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John Pappas has become the vice president of government relations
for the Poker Players Alliance and the first permanent employee in the
group’s Washington, D.C., office.

He had been a consultant for the group through his previous position
as associate vice president of Dittus Communications. “It is obviously
an issue that I have known and followed the politics and policy of for
nearly two years now,” he said. And, he acknowledged, he enjoys playing
the card game occasionally.

In his new position, Pappas is charged with coordinating the
lobbying and grass-roots efforts to get the game licensed and regulated
in the United States. “Any time you have a chairman of a committee
introducing legislation, then it will be an interesting issue and get a
lot of attention. I want to be part of that,” he said.

Before he went into the private sector, Pappas was communications
director for Rep. John B. Shadegg (R-Ariz.); that experience made him
an attractive hire, said the alliance’s president, Michael Bolcerek.

The alliance plans to keep working with Dittus Communications. Last
year, the Federalist Group lobbied on behalf of the alliance, spending
$540,000 for the year.

WASHINGTON — Anyone who thinks poker isn’t a game of skill should see Boy Wonder playing Texas hold ‘em online from his D.C. apartment. The 24-year-old sharp starts with six tables. Then eight, then 11. He folds. He checks. He raises. New windows pop up on his monitor like whack-a-moles. Boy Wonder doesn’t even break a sweat. This is a job to him.

Well, it was a job. Last Monday, he laid down his poker career to become an internet consultant. His roommate, Johnny CIA, had already done the same thing. They’re hardly alone. A law passed last September by Congress outlawing financial transactions between online casinos and American banks and credit card companies has had a profound effect on the poker players in the United States. In less than a year, according to players and industry insiders, the Unlawful Internet Gambling Enforcement Act (UIGEA) has pushed online poker into the shadows and saddled a national pastime with a prohibition-like status that many compare to the booze ban in the 1920s.

“There was mass panic when the legislation came out,” says Boy Wonder, who asked to be identified only by his screen name because he fears the IRS might target him. “(The Act) scared away the novice.”

The novice used to pay the rent for Boy Wonder, who started playing poker full-time after graduating from Haverford College in 2005. He earned around $1,000 a week playing in $1/2 and $2/4 limit games, which specify the amount a player can bet during rounds of play. But now the game is more trouble to him than it’s worth. “It’s unstable,” he says.

Some major sites such as PartyPoker.com ban Americans altogether. But others like PokerStars.com and FullTiltPoker.com don’t, and determined players have found ways around the legal impediments. Boy Wonder and Johnny CIA describe pre-paid VISA debit cards sold through foreign middlemen that allow Americans to pay online casinos. Some gamblers bankroll friends that have existing credit. Americans can also set up offshore bank accounts or sign up for foreign credit cards. Some use phone cards. There are many ways to keep playing. Many are legally dubious.

In January, the FBI arrested the Canadian founders of NETeller, an online money transfer service based in the Isle of Man that was popular among poker players. Last week, a federal grand jury in Salt Lake City charged seven people and four companies with bank fraud, money laundering and racketeering for concealing money transfers for gamblers playing online.

“You’ve created a whole criminal culture,” says former New York Sen. Al D’Amato. D’Amato is the chairman of the Poker Player’s Alliance, a 500,000-member grassroots group of poker enthusiasts working to overturn last year’s law. Instead of controlling and licensing the industry, D’Amato believes, UIGEA has only created the conditions for shady operators to flourish outside the reach of law. “Just like prohibition,” he says.

Equally troubling to D’Amato and a growing group of federal lawmakers is that UIGEA, which then-Senate Majority Leader Bill Frist (R-Tennessee) tacked on to a port security bill in the dead of night, gives the government too much control over the personal liberties of citizens in a digital age.

“The fundamental issue here is a matter of individual freedom,” Rep. Barney Frank (D-Massachusetts) said at a news conference last month. Frank introduced a bill that would re-legalize online poker and gambling and regulate the industry, requiring that all gaming sites build technological safeguards to prevent underage and compulsive gambling, crack down on cheating and protect user privacy. Better sites already use this technology, but lawmakers believe that without oversight, dishonest services will emerge, and the government will divert important resources to stop Americans from gambling on them.

Legalizing online gambling under a federal umbrella could raise around $3.5 billion a year in tax revenue, according to the Poker Player’s Alliance. It might also get the U.S. out of hot water internationally. In March , the World Trade Organization ruled that America’s online gambling ban has unfairly closed U.S. markets to offshore casinos. The U.S. Trade Representative’s Office fought the ruling by arguing that restrictions on remote gambling were needed to protect American morals, but that argument fell apart when the WTO noted that the U.S. allows online betting on horse racing, which is supported by a powerful lobby and managed to carve out an exemption from UIGEA. The WTO ruling clears the way for lawsuits from online gaming countries such as Antigua and Barbuda or even the United Kingdom.

Frank’s is not the only proposal that puts online poker back on the table. Rep. Bob Wexler (D-Florida) is drafting more narrowly-crafted legislation focused specifically on games like poker, mahjong and bridge that many players believe have been unfairly lumped with games of chance like roulette and craps. Indeed, a number of states already allow high-skill versions of poker such as Texas hold ‘em, Omaha Hi Lo and seven-card stud, even if federal law does not. “We’re looking at a standalone bill that would specifically identify poker and allow that and similar games without restriction online,” says Josh Rogin, Wexler’s press secretary.

Another measure , introduced May 3 by Rep. Shelley Berkley (D-Nevada), would commission a National Academies study to look into online gambling issues and other countries’ regulatory frameworks. “If we banned every activity that someone had an issue with, that’s all we’d be doing,” says David Cherry, Berkley’s spokesman. “We’re setting up a cat-and-mouse game.”

Cherry describes current U.S. law as “Swiss cheese.” D’Amato, who grew up playing poker, isn’t as gentle: “We talk about fair trade and free trade. We talk about individual rights. We’re sanctimonious hypocrites.”

For now, though, online poker players have been handed, as they say in the business, a bad beat. Stars like Chris Moneymaker and Greg Raymer cut their teeth in online poker rooms, then crossed over to win world championships in live tournaments. Their success fueled the growth of the industry. But today’s aspiring sharks have had to temper similar dreams.

At least for one more night, however, Boy Wonder is in the clear. He’s got trip tens and a fat fish on the line. He clicks. He bets. He wins.

The Poker Players Alliance is about to reach the 500,000-member
mark, a significant milestone for a group that had 120,000 members just
four months ago.

The 400% growth in membership has been fueled by outrage over the
arrests of NETeller’s cofounders and the subsequent seizures of money,
the high-profile appointment of former Senator Alfonse D’Amato chairman
of the board, and a series of PokerStars freerolls that registered
tournament entrants.

The result is an impressive base — one that D’Amato and PPA
President Michael Bolcerek believe will lead to online poker regulation
and licensing in the U.S.

But what do the numbers actually mean on Capitol Hill?

“It’s not really about the numbers,” said Massie Ritsch,
Communications Director for the Center for Responsive Politics in
Washington D.C. “You can have a hundred supporters, and if they’re
active and trying to communicate with their elected officials and
coming to Washington, those few hundred members can do the work of a
million people. You can also give the impression of having more people,
but really have very little actual power.”

Lobbying is less about membership figures and more about money and
access, says Linda Killian, Director of the Boston University
Washington Journalism Center and author of The Freshmen: What Happened to the Republican Revolution.
She believes the addition of D’Amato is a more significant step than
500,000 members because former Senators typically have access to the
power structure in Washington.

“Former administration members and Congressman are at the top of
the lobby pyramid,” Killian said. “They spend three to five years in
the capital (on average), build up a wealth of connections, and
instantly they become very valuable as a lobbyist.”

Killian, whose expertise is in politics, not gambling, said a name
like D’Amato’s can add a certain level of prestige to a lobby,
increasing the group’s access level. And with access comes face time
with committees and potential decision makers.

Money is also important

The PPA spent $560,000 in direct lobbying efforts last year, 100 percent more than they spent in 2005, according to www.opensecrets.org .
This puts them on par with land-based casinos and gambling companies.
The MGM Mirage was the largest gambling contributor in 2006, spending
$851,085 in 2006. Harrah’s Entertainment was second with $531,221.

“People on Capitol Hill responds to two things, money and votes,” Killian said.

Both Killian and Ritsch believe a large membership base is only
effective if the people involved are active. The PPA claims to be a
grassroots organization, one capable of mobilizing its members to cause
changes in Congress. But grassroots efforts tend to be hit or miss,
according to Ritsch.

Killian said writing letters to Congressman and picking up the phone
can have a large impact. Ritsch echoed the sentiment, but said
narrow-issued activist groups, like the PPA, are often filled with
“casual members,” people who appear on paper, but never really show up
when it’s time to influence a vote.

“It’s called Astroturf Lobbing,” Ritsch said. “It’s a pretty
common trick of the trade to form a coalition, fund it with industry
money, then put a paint of coat on it that makes it appear like there’s
a lot of active members.”

It comes down to involvement

D’Amato freely admits that much of the PPA’s money and clout comes
from industry leaders who have an eye on the profitable U.S. online
gaming market. But he said this is true of any lobbying effort and
believes the number speak for themselves.

“I have a doctor friend who’s outraged that he can’t play online
poker in his home,” D’Amato said. “He’s an example of the type of
members we have. The small guy, who is resentful of a bill pushed
through in the dead of night, of the power that resides in just a
handful of people.”

And according to the experts, the PPA’s success will hinge more on
the outrage of these “small guys,” rather than the 500,000 members.

“Certain members of Congress will pay attention and be impressed by
the membership number alone,” Ritsch said. “But most are savvy enough
to see when it’s really an industry behind the effort. When it comes
down to it, will one of these online poker players be willing to put in
the effort to write a letter or come to Washington? Will they be
willing to skim some of their winnings to make a contribution? If they
do, who knows, there may be an election or two that swings on a
candidate’s online gaming position. But online poker players have not
established themselves as an influential group the way senior citizens,
gun rights, and abortion opponents have.”

“In the end, it comes down to how much the members are willing to do,” Ritsch said.

Senator Alfonse D’Amato will be appearing on “Pumped on Poker” today (5/16) at 7pm PST.

Pumped on Poker (www.holdemradio.com)
May 16th
7pm PST / 10pm EST
Click “ON AIR” to listen Live

This is Part 1 of a 2 part interview.

If you cannot listen live you can go to www.holdemradio.com and click “Pumped On Poker” on the right side menu and have a private replay or download to your iPod.
Our other guest for this show is Johnny Chan, 10-time WSOP bracelet winner.

“The WNBC/Marist Poll is a collaboration between WNBC TV and the Marist Institute for Public Opinion at Marist College.  The WNBC/Marist Poll lets you know what people in the tristate area and across the nation think about the latest topics from politics to lifestyles.  The poll has a track record for accuracy and independence.  It provides a regular measure of the public pulse and is a source for the hottest trends.”

Perhaps the biggest government blunders in U.S. history have been prohibitions.

    The
prohibition against alcohol led to black market smuggling and
speakeasies, and reaped huge profits for organized crime. Today, the
prohibition on Internet gambling promises to funnel players
underground, diminishing society’s ability to deal with serious
challenges such as underage and problem gambling, and, more
importantly, interferes with the right to individual liberty and
privacy.

    Rep. Barney Frank’s (D-Mass.) efforts to deal with this outrageous legislation are heroic.

    With
the current Internet gambling ban, the unintended consequences abound.
Law enforcement and financial institutions must redirect resources to
monitor and then block poker wagers instead of focusing resources on
tracking terrorist financing. And, because the ban funnels players
underground and forces them to use less transparent financial systems
to place bets, law enforcement finds itself even more hampered to
police potential money laundering.

    In
addition, reputable sites that use age-verification software are shut
out while underground sites that do nothing to prevent minors from
playing are favored. Problem gamblers are left as prey for unscrupulous
operators that will work outside the law.

    Frank
has introduced a more sensible solution. His plan creates a licensing
and regulating mechanism that will allow us to sort out the most
responsible sites – those that are good corporate citizens from those
engaged in unscrupulous activities and practices. The legislation also
protects minors and problem gamblers while allowing the majority of
adults to play poker and other games online.

    The
truth is that today’s technology makes licensing and regulation of
Internet gambling possible. Age verification technology tools that
exist today to keep kids off of poker sites were non-existent even a
decade ago. As a result of these tools, many of the larger operators
are able to keep kids off poker sites.

    Frank
understands that these technological advances enable us to effectively
regulate the industry. He also knows that more than 80 countries and
jurisdictions, including the United Kingdom, are demonstrating how to
successfully oversee the industry.

    There
is another important benefit to this commonsense approach: revenue. An
analysis conducted by a leading economist reveals that more than $4
billion in federal and state revenues could be raised annually if
Internet poker were properly regulated and taxed in the United States.

    It can be done, and it should be done.

    I
played poker in college, in law school and later in a local fraternal
group on Long Island. After I was elected to Congress, a group of us
would get together when we would have late votes on Thursday nights to
order takeout food and play. It was a great way to while the time away,
have some fun and discuss the events of the day.

    Now,
I play every Monday night. But many people don’t have the opportunity
or occasion to meet and play in person. For the 23 million Americans
who play poker online, the Internet has provided a forum to socialize
and match their skills.

    Playing
poker online is simply an American tradition evolving into the 21st
Century. It is unfathomable that poker, an American pastime and game of
true skill, should be banned for the millions who enjoy playing
responsibly.

    The
Poker Players Alliance, with 425,000 members and growing, salutes
Congressman Frank for his courage to take on this issue in defense of
our individual liberties.

    
Just as the prohibition of the 1920s failed, so too will today’s
prohibition of Internet poker. Only meaningful regulation of online
poker, like the Frank plan, will produce positive outcomes for the
players, children, the economy, the taxpayer, and society in general.

The U.S. decision to clarify its World Trade Organization commitments to not include Internet gambling could have far-reaching effects, according to legal analysts.

“It opens up a slippery slope,” said Joseph Kelly, professor of Business Law at Buffalo State. “This is one of the first times this has been done, and it’s going to require a long period of comment and other countries are going to be able to express their opinions on this.”

The U.S. is invoking Article XXI of the General Agreement on Trade in Services (GATS) to clarify its commitment of “recreational services” to exclude Internet gambling. The move is a response to a loss of a dispute in the WTO with Antigua, which argued that the U.S. was taking a protectionist stance in regards to Internet gambling in allowing its citizens to make interactive interstate wagers on horse races and lotteries while barring offshore companies from taking bets from U.S. customers.

“We never believed that we had this obligation,” said an official from the Office of the United States Trade Representative (USTR). “We certainly never intended to make this obligation, and the dispute settlement panel agreed with us, that we’d never intended to make this obligation.”

The U.S. filed its modification last Friday and it was circulated by the WTO Secretary on Tuesday. There is now a 45-day process in which nations may notify the WTO if they believe they have an economic claim as a result of the modification.

“It’s absolutely one of the most incredible conclusions that I’ve heard,” said former Senator Alfonse D’Amato, Chairman of the Poker Players Alliance. “The next thing you know we’ll decide to take steel and say that it was included there by mistake.”

D’Amato, who admits he had doubts about the WTO when the U.S. joined the trade alliance in 1993 while he was in the Senate, has changed his opinion on the organization in recent years. And he’s worried about the international perception that since the U.S. isn’t happy with the recent ruling on the side of Antigua, that it is simply changing the rules to fit its circumstance.

“It shows an arrogance and contemptuousness, which is not good for the diplomacy of the United States — whether it’s trade or any other matters,” D’Amato said. “And that’s how we’ll be characterized, as being contemptuous to the rules.”

D’Amato went on to say that other nations may use the same tactic if they weren’t happy with how the WTO ruled in cases involving the U.S. Some critics have implied that China could do something similar in a copyright dispute that the WTO is considering.

“This is a unique circumstance regarding the scope of a commitment,” said a USTR official, referring to the Antigua case. “Disputes generally aren’t about whether someone has scheduled a services commitment in a particular area. I don’t think there’s ever been such a dispute. It’s a very unique circumstance, so it’s just wildly wrong, frankly.”

Once the 45-day comment period ends, the U.S. will have three months (that may be extended) to negotiate compensatory adjustments with nations that feel they will suffer damages from this clarification.

“There’s very little we can say until day 45, because we don’t know who is going to make a claim,” said the USTR official.

D’Amato believes that the U.S., however, will eventually have to bow to the pressure of the international community which is increasingly regulating Internet gambling.

“I’m not suggesting that it tops the international trade issues or the international issues that we face,” D’Amato said. “But I will suggest that it’s going to grow, and it’s a poor example of the United States picking and choosing to enforce laws that it likes while blatantly disregarding laws with an arrogance and contemptuousness. We look like ugly Americans when it comes to choosing to disregard valid laws that we agreed to.”