Internet poker players lobby for legalization

Jul 21, 2009 5:04 PM
by David Stratton |

Poker players led by the Poker Players Alliance (PPA) will descend on Washington, D.C. this week to lobby the nation’s leaders in support of poker and legislation to regulate and license the game played by more than 10 million Americans online.

"Our members – the poker players of America – are our best advocates to protect the future of poker," said former Senator Alfonse D’Amato, chairman of the PPA, the leading poker grassroots advocacy group with more than one million members nationwide. "National Poker Week, with events in Washington, D.C., and across the country, is the PPA’s way to make it clear to my former colleagues in the U.S. Congress that poker is important to voters and is here to stay."

Over 30 of PPA’s state directors and half a dozen professional poker players will travel to Washington, D.C., during National Poker Week (July 20-25) to meet with their members of Congress and ask them to support legislation establishing licensing and regulation of online poker, including H.R. 2267 introduced by House Financial Services Chairman Barney Frank (D-MA).

They will also deliver a petition to President Obama asking his support to exempt poker from the Unlawful Internet Gambling Enforcement Act (UIGEA), and for the licensing and regulation of online poker.

But not all poker groups will be in Washington to advocate the legalization of online poker. The National League of Poker (NLOP), which sponsors a free, online poker league of which GamingToday has a member poker room (see gamingtoday.com), will point out the pitfalls of the proposed legislation, along with challenges that must be addressed before opening the Internet to legal online poker.

"We’re not opposed to legalized online poker," said Michael Clebnik, chief operating officer of the NLOP. "But unless issues … are addressed, we remain extremely concerned for the American poker player."

Clebnik said that three issues that haven’t been addressed by the Frank bill include a software audit trail, taxation and player collusion (cheating).

"The most challenging concern is the software audit trail," Clebnik said. "In order to assure Americans that licensed operators are not allowing intrusions, hackers and other potential software compromises, a true forensic examination at the code level has to be completed on the software of all licensed gaming operators – what government agency will ensure software compliance?

"Surely no one believes the U.S. Treasury will be able to provide this oversight."

As an example of the susceptibility of online poker software, Clebnik cited a betting scandal at AbsolutePoker.com, in which a few players stole over $20 million by hacking into the system, allowing them to see opponents "hole" cards.

"The site operators refused to admit this was happening, but when the scandal was finally exposed, they chose to take no actions against the known conspirators," Clebnik said.

The second critical issue is taxation, which Clebnik calls the "real" reason behind proposed legislation.

"Who taxes the online casino operator and how does taxes flow back to the state level?" Clebnik asked. "And why would states where gambling licensing and jurisdiction currently reside agree to a federal Internet gambling act?"

Massachusetts, for instance, already has a lucrative state lottery system, which could see tax dollars siphoned off by online gambling, Clebnik said.

Adding to the complexity of the jurisdiction issue are Indian reservations that offer gambling – when and at what level will players be taxed for their winnings?

Finally, Clebnik said the issue of player collusion and cheating is not addressed in the proposed legislation.

The most common example of player collusion is when a group of players set up instant messaging or communicate via cell phones, giving themselves a sizable advantage over an unsuspecting player.

"Online ring or cash games are fertile ground for this type of collusive behavior and there is virtually no way to monitor or control it without establishing an outright ban on games where the player can select the table himself," he said.

Another way of online cheating is setting up a series of computers, each using IP addresses so they look like they are all coming from different parts of the country, but are actually all located on one desktop.

"This method does not require an advanced software engineering degree or millions in capital to accomplish, just a few inexpensive computers will do the trick," he said.

Clebnik said the most important element in the success of online poker will be site and software security, as well as site operator credibility.

"In addition, without better clarification and enforcement, we feel that the potential tax benefits are exponentially overstated," he said.

Question? Comment? E-mail me at: David Stratton