- The Washington Times - Thursday, July 26, 2012

The Obama administration may have called off the game more than a year ago, but the nation’s poker partisans are still looking for a deal.

Card sharks are ramping up pressure on the federal government to remove a cloud of uncertainty hanging over Internet poker, caused by a patchwork of federal laws that has left the game in a state of limbo in the U.S.

“There’s a significant reason to believe Congress should do something this year. It’s our No. 1 priority, that there are strong consumer protections, so our members can go to a site that is safe and secure, and they can deposit their money and get it back when they want it. Those things aren’t guaranteed right now,” said John Pappas, executive director of the Poker Players Alliance, a group with more than 1 million members lobbying lawmakers to tackle the issue.

In April 2011, the U.S. Department of Justice brought fraud and other charges against three major online-poker services, accusing them of systematically bilking their members out of millions of dollars.

On Thursday, a U.S. district judge sentenced Ira Rubin to three years in prison after the 54-year-old man pleaded guilty in January to helping PokerStars, Full Tilt Poker and Absolute Poker hide transactions and engage in illegal gambling, money laundering and other offenses.

While the Obama administration has taken aim at shady offshore poker sites, its new interpretation of a Kennedy-era law has created a state of confusion over whether online poker is technically legal in the U.S.

In December, the Justice Department reversed its decades-long view of the Wire Act, which presumably banned all forms of online betting, including poker. In its announcement, the department said it now sees the law as prohibiting gambling on sports events, but not games such as poker that the bettor plays.

Complicating matters is the 2006 Unlawful Internet Gaming Enforcement Act, which bans businesses from accepting and processing online gambling transactions.

Combined with the new Wire Act doctrine, current guidelines technically would allow online poker sites to operate domestically, but the letter of the law makes it illegal for banks and other institutions to make payouts, accept deposits into online accounts or otherwise do business with Internet poker firms.

Whether the Justice Department would prosecute in such cases, given its new take on the Wire Act, also remains unclear.

“It’s an open question whether someone could open a U.S.-based poker site that accepts real money,” Mr. Pappas said.

Even the head of the nation’s largest gaming trade group, which presumably could take a financial hit via expanded online poker, is urging lawmakers to puts their chips on the table and clear up the growing confusion.

“There’s a real problem. Right now, there are still about 2,000 offshore websites accepting bets from 10 [million] to 15 million Americans every year for playing poker,” Frank J. Fahrenkopf Jr., president of the American Gaming Association (AGA), told The Washington Times in a wide-ranging interview this week. “We need a federal statute that will legalize just online poker. These offshore websites don’t care about consumer protections, don’t care about underage gaming and don’t care about people who can’t gamble responsibly.”

Several members of Congress, such as Rep. Joe Barton, Texas Republican, have proposed bills that would expressly legalize and regulate online poker.

“Internet poker isn’t a crime. It is a game of skill, and it shouldn’t be outlawed,” Mr. Barton told the Fort Worth Star-Telegram this month.

In the Senate, Majority Leader Harry Reid, Nevada Democrat, and Sen. Jon Kyl, Arizona Republican, reportedly will soon introduce similar legislation, though neither will discuss it right now.

A spokesman for Mr. Kyl declined to comment, and a call to Mr. Reid’s office seeking a statement was not returned.

On the surface, it may seem as if AGA members should be vehemently opposed to an expansion of domestic online poker, which, theoretically, could take business away from traditional casinos.

Some, such as casino magnate and major Republican donor Sheldon Adelson, remain critical of it, but that isn’t the case with everyone, Mr. Fahrenkopf said.

Companies such as Caesar’s, he said, could jump on the Internet poker bandwagon, in the process offering players the security of a world-renowned name in gambling standing behind their money to ensure fair games, timely payouts and no fraud.

Analysts say Internet poker offers newcomers the chance to learn the game at very low stakes and, at least in the short term, online games won’t siphon customers from casinos.

“Internet poker and brick-and-mortar poker are compatible,” Mr. Pappas said.

While that may be true for the foreseeable future, others question whether online gambling eventually could pose serious problems for Mr. Fahrenkopf’s members in Las Vegas, Atlantic City and elsewhere.

“What you might find over a generation or so is that it may have a dramatic impact. As this current generation of young people mature and become increasingly used to gaming online, they may choose different venues,” said Bill Eadington, director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada at Reno. “It’s a new environment, and nobody is quite sure how it’s going to pan out.”