Fridays are typically the news world's trash-dump days. Important announcements are rarely made on Fridays as folks rush home or out of town, and any news one wants buried in a weekend's two-day news cycle is tossed out late that day. The figuring is, most will forget the news by Monday.
And then New Hampshire and Kentucky weighed in. Suddenly gamblers had reason to be amused, and perhaps even a touch excited.
The New Hampshire State Lottery, the nation's oldest, was the first big casualty of UIGEA (The Uniform Internet Gaming Enforcement Act). Banks, already reeling from financial losses from bad loans, now have a risk of law enforcement activity directed at them and are not willing to take any risk in anything being labelled as Internet gaming.
So when the final Fed rules on the Unlawful Internet Gambling Enforcement Act (UIGEA) kicked in on Monday, January 19th, they simply bounced back any and all credit- and debit-card payments labelled as gambling from any source. Most gamers did not notice the change until later in the week when the big draws were held.
Although state lotteries are specifically exempted, banks are not willing to take the risk of their discernment being wrong so it all gets bounced back to the issuing bank, and they, in turn, also charge the disgruntled customer a fee for the failed transaction.
The Manchester Union Leader reported the problem was isolated to credit- and debit-card purchases of the popular Powerball and Tri-State Megabucks lottery game subscriptions. Said New Hampshire State Lottery Commission Executive Director Rick Wisler, "We could end up losing some significant revenue from this. It can amount to a million dollars a year or more to the lottery if credit cards are not allowed; we're caught in the cross-hairs of over-regulation".
In a telephone interview with a VISA USA executive who wished to remain un-named, he said, "The transactions are coded electronically and pass through the data centre with a generic source coding range of numbers. There is a specific range of codes that identifies it as coming from a gambling entity. The receiving institution has a filter set up to automatically bounce these back to the requesting merchant(s)."
And it's not as if the Fed and Congress were not warned. The American Banking Association, on behalf of its members, said UIGEA was too vague. They testified before Congress and member banks submitted over 400 comments and letters. Wayne Abernathy, ABA executive vice president for policy and regulatory affairs, said, "UIGEA and the Proposed Fed Rules imposed an enormous unfunded law enforcement mandate on banks in place of the government's law enforcement agencies." Because of this, they felt UIGEA was not likely to be a successful public policy.
While Internet gaming was not a priority for the incoming administration, President Obama used two simple words, "I won," to show Republicans there's a new sheriff in town. Obama subtly reminded them of his nine million more votes than their guy, the 58-41 Democratic seat majority in the Senate and 60% House seat majority. The train had room for them if they wanted to provide substantive comments and he made it clear it was leaving the station whether or not they were on board.
Not known for uttering anything but the most careful of remarks, the new President made it clear bipartisanism did not mean Republicans can do, say or get what they want. And if they wanted to spend the next four years listening to conservative radio talk show host Rush Limbaugh versus working to get something done, the choice was entirely theirs.
So with states scrambling for revenues and this ticking bomb, no matter that a lottery is merely a tax for those not smart enough to understand the concept of odds… this is a Joe Sixpack voter pocketbook issue and is likely to force UIGEA action out of committee. Way to go, Bushie!
And finally, Kentucky Governor Steve "It Ain't Over Until I Say It's Over" Beshear said Friday he will appeal this week's dismissal of his case to seize dot-com domain names belonging to online gambling sites. He (and he alone) believed these companies to be acting illegally in his state. He lost in court and while I would like state that he did the sensible thing with taxpayer money at stake and folded his tent, he instead said, in so many words, "Hang on there a minute…"
Two of three appellate court judges agreed with the plaintiffs in the case that state courts lack jurisdiction to seize ownership of the web addresses, but the matter will now head to Kentucky's Supreme Court. That's right, the state is hoping for best two out of three and will mount another six-to-seven-figure legal challenge to appeal as its state loses more jobs and cuts back on schools. Why does hubris always trump doing the right thing?
Hang on for a few more weeks and months while we await the outcome of yet another crazy state governor flexing his muscles and wasting precious tax dollars to prove he is right. Illinois Governor Blagojevich would be so proud! I am sure he already has phoned in a Tennyson poem for Governor Steve to use in his victory press conference.
Who says Fridays are boring news days?!?
Editor's note: Contributing columnist Denis Campbell brings an independent and experienced eye to poker's political scene. Campbell has worked closely in the past with former Cabinet Secretaries in the Carter and Clinton administrations, Ambassadors and members of Congress. He offers commentary on US and UK politics for the BBC and Huffington Post, and is currently the editor-in-chief of UK Progressive Magazine. Here, Denis offers his insights on matters affecting poker. Denis' views do not necessarily reflect those of PokerNews.
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