Friday, March 19, 2010

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.

Welcome to KentuckyA 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?

UIGEAThe 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.

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Blogger RGC2005 said...

I am a Kentucky resident and asked an attorney friend to explain what the heck this is all about. He wrote two really good articles explaining the case in layman terms at
Personally I think the impetus for this whole case is to draw the owners of gambling sites into the USA so the US DOJ can arrest and prosecute them in a very conservative federal district.

3/19/2010 10:30 AM  
Blogger Brian said...

Here's the funny part to me. When this was first implemented, all I heard was "Bush" this and "Republicans" that. Now that it is actually going to effect, with Obama and the Democrats in office, I never hear or read anything about them.

Online poker is for dopes anyway. Poker has been subject to cheating since its inception. Now you have the most awesome platform ever to cheat and steal at poker, and most people think the UB and Absolute Poker-type things are confined to the big dollar games. Get real. It would be so easy to steal from the tons of low-dollar games. Who is going to care about someone complaining about losing 25 or 50 bucks?

Although I do not think the government should protect people from themselves, I gotta say here many people are being done a favor.

And here's another thing: I hear players whine and moan about the rake, yet say let the government regulate online poker and let them play. You think the rake is bad now, wait until Obama is getting a cut of every hand.

3/23/2010 7:29 PM  
Blogger RGC2005 said...

I guess you lost your initial deposit on Party Poker before you cleared the bonus?

3/25/2010 9:55 AM  

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