US Government Seeking Revenue: Could Legal Online Poker Be The Answer?

October 9, 2008

In a time when the US economy is falling, and falling fast, the US government is seeking new ways to generate revenue. Therefore the timing of the proposed S. 3616 legislation by Senator Robert Menendez, which requests the legalization, regulation and taxation of the online gambling industry, couldn’t have been better.

According to a study by PricewaterhouseCoopers, the online gambling industry is estimated to generate revenue of about $40 billion over the next 10 years. This revenue would include everything from income tax, corporate income tax and wagering tax to licensing fees. Along with this estimate, the study revealed that if all US states were to hop onboard the legal online gambling express, the US would have the potential to generate up to $17.6 billion each year.

Much of the online poker and gambling industry has already stated their willingness to obtain a license from the US, should the country legalize online poker and other forms of online gambling.

As it stands now, the US is only losing an exceptional sum of money each year by choosing to keep online poker illegal. Americans continue to participate at online poker sites for real money, so every penny that is lost is simply leaving the US market, and those won are producing no tax revenue.

There are still plenty of issues in Washington that need attention, so I wouldn’t expect too much too soon, but certainly Menendez’s proposed S. 3616 is worth some attention. American online poker fans can rest a little easier at least knowing that the political debate over the pros and cons of legalizing online poker in the US is becoming much louder is Washington.

And here’s a little food for thought – Democratic Presidential Candidate Barack Obama simply loves to play poker. This doesn’t mean he is fully prepared to legalize online poker, but it’s definitely something to consider as we head into the election month of November.

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    DoylesRoom.com Seized In Kentucky Online Poker Hearing; Final Ruling Oct. 15

    October 8, 2008

    The debacle in Kentucky continues this week as Franklin County Circuit Court Judge Thomas Wingate declared he would give his final verdict in the case, where the state is attempting to seize 141 domain names believed to be in connection with illegal online poker and gambling, on October 15th. Premature to this decision, however, GoDaddy.com took it upon themselves to cough up four of the domain names in question, including DoylesRoom.com.

    illegal online poker hearing in KentuckyLate Monday night, before Tuesday’s hearing, the online domain registrar handed over the certificates of four online gambling domains which had been registered through GoDaddy.com. The domains were that of DoylesRoom.com, SlotsofFortune.com, BingoWorkz.com and USABingo.com.

    Judge Wingate ordered that all seized domains should remain unaffected, therefore continuing operations as usual, until his final ruling on October 15th. Head over to any of the four domain names GoDaddy so willingly relinquished to the courts and you’ll find that nothing seems out of place – not yet anyways.

    The defense attorneys argued at great length that the order to seize 141 domain names violated a number of provisions in the Commerce Clause of the U.S. Constitution. They also argued that domain names cannot be defined as “gambling devices”, and that online poker is a “game of skill”, legal in Kentucky, therefore should not be connected with other illegal online gambling operations.

    Edward Leyden, President of Interactive Media Entertainment & Gaming (iMEGA), made an interesting point as to how Kentucky Governor Steve Beshear can claim online gambling to be illegal in the state while the home of the Kentucky Derby, Churchill Downs, operates an online horse race betting site, TwinSpires.com, which is licensed in Oregon. Leyden posed the question that if Kentucky is so intolerant of online gambling, why should this site be permitted?

    The TwinSpires web site responded by comparing horse racing with poker, “Just like poker, you are not playing against the house. You are playing against the rest of the people wagering on racing; the better your strategy, the more you can win.”

    So it would appear that, in an attempt to remove their own hide from the block, TwinSpires has actually positioned itself in support of the defense; or at least those dealing in online poker rather than casino gambling.

    Leyden continued his calculated attack by indicating that if the TwinSpires gambling site alone should be permitted to operate in Kentucky, serving only the interest of the state, such operations are prohibited by the US Constitution. Under the Commerce Clause, no state is permitted to engage in discrimination to eliminate competition. Therefore, with the seizure motivated by protectionism, it must be deemed unconstitutional.

      Senator Proposes New Legal Online Poker Bill, S. 3616

      October 2, 2008

      U.S. Senator Robert Menendez has introduced a new bill, S. 3616, aimed to legalize and regulate Internet skill games in the United States. The Bill, deemed “Internet Skill Games Licensing and Control Act of 2008”, would effectively decriminalize the transfer of funds for the purpose of playing online poker, bridge and mahjong.

      Menendez’s bill defines Internet skill games as any online game that utilizes the simulation of cards, dice or tiles, with the factors of winning dominated by skill rather than luck.

      Should this bill be passed through Congress, it would alleviate the problems online poker fans have faced since the passage of the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). This bill calls for clear and unmistakable regulations that would allow financial institutions to conduct business with sites that provide Internet skill games.

      S. 3616 clarifies what online poker players in the US have been trying to get across to the government for nearly two years now – that online poker is a game of skill and should be licensed and regulated in the United States, not put on prohibition.

      In yesterday’s Press Release from the Poker Players Alliance (PPA), the “poker grassroots advocacy group” praised the actions of Senator Robert Menendez for introducing S. 3616, stating, “The legislation establishes the needed licensing and regulatory framework for the United States to exercise appropriate control and oversight over Internet poker and other games of skills.”

      Alfonso D’Amato, former Senator and current Chairman for the PPA had this to say: “This action by Senator Menendez is yet another example that prohibitions on Internet gambling, and specifically poker, will not work to protect consumers. The PPA has long advocated for thoughtful and effective licensing and regulation of online poker as a means to protect vulnerable communities, such as children and compulsive gamblers, and provide appropriate controls to thwart consumer fraud and abuse. Senator Menendez legislation is the right vehicle to achieve those goals.”

      The PPA’s Press Release goes on to identify the key provisions of S. 3616, the ‘Internet Skill Games Licensing and Control Act’:

      - Thorough vetting of potential licensees
      - Mandatory implementation of technologies to protect against underage gambling and to monitor and detect individuals with excessive gambling habits
      - High standard to thwart fraud and abuse of customers
      - Regulation to prevent money laundering
      - Processes to prevent tax avoidance

      You can read the complete bill, S. 3616, here.

        Kentucky Seizure Of Illegal Online Gambling Domains Frozen

        September 29, 2008

        A Kentucky court in Frankfort held another hearing Friday, September 26, that resulted in freezing the previous court ruling which called for 141 online gambling domains to be seized by the Commonwealth of Kentucky due to illegal online gambling operations. This most recent hearing is considered a major, if not temporary, victory for pro-gambling advocates.

         

        According to a press release from the Kentucky governor’s office, one online gambling operator with at least two domains on the list of 141 has already succumb to the initial order for seizure, but the remaining domain owners are not willing to hand over their assets so easily.

         

        Circuit judge Thomas Wingate heard the defense statements on Friday of multiple counsels defending the interest of online poker and online gambling operators. Judge Wingate agreed that the defense would need time to prepare legal briefs in the case, granting a continuance. The previous ruling has been frozen, and the hearing will resume in early October, on the 6th or 7th of the month.

         

        Though Wingate was not pleased that attorneys for the defendants would not reveal the names of corporations or owners of the domains in questions, he did describe the case as “very complex” when calling for a continuance. The judge reiterated to the defense that he is not lifting the order for seizure, stating this is only a temporary freeze, and that “You are going to have to eventually pony up and say who these people are.”

         

        The PPA (Poker Players Alliance) and iMEGA (Interactive Media Entertainment & Gaming Association) each file “friend of the court” briefs in the case that advised judge Wingate of related difficulties concerning the way the case had been filed up to this point.

         

        Executive Director of the PPA, John Pappas commented after Friday’s hearing. “The Poker Players Alliance is pleased that the court decided to allow for a full review of this case, including arguments from both sides. Until this point, the state and its hired gun class-action attorneys have acted in an ex parte fashion – only presenting one side of the argument to the court. The continuance granted today will ensure all the cards are on the table and allow the current owners of the domain names of the 141 websites to retain ownership in the interim.

         

        “The PPA believes that a thorough review of the facts of the case will result in a favorable outcome for the thousands of Kentucky residents who play online poker.”

          Kentucky vs. Online Gambling Domains: Update

          September 26, 2008

          As you probably already know, the Franklin Circuit Court of Kentucky has ordered the seizure of 141 online gambling domain names declared by the courts to be guilty and/or in connection with illegal online gambling activities pertaining to residents of the state.

          On September 18, the court judge ruled that the plaintiff in the case, the Commonwealth of Kentucky, was to take control of these domain names.

          4Flush.com has obtained a link to the actual order to seize the domain names, signed by the Kentucky court judge, stating the names of the 141 domains in question and the course of action to be taken.

          You can view the document here: Order Of Seizure Of Domain Names

          Below is the entire list of 141 online gambling domains set to be seized by the Commonwealth of Kentucky:

          123bingo.com
          777dragon.com
          7sultans.com
          absolutepoker.com
          aceshighcasino.com
          alljackpots.com
          allslots.com
          arthuriancasino.com
          atriumcasino.com
          aztecrichescasino.com
          bellavegas.com
          bet21.com
          betroyalcasino.com
          bigtimebingo.com
          bingoknights.com
          bingoville.com
          bingoworkz.com
          blackjackballroom.com
          bodoglife.com
          bonuslevelslots.com
          bookmaker.com
          bugsyclub.com
          cakepoker.com
          capitalcasino.com
          captaincookscasino.com
          caribbeangold.com
          casinobar.com
          casinoclassic.com
          casinoextreme.com
          casinofortune.com
          casinograndbay.com
          casinokingdom.com
          casinoshare.com
          casinous.com
          cirruscasino.com
          clubusacasino.com
          cocoacasino.com
          coolcatcasino.com
          countycasino.com
          crazypoker.com
          crazyvegascasino.com
          desperatehousewivesbingo.com
          doylesroom.com
          dsipoker.com
          englishharbour.com
          ezbets.com
          firstwebcasino.com
          fortunejunction.com
          fortuneroom.com
          fulltiltpoker.com
          galaxiworld.com
          gamblingboard.com
          goldencasino.com
          goldgatecasino.com
          goldenpalace.com
          grandmondial.com
          highrollerslounge.com
          indiancasino.com
          inetbet.com
          itsrealpoker.com
          ivegas.com
          jackpotcapital.com
          jackpotcity.com
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