Online poker advocates lobby Congress to lift federal ban

Poker players are gambling on Congress seeing things their way.

Advocates for legalizing online poker have descended on Washington this week for a lobbying blitz that's supposed to last until Friday. They're betting they can overturn or at least ease federal laws that generally bar Internet .

They're seeking regulation of Internet gaming, a change they say would reduce compulsive and underage gambling, according to John A. Pappas, the executive director of the Poker Players Alliance, whose slogan is "Poker is Not a Crime."

Members of his organization plan to meet with 100 members of Congress from 35 states this week and were to host a charity poker tournament Tuesday night benefiting the USO and the Walter Reed Army Medical Center. They've enlisted the help of famous poker players such as Annie Duke, Andy Bloch and Howard Lederer.

Among those pushing legislation is Rep. Barney Frank, D-Mass., the chairman of the House Financial Services Committee, who sees the measure as consumer protection and a potential source of revenue, since winnings could be taxed.

Pappas kicked off the lobbying effort Monday by hosting a panel to promote the benefits of lifting the gambling ban. Many American poker players have been getting around the ban since it was instituted in 2006 by using sites based in the Caribbean or the United Kingdom. The sites make up more than a third of all online players.

However, Rep. Spencer Bachus of Alabama, the top Republican on the House committee, condemned the gambling legislation in the works. Bachus helped write the 2006 bill, which made it illegal for banks or credit card companies to process money earned through online gambling, although it doesn't specifically define online gambling.

Bachus, in a statement, said he'd continue to support efforts to discourage online gambling.

"Illegal off-shore Internet gambling sites are a criminal enterprise, and allowing them to operate unfettered in the United States would present a clear danger to our youth, who are subject to becoming addicted to gambling at an early age," he said. "In fact, studies have shown that earlier one begins , the more likely it is he or she will become a compulsive problem gambler."

Regulation, however, wouldn't only protect children by instituting age identifying software, but also would keep players from being defrauded by shady sites or other players, Pappas and other panelists said.

"I really see this as a consumer protection issue," said Parry Aftab, who was on Monday's panel and serves as the executive director of Wired Safety, an Internet safety charity organization. Online players "can't go to the (Federal Trade Commission) and say 'someone defrauded me.' You can't get any help," she said.

Pappas, whose organization has spent $400,000 in the past three months alone on lobbying efforts, agreed.

"It's a marketplace based on trust," Pappas said. "There is no business if people don't trust them. It's a bottom-line business issue that they have the safest, securest site out there."

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Jul 22, 2009
While this should absolutely be legal for common sense, freedom reasons, it still doesn't address "poker bots."

Jul 22, 2009
I did not mean to suggest I want the government regulating the bots or the like... Only that even with legality out of the way, there are still major hurdles for online gambling.

From my brief research, it's actually not illegal for an individual to gamble online (minus sports betting). It is illegal however for the "casino" to make money (take a rake) and also illegal for banks to transfer money to online "casinos." Such explains why most (if not all) are out of the United States and have third party financial intermediaries.

Oh well.

RFC
Jul 22, 2009
The right to contract does not preclude federal or state regulation of the activity under the contract. If it did, you would be able to contract for illegal services (which you are not). Remember, a "contract" means nothing without the ability to enforce the contract, and enforcement comes from the government (i.e. the courts). The government is not going to enforce contract provisions for conduct it has otherwise deemed illegal (except in extremely rare cases).

The problem here is that countries cannot effectively prevent or stop online gambling, except through the most extreme means. So the idea here is to legalize online gambling on the federal level (because online gambling qualifies as interstate commerce). By legalizing it, the expectation is that more people will gamble and that profits will increase, even though there will be costs associated with complying with government regs. If taxes and reg costs cut too far into profits, gambling sites will stay off-shore.

Now, there are a ton of issues to work out before this actually becomes viable federal legislation, not the least of which is the fact that several states will have seizures over federal legalization because (a) they fear it will cut into their own state gambling or (b) they fear it will legalize gambling in states that have resisted legalizing gambling.

Oh, and the debates on this issue promise to be painfully moralistic and uninformed. Think a bastard cross between Bible-thumping, internet "tubes," typical misunderstanding of constitutional law and (for good measure) a host of difficult-to-predict economic effects. No matter what side you're on, the numb-skulls will be out in force.

RFC
Jul 22, 2009
Velanarris - I'm no pro at local and federal gambling laws, but there are plenty of state laws that make gambling illegal. Even Nevada (where gambling is famously legal) actually regulates casino type gambling (which is to say, follow the regs or your gambling business is illegal).

Gambling laws across the states vary widely, but most make typical forms of profitable gambling illegal. (Most states do not prohibit social or charitable gaming or gambling, but that's not what we're talking about here.)

You say that "Gambling is not illegal in the US." That is simply untrue. The whole premise of the article is based on the fact that online gambling is illegal under federal law. Every day in Ohio, I hear about the debate to legalize casinos or slot machines... why? Cuz it's presently illegal.

RFC
Jul 23, 2009
Well, if you think that your statement that "Gambling is not illegal in the US" is correct despite the fact online gambling is illegal under federal law (the Wire Act, to name one law), and numerous localities and states have laws against gambling... then go your own way. You consider "gambling" to be categorically distinct from "online gambling." I consider "online gambling" to be a logical sub-set of "gambling." I'm sticking with my interpretation... my bet is that it will cause far less confusion.


Jul 23, 2009
There's no confusion now, except on the governmental level where they're trying figure out a way to outlaw something unenforceable.

Regardless of how you feel about gambling, it should be obvious that the governments failed on a multitude of levels and any positions they're holding on to are quickly eroding.

If you'd like a really interesting debate, check out the state of Delaware - they want to make sports betting legal. Sports betting is illegal nation wide, but the state falls under a grandfather clause allowing them to do so. Many leagues, associations, and even senators have already rallied against them to prevent this even though they're clearly permitted by law.

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