Politics rears ugly head (again) over sports betting issue

Jun 16, 2009 5:04 PM
Burnt Offerings by Stan Bergstein |

As Rep. Barney Frank slowly builds his base of support in Congress, hoping to find enough votes to get his Internet gambling bill passed, federal prosecutors have stepped up their determined efforts to shut off the supply of the one item most needed to play online: money.

The executive director of the Poker Players Alliance, John Pappas, says at least $33 million in funds owed to 27,000 or so online poker players has been frozen by banks at the request of the government.

The feds have hit hard this month, cracking down by notifying four banks, including giants like Citibank and Wells Fargo, that it wanted the money in the accounts of Allied Systems and Account Services, which processes money payments for online poker sites, frozen.

The banks complied. Wells Fargo had no choice. It received a court order to freeze the money. Citibank said it had received a request from prosecutors to do so.

Either way, it became clear the feds were playing hardball as Barney Frank moved closer to gambling that he could muster enough support to get his bill passed.

The nation’s leading authority on gambling, Nelson Rose of Whittier Law School in California, called the latest federal move "very aggressive," and told the New York Times he was not sure it was based on solid ground, since it was not clear what law would cover seizure of monies owed to poker players.

The government action came at a time when another of its favorite targets, sports betting, was creating waves in the east. Delaware already exercised its grandfathered status as one of the select four states – Nevada, obviously, Montana and Oregon being the other three – that allow betting on sports. It hopes to be in operation in time for the football season this fall.

New Jersey is huffing and puffing, hoping to overthrow the federal ban on sports betting, which if accomplished could lessen the pressures calling for slots at the state’s three tracks, The Meadowlands, Monmouth Park and Freehold Raceway. The casinos – a powerful influence on legislation in New Jersey – have been having rough times since Pennsylvania legalized racinos at its tracks, and their contract to subsidize horseracng to the tune of $30 million a year expires in 2011. They say now they will not renew it, but Gov. Jon Corzine has appointed a task force which could give him a convenient rationale to finally step in and help the tracks.

Across the Hudson River, in New York, the big racino at Aqueduct Racetrack was delayed again, this time by a very wealthy citizen overpowering the wishes of the electorate by sponsoring a rare and outright coup on the American political scene.

The multimillionaire, who readily took credit for the coup, was Tom Golisano, a Rochester entrepreneur who decided he would restore control of the New York Senate to Republicans, who had controlled it for 40 years but lost command in last November’s election.

Golisano understands the baseness of human nature as well or perhaps better than most, and he appealed to it by convincing two Democratic state senators to join the Republicans in a successful overthrow of Senate control.

The two he chose were two New York City senators, Hiram Monserrate of Queens, currently facing charges of slashing his girlfriend with a broken bottle, and Pedro Espada Jr. of the Bronx, who allegedly owes the state thousands of dollars in fines for failing to file overdue campaign finance reports.

These two upstanding gentlemen upended the will of the New York electorate, and Espada, for his part, was named temporary president of the Senate.

The title is not simply honorary. In that role Espada technically is empowered to sign off on any agreement, or possibly negate it, on the Aqueduct racino. He gets to vote, as temporary Senate president, along with the governor, David Paterson, and with the real ruler of New York, Assembly speaker Sheldon Silver. Espada also gets to appoint two people to the board of directors of the New York Racing Association.

If things get much worse, New Yorkers as well as Californians may be moving to Las Vegas. Consider that possibility, shudder at it, and think how lucky you are to have Oscar Goodman.

Question? Comment? E-mail me at: Stan Bergstein