RAWA Hearing Nearing

This Restoration of America’s Wire Act (RAWA) has reared its head again, with the bill having been introduced here in the new Congress. I was just reading about the hearing for the House Subcommittee on Crime, Terrorism, Homeland Security, and Investigations to discuss it that had been scheduled for Thursday morning, although it appears that has now been postponed to a later date.

RAWA is the Sheldon Adelson-backed bill proposing to rewrite (not really “restore”) the Federal Wire Act of 1961 to prohibit most forms of online gambling. That would include current state-regulated online gambling (and poker) such as we have in Nevada, New Jersey, and Delaware, although horse racing and fantasy sports would be excepted.

The bill got some notice last December during the “lame duck” session with some thinking it could get added to the big omnibus spending bill passed then, but that didn’t happen. So RAWA got reintroduced this year in both the House and the Senate, and now it is sounding like it is getting more attention early on in the Congressional cycle this time around.

The fact that it’s the Subcommittee on Crime, Terrorism, Homeland Security, and Investigations gives you an idea where the focus will be when it comes to this impending discussion of possibly prohibiting online gambling. The list of folks slated to appear as witnesses at the postponed hearing also suggests we should be ready for a mostly one-sided discussion of how some believe online gambling fits into one or more of those categories.

There’s John Kindt who teaches business at the University of Illinois and has been out there comparing online gambling to crack cocaine ever since the internet first became a thing. Les Bernal, the National Director of a group called Stop Predatory Gambling is another on the list. So is Michael K. Fagan, another whom I recall turned up once before as a “Law Enforcement and Anti-Terrorism Consultant” before to express reservations about one of Barney Frank’s online gambling bills in the past (back in 2010).

The only witness who won’t be opposed to regulating online gambling is Parry Aftab, a lawyer who is the Executive Director of WiredSafety.org, a group whose purpose is to increase safety online. She’s also been a witness at previous House hearings regarding such as one in which she spoke in favor of one of Frank’s bills (in 2009) and another where “internet gaming” was discussed (in 2011).

Folks have been opining lately about the prospects for RAWA, with Nolan Dalla not long ago giving 10 reasons why he thinks it could be passed and Steve Ruddock responding with 10 reasons why it hasn’t got a chance. Tend to lean toward the latter view, at least at present.

Am glad, actually, the hearing got postponed, as I’m going to be traveling and thus wouldn’t have been able to follow on Thursday. Still want to see it, even if it’s easy enough to guess how it will go. What happens thereafter with RAWA is less clear.

Railbirding RAWA

A few months after I started this blog -- more than eight-and-a-half years ago, if you can believe that -- the Unlawful Internet Gambling Enforcement Act of 2006 was passed into law. Suddenly I found myself writing about a host of other topics besides simply playing poker, among them legal matters affecting my ability to play the game online.

As we’ve been reminding each other over and over again since the UIGEA was passed -- kind of like repeatedly relieving a bad beat -- that bill was snuck onto another one in the dead of night just before that Congress adjourned for the final push of campaigning prior to the ’06 elections. Thus did it become law without going through what many would rate a legitimate process of thoughtful debate and decision-making -- that is to say, via a process other than one in which our elected representatives would appear unequivocally to be representing the wishes of those who voted them into office (not that such an ideal is so often realized).

From there followed several years of mixing in posts in which I’d write about various legal developments that followed the UIGEA, including the long, drawn-out process of the regulations getting finalized by late 2008, as well as the many rival federal bills introduced by Barney Frank and others hoping to legalize and regulate online gambling in the U.S.

Then came Black Friday, which I might call a game-changer but in truth more or less stopped the game altogether, at least for most online poker players in the U.S. Before then, though, I remember somewhere along the way finding an analogy between poker and legal machinations surrounding the online game, the parallel having to do with both involving a combination of luck and skill.

That’s a generalization, but the point was that when it came to legislation regarding online poker, the process was in some respects controlled by the “players” (i.e., legislators, judges, lobbying groups, plaintiffs and defendants and those representing them, and so on) and also -- seemingly -- by what often appeared “chance” elements insofar as the combination of individuals and circumstances would result in lots of unpredictable outcomes.

Some “players” in the legislative game -- like in poker -- have a lot more influence than others, with money often making the difference in both contexts. Such is what we’ve been seeing happening over the last couple of years with Sheldon Adelson’s ongoing efforts to curb online gambling of all kinds. The CEO of Las Vegas Sands (parent company of the Venetian Macao Limited) is purportedly the 10th richest person in the world (as of this past summer), thus it hasn’t been difficult at all for him to toss chips various legislators’ way in order to lean on them to play his way.

The most recent orbit of this game has involved Adelson backing this new Restoration of America’s Wire Act (RAWA) first introduced in both houses back in March of this year. This federal law would rewrite the Federal Wire Act of 1961 (which the DOJ opined in late 2011 only applied to sports betting) to prohibit most forms of online gambling in the U.S., including making current state-regulated online gambling (in Nevada, New Jersey, and Delaware) illegal. (Horse racing and fantasy sports would still get a pass.)

RAWA has gotten some co-sponsors but not huge traction this year, but during this “lame duck” session some surmised it could be tossed into this huge $1.1 trillion omnibus spending bill, with a lot of talk about how the Senate Majority Leader Harry Reid (NV) was being goaded by Adelson (and his money) into sneaking it in there in UIGEA-like fashion. You’ll recall how during an earlier lame duck session (in 2010), Reid was introducing a federal bill to license and regulate online poker while curbing other forms of online gambling. Well, now he apparently is sitting behind someone else’s stack.

During the day yesterday I noticed Rich Muny, Vice President of Player Relations for the Poker Players Alliance, noting how on his most recent webcast a former member of the House, Jon Porter, said it was “50-50” the RAWA would get added to the spending bill. The bill finally dropped last night without RAWA, and as one commentator in a Two Plus Two thread about the situation noted, “we went from about a 50% chance of being safe, to about... 85%.”

Again, just following the story makes it hard not to think of poker analogies. In this latest hand, those not wanting to see a federal bill outlawing online gambling across the U.S. were all in preflop with Q-Q versus an opponent’s A-K-suited, and now have faded both the flop and turn to have a big edge with one card to come.

The problem with those analogies, though, is that most who oppose RAWA aren’t even sitting at the table, never mind making decisions about pushing their stack in behind a premium hand. They’re on the rail, watching others with big stacks keep buying back in and playing the game on their own.

On the Super Committee

Sounds like an excruciatingly boring version of, say, the Super Friends or Justice League of America or other comic book/cartoony teams of superheroes, doesn’t it? With deadeningly dull super powers, too.

Creating compelling agendas faster than a speeding bullet! Formulating and passing along recommendations more powerful than a locomotive! Untangling knotty procedural questions with flawless applications of Robert’s Rules in a single bound!

Once again, online poker players in the U.S. find themselves scratching their heads over our government’s legislative machinations, trying to sort out what exactly our fearless leaders are up to now. This time the focus is upon this new Joint Select Committee for Deficit Reduction -- a.k.a., the “super committee” -- that was created as part of the resolution of that whole “debt ceiling” crisis earlier this month.

The 12-member, bipartisan committee was created in order to discover both places to cut and potential revenue sources in order to reduce the budget by a hefty $1.5 trillion. The group has a short time to formulate recommendations, having to pass them along to Congress by November 23. The House and Senate will then have just one month to vote “up or down” on what the super committee has given them, with no amendments or filibusters allowed.

Supporters of licensed and regulated online poker in the U.S. believe it is possible that the super committee might include some form of internet gambling legislation in its recommendation. If such were to happen -- and Congress were to approve the committee’s recommendations -- that would speed up the process by which Americans could get back online to play poker, making such happen much more quickly than via the usual, laborious legislative process of introducing a bill (such as we’ve seen Rep. Barney Frank try multiple times, or the more recent “Barton bill”), getting it through committee, having the House and Senate both vote in favor, and then finally having the president sign it into law.

Some are pointing to various gestures made by Senator Majority Leader Harry Reid (D-NV) (who is not on the super committee), the newfound interest in internet gambling of chief UIGEA-architect Sen. Jon Kyl (R-AZ) (who is a member), and the significance of various lobbying efforts and other noise around Capitol Hill thought to suggest the time is ripe for finally entertaining online gambling. (Here’s a summary of various “circumstantial” evidence that regulating online gambling may be something considered by the super committee.)

Last week Rich Muny, VP of Player Relations for the Poker Players Alliance, appeared on the Two Plus Two Pokercast (the 8/22/11 episode) to say he was “as enthusiastic about this as I've been since this [fight to license and regulate online poker] started,” calling the super committee “a golden opportunity” to get some sort of legislation passed.

All of which perhaps sounds like something might happen here (and soon). Still, I can’t help but remain somewhat guarded -- if not dubious -- about it all, for a couple of reasons.

One has to do with the current political climate in the U.S. The fast-approaching presidential campaign seems to be highlighting so-called “moral” issues more and more, with (sometimes) related matters of faith getting mixed in frequently, too. And, as Barney Frank once pointed out in one of those House Financial Services Committee meetings, “there is a moral disapproval of gambling” among many legislators as well as those whom they represent.

I might be wrong, but it feels as though today supporting online gambling -- even in the context of (heroically?) attempting to alleviate the country’s budgetary woes -- is less politically savvy than it would have been just a couple of years ago. So that could present an obstacle to online gambling becoming part of the super committee’s recommendations.

My other reservation comes from the idea of the federal government actually passing such legislation and thereby being the ones to oversee online gambling -- including poker -- in the U.S. Nothing specific here other than the usual, vague worries over how exactly that would play out.

I mean it might work out just great. But something tells me it wouldn’t be exactly super.

Zombie Bill Dies, UIGEA Monster Lives

A running joke over the last week-and-a-half among some observers has been that the “online poker bill” proposed by Senator Harry Reid (D-NV) -- prematurely pronounced dead several times -- somehow possesses “zombie”-like qualities in its refusal once and for all to meet its end.

In truth, though, it is the Unlawful Internet Gambling Enforcement Act of 2006 that is the real monster here. And unlike Reid’s bill, which apparently has finally been cast aside as far as the current Congress is concerned, the UIGEA really won’t die, despite our most earnest wishes for it to do so.

Last night Andrew Feldman posted an article over on the ESPN Poker page announcing that “multiple sources” had confirmed there would be no more attempts made to attach Sen. Harry Reid’s “Prohibition of Internet Gaming, Internet Poker Regulation and UIGEA Enforcement Act” to any of the legislation being considered during this current “lame-duck” session of Congress.

One of Feldman’s sources for the news was Poker Players Alliance Executive Director John Pappas, who expressed disappointment that the bill would not be presently pushed through, referring to the bill’s opponents as having “their heads fully in the sand” when it came to the need for and significant benefits to be had from licensing and regulating online poker in the U.S.

Looking ahead, then, to the 112th Congress which will begin its work on January 3, 2011, prospects for this particular bill appear quite dim. So does the likelihood of any other legislation designed to promote online gambling in the U.S. (such as the failed Barney Frank-sponsored bills of the past few years). Nor should one expect from the upcoming Congress any serious legislative attempts to curb or repeal the UIGEA, either.

That’s because when the new Congress takes the Hill, Republicans will enjoy a majority in the House of Representatives, which in turn means that Rep. Spencer Bachus (R-AL) will be taking over as the chairman of the powerful House Financial Services Committee, assuming the seat previously occupied by Rep. Frank (D-MA). This is the committee from which one should expect bills like Frank’s previous ones to come -- that is, bills designed either to stop the UIGEA or to introduce licensing and regulatory schemes for online gambling in the U.S. which would render the UIGEA insignificant.

Bachus, most certainly part of the group of politicians Pappas was referencing with his “heads fully in the sand” remark, staunchly opposes all forms of gambling, online or elsewhere. I think it is safe to assume he will therefore make it difficult if not impossible for his committee to consider with any seriousness any bills that might be viewed as promoting gambling, poker included.

When I first wrote here about the “Reid bill” last Monday (12/6/10), I concluded that I was neither all that excited about its particular vision for online poker in the U.S., nor did I think much about its chances to become law.

Over the last 10 days I began to understand and appreciate some of the arguments being made by those who supported the Reid bill. But really, the greatest argument for the Reid bill always seemed to me to have had little to do with what it was actually proposing, but rather the fact that if it were to become law we online poker players would no longer have to worry as much about the UIGEA.

That is to say, I understand the idea that we’ll basically take anything other than what we’ve got, this horrendous (probably unconstitutional) law, a law which is starting to have greater effect since its full implementation on June 1, 2010, and which will mostly likely continue to do so going forward.

As Andrew “Foucault” Brokos wrote on his Thinking Poker blog last week, the Reid bill was “far from ideal for the professional player, but there [was] no reason to think that we [were] in a position to hold out for something better.” This is true -- in fact, in terms of political bargaining power for such a bill, I never thought Reid had much from which to draw right now, despite being the Senate Majority Leader, let alone what’ll be the case next year.

Considering the prospects of the Reid bill failing to pass, Brokos predicted “things will get very bad in the not-too-distant future.” I’ve no reason to think he’s wrong there, either. The UIGEA, that law that blocks U.S. banks and financial transaction providers from allowing transactions with online gambling sites (even if they are non-U.S.), remains free to continue with its destructive ways.

And now we are in a situation where there is no legislative response imminent. So what can we U.S. players hope for?

Seems to me all that’s left to look forward to at the moment would be a successful challenge to the UIGEA in the courts -- that is, the overturning of the law as indeed unconstitutional, something that obviously would be long, long time coming, if it were ever to happen at all.

Such has been tried. The Interactive Media Entertainment and Gaming Association (iMEGA) took a shot, taking the angle that the UIGEA not only should be made “void for vagueness,” but violated things like individuals’ privacy rights and the First Amendment. They received an unfavorable ruling in the U.S. 3rd Circuit Court, though, and lost their appeal, too.

One so-called “silver lining” in that appeals ruling was the court saying that states had priority over the federal government when it came to the business of regulating gambling, including online. So I suppose court battles vs. the UIGEA could be waged on the state level (i.e., rulings that said the federal law couldn’t apply in a particular state because of its stand on online gambling). I’m not entirely sure about that, though.

In any event, I can’t just now envision other ways to prevent the UIGEA from affecting us as we Americans try to make deposits and continue playing on PokerStars, Full Tilt Poker, and other U.S.-facing online poker sites. Not for the next couple of years, anyway.

In other words, it doesn’t look like we are going to sneak the UIGEA out the backdoor via any law-makin’ legerdemain anytime soon. Somebody’s gonna have to fight this sucker heads-up.

Online Gambling in the Mainstream Media; or, Getting Frank with Leno

A late night for your humble scribbler. Was up following the first day of action over at PokerStars’ World Championship of Online Poker, in particular Event No. 2, that $10,300 buy-in “High Roller” event. (See full schedule here.) Sucker didn’t end until daybreak here on the east coast, actually, with CrabMaki (a U.K. player named Dave Shallow) taking the $605,655 prize for winning. Here’s the full recap of Event No. 2 over on the PokerStars blog.

Speaking of late nights and poker, you probably heard there were a couple of occasions last week when online poker made it onto late night television, popping up in the “mainstream” -- i.e., on major network shows -- as a subject of discussion.

One was that “Nightline” segment about online poker that after several delays finally aired on ABC. (I wrote a little something here in anticipation of that report a couple of weeks ago.) While there was a kind of “cautionary tale”-like atmosphere attached to the report that folks under the age of 21 are playing poker online, I thought the piece ended up being about as balanced as one could hope for, and even perhaps shed a positive light (overall) on online poker as not necessarily a hopelessly degenerate activity.

If you missed it, you can view the “Nightline” piece here.

That segment aired on Tuesday night. Coincidentally, Rep. Barney Frank was a guest on “The Tonight Show with Jay Leno” on NBC that same evening, and they, too, talked some about online gambling.

It was amid a discussion of individual liberty that Frank chose to allude in a general way to the legislative fight currently underway involving his H.R. 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act. At the end of July, Frank’s bill was passed by his House Financial Services Committee, and now awaits consideration by the entire House and/or Senate.

Referring to his proposed bill, Frank noted how licensing and regulating online gambling in the U.S. would lead to “billions of dollars” in tax revenue, and the studio audience cheered in response. But rather than agree with Frank (and the crowd), Leno then raised an objection to online gambling -- a very familiar one, actually.

If you didn’t catch Frank on Leno’s show last week, here it is (the talk of online gambling starts right around the 3:50-mark):



Here is what Leno said by way of objecting to online gambling:

“To me, Vegas works because you have to go to the desert to get there. You have to make an effort. You go to the desert, you lose your money and you come home. You can’t go to the desert again unless you get more money. If you’re sitting at home and you’re up late at night and you got your little credit card, next thing you know... it’s like a mini bar. You’re not going to eat the potato chips unless they are in the mini-bar.”

We’ve heard this line before. So has Frank -- many times -- and he had a ready response. Frank pointed out to Leno that gambling is available in other places than Vegas. Frank also explained that his H.R. 2267 wouldn’t allow for the use of credit cards to gamble online.

The discussion then moved on to lotteries and other issues, but did circle back to Frank’s position that adults shouldn’t be treated like children as Leno’s whole “you have to go to the desert” argument implies -- as though when it comes to gambling we all need artificial restrictions in place to prevent us from constantly doing harm to ourselves. You know, sort of like putting the cookie jar up on the refrigerator where we can’t reach it easily and thus spoil our dinners.

Leno’s line about the mini-bars made me think back briefly to my summer in Las Vegas. I lived for nearly two months in a hotel room while there helping cover the WSOP for PokerNews.

There was a mini-bar in my room, of course, full of overpriced snack items and beverages for the taking. Somehow I managed to resist taking a single item from the mini-bar during my entire stay there, knowing I could purchase all of those things at a quarter of the price if I just figured out a way to leave the room.

Actually, it wasn’t that hard for me. As Muddy Waters once sang, I’m a man. Way past twenty-one. Truth be told, I have been able to decide for myself about such things for a long time now.

I guess Leno is in part going for the laugh there. It’s funny to think of adults as being childish, immature, etc. But I think he also genuinely objects to online gambling in the U.S. And the fact is, as Leno’s continued popularity shows, a lot of people in America tend to like Leno’s lines.

Why do they like Leno? I have no idea. Maybe it’s because, well, he’s just there. Like the mini-bar.

House Financial Services Committee Passes H.R. 2267

As you have surely heard by now, H.R. 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act, was voted on yesterday by the House Financial Services Committee and passed by a vote of 41 yea, 22 nay, and 1 present (i.e., an abstention). It is being described by some as a “bipartisan” vote, although only a few Democrats voted against it (four), and a handful of Republicans voted for it (seven).

The bill will now be considered by the entire House of Representatives. Before becoming law, it will have to receive a favorable vote from the House, then the Senate, then be signed by the President. There was some joking around on Twitter yesterday about how best to describe the situation with a poker analogy. Seems to me like what’s happened here is the equivalent of surviving Day 1 of the Main Event. Or maybe just surviving to the dinner break of Day 1. Such a long, long way to go.

As the high-frequency Twittering on H.R. 2267 indicated, there was a lot of buzz in the poker community regarding yesterday’s turn of events, with many -- including the Poker Players Alliance -- heralding the Committee vote as especially good for poker. “This is a great day not only for poker players, but for proponents of Internet freedom and individual liberty,” said former Senator and PPA Chairman Alphonse D’Amato.

Just to review, this was the bill first proposed by Rep. Barney Frank (D-NH) back in the spring of 2009, a version of an earlier bill Frank proposed during the previous Congress (the IGREA). Like Frank’s earlier bill, H.R. 2267 proposes a mechanism to license and regulate online gambling in the United States. If signed into law, it would put the Secretary of the Treasury in charge of issuing licenses to anyone wanting to run an online gambling site in the U.S.

The bill outlines a number of requirements of licensees, including having safeguards against fraud, money laundering, and “terrorist finance.” There’s other stuff in there about keeping kids from playing, watching out for compulsive or problem gamblers, and such. Licensees would also be required to collect taxes related to internet gambling.

Additionally, H.R. 2267 specifically shields the financial transaction providers from any liability when it comes to handling transactions for licensees. The bill also permits states and Indian tribal authorities to “opt out” and disallow online gambling in their jurisdictions, if they so desire.

Yesterday’s hearing including a “markup” of the bill during which Committee members proposed numerous amendments to H.R. 2267 and voted on them. Most of these amendments passed, while a few did not. Here is a quick summary of the 13 amendments that were agreed to by the committee:

1. The so-called “bad actors” amendment (No. 2) adds that those who have committed gambling-related felonies be specifically prohibited from obtaining licenses, as well as those entities which have failed to use "due diligence to prevent any U.S. person from placing a bet on an internet site in violation of Federal or State gambling laws."

In the online poker world, it appears this amendment could potentially have some consequence for those sites which have continued to accept U.S. bets post-UIGEA (e.g., PokerStars, Full Tilt, UB, etc.). Hard to say for sure, though. Of course, those sites would argue they have not violated any gambling laws -- including the poorly-worded UIGEA which fails to define "unlawful internet gambling." (Indeed, PokerStars already has said as much today.)

2. An amendment (No. 3) specifically excluding licensees from offering sports betting -- except for “pari-mutuel racing as permitted by law” (i.e., horse racing).

3. An amendment (No. 4) to prevent direct advertising of online gambling sites that targeted problem gamblers or minors.

4. An multi-part amendment (No. 8) that appears to be redundant to many provisions already in the bill or part of existing Federal and state gambling laws, though does include the licensees making available some sort of “loss limit” option for bettors. This one also includes a specific note about players being at least 21 years of age, which would be a significant change from most sites’ current minimum age requirement of 18.

5. An amendment (No. 9) modifying the “opt out” provision to give states and Indian tribal authorities more time to do so.

6. Another amendment (No. 10) barring licensees from targeting minors in their advertising.

7. An amendment (No. 11) that reiterates licensees would lose their license if it found they’re allowing minors to play on their sites. (Again, some of these amendments are essentially redundant either to the bill itself or to other amendments.)

8. An amendment (No. 12) specifically stating licensees cannot accept credit card payments.

9. An amendment (No. 13) disallowing those obtaining licenses to accept bets from customers who are behind on child support payments. (Thanks to PokerGrump for helping me read this one correctly.)

10. An amendment (No. 14) clarifying that state lotteries aren’t part of the scope of that which is covered by H.R. 2267.

11. An amendment (No. 15) that kind of builds further on the “bad actors” amendment by making very explicit the significance of sites having not prevented U.S. citizens from making online bets once the UIGEA was signed into law (on October 13, 2006). Again, this one seems mostly redundant to the earlier, first-agreed-to amendment, but does perhaps add a bit of extra attention to the distinction between sites that pulled out of the U.S. upon the UIGEA’s passage (e.g., PartyPoker) and those that did not.

12. An amendment (No. 16) clarifying that licensees show that they are “majority-controlled” by U.S. persons.

13. A “data collection” amendment (No. 17) requiring licensees to make public information about player behavior.

As I’ve said before here, I feel pretty much completely out of my element when trying to speculate about what could happen next when it comes to the legislative process. Kind of like getting involved in a game like Badugi where I am sort of familiar with the rules but to guess correctly about how things will proceed would probably require my getting lucky.

My gut feeling is this bill will be met with a lot of resistance from the entire House, and perhaps even more from the Senate (if it were to get that far). I’m also a little less enthusiastic than some about the prospects for online poker in the U.S. under such a licensing scheme. Of course, if we start to see banks and financial transaction providers comply with the UIGEA in greater numbers, I think a lot of U.S. players would swiftly welcome the introduction of licensed and regulated online poker as a way to play.

But like I say, I’m not even going to try to speculate further. All I know is I am an American who wants to continue to be able to play online poker. I also know I want to be continue to be able to write for sites who depend on online poker remaining healthy both in the U.S. and elsewhere.

But I also know that despite my being an adult and responsible with my decisions, I live in a time and place where others are deciding about my being able to do such things.

What We’re Hearing About the Hearing

A hearing to consider Barney Frank’s two bills -- H.R. 2266, the Reasonable Prudence in Regulation Act & H.R. 2267, Internet Gambling Regulation, Consumer Protection, and Enforcement Act -- had been scheduled for this Friday, April 16. The meeting of the House Financial Services Committee (which Frank chairs) was announced late last week, but soon after was postponed with no makeup date scheduled.

Both of those bills were proposed by Frank (D-MA) last spring. H.R. 2266 is a very brief bill that simply seeks to delay compliance with the Unlawful Internet Gambling Enforcement Act of 2006 until December 1, 2010. That one currently has 55 co-sponsors (all but five of whom are Democrats). H.R. 2267 is a much more comprehensive bill proposing the licensing and regulation of online gambling in the United States -- a version of Frank’s earlier, failed IGREA from the previous Congress. H.R. 2267 currently has 66 co-sponsors (all but four Democrats).

The Poker Players Alliance is saying a new date for the hearing should be announced soon, although whenever the committee does get together, it doesn’t appear there will be any debate or “mark-up” of the two bills at that time. Rather, the primary purpose of the hearing looks to be to invite the feds (i.e., representatives of the Federal Reserve and Department of Treasury) to come and address the situation in broader terms -- that is, to discuss “Governmental Perspectives” on the issue of online gambling in the United States (as the scheduled hearing had been titled).

Two years ago there was a hearing in which two such representatives -- Louise Roseman of the Board of Governors of the Federal Reserve System and Valerie Abend of the Department of Treasury -- came to answer questions about the feasibility of enforcing the UIGEA. I wrote a long summary of that hearing (from early April 2008) here, titled “UIGEA Regs: Burden without Benefit? Without a Doubt.”

That meeting came at a time when the regulations for the UIGEA were still being worked out, and Roseman and Abend both made it clear that those trying to put together the regulations were finding it quite difficult thanks to the vague nature of the UIGEA as it is written. Following that meeting, it appeared the UIGEA might well have finally been sunk under the weight of its own inconsistencies and impracticality. But the feds pushed on, and by the end of the year had come up with the regulations which were then finalized (in November 2008).

Technically speaking, the UIGEA went into effect on January 19, 2009 -- the last full day of George W. Bush’s presidency -- though compliance was not made mandatory until December 1, 2009. In other words, banks and financial institutions can if they wish go ahead and try to enforce the UIGEA now and block transactions between their customers and online gambling sites, although they aren’t required to do so. It was during the last week of November 2009 that the feds decided to push forward that mandatory compliance date to June 1, 2010, having been encouraged to allow further discussion of the UIGEA, Frank’s proposed bills, and perhaps other possible avenues to handling the issue of online gambling in the U.S.

A hearing followed soon thereafter during the first week of December, and once again it appeared there was some genuine momentum gathering to stop the UIGEA from finally being enforced. But that momentum died down quickly, and we find ourselves now just a month-and-a-half away from the deadline.

My sense is that online poker players in the U.S. have already come to accept that the UIGEA is going to go into effect on June 1. Among those who pay any mind to it, that is. A lot of those who play aren’t really fretting over the UIGEA too greatly, believing that even with the law in place there will always be another way to get funds on and off online poker sites.

Having already decided the UIGEA is a done deal, it becomes difficult to get too excited over the possibility of another House hearing. Indeed, my sense perusing forums, blogs, and other sources of online poker talk is that few are paying much mind to any of these legal machinations, including the craziness happening here and there on the state level (e.g., Kentucky suing Full Tilt Poker over the rake).

Rather, as poker players have always tended to do, we play on. The game requires too much of our mental capacity for us to spare any on things we cannot control, anyway. In other words, it seems like news of these hearings being scheduled and/or postponed mostly fall on deaf ears.

Then again, I have a feeling that as we get closer to June 1 this here legislative chatter is probably going to get a bit louder. Indeed, it might well become impossible not to start listening.

More Uncertainty: Legality and Online Poker

When it comes to “legal stuff” and online poker, I never feel entirely comfortable offering my opinions. Or even simply reporting what the hell is going on. I mean, I think I am a decent reader and even once in a while stumble on a good ideer or response to this or that. But when it comes to commenting confidently on this particular subject, my first instinct is usually to try to change it.

The fact is, current state and federal laws regarding online poker/gambling here in the U.S. are ambiguous at best, and the process by which new laws and regulations come to be is often also mysterious for most of us. Rarely does anything seem perfectly clear, and when it does, such moments of clarity are often frustratingly fleeting. There’s always an appeal, it seems. And an appeal of the appeal. And so forth. Never mind “running it twice.” These guys appear willing and able to run it a hundred times if they have to, with the rules changing each time along the way.

This week came a couple of stories regarding some of many ongoing legal machinations, neither of which necessarily offered any further clarity for us on this subject. Or comfort. One was a ruling from the Kentucky Supreme Court on the Commonwealth’s efforts to seize 141 domains hosting online gambling sites. Sounds like that one has turned the other way once again. For now, that is. (It’s always “for now.”)

If you recall, it was back in September 2008 that we first heard that a Circuit Court judge had granted Governor Steve Beshear’s order to “seize” the domains which hosted sites allowing Kentucky residents to gamble online. Seemed like a pretty obvious usurpation of authority, as though somehow Kentucky could rule the entire interwebs and take control of sites according to its own predilections.

A hearing was held the following month, and the Circuit Court ruled in favor of Beshear et al. If the offending domains didn’t start blocking Kentucky from accessing the sites they were hosting within 30 days, the domains would be forfeited to Kentucky. A “forfeiture hearing” was then scheduled, then delayed. Then the case wound up in the court of appeals, where it was determined Kentucky wasn’t king of the internet after all.

The sucker then went to the state’s Supreme Court -- an appeal of the appeal -- where it has been for the last long while. Finally, this week the Supreme Court ruled that, in fact, the ruling in the Court of Appeals didn’t hold “due to the incapacity of domain names to contest their own seizure.”

In other words, the owners of the domains -- who remained “anonymous registrants” and were represented by others -- have to come forward and defend themselves (says the Ky. Supreme Court). So the decision in the Court of Appeals has been reversed. (Full decision here.)

The Poker Players Alliance has commented, saying it “understands the technical nature of the decision” made by the Supreme Court, and that it “remains confident that, once that issue is cured, the Supreme Court” will see the light and uphold the previous decision of the Court of Appeals to deny Kentucky the right to seize the domains. I like the choice of metaphor there -- what we are looking at here is in fact an illness than needs to be “cured” before we can go forward.

Is this incurable, though? Who knows?

The other item of special note this week concerned House Representative Barney Frank (D-MA) telling PokerNews that he did not anticipate another delay would be granted for implementation of the final regulations of the Unlawful Internet Gambling Enforcement Act of 2006.

Another story that sounds, well, a little sick-making.

If you recall, those final regs were set to go into effect on December 1, 2009, but the feds granted six more months to consider other legislation, meaning the current deadline for U.S. banks and financial institutions to start blocking transactions with online gambling sites is now June 1, 2010.

Earlier this year, Rep. Jon Kyl (R-AZ) -- one of the first authors of the legislation that ultimately became the UIGEA -- decided to use his standing in the Senate to start blocking the President’s nominees to fill positions in the Treasury Department. Frank told PokerNews that Secretary of the Treasury Timothy Geithner has said he wouldn’t allow any further delays specifically because of Kyl’s tactics.

Frank remains confident, however, that even after compliance with the UIGEA becomes mandatory in June, its standing will be tenuous. “Once it goes into effect, banks are going to raise hell,” he told PN, anticipating the banks’ subsequent complaints will lead to the UIGEA’s repeal.

As I have written about numerous times here, even if the UIGEA is an ambiguous, murky law that probably couldn’t hold up to any court challenges, its going into effect is nevertheless going to have consequences on U.S. players of online poker, knocking many out of the game due to increased difficulties getting money onto the sites.

When I appeared on Lou Krieger’s “Keep Flopping Aces” podcast last month, he asked me what I thought would happen with regard to the UIGEA during 2010. I told him my sense was that I did not feel very confident that it would be repealed this year, nor did I think any other legislation would likely be passed.

By way of explanation, I said hoping for either a repeal or the passage of new legislation was sort of like pulling for a poor player in a poker tourney to win. He’d need a lot of breaks just to reach the final table, then still more examples of good timing and fortuitous cards to win in the end.

Of course, using that analogy served a particular purpose for me -- it enabled me to avoid speaking more particularly about things about which I have little clue.

In fact, I suspect most of us are essentially short-stacked when challenged to understand “legal stuff” and online poker.

Talking Online Poker: House Hearing Today

In a little under two hours, the House Financial Services Committee will be holding that hearing to discuss Rep. Barney Frank’s two UIGEA-related bills -- the Reasonable Prudence in Regulation Act (H.R. 2266) and the Internet Gambling Regulation, Consumer Protection, and Enforcement Act (H.R. 2267), both first introduced back in the spring.

As you recall, the Treasury and Federal Reserve granted a six-month delay for the enforcement of the final regulations of the Unlawful Internet Gambling and Enforcement Act of 2006, meaning banks and other financial institutions do not have to prohibit transactions with what they determine to be “unlawful” online gambling sites until June 1, 2010. (That doesn’t mean they cannot do so, if they wish, but only that they do not face UIGEA-mandated penalties for not doing so at present.)

The first bill, H.R. 2266, seeks a one-year delay, and so would push the deadline for compliance even further ahead to December 1, 2010. The second bill outlines a comprehensive system for licensing and regulating online poker in the United States.

Looks like the hearing will be featuring a number of witnesses with particular interest in and/or knowledge of the gambling industry (generally speaking), online gambling, internet safety, and the banking industry. Their testimony has already been posted over on the House Financial Services Committee’s website, so we can go ahead right now and get a decent idea what sorts of topics will be discussed later this morning.

The first witness, the Hon. Robert Martin, Chairman of the Morongo Band of Mission Indians opposes both bills. According to his testimony, Martin’s tribe, located in southern California, has employed as many as 2,500 (most of which are not tribe members) in its live casinos. He views H.R. 2266 as merely providing a further “safe harbor to those currently engaged in illegal online gaming” -- that’s his interpretation of the UIGEA’s characterization of offshore sites that allow U.S. customers. H.R. 2267 he views as posing a threat to the welfare his industry, paving the way for an unfair landscape in which tribes like his would not be able to compete.

The next witness is Ms. Parry Aftab, Executive Director of WiredSafety, “the largest internet safety and help group in the world.” She speaks in support of H.R. 2267 (and against the UIGEA), arguing that “the best way to protect families and consumers in connection with cyber gambling is by legalizing it, not outlawing it entirely.” Her testimony endorses the functionality of age verification when it comes to online gambling.

Then comes Professor Malcolm K. Sparrow of the JFK School of Government at Harvard University. (Is this a witness list or a game of Clue?) He’ll be addressing the question “Can Internet Gambling Be Effectively Regulated?” His written testimony consists of a lengthy (nearly 100-page) academic essay which I assume he’ll be summarizing for the Committee. The study was commissioned by WiredSafety, and essentially builds upon Ms. Aftab’s testimony that yes, indeed, online gambling can be regulated, and yes, in the opinion of Prof. Sparrow and his co-authors, the “establishment of a well-regulated industry under U.S. jurisdiction would offer a far better protection against online gambling’s potential social harms than outright prohibition.”

Mr. Jim Dowling of the Dowling Advisory Group is next on the list. Dowling is a fellow with some experience with trying to prevent fraud and money laundering. He appears “neither as an advocate nor a foe of Internet gaming,” but rather to share his view “that the current legislation prohibiting Internet gambling-related payments is lacking in regulatory support, and to be successful, the government -- probably the Justice Department—needs to provide banks an OFAC-like list of illegal sites that then could be blocked relatively easily.” (By the way, OFAC refers to the Office of Foreign Assets Control.) This question of providing a list of forbidden sites has been addressed before, and the feds have remained fairly steadfast in their unwillingness to commit to any such task. Dowling isn’t necessarily saying H.R. 2267 is going to make for a safer landscape, either, as he still maintains “legalizing Internet gambling poses significant money laundering and terrorism threats.”

After Dowling, Mr. Samuel A. Vallandingham, CIO and VP of the First State Bank, will speak as a representative of the Independent Community Bankers of America. Much as other representatives of the banking industry have done in past hearings on the UIGEA, Vallandingham is going to be explaining how arduous and unfeasible it is for the banks to be expected to enforce the UIGEA as it is written, and thus will be endorsing both of Frank’s bills.

The last witness on the list is Mr. Michael Brodsky, Executive Chairman of YouBet.com, a site that accepts wagers on pari-mutuel horse racing. Brodsky will speak in support of Frank’s bills as well, noting how he wants online gambling licenced and regulated. Skimming his testimony, I’m not seeing him specifically referring to the UIGEA’s “overblocking” of bets -- a great concern to sites like YouBet.com, which is why the horse racing folks got behind the petition to delay compliance with the UIGEA.

I’m sure we’ll be hearing from various Congressmen along the way, too, including Frank and the ever obtuse Rep. Spencer Bachus (R-AL), the highest-ranking minority member of the House Financial Services Committee who usually tries to link online gambling with suicide, terrorism, or other horrors plaguing our fragile, godless world.

While today’s hearing will produce a lot of news stories about the UIGEA and online gambling, it will be most interesting to see what (if anything) happens over the next couple of weeks with regard to either of Frank’s bills. While I wouldn’t mind seeing H.R. 2266 make it through and the delay get extended to a full year, I remain somewhat hesitant about H.R. 2267 and the idea of federally licensed and regulated online poker in the U.S.

My buddy the Poker Grump believes “federal licensure and regulation of gaming will eventually choke the life out of online poker,” and while I’m not entirely ready to commit to that as a certainty, I do have a lot of reservation about what such a regulated and licensed world might be like. (In particular, I fear those state opt-outs which might result in my not being able to play at all.) I do agree that online poker under the IGRCPEA (or whatever we want to call H.R. 2267) ain’t gonna be preferable to what we have now. But it doesn’t seem as though what we have now is going to be an option beyond some, ever-nearing deadline.

If Frank’s bill doesn’t pass and the UIGEA eventually does get implemented, that will spell some serious short-term damage to online poker in the U.S., probably followed by a court challenge to the UIGEA (which may well be successful). Thus, the UIGEA could get “overturned” without our having a bill like Frank’s get passed, although I can’t imagine that happening without the industry having to endure a few years of big time hurtin’ during the interim.

Stuck between a rock and a hard place. That’s where we be, I think.

Thankful, I Am

Whew. Like that turkey, named “Courage,” who yesterday received a last-minute “pardon” from President Obama sparing him from a dinner table, it looks like we online poker players in the U.S. have also been granted a reprieve. For a while, anyhow.

It’s Thanksgiving, and if yr like me you have a lot else going on today than to be checking in on yr poker blogs. But I did want to note the big news yesterday before going back into the kitchen to help Vera with that awesome feast she’s preparing for the big crowd a-comin’ a little later.

There was no official announcement yesterday, but apparently there will be a six-month delay before banks and other institutions will be made to comply with the finalized regulations of the Unlawful Internet Gambling Enforcement Act of 2006. As I mentioned yesterday, the Engineer was saying he’d heard as much over on the Two Plus Two forums. We also heard during the day from Joe Brennan, the chairman of the Interactive Media Entertainment and Gaming Association, who said an announcement by Timothy Geithner, Secretary of the Treasury, would be coming on Friday. That would make June 1, 2010 the new deadline.

The delay would add extra urgency to the hearing of the House Financial Services Committee scheduled next Thursday, December 3 at 10:00 a.m. to discuss both of Rep. Barney Frank’s bills, the Reasonable Prudence in Regulation Act (H.R. 2266) and the Internet Gambling Regulation, Consumer Protection, and Enforcement Act (H.R. 2267).

If you recall, the Reasonable Prudence in Regulation Act is a very brief bill simply asking the feds for a one-year delay. Not sure what the status of this would be if a six-month delay were already in place, but the added delay could still be entertained, I suppose. This H.R. 2266 actually has 53 co-sponsors at present, which suggests some real support for the idea of holding off on making UIGEA compliance mandatory.

The other bill, the Internet Gambling, Regulation, Consumer Protection, and Enforcement Act, is Frank’s second go at comprehensive legislation designed to regulate (and tax, natch) online poker in the U.S. (following his earlier, failed IGREA bill from 2007). That one is now up to 63 co-sponsors, so there appears to be a bit of a groundswell there, too, as far as getting it to a House vote.

My initial reaction is to be ecstatic about the still-not-official-but-seemingly-gonna-happen announcement of a delay. Not just for the sake of folks being able to continue playing online poker, but for the rest of the industry, too -- including the media side of things, in which I now have more than a little bit of an investment.

My second reaction considers what may come next. It appears this idea of regulation -- the prospect of which doesn’t thrill all of us -- may well happen, and possibly sooner than later. While many of us would like the situation to remain as is, that doesn’t appear to be an option, really.

Rather, we’re probably looking at one of two futures here. We could get to the end of these six months and the UIGEA’s “Final Rule” could still be implemented. Seems less likely today that would happen, but it could. Americans would start running into trouble processing transactions with online gambling sites, and eventually a case would go to court. Some have said the UIGEA wouldn’t hold up in that setting, but we’re talking months or years down the road -- and a lot of headaches -- before we got to that point.

The other possible future appears to be some sort of regulation of online poker, such as suggested by Frank’s bill. Thursday’s hearing will tell us a lot, I think, regarding the chances of that happening. I’ve wondered aloud on here a couple of times about the question “Do We Really Want Online Poker Regulated?” While I’ve been less than enthusiastic about the idea of regulation, it is starting to look as though it might become more difficult to fight that fight going forward -- that is to say, it doesn’t look like we’re gonna be able to keep things the way they are.

Stuff to ponder in between bites of turkey and cranberry sauce, I guess. And during the commercial breaks of today’s football marathon. Speaking of, I better head over to Pauly’s Pub to make my picks this morning. After four weeks of outpicking everyone, last week I was tied for last with just 9-of-16 correct -- including three or four heartbreaking last-minute losses -- thereby dropping me back into a tie for tenth. So my team, More Cowbell, needs to get things back on track starting today.

For now, though, among the many things I am thankful for today, I am most certainly glad about the delay of compliance with them UIGEA regs.

Have a great T-giving, peoples!

The Door is Closing: Hoping for UIGEA Delay

Yesterday on the Two Plus Two forums, a question was asked about “how pivotal are the next 24 hours” when it comes to the possibility that compliance with the finalized regulations for the Unlawful Internet Gambling Enforcement Act of 2006 -- scheduled to begin next Tuesday, December 1 -- will be delayed.

According to Rich “The Engineer” Muny, a member of the Board of Directors of the Poker Players Alliance, “If [the] Treasury decides to delay implementation of the bill, it could be announced tomorrow, or it could go to Monday just as easily.” Indeed, as Muny implies, since the Thanksgiving holiday is upon us, if we don’t hear anything today, then Monday is really the last chance.

It is very difficult for the average shamus to detect the odds of a delay with any precision here. I’ve been reading the forums and other sites, and occasionally see expressions of optimism about the feds stepping in here and extend the deadline. But it is hard to tell from where such optimism comes.

On November 20 (last Friday), an article titled “High Stakes for Online Gamblers” popped up over on the Newsweek blog regarding the impending deadline and the recent request for a delay. The article, by Jeremy Herb, makes reference to an unnamed “Federal Reserve official” saying that a decision regarding delaying compliance had yet to be made.

That’s with just a week-and-a-half to go. Talk about a sweat.

Herb’s article additionally provides a decent overview of the situation, including some background on how the UIGEA came to be and the problems that still exist for banks and other financial institutions with regard to implementation. Herb references that October 1 letter from House Rep. Barney Frank (D-MA) and Rep. Peter King (R-NY) -- also signed by 17 other members of Congress -- asking the Department of Treasury and Federal Reserve “to extend the date of compliance for the final regulations implementing the Unlawful Internet Gambling Enforcement Act (UIGEA) by one year.” The feds do have the power to enact such a delay thanks to something called the Administrative Procedure Act.

He also notes that other November 3 letter, also sent to Timothy Geithner (Secretary of the Treasury) and Ben Bernanke (Chairman of the Federal Reserve) by Senator Jon Kyl (R-AZ) and Rep. Spencer Bachus (R-AL) in which they “strongly oppose” the request made by Frank et al. for an extension, arguing that “there is no justification for delaying the compliance deadline of the UIGEA regulations.”

Among other points made by Kyl and Bachus, they cite the fact that banks have already had nearly a year to ready themselves for compliance, and so should not need any further time in that regard. Also, the pair notes how the “Final Rule was adopted after a lengthy and open rulemaking process,” and that any “‘problems’ [they use the scare quotes] raised by certain interest groups are speculative.”

You remember Kyl as one of the first authors of the bill that eventually became the UIGEA, and Bachus as the clown who in House hearings rode a moral high horse while misrepresenting studies about gambling and Full Tilt Poker pro biographies. (If yr curious, here is a post in which I shared some details from Bachus’ mostly deranged contributions to the discussion of online gambling.)

The most infuriating moment in their letter comes at the end when they characterize the delay request as “a blatant attempt to circumvent the democratic process.” O RLY?

Let us think back to how the bill came to be passed by the House and Senate back on September 30, 2006 after being sneakily appended to the Security and Accountability For Every Port Act of 2006. There was zero discussion of the UIGEA part of the bill when the House and Senate hastily voted in favor of the SAFE Port Act in their final session of the 2006 Congress. Then President George W. Bush signed it into law two weeks later. Indeed, thanks in large part to then Senate Majority Leader Bill Frist (R-TN) and Sen. Kyl, their efforts represented as “blatant” an example of legislators working “to circumvent the democratic process” as it gets.

The fact is, both Geithner (top) and Bernanke (bottom) -- the ones to whom the petition to delay compliance has been directed -- have a lot else on their minds at the moment. Geithner’s status as Treasury Secretary is presently more than a little tenuous. Just last week he was explicitly asked to resign by House Rep. Kevin Brady (R-TX). Said Brady to Geithner, “the public has lost all confidence in your ability to do your job. Conservatives agree... liberals agree... it is time for a fresh start.”

Bernanke is also facing a lot of opposition from Congress at the moment. President Obama has already nominated Bernanke for a second four-year term as Federal Reserve Chairman, but Congress has to approve the nomination, and it is expected that their approval -- if it comes -- will not be without a lot of strife. The first hearing on that matter is scheduled for next Thursday, December 3.

So the guys who have to step in here and do something for us... well, one wonders how high a priority the UIGEA really is to them at the moment.

It’s frustrating as hell. We took a big hit early on in this one, and have been playing with a short stack from the get-go. Now the blinds have finally caught up with us. We have to catch a hand to survive.

Here’s hoping we do get the word today of a delay, and thus have something else to be thankful for tomorrow.

(EDIT [added 11/25/09, 10:30 a.m.]: This just in -- the House Financial Services Committee, chaired by Rep. Barney Frank, will be meeting on Thursday, December 3 at 10:00 a.m. to discuss his two bills, the Reasonable Prudence in Regulation Act [H.R. 2266] and the Internet Gambling Regulation, Consumer Protection, and Enforcement Act [H.R. 2267]. Of course the former bill -- which seeks to delay implementation of the UIGEA regs one year -- would apparently be somewhat moot should the regs go into effect on 12/1. Again, hard to read this announcement as an indicator of anything specific with regard to a possible delay. Stay tuned!)

(EDIT [added 11/25/09, 3:25 p.m.): The Engineer is reporting there may be a six-month delay in the implementation of the finalized regs. Read here. Good news, if this turns out to be the case!)

UIGEA Compliance Less Than Two Months Away, Frank Seeks Delay

We poker fans and players have a lot to occupy ourselves at the moment. There are the various tourneys happening in London and Aruba to follow. We continue to look forward to the November Nine (just over a month away now). And, of course, we continue to enjoy our own games.

Meanwhile, that Unlawful Internet Gambling Enforcement Act of 2006 -- or, as I sometimes purposefully mispronounce it, the Awful Internet Gambling Enforcement Act -- continues to creep up on us. Will something be done before that absolutely-final-no-we-cannot-delay-it-any-further deadline of December 1 arrives? Or will time run out?

You may recall that the finalized regulations for the UIGEA were put into effect on January 19, 2009, the very last full day of the George W. Bush presidency. In other words, it has been the case for a while that banks (or “designated payment systems”) can, if they choose, block clients’ transactions with online poker sites, although for the most part very few have bothered to do so.

There have been a few reports scattered here and there in the forums of people running into occasional hassles with transactions. There was also that bit of applesauce that occurred over the summer when the Assistant Attorney General of the Southern District of New York ordered a few large banks to freeze the accounts of a couple of companies (Allied Systems and Account Services) that were processing payouts for online poker sites. Not sure, actually, that it was the UIGEA that afforded the legal leverage to do that or not, but it did cause quite a bother for online poker players nonetheless.

Something like $30 million in funds were frozen, with the result being that many online poker players faced inordinate delays when trying to withdraw from the sites, most particularly from Full Tilt Poker and PokerStars. The sites eventually found new means to make the payouts happen, though, and all was (mostly) well.

However, from the perspective of the “designated payment systems,” adhering to the UIGEA’s prohibition against allowing their clients to make transactions with online sites that offer (still undefined) “unlawful internet gambling” has been essentially voluntary, since the regs state that “compliance... by designated payment systems is not required until December 1, 2009.” Also noteworthy is how in the finalized regulations the blocking of transactions will only be required when players try to move funds from their bank accounts to the online sites -- not when they withdraw.

That’s less than two months away. Meaning if nothing happens between now and December 1, the online poker experience for the American player is going to change significantly, I think. We’ll be able to withdraw, I imagine, but depositing is gonna be a headache. And you can imagine how things will go once that starts to happen.

We’ve seen a few bills proposed over this year -- a couple in the House, one in the Senate -- that if somehow rushed through and made law would successfully stop the UIGEA madness, either temporarily or permanently.

There’s the Internet Gambling Regulation, Consumer Protection, and Enforcement Act (H.R. 2267) introduced by Barney Frank (D-MA) which seeks to establish a federal licensing and regulatory system for online gambling to be run by the U.S. Treasury. That one has exactly 60 co-sponsors at present, and has been referred to the Subcommittee on Crime, Terrorism, and Homeland Security. So there are members of Congress other than those on Frank’s own Financial Services committee who have been (theoretically) invited to contemplate it.

Then there’s the Internet Poker and Games of Skill Regulation, Consumer Protection, and Enforcement Act of 2009 (S. 1597), introduced by Robert Menendez (D-NJ) over in the senate. Menendez’s bill offers to create a similar system of licensing and regulation, but focuses more specifically on “skill” games like poker. Menendez’s bill also includes a few other differences that make it less attractive than it might seem to online poker players. S. 1597 appears to be collecting dust at the moment, having no co-sponsors after having been referred to the senate’s Committee on Finance.

And there’s also Barney Frank’s H.R. 2266, the Reasonable Prudence in Regulation Act, which very simply asks that forced compliance with the UIGEA regs be delayed for a year (to 12/1/2010). That one, which has been referred to the House Committee on Financial Services (chaired by Frank), has collected 46 co-sponsors.

I suppose it’s possible -- though highly unlikely -- that one of these bills could suddenly catch fire and start moving through Congress. There’s always a chance, too, that one could get appended to some other bill and via a bit of legislative legerdemain (not unlike what helped the UIGEA become law in the first place) could get pushed through before December 1. But the likelihood of that happening seems mighty remote, too.

Let’s not give up hope yet, though. As always seems to be the case when it comes to U.S. legislative procedure, there’s still another way.

Last Thursday (October 1), a letter was sent to Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke asking for a one-year delay of the implementation of the UIGEA regs, citing how the enforcement of the law would place an “unreasonable burden on regulators and the financial services industry at a time of economic crisis.” The letter is signed by Frank and 18 other members of the House Financial Services Committee.

To be specific, the letter asks the feds to use their authority under the Administrative Procedure Act to bypass the usual hurdles and go ahead and agree to the one-year delay. Mention is made in the letter of Frank's H.R. 2266 (which would accomplish the same purpose), with the optimistic statement that “we believe this legislation is likely to move.”

So, yeah, the feds can still do whatever the hell they want when it comes to the UIGEA. Here’s hoping they do, in fact, give us another year to pursue the fight against that awful law.

But, really, it is hard to have any idea here what river card is gonna fall.

On the Menendez Bill (S. 1597); or, Be Careful What You Ask For

Last week Senator Robert Menendez (D-NJ) introduced yet another online gambling-related bill, something called the Internet Poker and Games of Skill Regulation, Consumer Protection, and Enforcement Act of 2009 (S. 1597) (full text here).

Once again, the news of another “anti-UIGEA” bill has evoked a kind of vague enthusiasm in the poker community. And once again, I find myself wondering “Do We Really Want Online Poker Regulated?”

You might recall that Menendez introduced a somewhat similar bill on the Senate floor last September (S. 3616). That one also focused on “games of skill” as it brought together various ideas for regulation of online gambling that had been proposed in the several other bills introduced over on the House side during the previous (110th) Congress.

Mendendez’ previous bill went nowhere -- in more ways than one. Once S. 3616 was introduced, it was referred to the Committee on Banking, Housing, and Urban Affairs, and that’s the last action taken. But like all bills introduced in the Senate, it remained “in play” (as it were) even as a new president took office and a new Congress took up residence over in the House. That’s because unlike House bills, which fade into history if not made laws during the Congress in which they are proposed, Senate bills that have not been acted upon perpetually remain in consideration since the Senate is technically a “continuing body.” (EDIT [added 8/12/09]: Might not be accurate here with regard to the fate of Senate bills, I am afraid -- see comments.)

In other words, when Menendez decided to introduce a second online gambling-related bill last week, his decision meant he’d had a rethink and wanted to propose something different from before, since his earlier bill was still on the table. That’s a little different from Barney Frank (D-MA) reintroducing his legislation last May -- he had to, if he still wanted the legislation considered, since all of those bills he’d proposed during the previous Congress (including the Internet Gambling Regulation and Enforcement Act, or IGREA) had died away.

So there’s a procedural difference to note here. And, indeed, the new bill from Menendez does represent a kind of rethink, insofar as it presents a much more detailed outline of how licensing and regulation of online poker (and other “games of skill”) would go.

There’s also a fairly huge difference between the bill Frank proposed back in the spring -- his Internet Gambling Regulation, Consumer Protection and Enforcement Act (H.R. 2267) (full text here) which now has 54 co-sponsors -- and the Menendez bill. I’ve already heard some commentators strangely describe Menendez’ bill as just “a Senate version” of Frank’s House bill, but that’s not even close to being the case. While it does recite several of the same mechanisms for licensing and regulating online sites that Frank’s bill recommends, it also makes that distinction between “games of skill” (e.g., poker, chess, bridge, mah-jong, backgammon) and other forms of online gambling, and thus only proposes to regulate sites that offer such skill games.

Like Frank’s H.R. 2267, Menendez’ bill sets up a federal licensing and regulatory system, to be run by the U.S. Treasury, but also allows for individual states (and tribes) to ask to be allowed to take over the business of issuing licenses and do the regulating. This continues to be the part of such proposed legislation that frets me the most, as I happen to live in a state where it seems quite possible my government would decide against letting the feds license and regulate online gambling here.

In his analysis of Menendez’ bill, I. Nelson Rose, a gambling law professor at Whittier Law School in California, explains that this state “opt out” provision is quite sketchily explained and even self-contradictory, and so is hard to respond to as it is presently worded. If you are interested, you can read Rose’s analysis here, which once again gives us a lot of reason not to be so excited about this or any other bill proposing the licensing and regulating of online poker.

The Poker Players Alliance has come out in favor of the new bill, noting how it speaks to the need “to protect consumers by exercising appropriate control and oversight over Internet poker and other games of skill.” PPA Chairman Alfonse D’Amato calls S. 1597 “another powerful step towards protecting Internet freedom, protecting consumers and protecting online poker.”

What do I think? I have a couple of responses.

For one, I have to think the prospects for Menendez’ bill are quite dim, especially compared to Frank’s. I say that mainly because of the present makeup of the two legislative bodies, as well as the relative power Frank and Menendez currently enjoy in each. And like that previous House bill introduced by Rep. Robert Wexler (D-FL) regarding “skill games,” I think S. 1597 is likely going to remain in the background of any discussions about licensing and regulating online gambling for the near (and possibly far) future.

Secondly, I’m becoming less and less enthused by these bills as time goes by as it becomes increasingly clear that each doesn’t really represent “another powerful step toward protecting Internet freedom” (as D’Amato says), but instead introduces ways to restrict such freedoms.

I fully recognize that we need to be able to play online poker without worrying about sites cheating us -- and we need to have some legal recourse whenever they do. But what’s the point of fighting for that protection if by doing so we help create a situation in which some of us -- maybe a lot of us -- cannot play at all?

The sole reason to be at all energized by any of these bills is the way they invite criticism of the hopelessly-flawed and unfair Unlawful Internet Gambling Enforcement Act of 2006 -- the bill that has become law.

And, really, the only bill I’m supporting at present is the one Frank introduced back in May just before his latest attempt at licensing and regulating online gambling, namely, his Reasonable Prudence in Regulation Act (H.R. 2266) (full text here), a simple two-pager that does nothing more than ask for a one-year delay before financial institutions’ compliance with the UIGEA becomes mandatory. That happens on December 1, 2009, and I do think we online poker players are going to face some frustrations here and there -- particularly with regard to depositing -- if that date arrives without any legislative action happening in the interim.

H.R. 2266 currently has 35 co-sponsors -- more than I thought it would have at this juncture. It has been referred to the House Financial Services Committee (which Frank chairs), and so shouldn’t completely fall off the radar, although I’m not too hopeful about it moving through the House, Senate, and onto the president’s desk before December 1.

Even so, I think that’s probably where our energy should be directed -- toward the rapid passage of H.R. 2266 -- and not so much expended as vague, misinformed praise for bills we may not actually want to see become law.