PokerWorks

It was looking grim. The Unlawful Internet Gambling Enforcement Act (UIGEA) regulations pertaining to bank enforcement was set to go into effect on June 1, 2010, and none of the pending bills to legalize and regulate online poker were making much progress. But the Poker Players Alliance (PPA) stepped up with a last-ditch effort to make something happen, as the lobbying organization petitioned Timothy Geithner and Ben Bernanke to remove skill games, like poker, from the UIGEA regulations. And a letter from 22 members of Congress followed and reiterated the request.

The UIGEA of 2006 has run its course, and despite numerous efforts to overturn or reverse it with new legislation, and no matter the objections voiced by financial institutions forced to comply with the law, its enforcement date remains as June 1. And in March of 2010, Barney Frank was quoted as saying that he believed nothing could be done to stop it from going into effect. However, he added that “it’s frankly so dumb and oppressive that it will create support to repeal the bill.” Nevertheless, the implications of banks enforcing UIGEA regulations could have global effects on the online gaming industry, and those closer to the world of poker more fully understand this.

In April, with no fanfare or press release to accompany it, a petition was sent to U.S. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke asking that skill games be recognized as such and removed from the wording of the UIGEA. Penned by the PPA, the letter attached an “Interim Final Rule With Opportunity to Comment” for clarification purposes of the UIGEA terms. The form noted that games like poker, chess, bridge, backgammon, and mah-jong are widely recognized as skill games determined by peer-to-peer outcomes (as opposed to playing against the house) and should not be categorized with other “gambling” as does the broad wording of the UIGEA. In addition, the petition questions the fact that pari-mutuel horse racing is not affected by the UIGEA, and details regarding that carve-out are requested.

As a follow-up, a letter was drafted on May 5 in support of the PPA petition and forwarded to Geithner and Bernanke. The message restated the concerns of many members of Congress that the UIGEA failed to define “unlawful internet gambling,” just as the Wire Act has never been updated through the years. “In the absence of a clear definition [of UIGEA regulations], regulated financial institutions and payment processors are tasked with parsing decades-old federal and state laws that never contemplated the internet, and their application to activities that may or may not be gambling,” the letter stated. “We believe that Congress should clarify what is and is not unlawful internet gambling, and there are bills before Congress that do that… We believe the best way to clarify the regulation is to have the regulation apply only to [sports betting and house-banked games], about which there is some consensus, and to exempt from the scope of the regulation peer-to-peer and pari-mutuel wagering.”

The letter was signed by 22 members of Congress, all Democrats: Steve Cohen, Dan Maffei, Linda Sanchez, Paul Hodes, Tom Perriello, Jim Moran, Ciro Rodriguez, Jerrold Nadler, Steve Israel, Phil Hare, John Larson, John Yarmuth, Joe Courtney, Shelley Berkley, Jim Himes, Bill Delahunt, Ron Klein, John Conyers, Dina Titus, Peter Welch, Ed Perlmutter, and Bobby Scott.

The PPA’s executive director John Pappas commented on the letter sent to support the petition, “The PPA is grateful for the support… We are still strongly supporting legislative efforts to license and regulate online poker and provide the consumer protections that the UIGEA will not, and are hopeful of the passage of bills like [Barney] Frank’s HR 2267, but believe our petition is the best bet to address the short-term issues facing online poker.”

No response from Geithner or Bernanke has been received thus far.