demonstrate unambiguously that the existing government prohibition on Internet gambling is a failure and a mistake. The millions of Americans who continue to gamble online are vulnerable to being defrauded by offshore operators who exploit U.S. prohibition policies, leaving U.S. consumers without legal protections when they make a bet or play poker online. It is clear that a different approach is necessary to protect consumers, as well as to recapture the billions of tax dollars currently lost to offshore gambling operators and out of the U.S. economy. Now more than ever, Congress should understand why it should step in and regulate the industry to protect the public. We are hopeful that increased attention in the media about the issue will lead to increased movement in Congress.

“Left out from the 60 Minutes and Post coverage were details about the specific benefits achieved through regulation. Legislation introduced last year by Rep. Barney Frank, the Internet Gambling Regulation and Enforcement Act of 2007, would establish an enforcement framework for licensed gambling operators to accept bets and wagers from individuals in the U.S. It includes a number of built-in consumer protections, including safeguards against all of the types of improper activity identified in the recent news coverage. These safeguards include protections to combat compulsive and underage gambling, money laundering, fraud and identity theft. Moreover, as the coverage reveals, the structure of the Internet allows for greater protections since there is a complete audit trail of all Internet gambling activity and transactions. A companion piece of legislation would ensure the collection of taxes on regulated Internet gambling activities. Revenues from regulated Internet gambling are estimated to be between $8.7 billion and $42.8 billion over 10 years, according to a tax revenue analysis prepared by PricewaterhouseCoopers.”

Soon after, the PPA released a statement comprised of a message from the organization’s chairperson, former U.S. Senator Alfonse D’Amato. It also emphasized the need for licensing and regulation of the industry to prevent fraud and abuse from occurring again as it did with Absolute Poker and UltimateBet, and it read:

“The recent cheating scandals underscore the need for U.S. licensing and regulation of online poker to help protect consumers. While even the most highly regulated industries are susceptible to fraud and abuse, regulation does provide assurances that when consumers are harmed they have recourse, and that the offenders will be sanctioned. The continued pursuit of poker prohibition, on the other hand, will only drive this industry underground. As the Washington Post pointed out, prohibition represents a widening disconnect between 21st-century technology and 20th-century laws.

“Regulation of Internet poker does not equal an expansion of gambling in this country. Like it or not, the phenomenon of internet poker cannot be wished away. The American market has spoken. There is strong demand for Internet poker and no reasonable government can or should stand in the way of adults competing in games of skill on the Internet. To the contrary, the government should step up and exercise regulatory oversight on this multi-billion dollar interstate commerce, and collect the revenue--especially during this country’s economic crisis.

“The federal government cannot continue to abdicate this basic responsibility to the millions of its citizens who choose to play poker on the Internet. The attempt to enforce an outright prohibition of online poker is deeply flawed and unworkable, and it invades upon the personal freedoms of law-abiding adults who wish to engage in a game of skill. And as 60 Minutes and the Washington Post stories reported it also exposes American consumers to the rare unscrupulous bad apple operator who will take advantage of the lack of a U.S. regulated marketplace.

“Now more than ever the U.S. Congress needs to step up and enact real public policy as it relates to Internet gaming. We look forward to working with the new Administration and the new Congress to advance sensible regulatory solutions such as those introduced in the 100th Congress by Representatives Barney Frank (H.R. 2046) and Robert Wexler (H.R. 2610) and Senator Robert Menendez (S.3616).”

The Kahnawake Gaming Commission also released a statement on December 1st in response to the 60 Minutes piece, as it felt that there were numerous facts that were integral to the story but had been omitted when the final product aired on CBS.

First, the KGC wanted to emphasize that UltimateBet was owned and operated by Excapsa when the cheating began, and a court settlement was recently reached wherein Excapsa paid Tokwiro Enterprises $15 million for the sale of a company with such flaws. Second, it should have been emphasized that all cheated players on UltimateBet and Absolute Poker were repaid an amount that exceeded $20 million. Third, security measures, including the migration to the CEREUS software platform, have been implemented at both sites to prevent any future cheating. And lastly, the KGC has filed a criminal complaint against Russ Hamilton and is working with law enforcement to bring the accused to justice.

Ultimately, the result of the 60 Minutes broadcast should be a renewed vigor to work toward the legalization and regulation of online poker in the United States. The PPA and SSIGI are working to do just that, but the two organizations need the help of the poker community to do it. It is only with our voices that our intentions will be heard. The PPA gives a forum with which to do that, and more information can be found at www.PokerPlayersAlliance.org. And SSIGI keeps poker enthusiasts informed and gives opportunities to be a part of the solution, details of which can be located at www.SafeAndSecureIG.org.

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