Legislation to Clarify UIGEA Fails to Pass Committee; Al D'Amato and PPA Speak to the Issue

Lawmakers failed Wednesday to agree on a clear definition of illegal Internet gambling and the Federal Reserve and the Treasury Department have been unable to finalize rules that would implement the Unlawful Internet Gaming Enforcement Act (UIGEA) because Congress didn't clearly define online gambling when it passed legislation less than two years ago.

Rep. King's Amendment Would Have Clarified Matters
The House Financial Services Committee voted Wednesday on legislation by Rep. Peter King, (R-NY) that would have required federal regulators to write a uniform definition of the types of gambling that would and would not be allowed on the Internet, followed by new rules implementing the ban. Under committee rules, the 32-32 tie vote meant the legislation failed.

Bankers Can't Police Transaction Without Celar Guidelines
Banks and other financial institutions complained that they are being forced into a law enforcement role because UIGEA prohibits them from accepting payments to settle online wagers without giving them a clear set of rules.

"The financial institutions are in the position of being told not process bets, but it's not clear what is legal and what is illegal," said Rep. Barney Frank, (D-MA), the committee's chairman. He said financial institutions had been given "a job that is undoable."

PPA Chairman and Former Senator Al D'Amato Had Some Strong Words
Former Senator Alfonse D’Amato (pictured left), chairman of the Poker Players Alliance (PPA), the leading poker grassroots advocacy group with over one million members nationwide, issued this statement in response to the House Financial Services Committee’s failure to pass H.R. 5767, the “Payment Systems Protection Act.”

“The PPA is surprised that the Financial Services Committee today failed to clarify what constitutes ‘unlawful Internet gambling’ under the Unlawful Internet Gambling Enforcement Act (UIGEA). The King Amendment would have required a separate formal rulemaking with an administrative law judge to determine the definition of unlawful Internet gambling.

Without Clear Definition, UIGEA is "...difficult if not impossible to enforce."
“The Federal Reserve, Department of Treasury, and the banking industry have all testified before Congress that the lack of a definition of ‘unlawful Internet gambling’ makes it extremely difficult if not impossible to enforce this law and would result in a broader review and denial of financial transactions because they could possibly be deemed unlawful under UIGEA.

“It is disappointing to realize that opponents of this legislation still do not truly understand the intent of the bill. It was clear today that those who oppose this bill chose to focus on emotional and non-germane issues, such as the harmful impact of gambling on children, instead of on the merits of the bill itself.

UIGEA is Unworkable and Unenforceable as it Now Stands
“As it stands, UIGEA is a completely unworkable and unenforceable bill that would do little to address the main concerns of its sponsors – namely, protecting underage and compulsive gamblers as well as cracking down on money laundering. To truly address these issues, the PPA firmly believes that Congress should implement thoughtful and effective regulation of the online gambling industry as opposed to outright prohibitions, which history has shown do not work.

“Unfortunately, debate over the morality of gambling trumped debate on the fact that UIGEA is completely ineffective and unenforceable.”

Congressional Lies: Like Bluffing With All Your Cards Exposed

The American Banker published a thoroughly misleading editorial by Rep. Spencer Bachus (R-Ala.--pictured right) yesterday, entitled: “Viewpoint: Blocking Web Gambling Rules Would Be Mistake.” Rep. Bachus’ opinion piece came as the House Committee on Financial Services is scheduled to vote today on the Payments System Protection Act (H.R. 5767), a bill to prohibit the Department of the Treasury and Federal Reserve System from proposing, prescribing or implementing any regulations related to the current ban on Internet gambling, as required by the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA).

Because Rep. Bachus' statements are so tranparently false, it's akin to a poker player trying to bluff with all of his cards exposed!

Let’s Separate Fact from Rep. Bachus’ Fiction:

UIGEA Has Not Lead to a Decrease in Internet Gambling
Statement: “Since the law was passed, gamblers and businesses engaged in Internet gambling have been deterred by the fear it would be enforced.”
Fact: Publicly traded foreign online operators left the US market—privately held companies did not. The Global Betting and Gaming Consultants, a UK based organization that provides economic research on worldwide gambling activities, found that there was a short-term dip in Internet gambling in North America right after the law was passed due to the consequences of the regulated companies pulling out, leaving the market to unregulated ones. Over the past year, online gambling has increased by 10 percent. Millions of Americans continue to gamble online, despite the attempt to prohibit Internet gambling.

Leading Financial Institutions Do Not Support UIGEA
Statement: “The law (UIGEA) passed with the support of a broad coalition that included…the American Bankers Association…”
Fact: Representatives from the American Bankers Association, Financial Services Roundtable, Wells Fargo & Co., and Credit Union National Association unanimously opposed regulations proposed to implement UIGEA in testimony to the House Committee on Financial Service’s Subcommittee on Domestic and International Monetary Policy, Trade, and Technology on April 2, 2008. They all questioned the fundamental approach taken by Congress in enacting legislation to force financial institutions to police online gambling.

“The UIGEA and the Proposed Rule do not provide a rational path towards halting unlawful Internet gambling,” said Wayne Abernathy, American Bankers Association’s executive vice president of financial institutions policy and regulatory affairs. “The path leads to an increased cost and administrative burden to the banks and erosion of the payments system, but it will not result in stopping illegal Internet gambling transactions. Imposing this enormous unfunded law enforcement mandate on banks in place of the government’s law enforcement agencies is not likely to be a successful public policy.”

Regulation Does Not Lead to Increase in Problem Gambling
Statement: Internet gambling lure young people who “by the tens of thousands are becoming compulsive, addicted gamblers.”
Fact: A report released in September 2007 by the UK Gambling Commission, which regulates Internet gambling in Britain, reveals that the prevalence of problem gambling has not increased over the last eight years despite the advent of Internet gambling. The British Gambling Prevalence Survey 2007 found that the rates of problem gambling were 0.6 percent and 0.5 percent of the gambling population, the same percentage of problem gamblers as reported in the last gambling participation survey conducted in 1999.

Internet Gambling Can be Effectively Regulated to Protect Consumers
Statement: “The UIGEA was necessary because enforcement tools were so inadequate.”
Fact: Top experts have testified before Congress that a regulatory framework for Internet gambling would protect consumers and ensure the integrity of Internet gambling financial transactions. Leaders in the fields of internet payment processing, identity identification and online safety described how existing systems and technology have proven successful in combating underage and compulsive gambling and protecting against money laundering, fraud and identity theft.

Rep. Barney Frank (D-Mass.) introduced the Internet Gambling Regulation and Enforcement Act (H.R. 2046) last year, which establishes a regulatory and enforcement framework for licensed gambling operators to accept bets and wagers from individuals in the US that includes a number of built-in consumer protections, including safeguards against compulsive and underage gambling, money laundering, fraud and identity theft. States would also have the right to control what, if any, level of Internet gambling is permissible within their borders and could apply additional taxes and restrictions.

“It is unfortunate that Rep. Bachus is using scare tactics to argue for the continued prohibition of Internet gambling,” said Jeffrey Sandman, spokesman for the Safe and Secure Internet Gambling Initiative. “The reality is that regulated Internet gambling, which is clearly working in the UK and other parts of the world, can utilize technology to offer strong consumer protections to combat underage and compulsive gambling in the US Currently, prohibition leaves millions of Americans susceptible as they continue to gamble in an underground, uncontrolled marketplace without such guaranteed protections.”

Can Barney Frank and Ron Paul Derail UIGEA?

The House Committee on Financial Services will mark up H.R. 5767 on June 24, 2008. This bill, introduced on April 11, 2008 by Reps. Barney Frank (D-MA) and Ron Paul (R-TX), would prohibit the Department of the Treasury and Federal Reserve System from proposing, prescribing, or implementing any regulations related to the current ban on Internet gambling, as required by the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA).

H.R. 5767’s introduction followed a hearing entitled, “Proposed UIGEA Regulations: Burden without Benefit?” in the House Committee on Financial Service’s Subcommittee on Domestic and International Monetary Policy, Trade, and Technology. According to Reps. Frank and Paul “It was clear at the hearing that the regulations are unworkable for the financial services industry, and this bill would, therefore prohibit their implementation.”

Representatives of the U.S. Department of the Treasury and Federal Reserve System acknowledged that U.S. financial institutions will face significant issues in attempting to comply with UIGEA. Testimony from representatives from the Credit Union National Association, Financial Services Roundtable, American Bankers Association, and Wells Fargo & Co., all spoke to the unnecessary burden they would face given the ambiguity of UIGEA and potential confusion stemming from multiple interpretations of what may or may not be illegal activities.

“Congress has studied this issue and heard from the financial services community and federal regulators that the current ban on Internet gambling is burdensome and doomed to fail. Now it is time for Congress to change course and find a way to protect the millions of Americans that are continuing to gamble online,” said Jeffrey Sandman, spokesperson for the Safe and Secure Internet Gambling Initiative.

Help Elect Scott McKay to the Washington State Senate; Help Overturn their Draconian Internet Poker Ban

Last night, on Keep Flopping Aces, my internet radio show that’s webcast on http://www.roundersradio.com/, I had Seattle attorney Scott McKay as my guest.

Scott is running for the Washington State senate against incumbent Margarita Prentice, the senator who pushed through Washington’s internet poker ban. Once of McKay’s central goals is to overturn the ban on Internet poker, a law that criminalizes a recreational hobby enjoyed by tens of thousands of law-abiding, tax-paying citizens.

His district—the 11th Senatorial District—is in Seattle, south of the city center and runs through an area that includes Boeing field. McKay is anticipating that only about 15,000 people will vote in the August 19 primary.

If you live in his district, or know anyone who does, please advise them to register and vote for Scott McKay to help overturn this ridiculous law. In addition, if you can provide the McKay campaign with names or email addresses of local people who might be willing to volunteer or help to get his message out, it would be a terrific help.

We poker players have a lot more political power than we realize, and there’s no reason why Margarita Prentice can’t be turned out of office. McKay estimates that 6,000 residents in his district are regular online poker players. If they all vote as a bloc, that’s more than enough to accomplish the task at hand.

If you're in a position to help Scott McKay’s election effort and help Washington State poker players in the process, please contact the McKay campaign and lend a hand.

Scott McKay

Campaign Address

P.O. Box 140

2701 California Avenue S.W.

Seattle, WA 98116

(206) 762-7834

You can listen to my interview with Scott McKay by downloading it as a podcast in a few days. Just go to http://www.roundersradio/ and navigate your way from there.

Is Omaha/8 Poker's Land of Opportunity?

Mark Tenner and I wrote Winning Omaha/8 Poker a couple of years ago, and we’re in the midst of writing a second edition—which means updating the book and adding new material where appropriate.

As a result, I’ve been playing Omaha/8 online these days instead of Texas hold’em—my usual game of choice—just so I can stay in closer touch with Omaha as I write about it, and stay tuned to whatever nuances seem to be developing in terms of new game strategies and that sort of thing.

Online poker players have changed Texas hold’em—particularly no-limit and tournament hold’em—dramatically in recent years, and if you don’t keep up with the game, you won’t recognize it. Newish concepts, such as “floating” and the use of Independent Chip Modeling are attributes of Texas hold’em that weren’t commonplace as recently as three or four years ago.

But Omaha/8 seems to have been stuck in a time warp. The game is not innovating as rapidly as hold’em has, and the players don’t seem to be improving either. I’ve been playing $10-$20 and $15-$30 online and I see errors I wouldn’t expect raw beginners to make, never mind supposedly skilled mid-limit players.

They raise way too often before the flop, call raises with hands that look to be one-way only, play draws in the face of bets and raises that are not draws to the nuts, and that sort of thing. It seems to me that Omaha/8 is the Land of Opportunity in online poker right now.

The same caveats apply: You can’t play too many hands, you have to toss hands that are outgunned on the flop if you don’t have a good draw, and as much as possible playing to scoop—not to split—is the game’s major strategic objective.

If you’ve got the patience and attitude for Omaha/8, there’s opportunity online right now. See you at the tables.

Narrow Escape

If you ride long enough, you’ll be hit by a car. Every cyclist says that, and every cyclist knows that when a bicycle and a car collide, it’s the cyclist who loses—big time.

I was hit yesterday, and I was lucky. All I have to show for it is a wrecked wheel along with a few scrapes and bruises.
Highway 74 is where it all happened. If you’re not familiar with the area, Hiway 74 has three lanes in each direction as it heads south and uphill toward Idyllwild. The road narrows down to a two-lane highway once it passes the southern edge of Big Horn, which marks Palm Desert’s city limits.

I rode into the entry area at Big Horn Golf Club, a very exclusive gated community, about 100 yards north of where those six lanes become two lanes. I planned to turn around and head back down hill, so I made a U-turn just inside Big Horn’s entry area and was crossing the three lanes of up-hill, south-bound traffic so I could go back down hill. Then I was hit.

I never saw the car coming. She obviously didn’t see me and I’m guessing that she was playing with her two dogs while driving. She hit my rear wheel—her car didn’t hit me; just my bike—and the next thing I knew I was moving sideways, going down in a heap, unclipping my shoes from the pedals, and picking myself off the pavement.

My wheel was completely trashed. It’s carbon fiber, which makes it light, extremely strong, fast, and very expensive, but it can’t stand up to that kind of punishment. Had she hit me a second earlier, I’d probably have broken a leg and maybe more, so I feel lucky that she hit my rear wheel instead of me, and that I came away unscathed.

I ordered a new wheel, which should be here late in the week, and I can’t wait to get back and ride again after my narrow escape. I plan to head right back up Hiway 74 to the scene of the crime. After all, I want to complete my aborted ride.

A Strange Study That Just Doesn't Sit Right

Fifteen percent of online casino owners have a criminal record, according to a recent report I read. A study financed by BestOCG.com and carried out by Professor Juan Manuel, an expert in business development at the "Facultad de Ciencias Económicas y Empresariales" of the Universidad del Itsmo in Guatemala, based its conclusion on “… a random sample of 119 online casino owners.”

Somehow, this just doesn’t pass my smell test. How, for example, is a researcher going to randomly sample 119 online casino owners. Many of the privately held online casinos are remote, hard to reach, and in some cases their ownership group is hidden behind a few layers of intermediaries—and randomly sampling a group of owners who are likely to discuss their personal backgrounds and criminal background with a researcher is not as easy as polling a sample of voters as they exit their neighborhood voting booths.

The publicly owned casinos can’t be counted in this survey because they are public corporations, owned by shareholders, and run by hired managers. Whether Professor Manuel included these organizations in his study, and looked for criminal backgrounds among the managers, is unknown.

The other question, of course, is what constitutes a criminal background? If a gaming executive has a criminal record based on charges of bookmaking and illegal gaming, that’s one thing; if he served time for embezzlement or other financial irregularities, that’s something else again.

I just don’t see how he could have conducted such a study. Nor do I understand whether, or if, he weighted his data based on the size of the market each online gaming site claims. After all, if you survey ten online sites, of which nine are very small and together have only 20 percent of the market, while the tenth site is extremely large and has the remaining 80 percent of the business, reporting the results based on site ownership—instead of on the basis of customers served—the is sort of off-center and misleading.

I haven’t seen anything about this study since I read the initial online report, so others may be skeptical too. And while I may be wrong, this study and its results just sounds improbable on the face of it.

Follow the Money: AGA Spent $800,000 to Lobby Congress during the First Quarter of 2008

According to a report in Forbes, The American Gaming Association, the trade group that represents major land-based casinos throughout the country, spent $800,000 in the first quarter of 2008 to lobby Congress about Internet gambling legislation and other issues.

The AGA is the driving force behind a proposal to mandate a federal study of licensing, regulating and taxing Internet gambling, and another proposal to license companies that accept online bets.

How much does it cost to get a law overturned? We’ll find out when the final tally is posted if and when AGA is eventually successful in seeing a study of online gaming conducted, and the results of that study used as a wedge to overturn UIGEA, license, and regulate online gaming in the United States.

Just stick around, watch, wait, and follow the money.

Serattle attorney Scott Mckay is running for the Washington State Senate to overturn the state's internet poker ban

Scott McKay is a Seattle attorney who is running for the Washington State Senate against incumbent Margarita Prentice, the Senator who pushed through Washington's Internet Poker Ban. One of his central goals is to overturn the ban on Internet Poker, a law that criminalizes the recreational hobby of tens of thousands of law-abiding and tax paying citizens.

Although a "newbie" when it comes to politics, McKay believes that if supported by Poker players, he can win because the total number of persons who are expected to vote in his district (11th District) is quite small -- perhaps only 15,000 in the August 19 primary.

If you're a Washingtonian who reads my blog, McKay, and poker in Washington needs your help. You can contact the McKay campaign at this address.

Scott McKay
Campaign Address:
P.O. Box 140
2701 California Avenue S.W.
Seattle, WA 98116
(206) 762-7834

A Long Way From There to Here

It was a long trip, but a great one. From Palm Springs to London, then a few days in the UK where we spent time in London, Bath, a tour of Hampton Court Palace—where we survived the maze—and a trip to the Tower of London. Then we flew to Dublin for a lap around Ireland, or at least much of it.

It’s been ten years since I last was in Dublin. The thing that shocked me was that it is even more crowded than before, the result, no doubt of the Irish economic renaissance, but that’s come at a price. Dublin is not an Irish city any longer, at least not in the sense that it was before it became a stellar attraction for people throughout the EU. It’s a multinational city now, for better and for worse—much the same as London is and has been for some time now—but it’s lost something along the way. Driving around the city is arduous, even though I had no troubles adjusting to driving on the wrong side of the car on the wrong side of the road.

Once we left Dublin, we headed south through the Wicklow Mountains to Wexford, and from Wexford, we went through Waterford and then on to Klonakilty. We had a five-year-old traveling with us and she loved Klon’s scale model villages at their old railway station.

We skirted Cork City along the way, but went to Cobh to see the Museum of Emigration there, then continued west to Klonakilty and then on to Killarney, where we hiked up to the top of the Torc Waterfall and, wandered around a town full of visitors. We weren’t the only tourists in Killarney. Walking down the streets we ran into Germans, Austrians, Dutch, Spanish … it seemed like the entire world was converging on Ireland’s rural west.

From Killarney in County Kerry, we headed north to Galway and stayed in a B & B down by the beach. We chose that B & B out of a book, but when we arrived we found it had some local notoriety: Chelsea Clinton stayed there a year or so ago, and there was a book full of clipping from local papers about her somewhat off-the-cuff visit to Galway. Although we were all dressed in sweaters or spring jackets, a few people were swimming in the ocean. I guess it’s all in what you’re used to, and coming from the heat of the desert—temperatures had already hit triple digits by the time we left California—we weren’t used to that kind of weather at all!

Our final destination was Sligo, with a side trip to Tubbercurry, a smallish village where my wife was born, before heading back across Ireland to Dublin, then a short flight to England, an eleven-hour flight to Los Angeles, and a car ride covering the last 130 miles home. The hotel we stayed at in Sligo, The Clarion, looks like a castle of sorts. But it’s not. It was converted into a hotel a few years ago from an old mental hospital that was built sometime in the late 19th Century. The street it’s on, Clarion Drive, used to be Mental Hospital Drive, but I guess that won’t do when you’re trying to create an upscale image for a hotel.

We managed a short side trip from Sligo to Drumcliff and the churchyard where my literary hero, William Butler Yeats, is buried. I included a picture of Yeats grave, and his famous quote on the headstone: “Cast a cold eye on life, on death. Horseman, pass by.”

It was a nice trip … or “a grand trip” as the Irish would say. I love Ireland and could have spent a month there as well as another month in Bath, which is a perfect jumping off point for any number of terrific day trips in the English countryside. But during our two weeks there we did too much and squeezed a lot more into the time we had than we probably should have, so we were completely knackered when we got home—never mind the jetlag.

It’s a Long Way from Clare to Here is a tune played by most traditional Irish musicians in pubs and concerts too. The melody ran through my head much of the flight home. And it is a long way, about 6,000 miles long. Part of my head is still there. The other part is in California. My body isn’t quite sure just yet where it belongs, but I’ll work that out.

And now the WSOP’s begun, so I have to focus my mind on poker again. I’ll be in Vegas, but not for a few weeks yet, and I don’t have any plans to play in any of this year’s WSOP events, though I probably will play in one or two of the deep stack events going on simultaneously at the Venetian.

More on that later. I’m still getting myself reorganized and caught up—long way from Clare or not.

Pictures:

Top Left: In front of the Tower of London

Second: Cobh, just south of Cork city, where most of the Irish immigrants departed for North America, Australia, and Third: Deirdre and me in front of Yeats grave, in small churchyard in Drumcliff, just north of Sligo.

Fourth Celtic cross in cemetary.

Bottom: That's me in front of a B & B outside of Klonakilty. The building was built into the side of an old Norman castle.