FULL TILT POKER BLOG

Posted by Editor | Filed under Alfonse D'Amato, Poker and the Law, Poker Players Alliance, UIGEA

III. Game On

I was playing a poker tournament at the Wynn a few weeks ago when I mentioned something about online poker. The old codger in seat two said, “Is that still around? I thought Congress outlawed that.”

In future installments of this series, I’ll discuss how the issue of whether online poker is affected by the new law (a battle that will be fought in the future in the courts). But for now, I need to make a vital point: THE LAW IS NOT SET IN STONE.

First, the UIGEA has a provision that requires the Department of the Treasury and the Federal Reserve Board, in the 180 days after the law’s passage, to draft regulations for the enforcement of the law. Based on those regulations, online poker could be expressly excluded from its penalties or prohibitions. Or, the regs could be written in a way that alters a lot of the law’s ambiguities to favor of creating huge barriers to the operation of online poker sites and/or to the ability of players to finance online poker transactions.

Second, there are other laws. The Wire Wagering Act of 1961 (known as “the Wire Act”) is the federal law mentioned most often as possibly applicable to online poker. An amendment to that law could make clear what the courts have already suggested/implied a couple times, that it does NOT apply to online poker. Or an amendment could explicitly say it DOES apply to online poker.

Third, especially with the ambiguous state of the law, there could be additional laws protecting or attacking online poker.

Finally, there is an ongoing dispute between the U.S., Antigua, and the World Trade Organization (“WTO”) over actions our government has taken to hurt the business of Antigua, that business specifically being the licensing and operation of online gaming sites. Most online gaming is organized or operated through non-U.S.entities, and when the U.S. takes action against online gaming (under the guise of protecting ITS citizens), it is harming the business interests of companies legally operating in other countries. The WTO is supposed to help work out these disputes and they are currently siding with Antigua. As is generally the case, however, the current Administration is thumbing its nose at international organizations designed to harmonize the interests of member countries.

Consequently, even though poker may have “lost” the war to keep the UIGEA from being passed, there are future wars to be fought which may be even more important.

IV. Enter D’Amato – First Senator of Poker, or Senator Pothole?

The Poker Players Alliance on Monday announced that it brought in Alfonse D’Amato, former Republican Senator from New York, to become Chairman of the Board of the PPA. This is a great move for the PPA, and I say that in spite of – maybe even BECAUSE of – my predisposition to not like D’Amato.

D’Amato, a U.S. Senator from 1981 to 1999, distinguished himself primarily for three things during his two decades in Washington: (1) championing the cause of Holocaust survivors and the families of Holocaust victims to recover funds from Swiss banks; (2) establishing himself as a special-interest friendly legislator, earning the nickname Senator Pothole for focusing on constituent services (which is not necessarily a bad or inappropriate thing), getting nicked in some ethics investigations involving his brother’s lobbying for defense contracts, and his office generally being a place where lobbyists felt comfortable; and (3) sticking himself into a bunch of silly controversies, like doing a goofy Japanese/Lance Ito impression during the O.J. Simpson trial, calling opponent Chuck Schumer a putz-head, and recommending that a female candidate consider having sex with Rudy Giuliani to improve her chances of winning.

D’Amato was on the opposite side of a legal issue that nearly ended my legal career in the mid-nineties. I was part of a small group of plaintiff/class-action law firms that was successful in filing securities fraud cases against public companies. After the big accounting firms got caught holding the bag for the S&L scandal – they had to pay millions in settlements when, because of conflicts of interest or greed or laziness, they provided audited financial statements for a bunch of crooks who defrauded the government and investors out of billions, they vowed to never let it happen again. Instead of cleaning their own house, they put together a lobbying war chest, millions and millions of dollars, including great p.r. advice that convinced them to use the high-tech firms as front men. Instead of pitching “we can’t let investors sue Ernst & Young,” it became “strike-suit plaintiff’s lawyers are robbing the high-tech firms of America’s competitive advantage.”

D’Amato was the chairman of the Senate Banking Committee, from which securities-law bills came. We put together our own war chest and hired our own lobbyists, but we were no match for them, and the law passed in 1996, over President Clinton’s veto. D’Amato was considered by our side as one of the bad guys.

The entire experience was a great education in how Congress works. Oliver Wendell Holmes, I believe, said, “People who love sausage and people who love justice should never see either being made.”

My partner and I, though another heavy-hitting Chicago lawyer, got an audience with one of our Senators from Illinois, Carole Moseley-Braun. We expected a sympathetic audience: Democrat, woman of the people, someone who would identify with the everyman-investor who we believed was getting a raw deal if you made it harder to sue big corporations for fraud.

We sat down in her office and she said, “Are you two of the strike-suit lawyers who make a living suing corporations whenever their stock price drops?”

V. That’s Why Al is the Right Man for the Job

I’m thrilled we have D’Amato representing our interests. I say this in a non-cynical, non-naïve way, but politics is a dirty business. D’Amato knows that business inside and out – the players, the approach, what’s allowed and not allowed, what works and what doesn’t.

It was a smart move, though one which might have had a bigger impact if it was taken BEFORE the law passed. As I said, the game is still on, but now D’Amato has to work on getting new laws passed, or getting exemptions in regulations promulgated from past laws. Maybe six months ago, he could have succeeded by simply convincing some key players to table the thing for another year, not rush in willy-nilly. Sloth would have been our ally and D’Amato could have expertly exploited it.

The odds are probably against him succeeding. Even though one of the primary authors of the law got voted out of office, and the vote was taken as the Senators and Congressmen were racing home, having passed an unrelated law that gives them all political coverage for having STILL not caught Osama bin Laden (frankly, unless he plays online poker, I don’t see what they’re doing that’s going to catch him), it’s hard to unmake a law. Even if the people voting for it had no reason to vote for it, it’s rare for them to ADMIT THAT.

D’Amato has a shot at getting good treatment for poker in the regs, but I have no idea how that game is played (though I bet Al does!).

But that’s based on a scenario that doesn’t include a lot of stuff I don’t know. As I said, I heard some non-specific information about a lot of legislative activity on this issue coming up. If that’s the case, and there is a genuine re-opening of the issue (compared with everyone in Congress feeling they have to stand by their previous vote simply because they’ll look foolish flip-flopping), its vital that poker players get in the game.

Between the UIGEA regulations and the new legislation that may be proposed, not to mention anything concerning the U.S. position regarding the WTO, there could be a lot of action on the subject of online gaming/online poker. And it’s not simply a matter of whether the outcome is pro-poker or anti-poker. A lot of special interests are lining up their clout for a place at the table to influence what comes out of it: (a) banks and other payment processors, who want to avoid becoming a police arm of the government; (b) casinos, who now want to get into some aspects of online gaming and therefore want it legal (or, better yet, legal and crippled so they can buy in cheap); (c) the horseracing industry; (d) the lottery business (state, private [did you know some states are selling their lotteries to private companies for billions of dollars?], online); (e) the NFL, which apparently wielded a lot of power behind the scenes in getting the UIGEA passed with a carve-out for fantasy football, from which the NFL makes a lot of money; (f) the sports betting business, though it is composed primarily of illegal bookies and offshore online entities; and, of course (g) the folks who want to direct a lot of aspects of your life along the religious principles THEY hold dear.

It’s not enough for us to identify interests that may be similar to ours (conceivably all these people but (g)). If we count on the banks to save online poker, they could succeed in getting regulations that help them but still doom us. The casino business could arrange a solution that cripples online poker so they can save it, and maybe the version they want isn’t nearly as good as what we have – think of all the things Harrah’s has done with the World Series of Poker to line its pockets at the expense of the players.

Popularity: 1% [?]

• No Related Post

Permalink | March 8th, 2007 Play Online Poker at Full Tilt Poker

Comments are closed.