Poker players tuned into Fox News on Wednesday witnessed Poker Players Alliance (PPA) Executive Director John Pappas debating against former prosecutor John Kelly about the U.S. Attorney’s Office for the Southern District of New York seizing over $30 million from online poker payment processors.
In November, online poker players in the United States were glued to CBS News program “60 Minutes,” which contended that online poker was illegal on multiple occasions. It’s a distinction that is supported by the U.S. Department of Justice, although the PPA asserts that the Wire Act of 1961 and other laws only apply to sports betting. Kelly told Fox News viewers that online poker “is not specifically outlawed. It’s one of the gambling engagements that are outlawed. The government has deemed it necessary in the SAFE Port Act of 2006 and other legislation that this should not be legal.” The Unlawful Internet Gambling Enforcement Act (UIGEA) was passed during the waning moments of the 2006 Congressional session at the urging of then-Senate Majority Leader Bill Frist (R-TN). The measure was attached to the SAFE Port Act, an unrelated port security bill.
Pappas quickly corrected Kelly, noting that the over $30 million seized was not as a result of the UIGEA: “The concern that the action is related to the UIGEA is completely false. In fact, the UIGEA doesn’t even go into effect until December 1st, so that is not true.” The regulations of the UIGEA went into effect on January 19th, one day before President Barack Obama assumed office. However, the financial services industry has until December 1st to come into full compliance with the confusing law. Congressman Barney Frank (D-MA) has introduced HR 2266, the Reasonable Prudence in Regulation Act, which would delay that date by one year.
Kelly also dove into the moral arguments against gambling that online poker players hear all too often: “You have children who have access to the internet that can engage in this. It’s going to lead to an increase in gambling addiction. States are going to lose out on a lot of revenue and most importantly, unlike gaming licenses, which are very strictly regulated, there’s no control or oversight.” To solve the latter obstacle, Frank introduced HR 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act, which would establish a comprehensive licensing and regulatory framework for the internet gambling industry. It was introduced on May 6th and sports 26 co-sponsors.
Online poker sites like Full Tilt Poker and PokerStars have compensated players for paper checks and echecks that have bounced. In some cases, rooms have doled out 10% bonuses for the inconvenience. Pappas boasted, “The sites that are operating today and offering poker services to U.S. players are not rogue operators. These companies are licensed and regulated in their home jurisdictions and do business around the globe. They treat their business much like a bank: They have compliance departments, fraud departments, and their customer security and protection are most important to them.”
In response to underage gambling, Pappas explained, “We believe that licensing and regulation will help mitigate those issues.” Online poker sites like PartyPoker, Pacific Poker, and Ladbrokes are owned by publicly traded companies on the London Stock Exchange.
Pappas’ appearance came during the Fox News program “Happening Now,” which airs from 11:00am to 1:00pm ET daily. The show is hosted by Jon Scott and Jane Skinner and covers the day’s breaking news from the United States and around the world.
While the show aired, the PPA and attorneys for the affected payment processors continued to discuss the future of the seized accounts with attorneys for the Southern District. In an exclusive interview with Poker News Daily, attorney Jeff Ifrah was surprised by the government’s action because it targeted funds earmarked for online poker players and not sports books. Neither Full Tilt Poker nor PokerStars offers sports betting.
Stay tuned to Poker News Daily for the latest from the Southern District.
