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PPA Pushes for Poker Players' Rights During Events on Capitol Hill

By Aaron Todd

The Poker Players Alliance (PPA) hasn't gone all-in, but it has raised the stakes.

The alliance, which boasts 20,000 paying members, was represented by its president, Michael Bolcerek, and three prominent professionals on Tuesday on Capitol Hill. Poker professionals Chris "Jesus" Ferguson, Howard Lederer, and Greg "Fossilman" Raymer came to Washington attempting to bring a poker face into the online gambling legislative debate before the Wednesday afternoon House Judiciary Committee hearing on H.R. 4777, a bill proposed by Rep. Bob Goodlatte (R-Va.).

The bill would amend the Wire Act, which pertains to interstate wagering. Another online gambling bill (H.R. 4411), which would limit a person's ability to fund an online gaming account, was proposed by Jim Leach (R-Iowa) and has already been approved in the House Financial Services Committee.

The group had a one-hour press conference at the Cannon House Office Building on Tuesday morning, visited injured soldiers at Walter Reed Army Medical Center in the afternoon, and had a two-hour reception in the Longworth House Office Building cafeteria in the evening, giving legislators, media and staffers the opportunity to meet the players, discuss the legislation, snap some pictures and get some autographs.

"There's never been a debate about poker and whether poker should even be part of this legislation because of its status, at least in our minds, as a game of skill," said Lederer. "I don't want Washington or America waking up with a hangover the day after this thing gets passed where Washington (says) 'What did we do?' and 70 million people in the country (say) 'What? They took away my poker?' I just think it's time that poker be part of the debate here."

A new survey conducted by ICR market research shows that most Americans agree. Ninety percent of 964 adults surveyed do not believe the federal government should prevent Americans from playing poker, while 74.2 percent do not believe that the government should prevent Americans from playing poker on the Internet.

Bob Hoy, a 52-year old network engineer from Sterling, Va., who as a member of the PPA, was invited to the reception on Tuesday night, personifies the argument the PPA is putting forward.

While he has played poker since he was 10 years old, he says he became a student of the game about seven years ago, avidly reading books and studying strategy. He started playing online five years ago and currently holds accounts in eight or nine online poker rooms. When asked how he would react if the legislation passed, Hoy had to think long and hard before he responded.

"I would have to make a serious decision, because I may have to break the law at that point if I felt that (the law) was unjustified," said Hoy. "I'm a conservative republican and I'm aghast right now at some of the congressmen that are supporting this bill that I think should know better. I don't think they understand the difference between poker and some forms of gambling."

The difference, according to the players and the PPA, is that poker is a game of skill. While there is some chance involved, the most skilled players continue to finish at the top of the biggest tournaments in the world.

"People make incredibly intelligent decisions under incredible amounts of pressure," Ferguson said. "The skill really comes across on TV. It's hard for me to imagine that people don't see it as a game of skill. Yes, there is chance involved, but I think that you have to agree that there is a lot of skill."

While the players object to the legislation at least in part because they don't believe that poker fits the traditional mold of gambling, others oppose it on purely ethical grounds. Radley Balko, a policy analyst with the CATO Institute, disapproves of the intrusive nature of the legislation.

"What the Leach Bill tries to do is force your bank or credit card company to identify (companies which allow deposits into online gaming accounts such as Neteller and FirePay) and prohibit you from doing business with them," Balko said. "And these companies serve a lot of purposes other than just placing bets online. It effectively deputizes private financial institutions to start monitoring its customers' behavior. I think we need to step back a little bit and ask ourselves if deputizing private institution is something we want to start doing. From a business standpoint and from a customer standpoint that should make everyone uncomfortable."

It certainly makes Hoy uncomfortable. An amateur player who has built up a $35,000 bankroll over several years, Hoy shares poker with his family, playing with his wife and teaching his 15-year old daughter to play. The couple plans to move to Las Vegas upon retirement to play more live games.

"I don't like to see someone legislating my morality," Hoy said.

More information on the PPA is available on the organization's Web site, . The site includes information on how to join and how to write you congressman and your senators about this issue.


Abramoff gets payback in gaming bill
A handful of gambling lobbyists have already called it Jack Abramoff’s payback. Others are less direct.

But the central irony remains: The same Internet gambling legislation Abramoff fought so hard to defeat on behalf of a client that helped states conduct lotteries over the Internet now includes an exemption to protect those lotteries.

Now Abramoff’s infamy and legal woes are driving anti-gambling legislation across Capitol Hill, even though one of the most prominent bills includes language that would protect his former client.

Two House bills, introduced separately by Reps. Bob Goodlatte (R-Va.) and Jim Leach (R-Iowa), seek to reinforce existing anti-gambling rules by respectively updating telecommunications and financial-services laws to give enforcement agents more power to prosecute gamblers who place bets on websites based outside the United States.

A previous version of Goodlatte’s bill was defeated on the suspension calendar in July 2000 after a last-minute push by Abramoff and his team to spread misinformation about the bill on behalf of his client at the time, eLottery, a Connecticut-based firm.

Abramoff is now out of the picture, but gambling interests remain powerful on Capitol Hill and the current crop of anti-gambling legislation reflects that sway. Versions of this legislation have passed the House twice and the Senate twice, but never in the same year. Both chambers now appear intent on bringing bills to the floor this year.

The Goodlatte and Leach bills, along with legislation introduced in previous years by Sen. Jon Kyl (R-Ariz.), attempt to crack down on the estimated $12 billion annual overseas gambling business, but none of those bills would regulate some closely related industries, in an attempt to avoid potential roadblocks.

In addition to the lottery exemption in Goodlatte’s bill, both pieces of legislation include language to protect fantasy sports from current anti-gambling laws, and the two bills also avoid a decades-long dispute between Congress and the Justice Department over the legality of interstate pari-mutuel betting on horse races.

“The underlying principle of this legislation is not to change the legality but to change the enforcement mechanisms,” said Martin Gold, a lobbyist with Covington & Burling who represents the National Football League, an ardent supporter of anti-gambling legislation. “It doesn’t make anything illegal that was legal, and it doesn’t make anything that was legal illegal.”

JUNE 2000
Goodlatte is staunchly opposed to gambling and first introduced a bill to improve the federal enforcement mechanisms for Internet gambling in 1997.

In June 2000, Abramoff and his team defeated the Goodlatte bill after a companion had already passed the Senate and his legislation appeared on its way to swift passage, according to a story in The Washington Post last fall.

Abramoff reportedly convinced a former aide to Rep. Tom DeLay (R-Texas) to help get the bill on the suspension calendar, which would increase the number of votes necessary to approve it, and directed funds to various religious groups to help him pressure conservative members to oppose the bill on the grounds that it would actually expand Internet gambling — a false charge, Goodlatte maintains.

The bill eventually fell short by 25 votes.

“It’s now clear to a great many members of Congress that they were hoodwinked by Mr. Abramoff,” Goodlatte said. “He effectively killed it in [the] Judiciary [Committee] by getting some amendments offered.”

In the intervening years, Goodlatte added language giving states the right to conduct lotteries over the Internet. The change was part of an ongoing effort by the lawmaker and his staff to craft the legislation around a specific task: to update the 1961 Wire Act to prohibit anyone from placing bets over the Internet so that the 45-year-old law would apply to current technology.

Goodlatte reintroduced the bill in February of this year, and the legislation now has 130 co-sponsors. The Judiciary Committee is expected to address it in the coming months.

“It is a bill we intend to consider,” committee spokesman Jeff Lungren said.

In addition to updating the Wire Act, Goodlatte’s bill also gives Treasury officials more oversight of financial institutions to track illegal bets. This latter provision is the entire thrust of Leach’s bill, which parallels legislation Kyl is expected to introduce in the Senate sometime this year.

The Leach and Kyl bills would require the Departments of the Treasury and Justice to establish “policies and procedures reasonably designed to identify and prevent restricted transactions” relative to Internet gambling. That would include monitoring of credit cards, electronic fund transfers and any checks or bank withdrawals.

Leach said his initial version of the legislation avoided any mention of horse racing, but the current version has a clause explicitly exempting any bet that adheres to the Interstate Horseracing Act.

Passed in 1978, the Interstate Horseracing Act governs all interstate betting on horses. The law creates a specific carve-out in the Wire Act to protect state-to-state betting on horse races provided it is legal in both the state where the bet is cast and the state where the race is run and provided all wagers are placed with a regulated pari-mutuel service.

Despite those protections, federal law-enforcement officials have argued that the law does not pertain to online betting.

In December 2000, despite strong protests from the Justice Department, Congress amended the Interstate Horseracing Act to include wagers placed “via telephone or other electronic media” provided both the sender and the receiver are licensed pari-mutuel providers.

Initially unaware of this dispute, Leach said, he was told early in the process to leave horse racing out of his legislation because it was a separate issue governed by previously established laws.

“It wasn’t in the initial bill,” Leach said of the horse racing exemption. The congressman said he wanted to limit his own legislation to betting that is already illegal under current law, adding, “Don’t ever underestimate the power of the gambling lobby.”

Goodlatte said he did not explicitly address the horse racing issue for the same reasons. “We don’t address it, nor do we try to repeal it,” he said.

The National Thoroughbred Racing Association (NTRA), which is both the trade association and governance body for breeders, owners and racing officials in the United States, sent out a release March 15 announcing that the organization “has secured language … to protect Internet and account wagering on horse racing” after Leach’s bill passed through the House Financial Services Committee earlier this month.

The same release said that NTRA officials had worked with Goodlatte to “ensure that [his bill] also contained language that protects online and account pari-mutuel wagering.”

The organization’s political action committee had already contributed $79,000 to members of Congress this cycle as of Jan. 23 of this year, according to the Center for Responsive Politics. Neither Goodlatte nor Leach was a direct recipient of those funds, but Goodlatte’s PAC, the Good Fund, did receive a $5,000 donation in July.

In addition, Federal Election Commission records show that Kyl refunded a $5,000 donation from the group late last year, according to His office did not return repeated phone calls for comment.

Almost 15 million people participate in fantasy sports leagues annually, according to the Fantasy Sports Trade Association (FSTA), which represents most of the online fantasy sport providers like CBS SportsLine and

The average player participates in six separate leagues in two different sports each year, according to a recently completed survey by Prof. Kim Beason of the University of Mississippi. Participants are overwhelmingly male and spend an average of $493.60 on league fees every year.

The professional sports leagues, particularly the NFL and Major League Baseball, draw some revenue from fantasy sports participants, but much of that is tied up as part of larger broadcast or marketing deals.

The leagues now appear to be repositioning themselves after a recent boom in fantasy sports participation.

In 2005, big-league baseball paid its players union $50 million for the fantasy rights to its players for five years. Last year, St. Louis-based CBC Distribution and Marketing, Inc. sued the league for requiring companies to secure a license to operate fantasy baseball leagues online, arguing that statistics are part of the public record. That suit is pending.

In addition, the NFL has a deal with CBS SportsLine to operate its website, but the fantasy rights are up next month and the NFL can now renegotiate its deal.

Fantasy sports are protected in each piece of Internet gambling legislation because the results are an aggregation of individual statistics in multiple games over an entire season; therefore, backers argue, winning and losing is contingent on skill in picking players and the financial rewards are almost always determined before the season.

The results of fantasy sports contests are nearly impossible to influence because the standings are determined by too many players over too many games for outsiders to influence those results, a number of lobbyists said on background.

Goodlatte said it is unfair to criticize the entire bill on the basis of the single exemptions.

“It all goes back to Abramoff,” Goodlatte said. “We were never trying to expand gambling. Clearly, it would contract Internet gambling. … [The legislation is] tighter now that it has ever been.”


Web payment firm NETeller doubles 2005 profit

Tue Mar 28, 2006 1:30 PM GMT15

LONDON (Reuters) - Online money transfer firm NETeller Plc (NLR.L: Quote, Profile, Research) more than doubled its 2005 profit as customer numbers rose 86 percent, it said on Tuesday, predicting more growth this year.

The Isle of Man-based company said it also added 8 percent, or 180,000, new customers since the start of the year.

NETeller, which has grown fast alongside the rapid rise in online gambling, said pre-tax profit for the year to December 31 rose to $97.8 million (55.9 million pounds) from $45.8 million in 2004.

It said customer sign-ups rose to 2.35 million at end-2005 from 1.25 million the year before, helping lift earnings per share to 76 cents from 37 cents in 2004.

NETeller said online gaming, which accounted for more than 80 percent of money transfers last year, was still growing strongly as it predicted further "impressive" growth for 2006, particularly in Asia.

NETeller Chief Executive Ron Martin told Reuters his firm was not overly concerned about the uncertain regulatory outlook for online gaming in the United States, where it gets much of its business.

"The U.S. market is important to us, but our growth in Asia and Europe has been twice the rate (of) the American market. As for regulatory, concerns ... like many market pundits, we feel the legislation is unlikely to go anywhere this year," he said.

Earlier this month, U.S. legislators approved a bill attempting to stop online gaming firms from accepting credit cards, checks, wire transfers and electronic funds transfers in illegal gambling transactions, a move that could spell trouble for firms like NETeller.

Unlawful gambling, under the legislation, would include placing bets on online poker sites, and any other wager made or received in a place where such a bet is illegal under federal or state law.

The company said that in any case it was diversifying into other areas after last year paying 12.4 million pounds ($21.7 million) buying Cambridge, England-based full service payment provider Netbanx.

It also moved to expand its geographical reach into Asia with the acquisition last year of debit card processor Quick Access, which is based in Macau.

NETeller was floated at 200p a share last year.

By 10:52 a.m., its shares were 3 percent down at 712p on what traders said was profit-taking after a good run. "They've had a very good rise," said one.

This valued the business at around 856 million pounds.

NETeller also on Tuesday said that Gord Herman would succeed Steve Lawrence as chairman around the time of its annual shareholder meeting, provisionally pencilled in for June.

Reuters UK

Regulate, don't outlaw, online gambling-Posted on Thu, Mar. 23, 2006


People who never bet on sports make an exception this time of year. Something about the NCAA basketball tournament — maybe it's the appeal of filling out those brackets and tracking their progress each day — brings out the gambler in all of us. But if some members of Congress get their way, we won't be able to place any of those bets online.

The proposed Internet Gambling Protection Act would prohibit using the Internet to operate a gaming business. But trying to shut down a multibillion-dollar industry with consumer demand that includes an estimated 8 million Americans annually is an empty legislative effort. Instead of outlawing it, Congress should regulate it.

Online gambling is now a $12 billion-a-year industry. Americans anted up more than $500 million to bet on this year's Super Bowl online, an increase of more than 12 percent from last year and more than five times the amount wagered through Nevada casinos. Overall, Americans wagered nearly $6 billion online in 2005, compared with about $1.5 billion in 2001.

Outdated law. The U.S. government says the consumers who placed these bets are in violation of the Wire Act, which was originally aimed at organized crime and sought to prevent gambling businesses from operating by phone in states where it was otherwise illegal to gamble.

This law shouldn't be applied to Internet betting. No case law or statute clearly defines where Internet bets are taking place. BetOnSports, for example, is based in Costa Rica. Our customers can place bets from anywhere that has an Internet connection. In part because of this ambiguity, no one has been prosecuted for online betting under the law.

Enforcing this outdated law or passing new legislation would be foolish at best and a violation of privacy and individual freedom at worst. Politicians who seek to prohibit online wagering in order to prevent underage gambling, excessive gambling and corruption could address these goals more effectively through regulation.

It may surprise our critics to know that we in the online gambling business share their concerns about gambling abuse. In fact, we have been seeking support from governments to devise systematic ways to protect vulnerable populations. What this industry needs is regulation, not to be pushed even further into the shadows, where organized crime and less reputable people can carve out a niche for themselves.

Regulation can address a number of important concerns about online gambling.

First, we can better prevent underage gambling. Most online gambling companies already try to prevent underage gambling. We don't advertise to anyone younger than 18, for example, and we have clear rules on our sites. Regulation could make these practices more enforceable and extend their reach. New technologies can provide regulators with better information, including the ability to provide an audit trail for each transaction or to block participation by certain players or classes of players.

• Second, we can better deter compulsive gambling. Currently, companies use software to help their customers keep track of their betting histories. We can also use this software to impose cooling-off periods. With regulation, these practices could become standard in the industry.

• Third, regulators can ensure transparency and good corporate governance, as they do in most regulated industries.

British model. The good news is that Britain provides a model for the United States. Its Gambling Act, passed last spring, provides for the licensing and regulation of online gambling, including the establishment of a national gambling commission to protect consumers, restrict the access of minors and prevent money laundering and other criminal activity.

It is time for the U.S. government to face the facts: The issue is not whether it is possible to stop online gambling; the issue is how to regulate a business that not only exists but is growing. We have begun the process by working to create an independent advisory council to establish operating standards acceptable to everyone. Not only would regulation strengthen companies that wish to operate responsibly, but legalizing our companies could bring in billions of dollars in tax revenue. That' s one gamble that would generate benefits for all Americans.

Carruthers is chief executive of BetOnSports, an online wagering company.

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