On Tuesday, a deal was announced to extend the tax cuts passed in 2001 and 2003, to continue those rates until 2012. There was also a provision for extending funding for unemployment benefits, so that the current benefits could continue to be funded up to current limits (not extending what people already have, but ensuring funding for them).
There has been some concern about how this will be funded or why there is an expansion of spending for unemployment benefits, or UI benefits.
It is now being discussed today that, Sen. Harry Reid may attempt to tack on a measure to the tax deal which would allow for the licensing and regulation of online poker.
A draft of the measure is available here. Currently, it deals only with poker, not other games such as blackjack or any sort of sports wagering.
In September of 2006, as one of the final acts of the Republican -controlled Congress, Sen. Bill Frist attached the UIGEA to the Safe Ports Act, meant to strengthen homeland security. The UIGEA, short for the Unlawful Internet Gaming Enforcement Act, barred any transfers to payment processors known to conduct business with online poker rooms.
After passage of the act, there were several raids and closings of payment processers used – Neteller, Allied Systems, and most recently eWalletXpress – in an attempt to bar all electronic transactions between U.S. banks and offshore-based online poker companies. Several notable online poker companies, such as PartyPoker, stopped accepting U.S. customers entirely.. The UIGEA went into full effect on June 1, 2010.
The most recent and serious attempt to overturn the UIGEA took place this past summer. 2004 WSOP Champion Greg Raymer, along with the Poker Players’ Alliance and many other writers, players, and activists, have lobbied representatives for passage of such a bill. It came out of the House Financial Services Committee by a vote of 41-22, but did not come to the floor for a full vote.
For the last several years, the Poker Players’ Alliance has worked with many in Washington to modify the legislation or pass new laws which would legalize, but regulate, online poker sites. The scandals of Ultimate Bet, which revealed gaping security flaws in poker clients, have taught that a strong licensing and regulation body is needed to ensure security of these sites, given the amount of money that can potentially change hands.
One glaring flaw in this bill is that only existing casinos and horse tracks would be able to operate online poker websites. Therefore, almost all of the current online poker infrastructure (including industry giants PokerStars, Full Tilt Poker, Bodog, Party Poker, and Cereus (formed through a merger of Ultimate Bet and Absolute Poker) would be completely cut off from U.S. players, of which the PPA estimates there are currently ten million. However, it should be expected that those companies who have continued to operate in the US since the UIGEA’s passage would face some sort of punishment (whether a fine or blackout period) should online poker ever become fully legal again. In this writer’s opinion, any legal environment is going to need help from the current market leaders to work towards creating a legally regulated market, instead of forcing brick-and-mortar casinos to build a network almost from scratch.
If this were to pass, it would at least provide a legal avenue for those millions of poker players and overturn the mess passed four years ago – which was, ironically, passed in the final days of that Congress as well. It may also provide some relief for conservatives wary about passing an extension of unemployment, if the taxes and fees from such poker regulation were to cover such an expense.