Jennifer Newell Blog

After a two-year court battle, the Interactive Media Entertainment & Gaming Association (iMEGA) was dealt a blow on September 1 when the U.S. 3rd Circuit Court of Appeals rejected its arguments and upheld the premise of the Unlawful Internet Gambling Enforcement Act (UIGEA). Though the judges made clear that the UIGEA does not render online gambling illegal on a federal level, as state laws do prevail, the premise of the 2006 U.S. law stands and does not intrude on the privacy rights of individuals.

After the passage of the UIGEA in 2006, the not-for-profit iMEGA took a stand against the law in the U.S. District Court with a request for a restraining order on the UIGEA per its case against the Attorney General of the United States, Federal Trade Commission, and Federal Reserve System. Judge Mary L. Cooper granted iMEGA standing in the case but ultimately dismissed it due to the fact that the UIGEA was passed in a constitutional manner. Ultimately, she ruled that the case should be heard by the U.S. Court of Appeals. And nearly two years from its inception, iMEGA received a ruling on the case from the U.S. 3rd Circuit Court of Appeals.

The court rejected the first argument by iMEGA that the law was vague, stating, “The Act prohibits a gambling business from knowingly accepting certain financial instruments from an individual who places a bet over the internet if such gambling is illegal at the location in which the business is located or from which the individual initiates the bet. Thus, the Act clearly provides a person of ordinary intelligence with adequate notice of the conduct it prohibits.” While acknowledging that the UIGEA does not prohibit any gambling activity, the numerous examples of ambiguity in the law were dismissed.

The second argument was that the law violated privacy rights via the internet, despite the District Court’s rejection of this claim. The Appeals Court denied this argument as well, noting that the cases cited for precedent are “misplaced” in this case.

However, there were some clarifications made, the most important coming from Judge Dolores Sloviter. “It bears repeating that the Act itself does not make any gambling activity illegal,” she wrote. “Whether the transaction…constitutes unlawful Internet gambling turns on how the law of the state from which the bettor initiates the bet would treat that bet, i.e. if it is illegal under that state’s law, it constitutes “unlawful Internet gambling” under the Act.” According to iMEGA’s response to the Appeals Court loss, this portion of the outcome is positive.

iMEGA Chairman Joe Brennan, Jr. stated, “The court made it clear - gambling on the Internet is unlawful where state law says so. But there are only a half-dozen states which have laws against Internet gambling, leaving 44 states where it is potentially lawful. It’s not perfect, but it’s a good start… We will turn out attention to the states to make the case that this industry can be properly regulated and produce badly needed tax revenue.”

With that, iMEGA is now in the process of consulting its legal team regarding a possible federal appeal.

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The situation in the Southern District of New York just became much more complicated.

What started with the Assistant U.S. Attorney forcing the seizure of more than $30 million online gaming funds looked as if the Southern District of New York would be challenged in court and possibly forced to return monies because of missteps and a lack of warrants. But on August 6, the Department of Justice took the battle into new territory by indicting a Canadian payment processor by the name of Douglas Rennick and charging him with conspiracy to commit bank fraud, engage in money laundering, and operate an illegal gambling business.

An announcement came in the form of a press wire from the U.S. Department of Justice, specifically Southern District of New York Acting U.S. Attorney Lev Dassin and FBI’s New York Office Assistant Director-in-Charge Joseph Demarest, Jr., that the indictment against Rennick had been filed on August 5 in the Manhattan federal court.

The 34-year old Rennick lives in Canada and performed funds transfer services for online gambling customers in the United States. According to the indictment, the company names used were KJB Financial Corporation, Account Services Corporation, and Check Payment Financial Co., and the purposes stated for the accounts were to issue checks for rebates, refunds, sponsorships, affiliates, and minor payroll needs. But reportedly, his primary actions with the accounts involved transferring funds between internet gambling companies and U.S. residents. It reads, in part, “Rennick and his co-conspirators provided false and misleading information to U.S. banks about the purpose of the accounts because the banks would not have processed the transactions had they known they were gambling-related.”

The accusations include the transfer of more than $350 million transferred from a bank account established in Cyprus to various U.S. bank accounts between 2007 and 2009. The three counts of conspiracy for Rennick could garner him, if a guilty verdict is rendered, a maximum of 30 years in prison and a $1 million fine for the bank fraud, 20 years and $500,000 for money laundering, and 5 years and $250,000 for gambling. The indictment also includes the request of forfeiture of $565,908,288 in proceeds claimed to have been garnered by Rennick.

U.S. District Judge Sidney H. Stein has been assigned to the case, which will be prosecuted by Assistant U.S. Attorneys Arlo Devlin-Brown and Jonathan New, while Assistant U.S. Attorney Jeffrey Alberts will be in charge of the forfeiture matter.

It should be noted that one of Rennick’s companies, Account Services Corporation, was the only one since the original Southern District of New York account seizures to file a motion for the return of its $13 million in funds. Not only did the court action accuse SDNY of failing to obtain proper warrants, but the return of the property of online poker players was requested as a result. The Poker Players Alliance was also granted status as “friend of the court” in order to assist with the case and present testimony.

No comment has yet been made by the PPA or Rennick, but the complications of this case are likely still being examined by attorneys. Sources told Bluff after the initial seizure of funds that attorneys like Devlin-Brown, a Bush administration appointee, were attempting to further their agendas before being replaced by the current administration. However, with the current involvement of the U.S. Department of Justice in the Rennick prosecution, the levels of operation became infinitely more complicated and unclear as to how the matters will proceed.

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Six months ago, the unexpected verdict came down. After the five men were tried in a Mount Pleasant, South Carolina court for holding a poker game but breaking a law from 1802, Judge J. Lawrence Duffy agreed with the premise of the defense attorney’s argument that poker was a game of skill. But since the law made it illegal to play “any game with cards or dice,” the decision was a reluctant but distinct guilty verdict. An appeal was promised.

By August of 2009, the defendants were in the midst of their appeal. Robert Chimento, Jeremy Bristel, Michael Williamson, Scott Richards, and John Willis began their journey through the South Carolina court system when they gathered in April of 2006 for a home poker game and experienced a police raid. Instead of accepting the issuance of fines, the five men chose to fight the outdated and unreasonable law in court, a battle that came to a head in February of 2009 with the aforementioned guilty verdict. With defense attorney Jeff Phillips and the Poker Players Alliance legal team in complete support of their cause, and the judge admitting that poker was not a game of skill but lacked any precedent to be distinguished from gambling, the appeal process began immediately.

In circuit court on August 5, Phillips again challenged the 1802 law. Under the argument that the law defines a “house of gambling” loosely, Phillips went after the law. “If an essential element of a crime is not defined, then how could a person know if they are violating it or not?” he asked after the hearing. The state attorney general’s argument that the loosely interpreted law puts poker in a games-of-chance category and therefore constitutes the game as gambling and illegal, actually fed into Phillips’ case better than expected, as the lower court judge clearly stated that poker was a game of skill.

With all eyes on the case in the hopes of overturning an antiquated law that does not apply to modern day society, arguments have been made and Circuit Court Judge Markley Dennis is set to render a ruling on the appeal in the coming weeks.

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The notion of the Senate bill had been discussed as far back as the beginning of the 2009 World Series of Poker, when PPA Executive Director John Pappas mentioned that Menendez was considering a reintroduction of his 2008 legislative proposal. Talks turned to promises during National Poker Week, it all came to fruition in the form of new legislation on August 6 when Senator Robert Menendez (D-NJ) introduced the Internet Poker and Games of Skill Regulation, Consumer Protection and Enforcement Act of 2009, otherwise known as S.1597.

According to insiders, Menendez took a great deal of time to restructure his bill to compliment the current pending legislation in the House - H.R. 2267 introduced by Rep. Barney Frank in May - and to specify internet poker as being in a category with other skill games like chess, bridge, mah-jong, and backgammon. Menendez’ 2008 legislation, S.3616 entitled the Internet Skill Game Licensing and Control Act, has been updated to indicate the importance of poker as a game of skill, and the new bill includes more protections for consumers.

The 91-page S.8309 is detailed in its wording, but the premise is to establish a licensing and regulatory framework for internet poker and other games of skill, as well as to oversee the industry that will be created as a result of the passage of the legislation. Specifically, the bill calls for the creation of a registry of unlicensed gambling operators to strengthen enforcement efforts, implementation of technology to prevent underage gambling and fraud and identify internet players with potential gambling problems, and funding for treatment programs for problem gamblers. Most importantly, however, the bill will clarify the 1961 Wire Act to distinguish poker and other games of skill from gambling activities that have and can be prosecuted under the 48-year old law.

The Internet Poker and Games of Skill Regulation, Consumer Protection and Enforcement Act of 2009 will also put into place a system to collect the billions of dollars in tax revenue that will be collected from the industry. In part, this would be done via a ten percent tax on all deposits made by players to gambling sites, and the proceeds would then be distributed evenly between the federal and state governments.

Poker Players Alliance Chairman and former Senator Alfonse D’Amato praised the efforts of Menendez in a press release: “Through our efforts on Capitol Hill during National Poker Week, the tides are turning and support for licensing and regulating Internet poker versus infringing on Internet freedom is growing. The PPA is pleased that Senator Menendez chose to introduce his bill to license and regulate Internet poker and include additional consumer protections. His continued support for protecting the Internet freedoms of poker players specifically, and Americans generally, is greatly appreciated. …I thank Senator Menendez for his leadership on this important issue.”

National Poker Week and the aforementioned growing support for pro-poker legislation have garnered Frank’s bill more than 50 cosponsors, with more being added to H.R.2267 weekly. The PPA plans to continue the momentum and stay in contact with Senators and Representatives during the August recess, and the organization encourages the public to contact their members of Congress as well with messages of support for the House and Senate bills.

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The addition of cosponsors to any legislation is important, as it shows broad support for a bill and its initial sponsor. When Rep. Barney Frank introduced the Internet Gambling Regulation Consumer Protection & Enforcement Act of 2009 (H.R. 2267) in early May, his primary co-sponsor, Rep. Ron Paul, signed on as its primary co-sponsor. Since that time, it has gained the support of a number of sponsors in the House of Representatives, and since National Poker Week began on July 19, three more have signed on to put the current number at 51.

As Frank explained during a press conference at the 2009 World Series of Poker, the initial support of Paul was important because it “puts the Republicans in a bind between their ardent social conservatives and another strong group of people that say to keep the government out of [personal] business, don’t overregulate business, and allow freedom on the internet. The UIGEA bill was the worst example of a violation of all three of those.” H.R. 2267 was proposed to essentially repeal the UIGEA, and its support has quickly grown with cosponsors. “The number of cosponsors indicates the kind of support you’ll have,” added Frank.

Others who initially signed on to sponsor the bill were Jim McDermott (D-WA), who himself introduced companion legislation to Frank’s bill that would provide for taxation of online gaming, Shelley Berkley (D-NV), Gary Ackerman (D-NY), Peter King (R-NY), and Robert Wexler (D-FL).

It was just since the lobbying push in Washington, D.C. during National Poker Week that began on July 19 that three more members of Congress have officially attached their names to Frank’s legislation. Rep. Linda Sanchez (D-CA) was the first to do so on July 21 in conjunction with a meeting with California PPA state director Steve Miller, lobbyist Edward Ayoob, Dan Goldman, and Annie Duke, during which time she and her staffers expressed their ardent support of Frank and his bill. John Conyers (D-MI) agreed to cosponsor the legislation the following day, and the addition of Mike Thompson (D-CA) on July 27 made for 51 cosponsors in total thus far.

All in all, there are four Republicans, one Independent, and 46 Democrats attached to H.R. 2267, in addition to Frank. If positive reports from many who lobbied on Capitol Hill during National Poker Week come to fruition, there will be even more support for the legislation in the coming weeks.

To view all of the cosponsors of the bill, as well as find contact information for members of Congress, visit the Safe and Secure Internet Gambling Initiative website or that of the Poker Players Alliance.

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National Poker Week continued Wednesday with poker pros like Annie Duke, Andy Bloch, and Greg Raymer in Washington, D.C., as well as about 35 Poker Players Alliance state directors. What better time or place to join forces with the USO to raise money for wounded soldiers through a star-studded charity poker tournament?

After the first full day of lobbying on Capitol Hill for the pro-online poker legislation, members of the PPA gathered with some of the most well-known poker pros in the business, various members of Congress and their staffers, and approximately 30 wounded soldiers to play a poker tournament at the Hyatt Regency on Capitol Hill to benefit the USO of Metropolitan Washington. The evening began with an offering of food and drinks, along with a presentation by PPA Executive Director John Pappas of a $25,000 donation to the USO, followed by the singing of the national anthem by PPA member Ivan Neville.

The amount given to the USO was supplemented when the poker tournament began, as $100 rebuys were in effect for the first several levels. Pro poker players like Dennis Phillips and talk show host Montel Williams immediately put bounties on their own heads as well as purchased rebuys for wounded soldiers who were eliminated at their tables. Duke and Howard Lederer launched into good-natured sibling rivalry as they each attempted to purchase more rebuys than the other. The rebuy madness eventually raised another $10,000 for the USO by the time the evening had concluded.

All in all, the PPA and the 150 players in attendance for the night raised $35,000 for the USO (United Services Organizations) that provide assistance and programs for soldiers recovering in military hospitals from service-related injuries. In addition to the 30 wounded soldiers who participated in the tournament, the poker pros in the tournament included Duke, Lederer, Phillips, Bloch, Raymer, Linda Johnson, Jan Fisher, and Jordan Morgan. Also taking part in the evening’s festivities were numerous members of Congress, including Xavier Becerra (CA), Shelley Berkley (NV), Pete King (NY), Rom Perriello (VA), Lynn Westmoreland (GA), Martin Heinrich (NM), and Ed Perlmutter (CO).

When the madness and excitement of the tournament concluded, Army Sergeant Bret Chevalier claimed victory in the event, which came along with a donated prize of a paid trip to Las Vegas. Coming in second was Donna Lawton, representing Utah for the PPA, who won a World Series of Poker Academy package.

USO-Metro President Elaine Rogers commented, “The Poker Players Alliance provided our wounded warriors with a fantastic evening and the opportunity to play poker alongside several pros. We are thankful to the PPA for their generous donation and a great event.”

Added Pappas, “The Poker Players Alliance is proud to support USO-Metro and all they do for recovering servicemen and women and their families. It was our honor to host the wounded warriors, and we are grateful to the members of Congress and professional players who came out to the tournament to show their support.”

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It had been some time since the last Washington, D.C. fly-in, and with the designation of National Poker Week, the process was scheduled to include two days of meetings with members of Congress with the purpose of lobbying for current and upcoming pro-online poker legislation. For many who chose to participate in the process, namely more than 35 Poker Players Alliance state directors who were making their first trek to D.C. in a professional capacity, the experience of lobbying was an entirely new one, but there was a reason the PPA hired actual career lobbyists to lead the way.

PPA state directors are comprised of a wide variety of poker enthusiasts, from poker pros like Jordan Morgan to recreational players like Steve Miller, the vast majority of whom had little to no political experience, especially in the halls of Congress, prior to this week. But that did not diminish their eagerness to do what they came to D.C. for. They attended a meeting on Monday night, where they received talking points, instructional packets, and words of direction and encouragement from PPA Executive Director John Pappas, former Senator Alfonse D’Amato, and Rep. Robert Wexler.

The main set of instructions included the idea that each person would be paired with a professional lobbyist who was well-versed in the issue of online poker and the legislative interests of the PPA. But each person was asked to bring their enthusiasm for the issue and be prepared to tell their own poker stories in order to let the Congressperson or their staffers know the reasons for their passion. And no matter the outcome of each meeting, everyone was encouraged to follow-up with their representatives or senators at a later date, especially when they would be in their respective home states during the August recess.

Armed with knowledge and enthusiasm about online poker, the PPA state directors, poker pros, and lobbyists set out toward the Senate and House buildings on Capitol Hill on Tuesday, July 21, to attend short but hopefully productive meetings with members of Congress or their staffers.

People reported back with mostly positive results at the end of the day. While there were a few offices visited that contained Congresspeople who were clearly against the issue and would likely not change their minds, most told stories of open-mindedness and enlightenment. For the most part, there were three kinds of encounters.

First, there were the Senators and Representatives already on board, some of whom even previously signed on to Barney Frank’s H.R. 2267 as cosponsors of the bill. Meetings with those individuals primarily consisted of relaying the most current updates to them, thanking them for their support, and asking them to recruit more of their colleagues to our side of the issue.

Second, some members of Congress clearly had no opinion - or no strong feelings either way - on the issue. Most of these meetings were interesting, as when talking points and statistics were presented, especially the number of PPA members in their state/district and how many Americans support online poker, ears were perked and questions were asked. Staffers took notes, House members asked for time to take the information under advisement, and positive impressions were left with many who had not given much thought to the legislation.

Third, there were individuals in Congress who opposed online gaming. The meetings with them were tough, but some of them quickly became less tense when certain talking points were raised, primarily that the upcoming Menendez bill in the Senate will focus specifically on online poker and eliminate other forms of gaming, and that many of the nation’s large casinos were beginning to sign on to the idea, mainly Harrah’s, as they saw the benefit to the entire gaming industry. In addition, the facts that more than 370,000 Americans signed the Poker Petition, more than 10 million Americans have online poker accounts, and more than 1 million Americans are dues-paying members of the PPA were strong talking points that raised eyebrows. Many who visited Senators and Representatives who were opposed to the issue seemed to be intrigued by the arguments and the personal faces on the subject, and a reasonable number of them seemed willing to reconsider their stances.

The effects of the lobbying will likely not be known for weeks or months to come, especially with the heavy Congressional focus on the financial state of the U.S. and the strong Obama administration push for immediate health care reform. However, more lobbying appointments were set for Wednesday, July 22, before the week would begin to wrap, and the push from the American online poker community continued to be strong.

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National Poker Week officially began on Sunday, July 19, but the real launch took place in the early morning hours of July 20, as Poker Players Alliance Chairman and former Senator Alfonse D’Amato made an appearance on the famous Howard Stern show. And as the day went on, many PPA state directors and some of the most well-known poker pros descended upon Washington, D.C. to prepare for Congressional lobbying and a push to legalize online poker in the United States.

Stepping out of his everyday comfort zone, D’Amato began the day with an early morning guest appearance on Howard Stern’s satellite radio show, willing to answer questions on a range of subjects from his life as a new father at 72 to his avid support of poker. It was then that Stern announced that he became a member of the PPA, which prompted high kudos from D’Amato and the following statement:

“I can’t think of a more fitting way to kick off National Poker Week than having my friend, Howard Stern, become a member of the PPA. I think him for having me on his show this morning and for supporting the PPA’s efforts to protect the freedom of American citizens to play the great game of poker at the time and place of their choosing - a freedom Congress voted to take away… With Howard Stern as a member of the PPA, it shows Congress and the public that protecting Internet poker is about more than just poker - it’s about protecting Internet freedom and personal responsibility.”

As many of the PPA members completed their journeys to D.C. for lobbying efforts later in the week, D’Amato was hard at work on Capitol Hill conducting meetings with potential supporters of Barney Frank’s H.R. 2267. He later spoke at a dinner meeting with news that one conversation in particular constituted a “major breakthrough,” as one of online poker’s “staunchest adversaries” may soon announce his support of the Frank bill. Though mysterious about his or her identity, D’Amato seemed confident that the positive outcome of the meeting will only bring the bill closer to passage. With more than 50 cosponsors of the bill now, D’Amato said confidently, “We can win this. I really feel that we are close to turning the corner and making real progress.”

PPA Executive Director John Pappas was also busy throughout the day, hosting a panel discussion in front of 60 or 70 members of Congress and/or staffers to discuss the benefits of regulating online gaming. With Annie Duke in attendance and several panel members in addition to Pappas, the issue of consumer protection inherent in online gaming legislation was the focus of the discussions that were reported to have been productive.

Everyone then gathered in the early evening hours to meet and enjoy dinner, and the PPA took center stage with Pappas leading the talks and D’Amato addressing the attendees. The special guest of the evening was Rep. Robert Wexler of Florida, a long-time supporter of online poker legislation, who briefly talked to the room about the “legitimacy and common sense” of the issue. “I don’t know of another issue or another industry or another interest where people are saying that we are a viable interest that wants to participate in the funding of our federal government. We have people saying, ‘Please raise revenue from me!’” Wexler went on to point out the importance of the planned face-to-face meetings with members of Congress and their staff in the fight to legalize online poker.

The focus of the PPA’s Monday night gathering was simple - to motivate the room full of people who had trekked all the way to D.C. to raise awareness for the issue and meet with members of Congress in the hopes of adding cosponsors to the bills and win their support for the issue. Many PPA state directors were in attendance, as well as other PPA members who were able and decided to stand up for their rights on Capitol Hill. Considering this would be the first time for most, everyone was set up to accompany a career lobbyist to several meetings over the course of Tuesday and Wednesday, and they were given instructions and encouragement.

It was a rousing start to National Poker Week, as poker planned its descent upon Capitol Hill through numerous meetings. Poker supporters came in the many forms, from retirees and self-employed people who enjoy the game of poker to pros like Annie Duke, Howard Lederer, Andy Bloch, Greg Raymer, Jan Fisher, and Linda Johnson. All were prepared to push poker legislation as they had never done before, and the week’s activities were officially off the ground.

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It was only days ago that action was finally taken in the case of online poker funds transfers that were seized by the U.S. Attorney’s Office of the Southern District of New York. Account Services filed a motion with the court to retrieve approximately $13 million of seized monies, and the Poker Players Alliance hailed the action. And soon after, the PPA took its own next step to participate in the process by asking to become a “friend of the court” in the Account Services filing.

Account Services filed its motion on July 10 and contented that the seizure of the millions of dollars was unlawful, noting that poker is not considered illegal gambling under federal law and that Account Services merely held money and assisted in transfers of funds that belonged to poker players and were not subject to seizure. The action to seize the funds by Assistant U.S. Attorney Arlo Devlin-Brown of the Southern District of New York was unlawful, the motion contended, and the funds should be returned to Account Services.

The PPA’s involvement in the case came when the organization filed its own motion, this one in the Southern District Court of California, to participate as amicus curiae, which would allow the PPA to become a friend of the court in the Account Services motion. And within days, Judge Jeffrey T. Miller granted the request, giving the PPA standing to file an amicus curiae brief by August 7, 2009, for the hearing to be held on August 21.

PPA Executive Director John Pappas said, “As the voice of online poker players, PPA should be granted the opportunity to provide evidence and legal briefings on why online poker is a game of predominant skill and not considered illegal gambling under the law. Recent rulings in Pennsylvania, South Carolina, Kentucky and Colorado all affirmed that poker is a game of skill. PPA was actively involved in representing the rights of the poker players in each of these cases and should be able to do so at the federal level. Any action contesting the government’s seizure of players’ funds will help protect the rights of U.S. internet poker players, and we will explore every legal avenue to ensure that our members’ voices are heard and their rights are protected.”

The funds seized by the Southern District of New York affected poker players across the United States, though many of the online poker sites from which money was being transferred reimbursed players for their inconveniences. However, with more than $30 million being seized, some of which occurred without warrants, the court cases to retrieve the funds are only beginning.

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It had been nearly a month since any word on the seizure of more than $30 million in online poker website funds by the Southern District Court of New York. While most of the sites had taken steps to reroute funds for poker players who had been caught up in the political move, the account holders missing seven- and eight-figure amounts of money were consulting attorneys and devising a plan to reclaim those funds. And on July 10, Account Services filed its Motion for Return of Property to call for a hearing and the ultimate return of its $13 million in seized money.

The seizures began in mid-June when online players began noticing that their transfers to and from poker websites were not successful. As checks bounced, the concern set in and was confirmed by the Poker Players Alliance when it released a statement about the situation. Assistant U.S. Attorney Arlo Devlin-Brown of the Southern District Court of New York ordered the accounts of several banks seized “because they constitute[d] property involved in money laundering transactions and illegal gambling offenses.”

The PPA immediately stepped in and requested standing in future hearings on the issued based on the fact that some of the seized funds belonged to PPA members, in addition to the fact that proper warrants were not used for some of the seizures. PPA Executive Director John Pappas requested a hearing, and Chairman Alfonse D’Amato denounced the seizures as being “without judicial authority and litigation tactics inconsistent with previously stated Department of Justice policy.”

But the issue seemingly fell silent, as did everyone involved. It took approximately one month for action to be taken and made public, but it eventually came in the form of a motion filed by one of the banks who found its funds seized. Account Services filed the Motion for Return of Property and respectfully ordered the return of funds seized from Wells Fargo Bank and Union Bank.

As part of the factual background included in the Motion, Account Services asserted the following: “Internet poker is a popular and widespread leisure activity in the United States. At least 10,000,000 Americans play internet poker, and some estimates set that figure substantially higher… All the times, the money on deposit is owned and controlled by the player. The funds are merely held in trust for the benefit of the player and released upon the player’s request.”

The Motion also provided more details about the seizure of funds from Wells Fargo Bank: “The Warrant [of Seizure] was issued on the basis of an affidavit filed under seal by Federal Bureau of Investigation Special Agent Dana Conte… The affidavit remains under seal. As of the date of this filing, no criminal or civil action, including forfeiture, has been initiated with regard to this seizure.” It goes on to say that ten days later, the funds were officially seized from Union Bank accounts without a warrant. “Thus, the Government had no legal authority to seize funds in question, and this Court should order the seized property returned.”

In response, the PPA released a statement of support for the actions taken by Account Services. “On behalf of the players whose money was seized by the government, the PPA is pleased that Account Services took this step of filing its motion and contesting the seizure. We fully endorse the arguments that Account Services has included in their filing that online poker is a game of skill and not the type of illegal gambling activity that is prohibited by Federal Law. The PPA will likely seek to get involved in this action to ensure that the voice of U.S. poker players are heart and their freedom to play the skill game of online poker is preserved - without the threat of the government seizing their money.

“The PPA has been and continues to advocate for a clear US policy, established through licensing and regulating skill games like peer-to-peer Internet poker. The PPA remains committed to legislation that creates a clear regulatory framework and we will continue to pursue every legal course available to ensure that poker players have the freedom to play online without fear of repercussion.”

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For the second year in a row, Poker Players Alliance Chairman and former Senator Alfonse D’Amato made the trek to Las Vegas during the World Series of Poker. In 2008, his trip consisted of a daylong visit to the Rio to speak with the poker media, handle “shuffle up and deal” duties for one of the main event starting days, and watch some poker featuring his favorite players like Phil Hellmuth. In 2009, he came to play.

To be fair, D’Amato came to the 2009 WSOP to represent the PPA in its announcement of National Poker Week, but he had another purpose to his several-day stay at the Rio. He registered for the $1,000 Seniors No-Limit Hold’em World Championship (Event 43), and just after the PPA press conference, he sauntered down the Rio hallway to find his seat and take his shot at a WSOP bracelet. He played well during the first half of the day, though his demise in the tournament came just after the dinner break. While his foray into tournament poker did not have the desired result, the Full Tilt Poker-patched player enjoyed his experience and found out first-hand how difficult a day of the tournament grind can be.

BluffMagazine.com caught up with the former New York senator the following day before he caught a flight out of Las Vegas.

You’ve been with the PPA for over two years. How do you feel about the direction you’ve taken it and where it’s going?

Of course, I’d like us to make further strides, but given the opposition that has come from the sports leagues and others, we’ve done pretty good. We are poised now, I think, for a big victory in the House of Representatives, as Congressman Frank has been leading the charge. When he holds a hearing, we will be able to get a bill that will permit the playing of poker on the internet. We have to tweak the bill, we think, in order to get it passed and in order to get some of the sports leagues to drop their opposition.

Did you anticipate their opposition?

They were the big pushers of the opposition initially. They funded the Christian right groups to come in and scream, and they were wrong. I think they see it now; it didn’t help their cause. We’re looking to work with them, not against them. We’re not looking to promote online gaming activities across the board. Hopefully, we can get the Congressman to make some modifications to his bill, and I think we can then get the support of the sports leagues and be able to get the bill passed, which will allow adults to play in their own homes. We’re not talking about kids; we’re talking about having the kinds of software programs making it virtually impossible for youngsters to play. We think that the industry needs regulation to keep honest people honest and to ensure the integrity of the game. And last but not least, we believe that we could raise anywhere between 20 and 30 billion dollars over the next decade, and that’s a lot of money to help [the federal government] during these difficult times.

Do you think victory will come from the Frank bill or the upcoming Menendez bill?

I think the Frank bill has to be tweaked somewhat and will eventually look something like the Menendez bill, and it will be a good compromise.

What are your hopes for National Poker Week?

We hope that we get enough people down during the week of July 19 to visit Congressmen and Senators. We have 35 statewide representatives and their delegations from the Poker Players Alliance who will be bringing the case to the legislators. We think we have a convincing argument, and there’s nothing like people seeing their legislators face to face and saying, look this is important to us and we want your support.

How many cosponsors are you hoping to get on Frank’s bill?

I think we’ll get at least 50; that’s our goal.

About your poker game, tell me a little about your WSOP tournament experience.

I lasted awhile. I guess about 60 percent of the field was gone when I finally got knocked out. I had a pocket pair of jacks, and I took a beating with that. I was down to 1,600 in chips, and it was desperation time, so I went all-in with my pocket eights and someone else had pocket kings. That was it, but it was a lot of fun.

Was this your first tournament?

Yes, but of course I play poker regularly. This was the first WSOP tournament, and I’ll definitely play again. But I’ve got a 16-month old baby at home and a baby girl on the way, and tournaments take time. I’ve been playing cash games for about 45 years, and that’s what I really enjoy the most.

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American political heavyweights are becoming familiar faces at the World Series of Poker. In 2008, former New York Senator and current PPA Chairman Alfonse D’Amato visited the WSOP with online poker supporter Rep. Robert Wexler. The 2009 Series saw Rep. Shelley Berkley accompany D’Amato for his second annual trip to the Rio. But on July 5, poker’s staunchest supporter in Congress, Rep. Barney Frank, took time out of his busy schedule as Chairman of the Financial Services Committee to become more familiar with the WSOP from a first-hand perspective.

After being escorted to the Amazon Room at the Rio in Las Vegas just before noon by WSOP Commissioner Jeffrey Pollack, Frank was introduced to the room full of poker players and fans. He spoke to the crowd with enthusiasm about current poker legislation and the importance of people getting involved by contacting their representatives in Congress to demand action on the issue of online poker. He then issued the “shuffle up and deal” command, toured the Rio Convention Center, and proceeded to hold a scheduled press conference in the early afternoon.

Frank was one of the many in Congress appalled by the passage of the UIGEA in 2006 and almost immediately went to work on legislation to repeal the law. While his first attempt was unsuccessful due to the Republican-controlled Congress and promise of the Bush Administration to veto any such efforts, Frank continued to pursue change and introduced the Internet Gambling Regulation Consumer Protection & Enforcement Act of 2009. In addition, he added a second piece of legislation to delay enforcement of the UIGEA until December 2010, and Rep. Jim McDermott followed up with a companion bill to add taxation to the legalization and regulation of internet gaming.

The current status of the bills is that they are awaiting committee hearings, which were recently pushed back to September due to financial regulatory priorities ordered to the top of the hearing schedule by the Obama Administration. Frank discussed the process and his own ideas with regard to the forward movement of the legislation at the July 5 press conference.

“I plan to move this bill,” he said. “As Chairman of the Financial Services Committee, I am now pretty vigilant to adopt a set of rules that will keep us from getting in trouble again… The committee could be done with that by September, so it is my intention this fall to bring up, in the committee, the bills I’m sponsoring - one to suspend the [UIGEA] regulations, the other to repeal the whole ban and substitute a sensible regulatory scheme. I think they’re going to pass.”

Frank did add that although he hopes to get both of his bills passed right away, he is aware of the potential obstacles and understands the need for priorities. If it looks as if the repeal effort will be delayed whatsoever, he will work on “getting the regulations suspended while we work on the other bill.”

During the waiting period for committee hearings, Frank hopes to obtain as many co-sponsors for the bill as necessary. With Ron Paul as the bill’s primary co-sponsor and the number of supporters growing consistently, one name was floated as to her support - Speaker of the House Nancy Pelosi. Frank responded that he hadn’t spoken to her about it as of yet, but noted, “I would be surprised if she wasn’t supportive.”

On another topic, a member of the press asked Frank about the recent seizure of online poker funds by the Southern District of New York’s assistant U.S. attorney. Specifically, in response to the notion that the Obama Administration ordered the actions, he responded, “I hope the Obama Administration and Justice Department wouldn’t be part of it. I’m pretty sure that’s the case… But the bottom line is that you can’t have the Justice Department order a subordinate to overlook things. I do intend to pursue with them clarification of what the policy is here.”

Frank’s visit to the World Series of Poker indicated, as does his movement on pro-gaming legislation, that his pursuit of change to the current law is serious and without reservation. His commitment to the passage of his bills to regulate online gaming in order to keep it safe and legal is a priority as a powerful member of Congress, and his advocacy on the issue will continue.

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Blame it on the economy…or the banking crisis. Rep. Barney Frank’s Internet Gambling Regulation Consumer Protection & Enforcement Act of 2009 will not come before the Financial Services Committee for a hearing until September, and the change in the plans is due to President Obama’s financial regulatory reform and its current precedence in the committee.

It was a decision that came as a bit of a surprise to online gaming legislation supporters, as the Frank bill seemed to be gaining momentum, adding co-sponsors, and gearing up for a full-blown lobbying effort during the week of July 19-25, recently dubbed National Poker Week. What is not surprising is that the companion internet gaming taxation bill introduced by Rep. Jim McDermott has been put on hold until September as well.

The postponement of any hearings regarding the aforementioned legislation can be attributed solely to the push from the Obama administration to make significant and imperative changes to the nation’s financial regulatory structure. In order to change the system and prevent another banking crisis like the one that currently plagues the United States, Obama has pushed through reform proposals that will require the complete focus of the Financial Services Committee. And to aide in that process, according to PPA Executive Director John Pappas, only legislation pertaining to said reform is being discuss in that committee. If time permits any other business to be heard, it will be only non-controversial items, and “Barney’s I-gaming bill would not fall under the category of non-controversial.”

Nevertheless, the focus of all attention paid to the legislation will not change. National Poker Week will proceed as planned, with the Poker Petition being delivered to Obama and members of the Poker Players Alliance lobbying Congress. The more co-sponsors attached to and sponsors willing to support the bill when it eventually comes up for committee consideration, the more likely the legislation will move forward.

The Internet Gambling Regulation Consumer Protection & Enforcement Act calls for the regulation and licensing of internet gambling operators within the United States, with the Department of the Treasury to maintain authority over the proposed process. While it is predicted that there may be adjustments made to the legislation, such as a carve-out for sports betting, there could also be a similar Senate bill introduced in the coming weeks by Sen. Robert Menendez to push for regulation and licensing specific to online poker rather than online gaming.

Poker and politics are guaranteed to be intertwined going forward, and while there is a delay in pursuing the goal of indisputable legalization of online poker, there seems to be no doubt that the process is moving ahead.

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It was a Monday morning like most others during the 2009 World Series of Poker, as poker players sat grinding in cash games and satellite tournaments and fans wandered the halls wondering looking at the setup of the infamous WSOP. The halls were typically sparse with people prior to the noon start time of the events, but June 22 found the weary poker media seated in a ballroom at 11:00am for a press conference hosted by the Poker Players Alliance.

The announcement of National Poker Week came with the support of PPA Chairman and former Senator Alfonse D’Amato and Nevada Rep. Shelley Berkley, both of whom spoke about their passion for working toward the legalization and regulation of online poker. They will be joining other PPA members, including poker pros like Greg Raymer and Linda Johnson, in Washington, D.C., during the week of July 19-25 to express their support of the cause.

BluffMagazine.com caught up with Rep. Berkley just prior to her words of encouragement and the “shuffle up and deal” instruction to the Amazon Room full of senior poker players who awaited the start of the $1,000 Seniors No-Limit Hold’em World Championship (Event 43).

You obviously bring a long background in gaming to the online poker fight.

Gaming is the major industry in my Congressional district, and I have hundreds of thousands of constituents who depend on a strong gaming economy to make a living, so if it’s important to my constituents, it’s important to me. I also used to be vice-president of the old Sands hotel, so I know gaming. I think of the 435 members of Congress, I’m probably the only one with any gaming background, so I think my colleagues look to me when it comes to information about gaming matters.

But there are members of the gaming community fighting against Rep. Frank’s pro-gaming bills, like Steve Wynn and others.

There is a definitely a split in the gaming industry. There are those who are very much in favor of online gaming and those who are opposed to it and think it will hurt brick and mortar casinos. My personal opinion is that of a representative of Las Vegas. I think it would be disingenuous of me to pick and choose which type of gambling I prefer or don’t, so I support all forms of gambling. It’s worked very well in Nevada. I grew up here, I turned out alright, I raised a family here, my kids turned out alright… I’m a big proponent of gaming.

Have you had any discussions with Senator Harry Reid, who opposes Frank’s proposed legislation?

Often! (Laughs) I don’t think he was a great fan. I don’t want to speak for him, but I think he understands now that there are built-in controls and ways of insuring the integrity of the game, which he was very concerned about as the former chairman of the Nevada Gaming Commission. Obviously, there isn’t anyone who knows more about gaming than Senator Reid, but I think a lot of his questions have been answered, and while I can’t tell you where he is on any of these pieces of legislation, I know he has an open mind.

Are you going to be participating in National Poker Week?

Of course; that’s where I work, in D.C.. I have a job there with a very long commute! (Laughs) I come home to Las Vegas on weekends and go back during the week to work. And yes, I will be helping with National Poker Week.

Do you play poker?

I’ve been known to play a hand or two! (Laughs) Now my dad is a great poker player; he’s 84 and still plays everyday - not online, though. He likes the live action poker games. As for me, I don’t play live or online because I don’t have time for too many recreational activities period!

Did you consider playing the Seniors event with Mr. D’Amato?

What?! Why would I think of playing the seniors event?! Actually, I more than qualify, but I have a ridiculous schedule and go back to Washington tomorrow. It’s for everybody else to enjoy and for me to advocate for them to enjoy.

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The following is the second of a two-part interview with Poker Players Alliance Executive Director John Pappas. The first appeared on BluffMagazine.com on Monday, June 22. You can read that interview here.

The Poker Players Alliance has become an integral part of the poker industry, becoming ever more important as the U.S. government passed and began to attempt implementation of the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006. As Congress has spent the past two years taking note of the hardships put upon financial institutions by the UIGEA, not to mention the infringement upon personal freedoms, several members of Congress have come to work with the PPA to overturn the UIGEA and introduce new legislation to legalize online gaming, with a special emphasis on poker as a game of skill.

With a major presence at the 2009 World Series of Poker, the PPA looks to bring more attention to its efforts on local, state, and federal levels. As discussed in Part 1 of this interview, PPA executive director John Pappas disclosed that there are currently over 1.2 million members of the organization and well over $100,000 in its PokerPAC, but there is more to be done, predominantly at the hands of PPA members. While there are attorneys and lobbyists working behind the scenes to preserve Americans’ rights, members of Congress need to know - and can be influenced by the voices of their constituents - that poker players and enthusiasts are a powerful voting bloc and demand their basic rights.

Pappas sat down with BluffMagazine.com to discuss some of the recent actions of the PPA and where its efforts will be concentrated going forward.

What does your lobbying consist of in relation to the recently introduced Barney Frank bills and companion McDermott bill?

There are a number of things. There are two main things the PPA is focusing on right now. The first isn’t actually the Barney Frank bill, but it’s on the subject of clarifying the regulations that are supposed to go into effect on December 1. The banks need to comply with the UIGEA regulations with regard to the bill that was passed in 2006. We’re working with a bi-partisan coalition to have legislation introduced very soon, we hope, that would make sure the regulations don’t apply to internet poker. That’s where we’re spending a lot of our lobbying energies right now. Barney, as you know, just introduced his bill about three weeks ago, and we’re also spending time on the Hill talking to members of Congress about that, trying to get people to cosponsor the bill. We already have over 30 cosponsors, which is far beyond where we were two years ago when Barney introduced his previous bill. We’re very pleased with the progress there, but we’d like to see a bill move first that addresses the regulations and to say that poker isn’t affected by the UIGEA in the short term, and in the longer term, we’d like to advance Frank’s bill, which would license and regulate internet poker.

What part did the PPA play in the preparation and introduction of the recent Frank bill as a standalone one?

Chairman Frank has always said he wants this bill to go on its own merit, so that was his starting position. In the end, do I think that his bill, as introduced, will go through the House and the Senate and straight to the President’s desk? Probably not. There are going to be some changes to the bill, and there may be some other way that the bill gets through, maybe attached to a larger appropriations bill or some other major must-pass legislation.

Can you talk about the possibility of a Senate bill to be introduced?

We did have a bill introduced at the end of last Congress, S.3616, which was the poker-only bill. Imagine the Barney Frank fill, but apply it only to games of skill. Frank’s bill currently envisions casino style games on the internet, but this would be a poker-only bill. Senator Menendez introduced that bill last Congress as a place-holder for this year. We’re very close to securing a Republican co-sponsor for that bill, so it will be jointly introduced by them, and we hope to have that done before the WSOP main event.

On another note, what is the PPA doing on the state level in places like Minnesota and Kentucky?

In Minnesota, we’re currently in negotiations with the attorney general’s office as well as with the Department of Public Safety to halt enforcement of this ridiculous mandate they put on the ISP’s. Fortunately, we’re also working with the ISP’s to say that they don’t have to comply with this, and if they do comply, we could take legal action against you if you start blocking access to online poker sites for our members. None of the ISP’s intend to comply that we are aware of, at least the ones we’ve spoken with, and I think the attorney general, governor, and Department of Public Safety are all kind of back-peddling on this whole proposal because of the outcry that they saw not only from the poker players but from folks who are supporters of internet freedom and those who oppose censorship of the internet. (Note: Since this interview, the MN Department of Public Safety has dropped their attempt to block residents from accessing online gaming sites.)

Kentucky is in a good place. The PPA just filed its amicus in May. We do not have standing in the legal fight; the Interactive Gaming Council does, which is the trade association for a number of the poker sites like Full Tilt and PokerStars. They’ll be filing their briefs by June 5, and once those are filed with the state Supreme Court, it should hear the case toward the end of summer. I’m very confident that the Supreme Court will uphold the lower court’s decision that the state had no right to seize those domain names.

When the Commonwealth originally brought the case, they did it in an ex parte fashion, which means that they went before the judge in a secret meeting, essentially, and they presented all the evidence with no one there from the opposing side to present evidence for the other side. The judge made the decision that, yes, they could seize those domain names based on that hearing. I’ve seen the transcript of it, and it’s ridiculous. They basically said that people who play online poker are either mentally retarded or drunk or complete gambling addicts. This was how the Commonwealth tried to portray poker players. But then they tried to extort the sites for billions of dollars to settle on this case, claiming that the Commonwealth is losing all sorts of money. But if the people playing online are as they said, would they then be allowed in a casino or racetrack in Kentucky? Where are they losing the money?

It’s a ridiculous case, and we’re very confident that the Supreme Court will uphold just on the basic facts that Kentucky doesn’t have jurisdiction to seize these domain names. And a domain name isn’t a gambling device. On those two counts alone, we win. And then you have the argument that poker’s a game of skill and not gambling under Kentucky statute, if we even get to that argument, we win that, too.

In which other states is the PPA is heavily involved?

Colorado, South Carolina, Pennsylvania. We won court cases in all those states in recent months. Even in South Carolina, the court found that poker was a game of skill but had to find the defendants guilty under the current statute. We were active in trying to pass a law there that passed out of committee and never got to the House vote, but we’ll be in a position to do that next year. We also have the court case there, where we’re appealing the case for the individuals who were found guilty despite the skill decision. In Colorado, where the gentleman was acquitted by a jury for holding poker tournaments in bars and taverns , the state appealed that, and we’re fighting the appeal. In fact, we just filed our briefs last week in that one. In Pennsylvania, our briefs are due in the first week of June. The judge there ruled that poker was a game of skill and therefore not unlawful gambling. The state again appealed it, so we’re fighting that. Quite honestly, should these cases be successful in appeal, that’s even better for poker because the value of the appeal is even greater than the initial victory. The higher the court, the broader the jurisdiction.

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