Wednesday, July 12, 2006

Online poker officially illegal (nearly)

So they went and did it. The House of Representatives has officially passed House Resolution #4411 (Link to text of the resolution), which officially prohibits online gambling. In the past, the legal status of internet poker was up in the air. Some folks thought that the Wire Act of 1961 (year?) covered it, but that law was passed specifically to prohibit the mob from running betting rings by telephone. The language of the act didn't seem to cover internet gambling in any way. The current House resolution is an update to the Wire Act and the language leaves nothing to the imagination.

The Act, fortunately, does not become law until Congress has a go at it. It is unclear how this will go. In the past, Congress has defeated such bills but that was due in large measure to the lobbying efforts of Jack Abramoff, who is now in jail on charges of bribery. Mr. Abramoff represented commercial and Indian casinos and worked very hard to defeat the previous attempts to ban online gambling in order to give his clients a clear shot at it. The idea was to push regulated online gambling the way England does and then tax it in the same manner that Vegas and Atlantic City tax gambling in their jurisdictions. Unfortunately, our prohibitionist society is not up for that challenge.

So where does that leave us poker players? Currently, we're in the clear. We still have to wait for Congress to act and then the President has to sign the act into law, which he most certainly will do if it passes. If that happens, playing poker online from the US will become very difficult. The act authorizes banks to stop any transactions involving online sites. How this will affect sites like Netteller and Firepay, which act as the intermediaries to fund your online poker accounts, is unclear. Banks have been reluctant to issue blanket stops on transactions from online escrow accounts because those site also carry legitimate business and there is no way to tell what the money back and forth is for/from. This act, however, will give the banks broader powers to investigate this. More importantly, since it explictly makes online gambling illegal, your ISP's might be coerced into blocking access to sites like PartyPoker and UltimateBet much the same way that your job currently does.

Whew. It's a good thing I just decided to stop online poker, right?

Seriously though, this could put a huge crimp in the demand for poker. There is no question that easy access to online poker is fueling the boom we are currently experiencing. Joe Hachem was interviewed in Bluff magazine this month saying he expects the World Series Main Event to draw between 8,000 and 8,800 players this year! Those kind of numbers cannot be had without millions of online players feeding the sattelite tournaments that get the majority of those players their 10,000 dollar buy-ins. If those sites cease to exist in the US, players will be forced to resort to standard casino gambling. In the Tr-State area, this means Atlantic City, Foxwoods and Mohegan Sun. Between the three of them, you're talking no more than 1600 seats for the entire population of New York, New Jersey and Connecticut! My prediction is that if this act passes, we're going to see an explosion in the number of underground poker rooms in New York and a HUGE demand for the kind of home games that we are having.

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