“I think we all should support poker, you know some people play poker professionally; they play for a living. And there is nothing wrong with that. And something that we can do to support our family and to support our community and do something good. We all should join together and fight for its right, and do something good about it. So I plan to be there and whatever I can do to support poker, I will be there”

Jerry Yang, 2007 WSOP Main Event Champion

Poker News (07/18/07)

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The speedy passage last fall
of legislation making it more difficult for Americans to gamble online
has led to three bills that take aim at the restrictions.

They are finding robust support from Internet gambling enthusiasts,
but garnering little attention from politicians, who face more pressing
policy issues than the right to gamble from home.

Indeed, some experts say, the shadowy world of Internet betting will
remain that way for some time, or at least until a new president is
elected. For most lawmakers, pushing for legislation benefiting what
some call a “sin” industry isn’t a way to win votes.

“People in Nevada think its our inalienable right to gamble,” said
David Cherry, press secretary for Rep. Shelly Berkley, D-Nev. “But it’s
a different world outside of Nevada.”

Moreover, the American Gaming Association, which represents casinos
and the power of millions of casino-generated dollars in federal
campaign coffers, doesn’t explicitly support Internet gambling
legalization, instead supporting the most cautious of the three bills.

That bill, co-sponsored by Berkley and Rep. Jon Porter, R-Nev.,
would authorize the American Academy of Sciences to study whether
Internet gambling can be regulated and would assess the federal
government’s de facto ban. Another bill, sponsored by Rep. Robert
Wexler, D-Fla., would specifically legalize Internet poker. A third
bill, sponsored by Rep. Barney Frank, D-Mass., would repeal last year’s
legislation and regulate all forms of online gambling.

The gaming association’s caution is understandable because it
represents land-based casinos rather than the companies now operating
Web casinos from offshore, more loosely regulated locations.

Some Nevada operators say the online gambling industry lacks
credibility and first needs an independent study showing that the
business can and should protect against underage and problem gambling
through regulation.

Casinos have another reason to reserve support for legalization.

The prospect of federal oversight and taxation of online betting is
troubling for an industry that has spent more than a decade keeping
commercial casino gambling regulated and governed by the states.

The primary role of the gaming association, born from the threat of
a federal casino tax, has been to avert federal legislation rather than
lobby for it.

The industry isn’t facing any frontal attacks from the feds now that
state-run gambling has become mainstream. But fears that the federal
government could tinker with casino regulation linger.

That’s one reason why only one American casino company has openly and consistently championed Internet gambling.

“This is a step in the right direction,” MGM Mirage spokesman Alan
Feldman said of Frank’s bill. “Parts of the industry have some concerns
about it. But this is an important issue that’s moved beyond the ‘wait
and see’ approach. The current policy is unrealistic and irresponsible.
And we know from decades of history that prohibition doesn’t work.”

MGM Mirage, which folded a short-lived Web casino for foreigners
because it couldn’t compete against offshore sites courting Americans,
is hopeful that regulation of Internet gambling could be authorized by
the feds but still regulated by states.

The relative silence from casinos and their gray-market counterparts
online leaves a big vacuum for the Poker Player’s Alliance, the nascent
lobbying group that says it has signed up at least 600,000 poker
players. The alliance is pushing Wexler’s bill to specifically legalize
the game with arguably the most passionate following online.

Their ace in the hole is Alfonse D’Amato, the poker aficionado and
former New York senator hired to lobby for the alliance and Wexler’s
bill.

D’Amato, a Republican in a Democratic-controlled Congress, is a skilled political operator and consensus builder.

Instead of raining on last year’s prohibition bill, D’Amato’s critique is careful and measured.

“There’s been concerns about all these people gambling online and in
an attempt to deal with this issue I think there was an overreaching,”
D’Amato said. Last year’s bill, which made it illegal for banks and
credit card companies to process online bets, was “a well-intentioned
effort that wasn’t studied like it should have been,” he said.

“You’re not going to stop the Internet. By legalizing it, you can
keep the bad guys out and raise the revenues , by licensing , that are
necessary to police it.”

That doesn’t sway conservative Christians and others who oppose the spread of gambling on moral and philosophical grounds.

“Is the president, in an election year, going to say we want people
to be able to gamble in their homes? No,” said the Rev. Tom Grey of the
National Coalition Against Legalized Gambling.

Grey says making gambling more accessible will increase addiction, a view shared in bipartisan circles.

Democrats, now in control of Congress, don’t want to rile conservative voters during the campaign season.

Advocates say there’s more momentum for legalization this year, and it’s not just coming from the United States.

There are more disgruntled gamblers with frozen online accounts and
others who are waiting weeks to complete transactions by mail or wire
that used to occur with the click of a mouse.

Although Frank lacks broad support for his legislation, his
ascendancy to the chairmanship of the House Committee on Financial
Services, for an activist lawmaker with a libertarian bent, is a
positive outcome for the casino industry.

“Last year there was no real discussion about Internet gambling on
the floor of Congress,” said Jeff Sandman, a Washington attorney
representing the Safe and Secure Internet Gambling Initiative, which
formed this year to push for legalization. “But now there’s new
interest and a new Congress.”

The initiative represents accounting and processing firms involved
in online wagering outside of the United States in places such as the
United Kingdom, which is legalizing Internet gambling.

There’s also a new number being bandied about in the halls of
Congress: the more than $6 billion in taxes that could be raised from
Internet wagers annually.

Meanwhile, publicly traded casino operators have accepted defeat,
pulling out of the United States, while gray-market operators have
moved further underground, hosting fewer marketing and charity events
and refusing to fly to the United States for fear of being arrested.

Legalization may ultimately be decided by bigger forces beyond our borders.

Growing pressure on the United States to soften its position on Internet gambling “is huge,” Sandman said.

The European Union and a handful of individual countries recently
filed claims with the World Trade Organization seeking compensation in
the billions of dollars from the United States for unfairly prohibiting
foreign online gambling operators from accessing the U.S. market while
allowing U.S. horse-racing networks to accept online bets. The federal
government says that the trade agreement didn’t include gambling, a
unique form of commerce, and that the country can prohibit activities
that threaten public morals and safety.

“The stakes are much higher now,” D’Amato said. “We don’t want to be the country that says, ‘We will do what we want.’ ”

House of Cards |

With the recent news that the Conference of the Caribbean Community (CARICOM) has joined the EU, Japan, and India in supporting tiny Antigua in its WTO case against the US regarding the cross-border provision of gambling services, we thought the time was right to finish our interview with Mark Mendel, lead counsel for Antigua in this landmark trade case, that we began back at GIGSE in Montreal.

Q: Mark, you’ve been Antigua’s counsel on this case for a while now, and I thought maybe you could give us a little history of the case for our readers who might not be familiar with it.

A: Antigua brought this case in 2003, primarily as a result of increasing efforts of the United States Department of Justice to prevent Antiguan companies from providing remote gambling and betting and services to consumers in the United States. We had evaluated the legal issues and determined that under the WTO’s General Agreement on Trade in Services (the “GATS”), the United States had made an unrestricted commitment to allow the cross-border trade in gambling and betting services from other WTO members, such as Antigua. Thus, the actions by the DOJ to stop the industry amounted to a violation of an international treaty.

The real objective of the case was to bring the United States to the negotiating table for some fair and reasonable solution that would allow Antiguan operators to provide services to consumers in the United States on some agreeable middle ground. Although, frankly, under the GATS Antigua is entitled to have the United States repeal its offending legislation, that was never really our plan or expectation. We just wanted some fair and reasonable treatment.

Unfortunately, from the beginning of the case to the current date, the United States has shown no willingness to compromise at all. So, we have tested them at the WTO through its dispute resolution process and have won at every stage. There is enormous and very complicated history here, but basically as the United States would not compromise we had to prosecute our case, which we had assessed as very sound. Through the smoke and chaff, the WTO has consistently said the United States had agreed to allow these services and by prohibiting them, the United States was in violation of the GATS.

The WTO rejected a so-called “morals” defence pushed by the United States at the very last moment of what might be called the original “trial” of the dispute at the WTO on the basis that the United States – which had said it prohibits all remote gambling throughout the country – could not establish that it did indeed prohibit all domestic remote gambling as well as that from foreign countries.

In essence, if the United States was going to say that “remote” gambling was so bad that it was necessary to prohibit it across the board, then it indeed needed to be consistent about that, and not use the claim as a way to discriminate against foreign trade. Although the discussion of this issue in the earlier rulings is somewhat impenetrable to the non-WTO literate (and was even so to many of them as well), the most recent ruling that came out in March of this year made it crystal clear. The United States has a wide variety of legal, domestic-only remote gambling operating currently.

Further, something that so many people have not realised but this last panel finally got right, and that is that federal law doesn’t prohibit remote gambling at all – just remote gambling that crosses a state or international border. By leaving states free to have as much intrastate remote gambling as they want, but prohibiting services that cross a border, the federal government cannot possibly say that it prohibits all remote gambling. And, of course, the crossing of a border is, by itself, not a logical basis for discriminating against services. At least not under international law.

Q: And how about the procedures at the WTO – in a step-by-step kind of way, how do those work? Certainly the terminology is quite different, at least as far as the procedure goes. You don’t go to court, since this is more like an arbitration proceeding than a typical court case, you convene a panel, for example. What does that consist of? Who’s on it? It’s not the most transparent process- what are the inner workings of the WTO like?

A: It is a very European process. The first “panel” – really, the initial or trial court – is selected from a large panel of international volunteers with good trade credentials. In our case, the panel consisted of a lawyer from England, a diplomat from Thailand, and a trade academic from India. You present your case substantially by written submission. There are no witnesses and no testimony. In the first process, you have two presentations before the panel, which are really oral presentations of written statements, followed by a question and answer session that can be good, bad, or useless, depending upon your panel.

A loss at the panel stage leads to a binding decision unless the loser quickly appeals, which the United States did in our case. An appeal goes to the WTO’s “appellate body”, which is a standing body of seven members from a number of countries, all of whom must be lawyers in their home countries. Your case is assigned to a random panel of three of the members, and it is much like an American appellate process – submission of briefs and counter briefs followed by an oral hearing where you make a presentation and then may or may not be subject to rigourous or not-so-rigourous questioning.

The appellate body is supposed to consider matters of law only and not make new findings of fact or survey new evidence. The one key power the appellate body lacks is the ability to “remand” a case – that is, send it back to the panel for reassessment based upon the proper legal standards and reasoning as adopted by the appellate body. All that it can do is approve or reverse a case, in whole or in part. I was very disappointed in the appellate body’s treatment of our case. While we maintained our victory, the reasoning was so opaque and the review of many issues so shoddy or inconsistent, it was really very poor work. But there is no further appeal of a case after the appellate body has its go, so both sides are stuck with it.

After we won the appeal, the United States was supposed to change its laws to accommodate the decision. I could describe for hours the various delaying tactics and twists and turns that have gone on since then, but I can summarise by saying that the WTO gave the United States a period of time to bring itself into compliance. During this period, the United States did nothing, but at the end of the period announced to the WTO that they were indeed in compliance. So, once again we brought them before a panel to assess the status of their so-called “compliance”.

It was here that we won clearly and decisively in the decision announced on 30 March of this year. After that ruling, it was really impossible for the United States to argue any more that it had “won”, or that its prohibition had been “broadly upheld” or that it just needed to “clarify the Interstate Horseracing Act”, as the United States had publicly been saying. I was and remain very happy about that ruling, and am extremely grateful for the excellent work done by the panel. That panel, by the way, had the original panelist from Thailand, a trade lawyer from Chile and was chaired by a distinguished businessman from Sweden.

Q: So where are we at now? The US keeps losing, but nothing has happened yet. The Antiguans have formally requested to be allowed to suspend their obligations to the US, but when can we expect something concrete to come out of this? Clearly, the WTO in uncharted waters here.

A: We are no doubt headed to an arbitration to determine the trade concessions that Antigua can levy against the United States until it complies with the decision – or until we can finally negotiate a fair settlement. That process will start in September probably. The trade concessions process is provided for in the WTO’s rules in order to make a hesitant dispute loser to speed up the compliance process. It has not been used very much, because generally losers either comply or they negotiate reasonable settlements. Here, the United States has done neither, so we really have no choice but to see what type of sanctions we can get and whether these sanctions can motivate the American government to act.

What you basically do with these trade sanctions is punish an “innocent” sector of the loser’s economy to compensate for the damage done to the winner’s economy on an annual basis by the failure of the loser to comply. Thus, the loser makes a completely unrelated sector of its economy suffer for its protectionism in another sector – here, to prop up its domestic gambling economy, the United States is in essence offering up other sectors for punishment. Not really a very smart political decision, usually, so most countries don’t let it get to this stage.

And now, the United States has really upped the ante by trying to solve the dispute by withdrawing the commitment to gambling services that it had initially made some ten years ago or more. Although we had not planned on this being the case, our dispute has presented a virtual plethora of firsts in WTO litigation. It is incredible to me to think that in the dozens and dozens of disputes – some very, very big – the United States has had at the WTO, they are taking unprecedented actions in this simple case brought by tiny Antigua.

Although we of course were aware of all of the possibilities when we brought the case, we had surveyed the United States’ actions in all of its dispute cases at the WTO, and found that it had always either complied or was on its way to compliance. But in the 25-plus cases it had expressly lost, it never once had refused to comply, much less try to withdraw its treaty obligations in the affected sector. So, particularly given the Antiguan government’s willingness to compromise to some extent, we fully expected the United States to do the same here.

Given the massive prevalence of gambling in the United States, this “moral issue” thing is simply a red herring. It really is amazing that the United States is willing to risk the sanctity of the WTO’s dispute resolution process on this case. But then again, when I was assembling this case back in 2002, we didn’t yet know just how intransigent this administration could be in virtually everything it does. Maybe that is playing a role here, I just don’t know.

Q: And what about our other trading partners – the Europeans, the Japanese, and the Chinese? You mentioned at GIGSE that you were in contact with the Europeans on this. Have you talked to the Japanese representative, or the Chinese?

A: We have spent some time talking to a number of other countries who are either allies or with which we share some common interests. I led a group meeting of the European Union, Japan, Macao, Costa Rica, Canada and India this past week to discuss our joint interests in this case, and in particularly the threats to the system that the United States behaviour poses. For a wee tiny country, we have actually gotten quite a bit of important support in the WTO. While a number of members aren’t so hot on the whole issue of gambling, very clearly this case poses a test of the fairness of the overall system, and virtually everyone is following it closely.

Q: The US has really taken the nuclear option on this. I’m sure it’s as hard for you to believe as it is for me – I mean, the US spent years negotiating GATS, and they were difficult negotiations. What is left of GATS if the US decides to redefine its own commitments? How far can other nations go in redefining their commitments? I really can’t believe that the USTR would throw all that hard work away- there are probably some career guys in there that worked on those negotiations.

A: Yes, as I noted earlier, it really is unbelievable that the United States would risk the whole system over this case – again, particularly where some ground for compromise existed. A number of countries we have talked to are angry about the hypocrisy on display – in the current Doha round of treaty negotiations, the Americans are apparently really leaning on some smaller countries to liberalise their services commitments, but at the same time, the United States is wanting to limit their own services commitments because a small country has won a WTO case based upon those commitments! The absurdity does not go unnoticed.

Q: What role does the DOJ play in this? The USTR represents the US at the WTO, but they still work with the DOJ on establishing the legal position of the US government, correct? The DOJ has taken a very hardline position on the internet gambling industry, and that seems to be reflected in this case.

A: In the hours I have spent thinking about this case and the intransigence of the United States I have been searching for a key to why they have chosen this case to be the one where they risk everything they have invested in the WTO’s dispute resolution process. And believe me, the process has been very much a “net-winner” to American economic interests. Why risk scuppering something that has worked so well for you and, in fact, is rightly viewed as the most successful International judicial body ever, over this issue?

Again, it really isn’t a moral issue. Although you hear a bunch of that nonsense from the halls of Congress, all you need to do is look at gambling in America to know that the morality thing, if it ever was an issue, has long been thrown out the window.

In some ways it is a federalist issue, as the United States is almost unique among nations today in the powers it gives to its member states. On the other hand, the WTO agreements are member-to-member only and countries like Antigua are entitled to look to the central government for redress. That being said, it drawing its commitments schedule to the GATS, the United States could have addressed the gambling issue on a state-by-state basis, as it did in other areas such as financial services and legal services. But here, it did not do that, so whatever a state says about gambling is, from a completely legal perspective, irrelevant to Antigua and its rights under the GATS.

Although I could very easily be wrong, what I have finally concluded is that this case is almost 100 per cent about the DOJ. One or more DOJ members have been present at almost every meeting we have held with the United States over the past four years, at almost every WTO session – their footprint is big in this case. This may sound odd, but I think that this issue – remote gambling – has been hijacked of sorts by a kind of dated old crowd in the DOJ who are still lost in the days of Bugsy Malone and smoky backrooms, when gambling was run by the mob.

Seriously, the one DOJ guy who has been a lingering presence in this case from the beginning even looks and talks like he stepped off a movie set about 50s-era gambling. I think this crowd has gotten the ear of senior DOJ officials, and are not going to budge one bit. And nobody else in the administration has had the courage, fortitude, or perhaps just the interest to take them on over this.

This is particularly more interesting given that until 1998, the official DOJ position was completely different. The official DOJ spokesman said on many occasions in the mid- to late-1990s that United States laws did not cover this kind of gambling service offered from and under the sanction of government in foreign countries. In fact, as we told the WTO as late as 1997, the United States government was affirmatively working with the Antiguan government on ways to ensure the fairness of gaming services and protection of American consumers. For some reason, that all changed in 1998 and this gambling crowd at DOJ has been very successful at establishing the myth of America having “had strong laws against this activity” since forever. As regards licenced, regulated services from foreign countries, the current United States policy is less than ten years old.

Q: The DOJ seems to view this case – which centers primarily on cross border remote wagering on horse racing – as a kind of trojan horse for the broader internet gambling industry. How true is that? Why not just concede on that narrowly defined issue and move on?

A: Because it is not “that narrowly defined issue”. As I mentioned earlier, the United States tried to spin its loss in this case as being only about horse racing, but that was simply not the case. Now they are having to face the reality of the case for the first time, and it is making things much more difficult for them. It is indeed about “the broader internet gambling industry” and by refusing to engage with Antigua over the issue in a timely manner, they may have opened the Pandora’s box that can never again be shut.

In particular, they have now gotten the European Union seeking massive economic concessions, and if they thought that we were a problem, the EU is going to be a much more difficult monster for the United States to wrestle. While Antigua is going to have to work hard and be creative to find ways to effectively retaliate against the United States, the EU won’t have any trouble at all. The United States is literally facing multi-billions of trade retaliation from the EU in all sorts of trade completely unrelated to gambling.

All of a sudden, for example, American exporters of auto parts, electric guitars or cotton sweaters to the EU are going to be shut or priced out of the market. All of those sectors stand to be sacrificed or at least severely compromised by the United States in this case, all so the United States can protect its domestic gambling industry. Or, perhaps even worse, to satisfy some dated little constituency in the DOJ. Simply boggles the mind.

Q: You have intimate knowledge of this case – just where do you think it really goes from here?

A: To paraphrase The Dude, Antigua abides! We are going to press on here. Everything we are facing currently is unchartered territory, and the good thing about that is that you are free to make whatever claims you feel you can justify and take whatever trail you think you can convince the WTO to follow. Our thinking in this case has never been square-headed and it is not about to get to be at this point. What we really hope for here is that the United States will gain some reason and look to compromise, finally.

Antigua didn’t bring this case so it can sell cheap Microsoft products or DVDs. This case was brought on behalf of a regulated, fair domestic gambling and betting industry. Antigua wants to be able to provide these services to American consumers, who very clearly want them. While there is still large ground for compromise, at the end of the day Antigua wants and deserves to be able to offer these services on some agreed and rational basis. Let’s hope that wisdom prevails here, and this whole dispute becomes just a footnote to WTO history rather than a defining moment.

Burke Hansen, attorney at large, heads a San Francisco law office

Every good business survives by reaching out to its target audience. You have to market your products to your customers and show them you’re the best around. The Poker Players Alliance went straight to its audience this past week, the 6,300 participants in the 2007 World Series of Poker Main Event, to show the poker world what a class act it has become. Bringing a group of staff that included former three-time Senator from New York and current PPA Chairman Alfonse D’Amato, the organization hit the ground running at the Rio. It’s paid off recently as well. The Poker Players Alliance has grown to well over 600,000 members, a number that has ballooned rapidly in recent days. Not too bad for an industry group that stood at 100,000 members last fall.
(more…)

Former Sen. Alfonse D’Amato and Rep. Robert Wexler (D-Fla.) brought their fight to repeal the UIGEA and legalize Internet poker to the World Series of Poker Monday.

D’Amato, chairman and chief lobbyist for the PPA, urged poker players before the start of play to write their Senators and Congressman and ask them to repeal the Unlawful Internet Gambling Enforcement Act.

“Why should Americans not be able to play poker online when they can bet on the ponies online?” D’Amato asked the cheering crowd before he kicked off Day 1D play by yelling “Shuffle up and deal’em.”

Later that afternoon, the large field of competitors paused to hear Wexler talk about returning online poker to American players.

“A few months ago, the government made a big mistake,” Wexler said, referring to the passage of Unlawful Internet Gambling Enforcement Act. “They butted into the lives of Americans told them they couldn’t play poker.” “Poker is as much our pastime as baseball,” Wexler told the audience. “It’s a game of skill,” Wexler said as the crowd cheered. Then he urged the players to write their representatives and support his proposed legislation allows Americans to gamble on skill games, including poker.

The crowd roared its approval, and Wexler and D’Amato continued their tour of the WSOP floor.

D’Amato and Wexler also made time to sit down with Casino City today to discuss repealing the UIGEA and creating a skill game UIGEA exception for poker.

AD: I’m fighting for the disenfranchised poker player. They’ve lost the right to play on the Internet. They should have the right to play on the Internet the same way Americans have the rights to bet on the ponies on the Internet. They’ve disenfranchised us. They’ve disenfranchised the poor poker player. That’s why I’ve joined this crusade. They’ve made us second class citizens. They’ve made us thieves. That’s the implication (of the UIGEA). We’re a country of fairness.

What did you think of the WSOP floor?

It’s quite something. But imagine how much greater and more spectacular it would be if you had players playing on the Internet. What a competition that would be. That’s the kind of thing that this can eventually be. But the legislation that was surreptitiously attached to the Safe Ports Act, the Unlawful Internet Gaming Enforcement Act prevents that. It’s one of the most hypocritical pieces of legislation ever passed and it was done in a duplicitous way. It says you’re engaged in a criminal act if you’re playing poker, but it’s ok to bet on horses, or lotteries, which is every bit the gambling – if not more than poker.

(At this point, PPA president Michael Bolcerek interjects and reminds D’Amato that the UIGEA just makes financial transactions illegal, not poker playing.)

AD: Let’s not be lawyers about this. It deprives you of the opportunity to play poker. It makes you deal with criminals. Anyone engaging in the wire transfers is guilty of criminal conduct. Essentially, they’re banning you from playing poker. They’re saying you cant’ do in you home what you can do by walking down the street to a casino.

VN: What about underage gambling?
AD: If you want to stop youngsters from gambling, why don’t you ban horse racing? At least under the legislation proposed by (Barney) Frank, who’s been heroic, and Wexler, they (online casinos) will have to use all kinds of sophisticated programs to prevent underage people from playing on the Internet. The technology works.And we will show Congress it works. All on this sanctimonious business about how we don’t want our kids to gamble on the Internet. I thought that fell on the mamma on poppa. I didn’t know big-brother government should step in. I’m going to be 70, why should I be precluded from gambling online.

VN: What type of pressure does the WTO ruling against the U.S. bring?

AD: Now we’re looking down the barrel of powerful cannon that’s going to blow our trade to smithereens as a result of the EU, Australia, and others bringing the same action (as Antigua) against the U.S. It will result in billions of dollars in penalties. And some of the biggest companies will be hurt when their IP is infringed upon. (Antigua and Barbuda is threatening to lift copyright protections.) Whether it’s the entertainment industry — Time Warner, Disney – or Microsoft, and a number of other leading technologies, the damage will be real.

VN: The EU says they want access to new markets rather than money for compensation in the WTO case. Doesn’t that lessen the pressure the U.S. might feel?

AD: It’s going to be billions of dollars we lose if that happens. Carried to its logical conclusion, it will be a colossal trade war. I can see a scenario that some that will want the sugar quotas lifted. And others will want another market opened. It will turn into a huge battle. And we’re wrong. We shouldn’t be involved in this battle.

VN: Many industry experts have called for study on online gaming. They claim it’s the only way to get data that Congress can use to pass a future law regulating online gaming. Yet you’re pushing directly for a repeal or skill game exception. Why?

AT: What you’re hearing is from certain segments of industry. And those segments are anxious to protect their businesses. You’re not going to stop the Internet and its utilization for all kinds of economic and commercial activities. The same companies (that want a study) will be pushing for repeal soon. Some are already. Others will move in that direction. And you can study this until the cows come home. But it’s not going to change.

VN: How are you going to get the votes needed to pass any legislation?

AD: We’re going to pick up the votes — I’m just not sure we’re going to pick up the votes before the WTO violation of law on our part. The WTO ruling plus a million members (editor’s note: they currently have almost 600,000 members) gives us critical mass. But members have to call congress and write into them. And not just a form letter. The have to tell them what they think and feel. And the educational process we’re engaged in before the mark up for the Frank bill to show (Congress) that programs keep youngsters on the Internet away from poker will help.

VN: I know you love to play poker Senator. How come you’re not playing in the Main Event?

AD: I didn’t enter the World Series because if I did, I would obviously make the final table, and that would take a week. Unfortunately, I have some things to do back in New York, so I couldn’t enter.

Congressman Wexler’s turn

VN: Why go for a skill gaming exception rather than an outright appeal of UIGEA?

RW: Barney (Frank) wants to undo the whole law. I went after poker and games of skill because that’s the best argument that Americans understand. ‘Why can’t you play in your kitchen and not online?’ Poker is a game of skill where there’s no house. You play against other people who want to play you. I would also favor an outright appeal as well.

VN: You’re obviously passionate about the issue. Why? RW: People are passionate about games of skill, like poker, and Congress has no business dictating the venues in which they’re played.

RW:People have been playing (poker) on the kitchen table, in the house, and in the halls of Congress for centuries. The idea to ban it on the Internet is illogical. Add on (legal) betting on horse racing and lotteries online, and there’s no legitimate case for not letting people bet on poker online. We’ll prevent underage gambling with the technology. And money laundering too.

VN: What kind of impact has the WTO ruling against the U.S. had?

RW:Other nations are bringing the U.S task. And an amended schedule has enormous financial implications as well. But we shouldn’t be violating the WTO. We can’t expect China, India and Europe to respect the WTO if we don’t.

VN: Have you heard from the Microsoft’s and Disney’s of the world asking about Antigua and Barbuda’s threat to suspend copyright protections?

RW: We haven’t yet, but we will. And rightfully so. The prohibition of online poker and games of skill are just registering with people. They’re just learning what the ramifications will be. And that will affect all sorts of elements of our economy.

VN: Any final thoughts?

RW: Prohibition didn’t work when we tried to outlaw alcohol. And it’s not going to work if we try to outlaw poker. It’s going to result in poker players using offshore sites that expose them to financial fraud. It’s counterproductive.

VN: Do you play poker?

RW: I play casually.

VN: What did you think of the WSOP floor?

RW: I wish more people could see the WSOP. It shows there’s an extraordinary enthusiasm for the game of skill.

Washington – No one’s ready to say you can bet on it, but Congress may change its mind and make gambling over the internet legal again.

Online poker was dealt a losing hand last year when Congress effectively banned most types of internet gambling.

Poker lovers like Michael Bolcerek complained that was unfair.

“We think it’s certainly more closely aligned with a sport than gambling,” said Michael Bolcerek of the Poker Players Alliance.

Did Congress make a mistake? Indianapolis Democrat Julia Carson says yes.

“I’m going to vote to repeal it, because it doesn’t make any sense to me,” Carson said.

It still makes a lot of sense to those who argue the internet has made gambling too easy and put financial ruin only one mouse-click away.

A Baptist minister told lawmakers about the addiction to online poker that led his son to rob a bank.

“This time next year instead of watching my son receive his diploma from Lehigh University as president of his class, I’ll be waiting proudly outside the gates of prison to see my son released,” said gambling opponent Rev. Gregory Hogan.

While the current law prohibits online casinos, it still allows betting on horse races.

That discrepancy is what appeared to sway Carson. “What’s the difference between internet gambling and being able to gamble on the horses?” Carson asked.  “I don’t think there is a difference, that’s why I’m confused.”

A year ago, the gambling ban passed easily when Republicans attached it to a homeland security bill.

Now that democrats are in charge, those who fought the ban then, are vowing to undo it.

The stakes in this battle are huge for entertainment companies who stand to make billions from online betting if it’s legalized.

Football buffs host holiday-grade parties for the year’s Big Game. World Cup soccer zealots gather and sing anthems in nation-flagged bars. Tour de France fans camp along French highways to wait for the peloton.

So how does a poker aficionado kick off the year’s biggest event, the World Series of Poker? If he’s Renton-based attorney Lee Rousso, he does what comes natural: He goes all in with a lawsuit.

On Friday, as the poker championship began in Las Vegas, Rousso sued the state of Washington in an effort to overturn its 2006 ban on Internet poker. Calling it a direct violation of the U.S. Constitution’s commerce clause, Rousso said the first legal challenge to the state law also should be the last.

“I think my chances are darn good,” he said.

The ban, which took effect last spring, specifically prohibited the type of Internet-based card games such as Texas Hold ‘Em that poker players in Washington — Rousso among them — have used to qualify for the annual multimillion-dollar tournament. Rousso said that Washington residents who qualified for the event likely did so through Internet-based tournaments even though it now is a felony to do so.

Susan Arland, spokeswoman for the Washington Gambling Commission, said commission lawyers have not seen the lawsuit and would comment only after they had read it. “We don’t have anything to say just yet,” she said.

Rousso said the state law is flawed. In his complaint in King County Superior Court, he argued that the state measure was passed not to put the state in compliance with the federal wire act — something it does not do anyway, he said — but instead to protect the in-state gambling industry, including card rooms and casinos.

This, he said, puts Washington in clear conflict with the Constitution’s commerce clause, which forbids individual states from passing protectionist laws against other states’ business.

Approved as Senate Bill 6613, Washington’s law also banned Internet-based sport gambling. Lawmakers said it was an effort to put the state in compliance with the Interstate Wire Act. Originally approved in 1961, the act was a federal effort to limit betting on sports over the telephone.

No one has yet been prosecuted under the Washington law.

Internet card rooms boomed in 2003 when an unknown accountant and amateur card player named Chris Moneymaker won the world champion’s bracelet after honing his craft solely on Internet Hold ‘Em.

Moneymaker is Rousso’s inspiration.

“He created the modern poker boom. He’s a guy who everyone says, ‘If he can do it why can’t I?’ “

This year’s tournament is the largest in its 37-year history, with 12,000 players vying for the final table and eventually, the final seat and a first-prize worth more than $12 million. Prospective players can either qualify through satellite tournaments or by paying $10,000 up front to sit in.

Rousso, 49, qualified online for the 2005 World Series by winning an Internet tournament. He lasted 14 hours.

The Mercer Island native likes his chances better in court. If he loses there, he says, he’ll push for legislation to return Internet poker to legal status. It never violated the Wire Act, he said, because the federal law refers only to sports gambling, not poker.

“Our backup plan is to get this done politically.”

New state gambling laws doom poker clubs, Cherry Masters

A crackdown on illegal gambling will force some clubs and bars to change or find new ways to attract customers.

Cherry Masters, electronic slot machines, will be the target of Indiana’s new gaming police, and Texas Hold’em clubs like Royal Crown in downtown Muncie will close after midnight with a new crackdown on illegal gambling.

“The state has declared us a game of chance,” said Linda Koger, who owns Muncie Liquors and is a partner in the downtown poker club. “We are being forced to close our doors.”

The option, Koger said, would be possibly facing a class C felony charge for promoting professional gambling.

During its last session, the Legislature approved House Bill 1510, which included new penalties for possessing electronic gaming devices like Cherry Masters and promoting illegal gaming like drawings, pull tabs and sports pools.

That law also redefined gambling as risking money or other property for gain, contingent in whole or in part, upon chance, and only permits charitable gaming. And it gave the gaming commission authority to enforce that law.

“We always contended that the law made them illegal,” Ernest Yelton, executive director of the Indiana Gaming Commission, said about Texas Hold-em clubs.

The clubs generally have membership and seating fees. Royal Crown had a big celebrity opening last year with longtime Tonight Show announcer Ed McMahon.

The gaming commission got 16 new officers strictly to go after illegal gambling. Yelton said video gaming like Cherry Masters would be the priority for enforcement, although other forms of illegal gambling would be addressed with cooperation of the Indiana Alcohol and Tobacco Commission, which enforces the law for holders of alcohol, tobacco and retail permits.

“The governor and the Legislature sent a strong message that in Indiana you have two types of gambling, legal and illegal,” said Yelton. “The one that is legal will be strictly regulated, and the one that is illegal will not be allowed.”
Regular players

A handful of poker players were standing outside Royal Crown Wednesday night, talking about the club closing as dealers planned some big dealouts on the final night.

“This is a club and it should be left as a club,” said Joe Ramos, a former dealer and player.

Ramos said Texas Hold’em offered entertainment for many people, with as many as 100 people a night playing at the downtown club.

“I guess I could go to a bar, get drunk and then get pulled over,” he said.

Ryan Clements, who runs the club, said the closing would be like losing family given the number of regular players.

“We have never had any problems,” Clements said.

The closing puts 15 people out of work and shutters a downtown storefront. Koger said she was still looking at how the club might be turned over to a charity.

Rep. Dennis Tyler, D-Muncie, voted for HB 1510, and said he did not know the bill would put Texas Hold’em clubs out of business. Tyler also has been criticized by some bar and restaurant owners for approving slot machines at horse tracks, including nearby Hoosier Park, while outlawing other gaming in other establishments.

“We did that to have property tax relief,” Tyler said, referring to how money from slots would fund property tax rebate checks to homeowners.

Tyler had a bill to legalize drawings, polls and pull tabs in bars, but that legislation never got in the final bill. He will renew those efforts during the short session.
No ‘Wanted’ poster

Brad Klopfenstein, executive director of Indiana Licensed Beverage Association, said some bar and restaurant owners would face a serious adjustment to the new enforcement effort by the gaming commission and other efforts by excise police enforcing alcohol and tobacco regulations.

“We are entering a whole new world here,” said Klopfenstein, who said the new gaming police were not unlike Elliott Ness and the “Untouchables,” special U.S. Treasury agents who enforced federal prohibition laws during the 1930s.

Yelton responded, “I can assure you we have no ‘Wanted’ poster here,”

The gaming commission is still working on a policy to enforce gaming laws, and Yelton said there were no plans to target eastern Indiana, even though the region was the headquarters for former Teamsters boss John Neal’s video gambling empire.

Neal was arrested last year on video gambling and money laundering charges, just two years after getting out of prison after serving time on charges of operating illegal gambling business, conspiracy to defraud the IRS and money laundering. Neal remains in the Ashland, Ky. federal prison on a probation violation from his previous conviction.

Yelton estimated there could be as many as 5,000 to 40,000 Cherry Masters or other video gaming machines throughout the state, still found in truck stops, tobacco stores, bars and other retail establishments.
Closing or changing

Klopfenstein said two Fort Wayne bars already closed over the pending enforcement and he expected the gaming police would make video gaming a priority.

Tammie’s Lounge was among the last local bars to have video gambling machines last fall when excise police issued citations there last November. Owner Tammie Rigney got rid of the machines and paid the citation.

“I am done with them,” Rigney said.

A few weeks ago, Rigney had a party where she paid out all drawings, NASCAR cards and sports pools, and ended that form of gaming. Doc Peterson’s trio, including Phil Dunn and Garland Simmons, played music as customers lamented the loss of popular gaming pastimes.

“I paid out 100 percent of everything,” said Rigney, who recalled how as many as 150 people would come on Saturdays to participate in drawings. “We are constantly looking at new ideas to bring people in the doors.”

One of those ideas is a party today (Saturday) at Irving’s Water Bowl with six live bands and a $5 charge.

As for the crackdown on gaming, Rigney said, “This is going to hurt a lot of people. It will be interesting what people in our business will do.”

The Star Press (06/30/07)