Thursday, January 24, 2008

Do We Want Online Poker Regulated? (1 of 2)

Do We Want Online Poker Regulated?There was a discussion over on Rounder’s Radio earlier this week regarding the subject of regulating online poker. Dr. Alan Schoonmaker hosted the show, which apparently was labeled as an episode of “Poker Talk Beyond the Books.” (I believe Dr. Al’s show, Poker Psychology, will be resurfacing over on Rounder’s sometime in the near future.) Schoonmaker moderated a debate between John Pappas, Executive Director of the Poker Players Alliance & Preston Oade, an attorney. Oade has argued a couple of cases before the Supreme Court and has also previously collaborated with Schoonmaker on some articles.

The conversants touched on a number of issues related to online poker, but the debate was essentially over whether or not U.S. online poker players really should want laws like Barney Frank’s proposed Internet Gambling Regulation and Enforcement Act (H.R. 2046) to be passed. Pappas takes the view that we indeed should, and the PPA has largely focused its lobbying efforts toward building support for the IGREA and other, related laws proposed last year like Rep. Wexler’s “Skill Game Protection Act” (H.R. 2610), Rep. Berkley’s “Internet Gambling Study Act” (H.R. 2140), and Rep. McDermott’s “Internet Gambling Regulation and Tax Enforcement Act” (H.R. 2607). Meanwhile, Oade believes such laws create more problems than they relieve, and that in this case “the cure is worse than the disease.”

I tend to concur with Oade’s view here, although I have to say I did not agree with other points made by Oade during the show. As I wrote here in a post last May (shortly after Frank’s bill was introduced), “The more I think about this IGREA . . . the more it seems to me that it ultimately invites more governmental interference between myself and the online poker sites where I want to play. I do think the bill would make online poker safer and more reliable, but I fear it may actually make it easier for those who oppose online gambling to keep a lot of us from playing.”

Such a statement partly concurs with Oade’s view, if I am understanding him correctly. He believes the Unlawful Internet Gambling Enforcement Act of 2006 does not in any way refer to poker or have the legal heft to include poker as an example of a “bet or wager” financial institutions are being told not to facilitate. I’ve said before here that the UIGEA’s references to a “game subject to chance” do at least appear to provide a basis for identifying poker -- like other forms of gambling -- as an activity banks, credit card companies, and third-party vendors aren’t supposed to allow. Nevertheless, Oade is probably right to say that the UIGEA mostly derives its definition of what is illegal from the 1961 Wire Act (which only covers sports betting), and even the recently proposed regulations don’t offer any clarifications that would unequivocally include poker in what the UIGEA is intended to cover.

Oade worries that one effect of the proposed legislation would be to remove any doubt about whether -- in a legal sense -- poker is to be considered gambling. That in turn may lead to (even more) states deciding on their own to prohibit citizens from playing online poker. Oade is also not thrilled about giving the feds control here, and sees the potential for an increasingly burdensome system of taxation ultimately causing online poker to be no fun for anyone.

Like I say, I largely concur with Oade’s position. While I like the fact that the existence of these bills helps keep alive debates about the heavily-flawed (and unfair) UIGEA, I don’t harbor genuine hopes for the IGREA or the Skill Game Protection Act to be passed. For one, I continue to doubt either will ever gather the momentum to make it out of the House (never mind the Senate or the President’s office). But even if there were a possibility they could become law, I would have too many reservations about what might come next to feel very good about that coming to pass.

That being said, I did have a serious problem with Oade’s much-repeated claim that online poker is -- as far as he can tell -- in fine shape as is and thus not in need any sort of additional regulating. As Oade put it at least a half-dozen times during the show, “if it ain’t broke, don’t fix it.”

When it comes to online poker, what we got ain’t nearly as hunky dory as Oade suggests. Online poker may not be “broke,” but it sure as hell is in need of some repair.

Tomorrow I’ll be sharing a bit more about Oade’s characterization of online poker, ca. early 2008, then add a few thoughts of my own. Meanwhile, if you’re interested, you might go check out that Rounder’s podcast.



Anonymous Anonymous said...

Sad to say, poker and other forms of online gaming will never become legal until the government figures out how to get their share or online gaming is securely in the hands of established politically connected gaming corporations.

J Davis

1/25/2008 8:38 AM  
Anonymous Anonymous said...

No, Mr. Oade has it completely wrong if poker becomes a game of skill.

Skill Games are ALREADY regulated by the Federal Trade Commission ( under the same section concerning sweepstakes, EXCEPT skill games require NO FREE entry option and have a special rule that states game sites MAY REQUIRE AND ENTRY FEE TO PLAY.


Skill games / sweepstakes already have a complete tax structure concerning W-2G forms and the like.

Poker tournaments already have a special tax withholding regulation from the IRS that actually ALLOWS netting win less buy-in fee IF YOU WIN that specific tournament.

No, the Wexler bill really creates nothing new, EXCEPT it will specifically include poker with games such as Solitaire, Hearts, spades and others currently considered skill.

It is inaccurate arguments like this that hinder, not help our cause for poker.

Does anyone REALLY believe the status quo will remain the same? T the DoJ and the government will like an ostrich stick their heads in the sand?


1/30/2008 6:46 PM  

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