Hurry up and wait: No online poker resolution in sight
When Black Friday hit last April 15, the landscape of online poker was forever changed, and the bankrolls and careers of scores of players were jeopardized.
However, most poker enthusiasts seemed to believe at least a few positives would emerge once the rubble was cleared. Among the most anticipated changes were greater industry-wide transparency and the swift legalization of online poker in the United States.
There appears to have been plenty of progress made with the former, as the fallout from Black Friday motivated players to demand accountability from those with whom they do business.
But the effort to get the virtual cards back in the air legally in the U.S. – something many industry observers, this writer included, predicted would happen within a year of Black Friday – has been met with an unanticipated delay of game.
The timing of Black Friday, in which the federal government shut down the major online poker sites, suggested that lawmakers were eager to capitalize on the potential windfall to be reaped for struggling state economies by regulating and taxing online poker.
Although enthusiasm among many lawmakers to do just that remains strong, the movement toward legalizing online poker, as with most efforts to change or introduce new legislation of any sort, has hit roadblocks through a combination of red-tape issues and detractors.
Perhaps the biggest obstacle for states was the lingering question of whether online gambling was prohibited under The Federal Wire Act of 1961 or the Unlawful Internet Gambling Enforcement Act of 2006, which appeared to specifically target online poker.
Late last year, several lawmakers asked the Department of Justice to clarify the legislation that is on the books, and they received this response: The Wire Act was written for and applies strictly to sports betting, and the UIGEA bans cyber gambling across state lines, but not necessarily within a state’s borders.
The ruling essentially gave states the green light to proceed with online gaming, so long as it doesn’t involve sports betting. Nevada and the District of Columbia already have passed legislation legalizing online poker, and Nevada likely will be the first state to offer legal online poker.
However, most states have been hesitant to pass legislation that might eventually be altered or usurped by federal law, and some still weren’t confident that the DOJ’s decision gave them a clear go-ahead. Lawmakers in most states are hoping for federal legislation that regulates online poker and clearly states guidelines and parameters.
Moreover, a federal solution would allow for a wider player pool, as players could compete against each other nationwide instead of just within their home state.
“Nevada has legislation and has submitted applications for licensing. We do intend to offer online poker in Nevada,” said Seth Palanksy, vice president of communications for Caesars Interactive Entertainment, which operates the World Series of Poker. “Our preference is a federal solution, so all players in the U.S. can play together and be properly regulated, taxed and governed.”
Even so, it appears Nevada will be dealing from the virtual deck soon, perhaps well ahead of any other states. This is because a federal solution, which once appeared on the fast track to approval, has met resistance from a couple of sources.
The detractors include executives at state lotteries, who believe legal online gaming will steal their customers and cut into their bottom lines, a good portion of which goes to funding education. The mere suggestion that it would affect education funding gets the attention of lawmakers, particularly those who might have been neutral or leaning toward opposing legalization to begin with.
American Indian tribes also have expressed concerned that legalized online betting would compromise their lucrative business.
Frank Fahrenkopf, CEO of the American Gaming Association, recently told more than 350 gambling regulators that he believes all such gaming entities can co-exist.
"I try to tell our lottery friends this all the time … that every form of legal gaming must be treated the same and fairly," Fahrenkopf told the Associated Press. "No one gets a leg up on anybody else. That's been our position all the way through."
So what does this all mean for the would-be online poker player who is waiting for the chance to log on? If you’re in Nevada, the opportunity likely will come soon, but others are in for perhaps a prolonged wait. The lottery and Indian lobbyists are sure to provide enough resistance to drag down the process of federal legalization, at least in the near future.
Many professional poker players have moved to foreign countries in order to continue playing online poker legally, as Daniel Negreanu suggested in a piece on Covers.com last year, a few weeks after Black Friday.
Others, such as Joe Cada, the 2009 WSOP Main Event champion who still lives in his hometown of Shelby Charter Township, Mich., haven’t played online poker since the feds put the hammer down a year ago. Cada said he has considered taking up residence across the border in nearby Canada so he can play, but for the time being he’s waiting like the rest of us for a change in the laws.
“It’s part of people’s rights and freedoms to play online, so it’s kind of hard to take that away,” Cada said.
Josh Nagel is a Reno, Nev.-based writer who covers sports betting and poker. Find him on Twitter @JoshNagel1.