California explores online poker

Mar 9, 2010 5:08 PM

by GT Staff |

Last week the California state senate held a special though informal session to discuss the pros and cons of legalizing Internet poker.

According to published reports, there were nearly 35 presenters who testified on the advantages and disadvantages of having an online poker system in California.

The participants included Native American Leaders, international online poker providers, university professors, anti-gambling advocates/moral police, gaming analysts, brick and mortar casino representatives, government officials and also members of the Poker Players Alliance (PPA), a grass roots organization that speaks out for poker players.

During an interview, Steve Miller, director of the PPA in California, said the session was mostly informational, with a chance to share ideas.

"It was sort of an introductory session, a fact-finding session," Miller said. "It was meant to inform the legislators about what the issues are."

Although no specific bill was talked about, the legislature spent the whole day on the issue discussing the merits and demerits of online poker legalization.

Technically, online poker is currently illegal in the United States, although there could be millions of players who patronize sites such as PokerStars and Full Tilt Poker.

The issue is more cloudy if you consider simply "intra-state" online poker, that is, poker played only within a state’s boundaries.

In the United States, the North Dakota House of Representatives passed a bill in February 2005 to legalize and regulate online poker and online poker cardroom operators in the state.

The legislation required that online poker operations would have to physically locate their entire operations in the state. Testifying before the state Senate Judiciary committee, Nigel Payne, CEO of Sportingbet and owner of Paradise Poker, pledged to relocate to the state if the bill became law.

The measure, however, was defeated by the State Senate in March 2005 after the U.S. Department of Justice sent a letter to North Dakota attorney general Wayne Stenehjem stating that online gaming "may" be illegal, and that the pending legislation "might" violate the federal Wire Act.

However, many legal experts have disputed the DOJ’s claim.

In response to this and other claims by the DOJ regarding the legality of online poker, many of the major online poker sites stopped advertising their "dot-com" sites in American media.

Instead, they created "dot-net" sites that are virtually identical but offer no real money wagering. The sites advertise as poker schools or ways to learn the game for free, and feature words to the effect of "this is not a gambling website."

On Oct. 13, 2006, President Bush officially signed into law the Safe Port Act, a bill aimed at enhancing security at U.S. ports. Attached to the Safe Port Act was a provision known as the Unlawful Internet Gambling Enforcement Act (UIGEA).

According to the UIGEA, "unlawful internet gambling" means to place, receive or otherwise knowingly transmit a bet or wager by means of the Internet where such bet is unlawful under any law in the State in which the bet is initiated, received or otherwise made.

Some operations have not closed and it is still possible for some American players to play online for real money and even sign up for new accounts. The UIGEA has had a devastating effect on the stock value of these companies.

On Nov. 27, 2009, Department of the Treasury Secretary Timothy F. Geithner and Federal Reserve Chairman Ben S. Bernanke announced a six month delay, until June 1, 2010, for required compliance with the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). The move blocks regulations to implement the legislation which requires the financial services sector to comply with ambiguous and burdensome rules in an attempt to prevent unlawful Internet gambling transactions.

There are also a couple of bills in Congress that would legalize online poker, but they haven’t yet moved out of committee, and a vote on them isn’t expected until the end of the year or beyond.

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