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Posts Tagged ‘UIGEA

Man, you’d think now that school is out I’d have more time on my hands to blog! But between moving, and work, and unpacking my life is more hectic than ever! So, I return to the blog-o-sphere with more news about Internet Poker.

Yep, that’s right. The Department of Justice handed down more indictments for operators of online poker and ten more domain names were seized, including most notably doylesroom.com which is run by poker great Doyle Brunson. Now, the newest word from online poker players in the US is that many of them are considering a move to Canada in order to continue their online poker careers. According to an article on casinocitytimes.com, Daniel Negraneu, who is a dual citizen of the US and Canada is considering splitting his time between his homes in Las Vegas and Toronto in order to continue his online poker career. Currently, all online poker players in the US who earned their living by playing poker online have been unemployed since April and roughly $400 million is tied up in the poker sites that have been seized. Initially, it was thought that American online poker players would start to bring their business to live games, however, it seems here that with no legislation in sight they are more interested in fleeing the country to continue their careers.

In more local news, the Nevada Senate committee has approved an internet poker bill. According to an article published in the Las Vegas Review Journal, the bill “authorizes the Nevada Gaming Commission to adopt regulations and to grant licenses to casinos to be ready to offer online poker if Congress passes an Internet gambling bill or if the U.S. Department of Justice says online gaming is allowed under federal law.”

What remains to be seen is when and if the government is going to take some action on this issue! Some say that the indictments are the stepping stone on the way to legislation, others say the issue will get so locked up in the political system that we may never see legislation. I am tending to lean towards the latter. Of course, we are approaching an election year, and lord knows people don’t want to rock the boat when they’re up for re-election. Which is just stupid in my decision, as are most things in politics, but I guess that’s a topic for another day.

So, I pose the question to you, my readers…how do you feel about this issue now that it’s had some time to sink in? Do you think the government will move forward with legislation or do you think the issue will never get through the legal system and made into law? Do you think the US will see a “mass” exodus of poker players to countries where this is legal? Or do you think the creative minds will find some way to still play online for money despite the domain seizures and lawsuits?

You know that old saying, opposites attract? Is that really true? Well, in terms of Poker players we’ll soon find out. Now that the dust has settled from the Internet Poker indictments, we will begin to see whether or not Internet Poker players will trek into brick and mortar poker rooms to feed their need for poker.

One of the main reasons that people play online is because they are able to play multiple games and tournaments at once. In a regular poker room, you are only able to play one game or tournament at a time, and a tournament can last hours on end without any payoff when its over. Imagine being able to play 10 or more tournaments at once. You’ve just increased your odds ten-fold. Also, the people who are attracted to online games generally come from a generation of very computer savvy, video game playing folks. They are able to work very quickly and efficiently to play as many games as possible at once and they can be very effective at this tactic. That is part of the rush for them. Imagine playing all those games online, then having to sit at a table in a poker room somewhere not in the comfort of your own home and be locked up in one tournament for 8 solid hours. BOOOORING. (See this blog post and the comments that follow for a good feel on what went down immediately following “Black Friday”) However, some big name players were requesting games in Vegas immediately following the events of “Black Friday.” So, it might be helping some rooms a little bit.

Online poker is an industry that has grown exponentially in the past ten years. It is estimated that since 2007 the number of online poker players between the ages of 18-34 grew by 27%. The draw of online poker is that players of any skill level can enter a low stakes game and learn to play without the intimidation of having to go into a live poker room and potentially be judged or laughed at by so-called “poker pros.” Poker is a very intimidating game for those who do not know how to play or who are not confident in their skills. One of the main drivers of online poker popularity was the rise to fame of Chris Moneymaker, who, after honing his craft online went on to win $2.5 million in the World Series of Poker in 2003.

However, it still remains to be seen whether or not these hard core internet poker players will end up in a brick and mortar facility, because it’s just such a different environment and is not comparable on many levels.

Do you think that brick and mortar facilities will see a spike in revenues now that the dust has settled from “Black Friday” and it doesn’t look like Internet Poker will be legalized anytime soon?

Wow, can’t a girl take a weekend off from blogging without the whole world collapsing?! Apparently not. As of Friday, BIG NEWS: the government has finally stepped in and joined the discussion on Internet Poker. If “joined the discussion” actually means taking over the whole conversation then I guess that’s what they have done. The owners of PokerStars, Full Tilt and Absolute Poker were charged on Friday with bank fraud, illegal gambling offenses and money laundering. All of the sites were shut down or seized by the government and if you try to log in to these sites you will see the following image:

Following this shutdown, the chips started falling. Wynn announced they were backing out of their deal with PokerStars. Caesars Entertainment and Station Casinos also had pending deals with online poker operators, however Station’s deal hinged on the ability for Full Tilt to be licensed, which doesn’t look to be happening anytime soon. The casino companies and poker companies weren’t the only ones affected. Politicians who received campaign contributions from PokerStars announced plans to return the money. Assembly Speaker John Oceguera, a democrat from Las Vegas, received $10,000 from PokerStars and said he intended to give the money back. Brian Sandoval and Rory Reid also received $10,000 donations from PokerStars claimed the money was returned last week.

In any case, this is shaping up to be a very interesting situation. While the partnerships between the casinos and internet poker companies mostly hinged on the ability for those companies to be licensed, they also signaled a certain confidence that the government would allow states to work through the loopholes of UIGEA. Clearly that is not the case. However, I also don’t think this is the end of the line for internet poker. In fact, it is more likely a path towards full legalization and legislation. The United States Government cannot turn a blind eye to internet poker forever, but they also could not continue to allow the companies to operate under the guise of legality. I will be very interested to see how the legislation will play out, and if there is federal legislation, will the existing poker companies overseas be licensable in the US? Originally, AB258 would not have excluded those companies from being licensed, however, new federal legislation may have something else to say about it. And that would not bode well for Caesars and Station casinos who are still in dealings with online poker companies. Stay tuned, because I’m sure this is a topic that will dominate the news and this blog for weeks to come.

Yep, I’m going to talk about Internet Poker again. But hey, it’s a really hot topic in the gaming world right now. So, here’s a quick recap of the week in review:

Wynn Las Vegas entered into a partnership with PokerStars and will operate as PokerStarsWynn.com once the legislation passes. This is a BIG deal. These two companies are giants in their respective industries, and joining forces only makes them stronger as a whole. As soon as Internet Poker is “legalized,” that is to say legislated, this newly formed partnership will likely take the lead in the market. Prior to this partnership, Nevada casinos were fighting to make sure that once Internet Poker is legislated, companies like PokerStars would not be able to get licensed because they have been breaking the UIGEA law by operating in the US. The newest law, which I talked about in my last post, would not prohibit the existing online poker companies from getting licensed. This was a VERY strategic move on behalf of Wynn Las Vegas as well as PokerStars. Two major players teaming up to take over the market, which is what likely will happen. 

In a less reported story, Caesars Entertainment joined up with 888 Holdings PLC, an Israeli company that offers Internet gaming options in Italy, France and the UK. This deal was approved on the same day as the Wynn/PokerStars deal was announced and it marks the first time that the Nevada Gaming Commission has allowed a casino operator to do business with a company who offers Internet gambling. The good news for Caesars in this deal is that they will be able to market it’s very strong World Series of Poker brand worldwide now across the Internet.

It seems that with these two mega-deals occurring within the same week that legislation is getting closer than ever in terms of Online Poker. At this time, Nevada should be very eager for AB258 to pass and to start regulating the industry. It means a boost in revenue for the state that is so desperate for any additional income and it will be very interesting going forward to see where this is going to go. Stay tuned, as I’m sure this is not the last of the new information I will hopefully be bringing you as this story unfolds.

As a follow-up to yesterday’s post, The Fight to Legalize Internet Poker, I found this very interesting post by David Schwartz on the Two Way Hard Three blog. The new bill, AB258, which can be read in it’s full text here, would in essence allow Nevada to legislate and operate online poker operations. The Nevada Gaming Commission would be in charge of regulating the new industry. This would include things like geographic verification of where the player is located as well as they would have to find a way to verify the player’s age. The NGC would also have to ensure the privacy of its players and have a way to guarantee the honesty of the game. The tax rate for players and games within the state would likely remain at 6.75%, and the tax rate for players and games in other jurisdictions would likely be 4%. It is uncertain at this time what kind of economic boost this would provide to the state of Nevada, but I think at this time, any economic boost would be helpful.

Another point I made in my previous post had to do with whether or not the established online poker companies could or would be granted a license in Nevada, even though they were technically breaking the federal law (UIGEA). The new bill specifically points out that unlicensed operators are not to be denied a license in Nevada for that reason alone. This part of the bill would likely draw some opposition from current casino operators in Nevada who feel that they will not be able to compete with these companies once the law is passed. In any case, it will be very interesting to see how this plays out.

There has been a long battle to legalize Internet Poker in the US. Now, you may be wondering, how do companies like PokerStars and Full Tilt Poker operate in the US? For the majority of Internet Poker sites, they operate from abroad, and their owners and operators usually end up choosing not to enter US borders, in case they are arrested and prosecuted under the Unlawful Internet Gambling Enforcement Act (UIGEA) which was passed in 2006. Other companies choose to operate under the assumption that they will not be prosecuted, because the law is hard to interpret in terms of who is gambling and where they are located. Senator Reid has been a champion of an Internet Poker Bill for many years and attempted to push through an Internet Poker bill during the lame duck session in December 2010, which ended up failing. But that wasn’t the end of the fight to legalize Internet Poker. Senator Reid is still trying to get a law in place that would make Nevada the regulators for the new industry. But some large casino companies such as Wynn Las Vegas and Caesars Entertainment are also involved in the fight. They are hesitant for Internet Poker to be legalized without some serious thought into what to do with existing companies. Obviously, if Internet Poker were legalized in Nevada, the big casino players would immediately want to be involved. Especially Caesars, with its World Series of Poker brand being very strong in the Poker world. However, it would be nearly impossible for these companies to enter a market that already has such saturation. The main point the casinos are trying to get across is that the existing companies must be excluded from being able to run their existing sites, citing that they have been breaking the law for years and should not reap any of the benefits of legalization. The big casino companies need a period of time after legalization to figure out how to run Internet poker sites effectively, which sites like PokerStars and Full Tilt have already mastered. Also, in terms of customers, there would be no reason for loyal PokerStars players to try out a Wynn Las Vegas brand of Internet Poker when they are already part of an established site. In any case, this fight is far from over and it will be interesting to see how it plays out.

What are your opinions on the legalization of Internet Poker? Pros and Cons for the State of Nevada? The US?


About Me

This blog is devoted to the gaming industry news and information - keeping you up to date on the happenings in the gaming world. My personal expertise lies in event planning and entertainment in casinos.

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