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Poker Players Alliance Reacts to Summary Text of Reid-Kyl Internet Gambling Bill

Online Poker Legislation

Player penalties, an excessive blackout period, a lack of international liquidity and the five-year penalty to companies that offered online poker in the U.S. after the Unlawful Internet Gambling Enforcement Act are four concerns the Poker Players Alliance plans to express to lawmakers regarding the summary text released last week of the Internet Gambling Prohibition, Poker Consumer Protection, and Strengthening UIGEA Act of 2012.

John Pappas, executive director of the PPA, said the organization has reached out to the offices of the bill's authors, Sen. Harry Reid (D-Nev.) and Sen. Jon Kyl (R-Ari.), to express these concerns. Many of the issues are based on the vagueness to the wording of the summary text. Pappas indicated that the PPA's main objective is to get a hold of the draft bill in order to see how the actual language might affect these concerns.

"We've asked for the language multiple times and it's not being shared with us or anyone that I'm aware of," Pappas said. "Even other key Senators in the process do not have the language. We're at a disadvantage not knowing exactly what is meant by parts of the summary text."

One such area is player penalties, which is the a provision the PPA has always deemed unacceptable in any online poker legislation. The summary text reads: "To deter U.S. players from patronizing illegal sites, the bill makes explicit that any property involved in or traceable to a gambling transaction in violation of the new act (including winnings) is subject to forfeiture." Usually forfeiture of personal funds only occurs when someone has been convicted of a crime. Pappas pointed out that the language could just mean that if an unlicensed site is shut down then funds will be seized from that site and players will not get those funds returned to them, rather than that the government will individually go after players.

"There was nothing like that in the 2010 bill, so it was surprising to see in the summary," Pappas said. "We have not seen exactly what is meant by this section that player funds can be targeted. The devil will be in the details, and we're trying to get to the bottom of that."

Pappas said the 15-month blackout period is being provided to let the Indian tribes, which would need to be licensed by the Department of Commerce, catch up to Vegas casinos that are already working to get licenses through the state of Nevada. A 15-month blackout period isn't as big of a deal as it was in Reid's proposal two years ago because of the change in the status quo for online poker following Black Friday, but it does extend the wait for poker players. Pappas would like to see the delay shortened to six months.

"I don't think it should take the Department of Commerce that long to form regulations when other countries and states have already achieved successful regulations," Pappas said. "Fifteen months seems exceedingly long. They should try to shorten it to a more reasonable time."

The summary text states that "no licensee or other U.S. person may accept bets or wagers from persons located in other countries." It's likely that licensed and regulated online poker in the U.S. would begin within the country's borders, but Pappas doesn't want to see language in the bill that would close the door on expanding to an international market.

"There's certainly enough liquidity in the U.S. to have a robust market, but I think players would benefit from international liquidity," Pappas said. "We'd like to see language that leaves the door open for the possibility of the U.S. market to compact with other legitimate and regulated marketplaces throughout the world."

One spot where the summary text is pretty clear is in reference to sites like PokerStars. which offered Internet poker in the U.S. after UIGEA. The summary text states: "Licensing of persons (or use of their assets) that were involved in offering Internet gambling to United States residents after 2006 (following enactment of UIGEA) is prohibited for five years after enactment of the bill, subject to a rebuttable presumption that state or federal laws were violated by their post-UIGEA gambling activities in the United States."

"We believe the five-year penalty box aimed to keep companies like PokerStars out of the U.S. market seem unduly unfair," Pappas said. "They should have the ability to partner with other U.S. gaming companies to offer what players believe is a very good service in the U.S."

Pappas said the PPA is OK with the bill requiring all states to individually opt in by a legislative vote, even though the 2010 proposal would have automatically opted in any state that previously allowed poker in some form.

"It's a fight we're never going to win," Pappas said. "There is such a thing as state rights, and there are people backing the bill that would automatically say it needs to be harder for states to opt in. It's a compromise the people drafting the bill are willing to make. We understand that the fight will shift to all 50 states. I think a number of states would immediately opt in, a handful of states we would have to go in and work to get that done, and some states will never opt in. It's something that's going to be in the bill, and I don't see any way to change that between now and when the bill becomes law."

Pappas still believes that federal legislation is much better than the alternative of letting individual states form their own gambling laws and regulations over time.

"The player penalties can be corrected," Pappas said. "After that, I don't know what issue would be any better on a state-by-state basis. It's not like states aren't going to put player penalties in there. California and Florida have player penalties in their proposals. We can nip that in the bud right here."

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