Reactions to Internet Gambling Act

There has been a mixed reaction to the Unlawful Internet Gambling Enforcement Act of 2006 (HR-4411) passed by US Congress last Friday (attached to the unrelated US Port Security Bill). The President is expected to sign the bill within the next 2 weeks.

Note- the legislation does not criminalize individuals for playing poker online. Rather, it will prosecute banks and processors who handle online gaming transactions.

Once the bill is signed, a Government Board has a period of 270 days to come up with regulations for banks and processors to follow. Then it will take time to implement the new regulations.

Poker rooms’ reactions have ranged from: immediately close accounts of US customers; to a middle ground of ‘more time is needed to assess impact’; to business as usual. The list summarizing statements from poker rooms we are aware of is at the bottom of this article.

Supporters of online poker ask Poker Players to let their opinions be heard and to get active.

First, that means being sure to vote on the 7th of November.

Second, players are encouraged to join organizations like the Poker Player's Alliance- (who lists voting records on HR-441) to help educate lawmakers that poker is a game of skill versus pure chance, and to lobby for an exemption for online poker in the short term and for regulation and taxation of online poker long term (similar to the way the UK is doing).

Meantime some gaming industry analysts say that U.S. gamblers will continue to bet online. But rather than using credit cards or other traditional banking vehicles, they will use other third party payment services based outside the U.S., such as NetTeller and FirePay.

Frank Catania, former director of gaming enforcement in New Jersey and president of Catania Consulting Group, calls the law "a sham" that won't stop online betting in the U.S. "There are so many alternate means of payment that it is not going to stop what is happening here," says Catania. "We are going to be spending a lot of money for enforcement, and it is going to be worthless."

Enforcing the act will cost about $2 million between 2007 and 2011, according to a May 26 Congressional Budget Office report.

Congressman Bob Goodlatte, the Virginia Republican who pushed through a July version of the anti-online-gambling bill in the House, concedes that the final version of the bill is not what he had hoped for. "It is not everything the House passed earlier this year, but it does include the enforcement prohibition to cut off funds going to the illegal online sites," says Goodlatte.

But he is still pushing for a separate piece of legislation to change the wording of the 1961 Wire Act to clarify that various forms of online gambling are illegal. "We need to modernize the Wire Act, which is 45 years old, and does not apply to all forms of gambling," says Goodlatte, adding, "It clearly applies to sports betting."

HERE ARE POKER ROOMS’ REACTIONS, grouped by reaction type:

NO MORE US CUSTOMERS:

Cryptologic, who licenses its software through its subsidiary WagerLogic Ltd, announced Monday that effective immediately its licensees will no longer take US customers. Their licensees include: Betfair Poker, Classic Poker, InterPoker, Littlewoods Poker, PokerPlex, SunPoker, The Ritz Club London, Totalbet Poker, UKbetting Poker and William Hill Poker. Interpoker went further to announce it has already closed out all US-based accounts. (Betfair already had a policy not to accept US Players.)

PartyPoker announced Monday that they will cease doing business with US players when the bill is signed into law.

888 Holdings, Plc., owner of Pacific Poker, issued a similar statement Monday saying if the bill becomes law, they will ban U.S. gamblers from their site and “will continue for so long as the legal situation remains the same.”

BUSINESS AS USUAL

Absolute Poker, BoDog, BugsysClub, Planet Poker, Superior Poker and UltimateBet have all publicly stated that they will continue to conduct business as usual with US customers. They emphasize they are legally licensed and regulated businesses.

Most point out that the US continues to violate the World Trade Organization (WTO) ruling on the case brought against the US by Antigua and Barbuda in August 2005, citing that the US doesn’t object to online gaming itself, rather it protects US-based online gaming (horse betting, lotteries) over those located outside the US, in direct violation of WTO agreements.

Superior Sports, owner of Superior Poker, added, “After consulting with our counsel who has read the bill in detail, we cannot view this bill as anything more than the current Republican leadership throwing red meat to their ultra conservative voters.”

WAIT AND SEE

Full Tilt says it is business as usual for the short term, until it can assess the impact of the legislation on its customers.

Poker Stars and Pokerroom said in statements that they have not decided yet what to do, and will further analyze the situation.

Empire Online, owner of Empire Poker and Noble Poker, in a statement Monday said, "In light of the new legislation passed by the U.S. Congress last Friday, Empire Online has immediately commenced a review of the likely impact on the Company's current business activities."

ParadisePoker, through their owner Sportingbet Plc, issued a statement Monday saying, "Should Sportingbet, Plc.'s non-U.S. international banking partners determine that the Act applied to them, then Sportingbet would no longer be able to take deposits from U.S. residents". They went on to say they are still assessing the impact of the bill, and will release a statement shortly. Media reports hint that Paradise Poker intends to halt doing business with US customers.

SITES ALREADY NOT TAKING US CUSTOMERS

Betfair, Ladbrokes, Playboy, Purple Lounge Poker and VCPoker have already had a policy in place not to take US customers.

Many other sites have not made official statements that we are aware of yet.

Prior related articles on the Internet Gambling Bill

- PPA Continues Fight for Online Poker

- Congress Shocks Online Gaming Firms- Outlaws Payments