Monday, November 06, 2006

The Poker Vote?

Who thinks November 7th will be their lucky day?Election day tomorrow. Current projections show the Democrats actually taking the House. Pollsters also have Republicans losing a couple of senate seats, though still keeping control. The most repeated forecasts for the new Congress have the Dems winning the House by a margin of 219-216 (or so), and the Republicans leading the Senate by around 51-47 (with a couple of independents).

Tomorrow’s elections have inspired some to consider -- in true “rabbit cam”-fashion -- what might have been the fate of the Unlawful Internet Gambling Enforcement Act had there not been a Republican majority in both the House and the Senate this summer and fall. For example, on a recent blog entry, professional player Andy Bloch speculated that “If the Democrats had control over one or both houses of Congress, the bill would not have passed when and how it did, if at all.”

Gotta say I’m not so sure Bloch is correct here. H.R. 4411 did, after all, pass through the House last July by a fairly wide margin (317-93). Only 17 of the “noes” were Republican, but 115 of the “ayes” were from Democrats. The push to prohibit online gambling was from its inception presented as part of a larger effort to enact so-called “family legislation.” (Set aside, for a moment, the obvious problems with that idea.) While Republicans were certainly responsible for the legislation and argued most conspicuously for its passage, at the end of the day a lot of Democrats also found reasons to support a law understood by many (i.e., a number of their constituents) to protect families. Bloch might be right that the back-door method of affixing the UIGEA to the Safe Port Act might not have occurred the way it did with a Democrat-led Congress, but it is hard to say how such a Congress would’ve voted on the UIGEA had it come up for legitimate debate.

(Incidentally, votes for the Safe Port Act in the House and Senate on September 29th don’t rate here . . . we cannot judge from these votes who was for and who was against the online-gambling portion of the Act.)

So much for the past. What about the future? I’ve heard some commentators suggest that a Democrat-led House may well have some effect on what happens next with the UIGEA. Could that be true? What does happen next? And will it make a difference to online poker players whether a given state or district sends a Democrat or Republican to Washington?

Well, first to consider are those called-for directives from federal regulators to “designated payment systems” (i.e., banks, credit card companies, other money transfer systems) and “financial transaction providers” (i.e., other third-party vendors like Neteller). All that “270-day period” stuff you've been hearing about refers to these directives. Within 270 days of October 13, 2006 -- the day the UIGEA was signed into law -- the “Secretary and the Board of Governors of the Federal Reserve System, in consultation with the Attorney General, shall prescribe regulations” to all of of those entities currently facilitating the transfer of money to and from poker sites. (Section 5364 of the Act is where you’ll find this charge to federal regulators being delivered.)

There is also that other reference under “Civil remedies” (Section 5365) that says something similar with regard to “interactive computer services” (or ISPs). That’s the part of the Act that says district courts can, if they wish, issue orders to ISPs for “the removal of, or disabling of access to, an online site violating section 5363 [e.g., poker sites], or a hypertext link to an online site violating such section [e.g., sites that link to poker sites], that resides on a computer server that such service controls or operates.” The district courts aren’t the only ones being encouraged to do some policing here. Section 5365 says the U.S. Attorney General also can weigh in (“may institute proceedings under this section to prevent or restrain a restricted transaction”). Additionally, the attorney general of a given state can likewise institute such proceedings. Incidentally, there is no mention here of any “270-day period” for anyone to issue instructions to ISPs. However, if such directives are coming, I’d imagine they’ll probably come around the same time the feds send their instructions to the financiers.

Okay, then . . . so if we’re not concerning ourselves anymore with the past and we’re indeed focusing on the future, let’s try to answer some questions . . . .

Will a Democrat-led House and/or Senate have an effect on how these regulations outlined in the UIGEA are handed down?

Not likely. Those who serve on the Board of Governors of the Federal Reserve System and the U.S. Attorney General don’t get elected -- they get appointed. I don’t really see how replacing some legislators is going to affect how the executive branch carries out laws previously enacted.

Will a Democrat-led House and/or Senate have an effect on future legislation, e.g., a so-called “poker carve-out” in a new, amended version of the UIGEA?

This “poker carve-out” is where some (including a lot of name pros and the Poker Players Alliance) are focusing their energies. In theory, the answer to this question has to be yes. By electing different legislators, different bills may well get introduced, voted for, and passed into law. I wouldn’t hold your breath, though. Starting in 2007, the Dems can only possibly enjoy a slim majority in the House. And they probably will stay the minority in the Senate. And the fact is, even then, there still will not exist a majority of members of either side of Congress who clearly oppose anti-online gambling legislation. Not by a long shot.

Will backlash against the UIGEA cause certain members of Congress to lose their seats in the House and Senate?

Doubtful. There are a few members of the House and Senate up for reelection tomorrow who were among the loudest backers of what became the UIGEA. Jon Kyl (R-Arizona), one of the original authors of anti-online gambling legislation back in the 90s, is in a fairly tight race for his senate seat, though it looks like he’ll probably hang on. Over in the House, Jim Leach (R-Iowa), the author of H.R. 4411, is in a tighter race, though he, too, may well retain his seat. In truth, there are a number of reasons why the “poker vote” probably will have little or no effect on tomorrow’s races. (I intend to discuss some of those reasons in my next few posts -- reasons why I believe online poker cannot currently enjoy public acceptance in this country.)

[EDIT (added 11/8/06): Jon Kyl indeed retained his senate seat by a comfortable margin. However, Jim Leach lost his House seat to Democrat Dave Loebsack in a close race. Of those other House members most involved in anti-online gambling legislation who were up for reelection this year -- Spencer Bachus [R-Alabama], John Boehner [R-Ohio], Chris Cannon [R-Utah], Bob Goodlatte [R-Virginia], and Steve King [R-Iowa] -- all won their races by comfortable margins.]

As for the big picture, we'll see what happens tomorrow. As poker players we know all about “current projections” and how quickly they can dissolve once your opponent hits that five-outer on the river. In any event, my sense is that no matter which party gains control of the House and/or the Senate, there will be little or no change in how the UIGEA plays out here in the near term.

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