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Poker News | Gambling and the Law

Poker and Politics in 2010: Possibilities for the Year Ahead

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The poker industry has become more embroiled in U.S. politics than most people ever anticipated, but the sharp increase in the game’s popularity over the past decade made it inevitable. Each year, more cases seem to come to the fore on the local and state levels, and federal legislation has been prominent since the passage of the UIGEA in 2006. As 2010 begins, it behooves the industry to take a look at pending cases and the potential for poker in the new year.

Beginning with the legislation that could most impact the world of poker, the United States Congress has several pending bills that have the potential to change poker, specifically online poker, as the industry now knows it.

The urgency to pass pro-poker legislation is clear. As the UIGEA stands, its regulations are set to go into effect on June 1, 2010, at which time financial institutions will be required to block - to the best of their ability - all transactions that may relate to online gaming. As far as most banks are concerned, this also pertains to the payment processors, so players will be severely limited as to their options for depositing or withdrawing money from any online gaming website. Regulations nearly became effective on December 1, 2009, but a last-minute stay was granted by Chairman of the Federal Reserve System Ben Bernanke and Secretary of the Treasury Timothy Geithner. Congress now has a six-month reprieve (five months since December has passed) to pass legislation to repeal the UIGEA and refocus efforts in a positive direction.

Those efforts will be headlined by Rep. Barney Frank and his H.R. 2267 bill, the Internet Gambling Regulation, Consumer Protection & Enforcement Act. Though first introduced in May of 2009, hearings were delayed due to issues like the U.S. financial crisis and health care reform, but he finally scheduled and held a hearing in the Financial Services Committee of which he is the chairman on December 3 (). It was reported that Frank will ask for a committee vote on the bill upon Congress’ return from the holiday recess, and a positive vote will allow H.R. 2267 to move forward to the floor of the House of Representatives for debate. Possibilities for passage of the bill include a straight up-or-down vote or attaching it to another must-pass bill, such as was done with the UIGEA in 2006 when it was attached to the Port Authority legislation.

Frank’s companion bill, H.R. 2266 (the Reasonable Prudence in Regulation Act) is now somewhat irrelevant, as it simply called for a delay in the UIGEA regulations to December 1, 2010. With a six-month delay already in place, this bill may be adjusted or sidelined.

Rep. Jim McDermott also proposed legislation in May of 2009 to accompany Frank’s bills. H.R. 2268 was named the Internet Gambling Regulation and Tax Enforcement Act and stands to provide the means to tax online gaming should it be legalized and regulated. The status of this bill is currently unknown, but McDermott will likely wait to see the progress of H.R. 2267 before deciding to push his proposal at the same time or wait until his bill becomes relevant.

Another bill pending in Congress is the Internet Poker and Games of Skill Regulation, Consumer Protection and Enforcement Act (S. 1597), which was introduced by Sen. Robert Menendez in August of 2009. The purpose of the proposal was to allow Congress to pursue a bill that focuses on games of skill instead of allowing all casino games and sports betting. Should Frank’s bill be halted due to extraordinary opposition on the parts of sports leagues and those opposed to gambling on games of chance, Menendez was prepared to move his bill instead. However, considering Frank’s recent movements with H.R. 2267, it seems that Menendez’ bill has been shelved for the time being, though it could be brought to the fore if necessary in 2010 to help overturn the UIGEA.

On the state level, there are numerous cases and pieces of legislation pending that have the possibility of helping poker expand. Whether it is the rights of poker players to host a home game or an entire state debating the possibility of allowing table games in its casinos, many states could pave the way for further poker growth in 2010 and beyond.

The most prominent case in the U.S. currently is the Kentucky domain seizure debate, which is currently awaiting a decision by the Kentucky Supreme Court. It started in 2008 when Governor Beshear ordered 141 gambling-related domain names seized because of their interference with the state’s own gambling ventures like the lottery and horse racing. But many groups stood up to fight the invasion of rights, and the Court of Appeals agreed that the Commonwealth of Kentucky overstepped its bounds in its seizure attempt. The Commonwealth since appealed the case to the Supreme Court, which agreed to hear the case and heard oral arguments in October of 2009.

Two issues in Kentucky remain to be resolved in early 2010. First is the last-minute motion by the Commonwealth to add the names of specific companies and U.S. citizens to its complaint. Second is the decision by the Kentucky Supreme Court, which is expected in January or February.

Texas will seek to revisit its poker laws in 2010, as the proposal by Rep. Jose Menendez to legalize poker games and tournaments was shelved in 2008 and 2009. Though he tried to push for a vote in the state legislature, the promise by Governor Perry to veto any such legislation prompted Menendez to wait for a more favorable time to make another attempt.

Another Supreme Court case could develop; this one in Colorado. The case was in the news for the better entirety of 2009, as several poker players were prosecuted for hosting a bar poker league. The lower court ruled that the defendants were not guilty because poker was a game of skill, not “professional gambling” as the state contested, but the case then went to the Court of Appeals where the verdict was overturned. In order to prove that poker is indeed a game of skill, defendant Kevin Raley and the Poker Players Alliance have decided to appeal the case to the State Supreme Court. A decision on whether or not the court will hear arguments in the case remains to be handed down.

Another case that began with a favorable ruling was the South Carolina judgment in September of 2009 that poker was a game of skill, despite the judge still finding the defendants guilty of hosting a home poker game per a 1802 law. The defendants took it to the Court of Appeals, where that judge not only found that the guilty verdicts should be overturned but the law should be reexamined as well. But the State Attorney General recently announced that he intends to fight that latest ruling, and he appealed the case to the South Carolina Supreme Court. An answer from the high court as to its willingness to hear arguments in the case remains to be announced.

California ignored the issue of intrastate online poker for as long as it could, but the current budget crisis may be the opening that supporters of the effort needed. The idea was first put forth in 2008 but quickly found that it didn’t have widespread support to move legislation forward. But in 2009, pro-gaming factions found the support of casinos like Commerce Casino and Indian tribes like Morongo that were willing to help push the legislation and convince the state that intrastate online poker will not only generate much-needed revenue but put California at the forefront of an industry that has the potential for exponential growth. The state legislature will likely hold hearings on the issue in early 2010, and a vote could be scheduled later in the year.

Pennsylvania and Florida both seek to legalize casino poker, with the latter even looking to regulate tournament poker in a way that can bring extra revenue to the state. Both states are close to seeing legislation passed, and both governors are anxious to sign the bills. Look for news of those positive poker feats in the early months of 2010.

Poker will continue to be in the spotlight in the coming year. In order to keep up with the latest developments and find out how to help on the state or federal level, contact the Safe and Secure Internet Gambling Initiative or the Poker Players Alliance. Their websites provide the most up-to-date information on state cases and federal laws, as well as connections to poker players’ representatives and ways to get involved.

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