The PPA was thrilled with how the Congressional hearing went. In particular, it was really good that it showed how ambiguous the law is and what a difficult time the regulators are having with this particular law. It highlighted the fact that the regulators, because they are having such a hard time, basically wanted to abdicate their responsibility and not clarify or create what one regulator called a “bright line” as to what is and what is not illegal Internet gambling. That’s the real issue here. The government – officials from the Federal Reserve and the Treasury – recognized it as a very difficult question to answer. Of course when the bankers sat down, they said “if the government’s not willing to answer that question, how can they ask the banks to?” Again, it clearly highlighted some serious problems with the regulations.

This means the regulators have a lot of work to do. If they want to create this “bright line,” it’s going to take them a long time. It was suggested at the hearing that it be made clear that sports betting is identified as illegal online wagering, and then develop a formal process for determining the legality of other activities. Of course this would be activity by activity and state by state. That would take a while, which is fine. I think that poker would do fine in that process and that poker would be declared legal, which would be a good thing. I would love to see that process happen. 

It’s important that we keep drawing attention to the difference between poker and sports betting; between poker and casino gaming. Poker is a game of skill and people love to play it.

Another really good thing was how bi-partisan the negative comments were about this law and the pending regulations. We saw Democrats and Republicans basically in unanimity making it clear that they weren’t happy with the law or the regulations. This was something new that we’ve not really seen. So far, this has been seen as a Republican law from the last congress which Democrats have been fighting against. In large part, this was because it was seen as a bit of political hackery.

There is a wing of the Republican Party – the true conservative wing – that realizes that this is a bad law. I think that those members of the party have wanted to come out against this and support the Frank and Wexler legislation, but felt that maybe they’d be going against their party and even costing themselves votes with the Christian conservatives. And I think that the more we see people like Pete King (R-NY) and Pete Sessions (R–TX) out there, in public, making it clear that this is not a good law, the more that wing of the party is going to feel that they can go out on the limb with them and maybe it’s not going to break. Maybe there won’t be negative consequences, in fact maybe there will be positive consequences, where these people will be voting for and promoting policies that they believe in. I thought that was really big. There is a real coalition here that is being built of the large majority of the Democratic Party and the true conservative Republicans. We’re starting to see this – it is starting to happen. It was one of the first times that we’ve seen this in a public setting.

The next steps will be that the coalition builds, momentum is gained, there are more hearings, and that the argument on our side of things – for online poker – will get stronger and stronger. Evidence in favor of online poker is growing as well. There are more and more studies about poker as a game of skill. And these studies show that online gambling isn’t a horrible thing that’s going to destroy civilization as we know it. And for the “doom and gloom” people on the other side, there is no evidence to support their views. It’s entertainment and people enjoy it – particularly when you talk about player to player games like poker.

It will take time to build up this coalition. It’s an election year and I think that we realize that it’s going to be tough to get anything passed. But I do think that next year is a very real possibility and I do hope that the regulations, or at very least the regulations that would severely and unfairly impact poker, wouldn’t be issued before we could get a legislative resolution.

In addition to providing Seidel with his first career WPT Championship, his victory puts him at the top of the CardPlayer Player of the Year standings, three spots ahead of fellow Team Full Tilter Phil Ivey and four spots ahead of defending champion, David Pham.

Seidel chose not to follow up his victory with a trip to Monte Carlo for the EPT Grand Finale, but a few other pros made the journey to the Cote d’Azur. When Day 3 kicked off on Monday, Rino Mathis, Dario Alioto, and Thomas Wahlroos all had very playable chip stacks. Will any of them go on to win? I’d like to say so, but with this much play left, not even a Donkey of my caliber will go out on a limb and predict victory yet.

The poker forums have been buzzing all weekend over the announcement that ePassporte is no longer accepting online poker-related transactions. That’s right – they’ve closed their borders and not even a valid Visa (or MasterCard) will let you deposit to sites like FTP using ePassporte.

While ePassporte has yet to issue an official statement to users, a letter posted online states the company has made its decision in light of “a widespread investigation of Internet gambling, including poker, by the United States Attorney’s Office for the Southern District of New York.” ePassporte’s letter goes on to say that the company does not believe it has violated any laws, but “we do not wish to be associated with anything that might be considered illegal by the United States government.”

In happier news, Congressmen Barney Frank and Ron Paul have recently introduced new legislation designed to prevent implementation of the controversial UIGEA regulations. Specifically, H.R. 5767 will “forbid the Secretary of the Treasury and the Board of Governors of the Federal Reserve System from proposing, prescribing, or implementing any regulation that requires the financial services industry to identify and block Internet gambling transactions.”

While calling this a move to repeal the UIGEA may be a little strong, Frank and Paul certainly don’t pull any punches in outlining the flaws they see in the legislation. “These regulations are impossible to implement without placing a significant burden on the payments system and financial institutions” writes Frank. Adds Paul, “The ban on Internet gambling infringes on two freedoms that are important to many Americans: the ability to do with their money as they see fit, and the freedom from government interference with the Internet.”

The bill has been referred to the House Committee on Financial Services for further action, and we’ll keep track of its progress through the legislature.

Until then, keep playing – and keep reading.

Everything considered, these regulations are bad – the law is just bad and it doesn’t work. The fact that the UIGEA is so ambiguous has really complicated things. One of the recent big issues has been the involvement of financial institutions in enforcing current regulations. What they’re asking the banks to do is to look at every single state and determine whether their laws against online gaming apply to poker. This is a huge problem.

Some states specifically mention “games of chance.” Is poker a game of chance? Define game of chance. Other states look at whether a game is “subject to chance.” Well, poker is clearly subject to chance. And of course, some state laws state that playing poker online is illegal. For example, the state of Washington identifies poker specifically, and a couple of other states are pretty clear as well. Whether these laws are valid or not is yet another question. But in most states, playing Internet poker is clearly legal.

This is what’s causing an amazing amount of work and problems for the banks. At first, people thought “okay, this makes a lot of sense, let’s try to implement this law.” Then they realized that it couldn’t be implemented. It’s not only that the banks don’t want to do it – and of course they don’t want to – but that they’re right not to do it. And the government understands that the banks are right not to do it. They had several people testify that this was clearly an undue burden. I mean, why are we asking the general counsel of every financial institution to look at the laws of every single state and determine which transactions are legal and which transactions are illegal? That’s asking way too much. The banks clearly need assistance in determining which transactions should be blocked and which shouldn’t. Even that was talked about – it’s very difficult.

One point that was brought up and put to the people that were writing the regulations was whether or not they could just put together a list of people or sites – like sports betting sites – that you can’t do business with or can’t send money to. The answer was clearly no. Basically, the way the law was written, it was intended to prevent transactions meant for illegal wagering.

Say that there’s a site out there that has both legal and illegal wagering, and maybe sell t-shirts at the same time. If this site was blacklisted because it offered illegal wagering, there would be no transactions allowed at all. The problem is that we don’t know if a customer wants to deposit money for illegal wagering or just wants to buy a t-shirt. Since the law doesn’t say “don’t do business with companies that offer illegal wagering,” they can’t legally blacklist a company that does. What the current law clearly says is that it’s illegal to allow transfers that will be used for illegal wagering. Obviously, it gets more complicated from there. Under the current law, there is no solution that’s not going to continue to overcomplicate this and cause even more problems.

Basically, the law got taken apart in every possible way. The bill – the UIGEA – got lambasted. As far as we’re concerned, we’d love it if poker were understood as a game of skill and therefore was not identified under the UIGEA as illegal. In my opinion, it shouldn’t be. In fact, when I was in Washington just over a year ago at one of the hearings, they had someone from the justice department who actually had to admit that there is no federal law against playing poker online.

What we need is a carve-out specifically for poker. As a best case, we’re hoping that the law is repealed. Barney Frank’s bill would repeal the law and then tax and regulate Internet poker, which is really what we’re looking for.

This will still probably take a little bit over a year – maybe even a year-and-a-half or something like that. Hopefully, we don’t get any surprises in the meantime. Things don’t work fast enough, and it may take time to undo, but I think it’s going to happen. In the end, it will be good for everybody.

Really, that’s it. But, here’s the good thing – much of the talk was from people who say the UIGEA as currently written is, for all intents and purposes, completely unworkable. In short, the banking industry dislikes the law because it forces them to police their clients’ transactions and block those that might be earmarked for “illegal gaming”. What’s more, the Justice Department can’t even help make their lives easier by identifying what constitutes “illegal gaming”.

So, what does all this mean for us? For now, more of the same, but industry representatives and online poker proponents liked what they heard. As the Poker Players Alliance posted on their site, “… the hearing was a huge success that verified what the PPA and others have been saying all along: prohibition does not work. It also reaffirmed our position that there is no federal statute that would preclude someone from playing a game of skill, like poker, on the Internet.”

For even more reasoned commentary on the state of online poker, check out what two pretty bright guys name Andy and Chris had to say in Washington on the eve of last week’s hearing.

Wow, that was bad. Even by my standards. Sorry. Really, I am.

With that out of the way, I’ll get to meat of this entry which is this; Erik Seidel is having another good run at a high-profile tournament. As of this writing, Erik is sitting in 11^th place out of 33 remaining players at the Foxwoods Poker Classic in lovely Ledyard, Connecticut.

When play resumes today, Erik will be sitting with 417,500 chips, which is about half as many as chip leader Allen Bari has in front of him. But with blinds at 4K/8K with a 1K ante, there’s still plenty of play left. And with eight WSOP bracelets to his name and only a couple of other name players left in the event (Paul Darden in 10^th and Ted Forrest in 12^th), we think Seidel has a pretty good chance of adding another trophy to his collection.

In news entirely unrelated to poker, Charlton Heston has passed away. If there is a heaven, hopefully they don’t let in those damn dirty apes. Otherwise, Chuck is in big trouble.

In honor of the passing of Moses, The Captain will now part the Red Sea and turn the doomswitch off (for a limited time only). Then we’ll stage a chariot race around the office because, well, we really have nothing better to do.

We’ll be back next week barring any life threatening injuries suffered in the race. And if one of us doesn’t make it we’ll have a nice supply of Soylent Green on hand. Mmmm, tastes like chicken…