Thursday, December 16, 2010

Zombie Bill Dies, UIGEA Monster Lives

Now What?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.

The Capitol BuildingThat’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.

UIGEA steamrolls alongConsidering 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.

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Blogger Grange95 said...

"... this horrendous (probably unconstitutional) law ..."

Are there still folks in the poker industry seriously advocating this position? iMega attempted this argument previously, and was shot down in federal court. The judge thought so little of the "vagueness" argument that it required only one paragraph with two sentences and one case citation to dispose of it. The other arguments raised by iMega were, to be charitable, legally weak.

One of the unfortunate side effects of the public fights over the U.S. Supreme Court's decisions is that people now use "unconstitutional" as shorthand for "ridiculous law I strongly oppose". In reality, most laws are constitutional, judges hate finding laws unconstitutional, and the best way to get rid of a law you think is bad is simply to call it a stupid law and lobby for its repeal.

12/16/2010 4:29 PM  
Blogger Short-Stacked Shamus said...

Good point, Grange95. I certainly reached for the adjective "unconstitutional" too eagerly there. I hereby step back from it even further than I did with those parentheses and the qualifying "probably."

"Horrendous" I'll continue to claim, though... :)

12/16/2010 4:45 PM  
Blogger Foucault said...

Thanks for the nod and a very nice write-up of your own, Seamus. I had been placing my hopes in some sort of inter-state compact, a la Powerball, formed by the various states that seem poised to launch their own igaming regimes.

My girlfriend, who has worked in state government and is generally knowledgeable about these things, sadly assures me that the states would do a terrible job of running things. According to her, the most likely outcome of state regulation would be a short-sighted, poorly managed, overtaxed system.

Sky-high rake and support that makes FTP look responsive? Shudder.

12/23/2010 9:03 AM  

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