Is Congress Ready to Act on Behalf of Land-Based Gambling Industry?

August 19th, 2011 by Chuck

A story in Wednesday’s edition of the New York Post (we linked to the printable version) explains that there is an increasing possibility that Congress would enact a law that would legalize online gambling before the end of the year.

The article uses anonymous sources and misspells the name of its “legit” source, but it does point out some things that clearly illustrate what a lot of people have suspected – that any consideration for passage of such legislation would be for purposes of serving to benefit the land-based casino industry.

The story is quoted as saying, “House Speaker John Boehner is another important Congressional leader to get on board, and his long-time aide, Lee Askew, earlier this year became vice president of government affairs for the American Gaming Association.”

The American Gaming Association is headed by long-time political operative Frank Fahrenkopf, who was formerly head of the Republican National Committee. It works as a lobbying group for the land-based casino industry, not for anyone who is currently in the online part of the business. Therefore, whatever bill eventually passes is going to have the effect of putting the larger hotel-casino chains in a position to capitalize in online gambling while creating a compromising environment for those who are already involved in it.

That’s the proper interpretation for all of this maneuvering.

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Nation’s Capital Could Have Online Gambling

August 16th, 2011 by Chuck

Washington, D.C. is the hub of government, as we know. But it might also soon become a hub of gambling – online gambling, that is.

The District of Columbia will get in on the gambling pie, and it could happen as early as the end of the year. Of course, there is an irony about this, as some of the district’s most “distinguished” residents are dedicated to squashing the freedom of Americans to play the games they wish and do it online.

But hey, the city fathers need the money.

This is a new stage in the marriage between municipalities and the gambling world; a new frontier, if you will. Politicians see this as something where there is activity, and can be taxed. And so inevitably, it will be. Many areas have gone with land-based casinos, but there is also a lot of money in web-based gambling, if an acceptable framework can be set up.

But what is acceptable? That is a big question, considering that federal law is prevalent in D.C., and there are other states, including Iowa and Massachusetts, that are looking very hard at online gambling as a source of revenue. Can they wait long enough for the Justice Department to sweep out as many of the established online gaming brands as they can, so that big campaign contributors (i.e., the land-based casino companies) can swoop in and take over the marketplace?

There’s some editorializing in that question, but a lot of reality as well. Indications are that some states could care less who gets the licenses, as long as they submit to regulation, generate money, and can be taxed. Will they point to the Tenth Amendment in order to facilitate superseding the Unlawful Internet Gaming Enforcement Act? If activity is kept within the state, can they do whatever they want? Maybe. We’ll see, and no doubt will follow up.

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Sponsorship Out For Many Poker Pros

May 18th, 2011 by Chuck

Part of the business model for many online poker operators has been marketing their brand through the sponsorship of professional players, most often at events taking place on land-based casinos. They wear the logo, and sometimes even participate in televised or online advertisements on behalf of the site.

With the “Black Friday” bust that involved their companies, Ultimate Bet (part of the same parent company as Absolute Poker, which was busted) let go of many of its “team,” in a purge that included Joe Sebok, Prahlad Friedman, Eric “Basebaldy” Baldwin, Maria Ho, Brandon Cantu, Tiffany Michelle, Scott Ian, “Hollywood” Dave Stann, Adam “Roothlus” Levy, Bryan Devonshire.

Some of them understood that since they were U.S. players, and may have had no substantial marketing value beyond U.S. borders, that they were going to be rather unnecessary. It is expected that similar moves might come from Full Tilt Poker and PokerStars, the two other companies that were initially targeted by the U.S. Department of Justice.

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Fahrenkopf: “No Question Volume Of Betting Will Increase Again”

May 17th, 2011 by Chuck

Frank Fahrenkopf is president of the American Gaming Association, which represents the interests of land-based casino owners. These are the entities who, for the most part, are looking to put the squeeze on the online gaming industry, and looking to enact legislation that perhaps only they can follow, and in effect, preclude the current operators from being in the business.

There are billions of dollars at stake, and Fahrenkopf, who in essence is a lobbyist, wants his clients to be in the driver’s seat. In the wake of the “Black Friday” crackdown of online companies who were operating offshore, he gathered with Keith Smith, president of Boyd Gaming; Gordon Kanofsky, CEO of Ameristar Casinos; and Virginia McDowell, president of Isle of Capri Casinos at a news conference to extol the virtues of “regulation at the federal level.”

At the same time, Fahrenkopf acknowledged that even after the UIGEA (Unlawful Internet Gaming Enforcement Act) went into effect, U.S. play returned to prior levels, and that “There is no question the volume of betting will increase again.”

That may be good news for those of you who thought the game was over. Here is the link to the story.

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Is Stage Being Set For Land-Based Casinos To Steal Online Business?

May 16th, 2011 by Chuck

Is it a bit naive that advocates for the legalization of online gaming are so shocked that not only is the current Democratic administration, and its Department of Justice, so intentionally hostile? Perhaps those people were expecting that juxtaposed against President Bush’s regime, which may have leaned toward “moral authority” as a guide, the Obama people would be a little more, well, “liberal” about the whole thing.

That might seem like a logical thing to expect, and indeed some of the bigger affiliates and operators had expressed that. But politicians are politicians. They accept money from people with specific interests. And some of those people would like nothing more than to see the leading online gaming operators, who have established a brand and large database of paying customers, put out of business, so that those who are in the land-based casino space, including many with a presence in Las Vegas and perhaps even Macao, can enter the online arena and essentially steal the business.

Indications are that this is the direction it is going. Many insiders, including Frank Fahrenkopf, who is the president of the American Gaming Association, believe that the wheels are being greased, and of course he is all for it. “The millions of Americans who are playing poker online deserve to know they are playing safely with law-abiding operators,” he says.

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Ex-Congressman: Obama Administration “Not Progressive”

May 15th, 2011 by Chuck

Toby Moffett, a former Congressman from Connecticut, is the founder and chairman of the Moffett Group, which engages in “government relations.” In other words, he is a lobbyist, and one of the issues he lobbies for is the legalization and regulation of online poker.

In that function, Moffett serves as a consultant to the Poker Players Alliance, which is a large group that has always campaigned for the rights of players to engage in online poker, trying to push along legislation that would make it so. they have greatly supported a bill that Barney Frank has proposed to impose regulations on the industry, while paving the way for legalization.

Moffett’s statement about the Department of Justice’s activities as they concerned shutting down three major poker sites (Poker Stars, Full Tilt Poker, Absolute Poker) on what the industry referred to as “Black Friday”:

“Why isn’t the Obama administration, a guy who likes to call himself the poker player in chief, why aren’t they on board and pushing this for the revenue, for the common sense approach? And from a progressive point of view, for those who want Barack to get re-elected, why would you throw overboard 10 million people-plus who are voters, college educated and who are not your voters? These are not progressive Democrats for the most part.”

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Poker Companies Start Refunding

May 14th, 2011 by Chuck

There continues to be confusion about the raid on three of the largest poker companies on the internet. PokerStars and Full Tilt Poker at first had their domain names seized, but they came to an agreement with government authorities that included staying out of the U.S. market, and facilitating the refund of money to existing players, in order to get those domains back. Absolute Poker is the third company in that group, and according to the Department of Justice, that same offer is open to them.

At last report, those refunds were already taking place or were in the process of taking place.

These agreements make a lot more sense for those two, because of the fact that they have cultivated a sizable amount of business outside of the United States. The same can not be said for Absolute Poker, which was primarily U.S.-facing. That company’s plans are a little more uncertain, since, for all intents and purposes, it has lost all its business. So the choices are between playing players and starting from square one, moving the business model to something more international, or folding, leaving everyone in the cold.

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PPA Head: “Hundreds Of Millions” Due In Online Player Refunds

May 13th, 2011 by Chuck

There are a lot of people who are worried whether they are ever going to be receiving their money out of some of the online poker sites that were the subject of the Department of Justice’s attack on the online poker industry. They are players of all levels, and one of them is the head of the Poker Players Alliance, perhaps the leading advocacy group for online poker players. John Pappas said that while he is hardly affected on a personal level, with just $56 in an account, he acknowledges that a lot of players have a lot more at stake in what could turn out to be the lowest percentage game of all. “It would be easy to say that tens of millions, if not hundreds of millions of dollars, have kind of been held up in limbo here because of the DOJ (Department of Justice) action,” he told USA Today. Pappas is in the business of organizing poker players, showing enough in the way of strength to push bills that would bring online poker in particular under some form of government regulation. You can read the story here.

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A Concert and Blackjack at Winstar World Casino

March 26th, 2011 by Wise Guy

Last evening the wife and I made the trek up to Winstar World Casino to see a Harry Connick Jr concert – and gamble a little. The concert proved to be very entertaining. If you have never seen him in concert, I highly recommend it. Mr. Connick has a great stage presence and is a very engaging performer – talented too. It was also quite the experience to see 30 to 50 something women going gaga over this guy. You would almost think you were at a Justin Bieber concert. That aside, the man really puts on a great show. Definitely worth the price of admission.

After the concert got out, I headed straight for the blackjack tables. One thing I have never liked about these Indian casinos in Oklahoma is the fact that you have to ante 50 cents per hand. If you are only betting $5 per hand, you are already at a 10% disadvantage before you figure in the house odds! I decided to pay $25 so that the effect of the ante was only 2%. This is still huge when added to the casino edge for the game, but, what can you do? There I was, so I had to make the best of it. Read the rest of this entry »

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N.J. Online Gambling Bill passes by wide margin

January 20th, 2011 by Chuck

The New Jersey legislature has passed the bill to legalize online gambling, and by a wide margin. It is expected to add over $300 million in revenue to the state’s coffers, and for that reason, among others, it gained overwhelming support.

The bill passed by a margin of 63-11 in the Assembly. It had already passed the Senate by a 35-2 margin.

The feeling is that since there was such tremendous bi-partisan backing for the measure, with both Republicans and Democrats getting so solidly behind it, that there would be very little difficulty with getting a signature from the desk of Governor Chris Christie.

Harrah’s has reportedly been the only party that has offered a lot of opposition to the bill, and that is because they were sure that a similar bill would be passed on the federal level this year (Barney Frank’s bill), and it wasn’t. Most observers figured that Harrah’s was simply protecting their own interests as a company that was headquartered in Nevada.

Companies which are located offshore can become involved in the internet gambling industry in the United States, as long as they partner up in some way with a brick-and-mortar enterprise. This is the sticking point, as it remains to be seen whether companies with established land-based operations will form alliances with companies that have heretofore only done business via the internet.

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