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Posted by on Feb 19, 2015 in Blog, General Poker, Politics | 3 comments

Ten Reasons Why Online Poker Could Get Outlawed

 

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Go back and read the poker forums sometime.  The evidence is all there in black and white.

In 2006, popular sentiment at the time was the Unlawful Internet Gambling Enforcement Act would never become a law.  Then, after the UIGEA did indeed pass and become law, the prevailing thought within the poker community over the next five years was the federal government wouldn’t do much to shut down the most popular sites and actually prohibit Americans from logging online to play poker.  Then, after Black Friday happened in 2011 an all the biggest poker sites operating within U.S. jurisdiction were shut down and hundreds of millions in player deposits were frozen, many of those same disengaged and apathetic voices are now saying the same thing.

Sigh.

Nothing to worry about, they insist.  Nothing to see here, so move on.  Just as before, the false presumption is — the Restoration of America’s Wire Act (RAWA) has no shot of passage.  After all, the federal bill which would outlaw online poker in all 50 states failed to muster enough support during the last session of congress.  Our side won the last time around, so why won’t we repeat the same victory in 2015?

Will we ever learn?

Is anyone else disturbed that so many poker proponents have been dead wrong time after time?  And when they’re proven wrong, who ends up paying the price?  Answer:  Poker and everyone involved in the game — including its players, cardroom staff, online support teams, and all related industries — from media outlets to software developers to marketing professionals.  Talk to so many of my friends who have been laid off from poker jobs within the last few years, simply because the money wasn’t available to pay them anymore.  That’s the cost of a stagnant domestic poker market.  Worsening poker games — less poker options — and for some, even unemployment.

Fact is, right now, the Sheldon Adelson-backed Coalition to Stop Online Gambling is winning the political battle in Washington.  In fact, they’re kicking our asses.  We aren’t even covering the spread.  As I wrote yesterday, “they are outspending, outmaneuvering, outthinking and outworking (us), despite the hard work and best intentions of many.”  Listen up, people.  We are losing.

What’s caused me to reach this stark conclusion and write about it?  Consider the current status of what’s happening right now inside Washington and the political landscape ahead over the next ten months.  There’s a storm on the horizon.  Anyone who doesn’t see it is blind to reality and to history.

What follows are ten compelling reasons why Restoration of America’s Wire Act (RAWA) might very well become federal law in the foreseeable future:

 

(1)  RAWA supporters have made this a top political priority and they’re now in positions of power —  While a similar version of RAWA never made it to a floor vote during the last session of congress because it lacked enough support, this year’s updated bill will most certainly reach the House Judiciary Committee, and will probably pass, leading to a full vote in the House of Representatives.  Guess who’s the chairman of this powerful congressional committee?  Answer — Rep. Bob Goodlatte (R-VA).  He’s been the most outspoken critic against all forms of gambling expansion ever since the National Gambling Impact Study Commission released its findings back in 1999.  He was also the primary sponsor of the Internet Gambling Prohibition Act, also known as the Goodlatte-Leach bill, which didn’t pass, but provided the basis for the more current RAWA.  Rep. Goodlatte stands as one of America’s most vocal critics of gaming/casinos/online gambling and now that he’s in charge of the committee expect it to move forward full steam ahead.  Once the bill passes the Republican-controlled House, it moves the to Republican-controlled Senate.

Over in the Senate, Goodlatte’s counterpart is Sen. Charles Grassley (R-IA), a leading conservative likely to grant widespread latitude to his fellow ranking Republican Sen. Lindsey Graham (R-SC), one of RAWA’s primary sponsors and a well-known lackey of Sheldon Adelson.  In fact, all of the top five ranking Republicans on Senate Committee on the Judiciary are strictly opposed to expansion of any kind of gambling, and at least five of six (Grassley excluded) would most certainly favor prohibition against online poker — including Orrin Hatch (R-UT), Jeff Sessions (R-AL), Lindsey Graham (R-SC), John Cornyn (R-TX), and Mike Lee (R-UT).  Ted Cruz (R-TX) is also on this committee.  As for Democrats, there are no real proponents of gambling counter forces of prohibition.  Moreover, the second-ranking Democrat on the committee is Sen. Dianne Feinstein (D-CA).  She’s signed on as a co-sponsor of RAWA.

The deck is clearly stacked in favor of RAWA making it to a debate within both of these powerful committees, and probably passing.  Odds are, the bill would then be up for a floor vote in both chambers sometime during this current session.  Again, recall Sheldon Adelson’s private meeting with House Republicans during the second week in January, just prior to the convening of the new congress.  This is a top priority.

Bottom Line:  The political climate is now ideal of some version of the RAWA to pass both the House and Senate.  Even in the unlikely event this doesn’t happen, look for proponents to tack on RAWA provisions to some other “must pass” legislation, much in the same manner UIGEA was signed into law.

 

(2)  The online gambling prohibition movement is well funded and far better organized — Say what you will about the Coalition to Stop Internet Gambling, which uses dumbed-down talking points and burned-out ex-politicians to convey its messaging.  Unfortunately, this well funded lobbying organization counts some influential people and powerful organizations among its membership — namely churches and religious groups, various branches of the NAACP and Latino advocacy organizations, local and state police associations, mayors councils, and business interests.  Then, there’s the rank and file moral objection among some citizens and voters which is always to be taken seriously in politics.

RAWA’s supporters have plenty of money at their disposal, perhaps even what amounts to an unlimited budget.  Adelson, the 11th-richest person in the world, has publically stated his intent to spend “whatever it takes” to make online gambling illegal.  Contrast this teeming political treasure chest with what RAWA’s opposition has spent (and done), which amounts to nothing tangible.  Caesars Entertainment is now in the midst of bankruptcy.  MGM-Mirage has been saying they’re for online gambling, yet has committed relatively little to the fight.  Stations Casinos-owned website Ultimate Poker is now out of business.  The casino industry’s leading voice, the American Gaming Association (AGA) retreated from its support of online gambling and poker and now insists that its neutral.  Translation:  Political insignificance.

In terms of organization, RAWA’s coalition continues to recruit wide support.  They educate lawmakers and the general public (however ludicrous their arguments might sound).  Most important of all — they have a political action plan that’s now fully put into effect and moving forward fast.  Moreover, RAWA forces have created slick media messaging designed to appeal to our most fundamental fears on public safety, family protection, morality, and even national security.  They have a website, they make videos, they engage in social media, and they cross market their messages on other popular platforms (religious, law enforcement, business, etc.).

Finally, there’s the enticement of current and future funding for candidates and political action committees, since campaign fundraising for 2016 has already begun.  Few, if any, elected Republicans have spoken out against RAWA, which would certainly risk Adelson’s financial backing.  Even Sen. Harry Reid (D-NV), who’s up for re-election in 2016, has made nauseatingly conciliatory remarks in favor of Adelson [Read:  Harry Reid’s Curious Soft Spot for Adelson].  Word is, he’s backing away from his previous support in favor of online gambling as a payoff to Adelson, who then won’t significantly bankroll opposition in the next election.

Bottom Line:  Pro-RAWA forces have no financial troubles.  They possess what amounts to a blank check.  That’s a temptation many politicians will find impossible to resist, particularly when there’s little or no compelling movement or advocacy working the other side of the debate.

 

(3)  The RAWA has reasonably broad bi-partisan support — In the current climate of political gridlock, both Republicans and Democrats will look to common issues where they can work together, which won’t alienate their voting base.  This odd alliance would seem to include standing up for families and protecting America against money laundering and terrorism (which are some of the RAWA supporters’ favorite talking points).  Consider that many conservatives and liberals are united in this effort.

RAWA is supported by members of both parties — including mayors, governors, congressmen, senators, and even presidential candidates.  The lobbying active coalition includes former New York Governor George Pataki (Republican), and former Denver Mayor Wellington Webb, former San Francisco Mayor Willie Brown, former Arkansas Senator Blanch Lincoln (Democrats).  Even though these are paid shills, they have already been active and will continue to be outspoken in support of RAWA.

Bottom Line:  Many current and former elected officials have already pledged their public support for RAWA and other measures to stop online gambling.  Hence, it will be very difficult for them to back away, or reverse themselves.  RAWA clearly enjoys widespread bipartisan support, not just at the federal level, but also in states and local communities.

 

(4)  There’s growing perception and even fear that America already has enough gambling — This might be the toughest argument to refute.  No doubt, casino gambling has proliferated over the past 20 years and is now legal in 37 states.  Some form of gambling is legal in 48 states.  With change, and even the growing public acceptance of gambling, usually comes the inevitable backlash against it.  It’s hard to justify why there needs to be more gambling in society.  Poker players and Libertarian-minded ideologues can argue about their fundamental rights being violated, but no one really cares.  It’s politically-connected groups and big money which will sway this debate, not the PPA or the Cato Institute.

There’s also the widespread opposition within the casino industry to modernity and change.  Smaller casino interests fear the bigger operators monopolizing online gambling, if and when it comes.  So, what’s in it for them?  Frankly, the answer is — little or nothing at all.  And so, many smaller casinos — including tribal groups — favor prohibitions against expanding competition.  This might not seem significant, but in a state with a small population and only a few casinos which oppose the threat of online gambling, this could be a tipping point for representatives to support RAWA.

Bottom Line — In the current political and social climate, it’s difficult to argue we need more gambling.  While it’s not clear if this translates into a stop gap measure like RAWA designed to outlaw online gambling, there are enough fears, even among some within the casino industry, to make passage a realistic possibility. 

 

(5) The advantages of having a simple message outweigh a more reasonable, but complex argument — In politics, the simplest message often wins.  Forward.  Drill Baby Drill.  A Kinder Gentler America.  It’s the Economy, Stupid.  It’s Morning Again in America.  Are You Better Off Now than Four Years Ago?  It’s far easier to recite rhetoric than state facts or go into detail.  It’s more effective to sling mud, than defend and explain a position.  It’s proven that the exploitation of fear works.  As political operative Karl Rove once famously said, “if you’re explaining, you’re losing.”

RAWA backers have come up with some ridiculously naïve political slogans, but given how often they’re repeated, they seem to be working.  The most egregious of these is the “click your mouse, lose your house” expression.  Dumb?  Yeah.  Accurate?  No.  Does it work?  You betcha.’  Imagine that you’re not Internet savvy and have never played online poker before.  Do you think this slogan might spook your family and raise your fears?  Answer — yes.

Bottom Line — A simple political message combined with the exploitation of someone’s worst fears is often an effective political weapon.  Quick — name the slogan of those who want to legalize online poker and gambling?  Do we even have a slogan?  Nope.

 

(6)  The online gambling movement remains disorganized and mostly divided — Not only is the casino industry divided as to where it currently stands on RAWA (some like Sands and Wynn are opposed, and others including Caesars and MGM-Mirage favor), online gaming interests have also seriously been at odds since the very beginning.  The only viable grass roots political force actively working in support of online gambling are poker players and small groups scattered throughout the U.S. which have done some truly heroic deeds (such as targeting and ultimately defeating Rep. Jim Leach in Iowa in 2006).  Meanwhile, other gamblers which would enjoy more options at their disposal are a complete no-show in this fight — including recreational game players, sports bettors (where are the voices of millions who bet on sporting events?), and tragically, the vast majority of poker players who are utterly indifferent to politics and their own plight.

Moreover, the continental divide which existed for so long between two poker giants — Caesars Entertainment and PokerStars.com — did immeasurable harm to any concerted effort to stop momentum for RAWA.  Little or no public relations campaign nor advertisements have ever been mounted by anyone within the online gambling industry, despite the billions reaped in profits that went to the owners of PokerStars, PartyPoker, FullTilt, UltimateBet, or the other giants which got rich and then did virtually nothing to try and affect the American political landscape and the source of their biggest market.  Now, that gross negligence has come back to haunt the entire industry.

Fortunately, Caesars Entertainment and Amaya Gaming (which now owns PokerStars) appear to finally be joining forces, politically speaking.  Question is, might it already be too late?

Bottom Line — RAWA supporters are clearly united when it comes to passage of a federal law.  Meanwhile, RAWA opponents have long been at odds and still haven’t demonstrated the ability to build an organization and work together.  In the race to be heard in Washington, we’re already way behind.

 

(7)  The current political tide and world events favors passage of RAWA — Who can or will argue with the FBI’s official position on online gambling, which states the most powerful law enforcement agency in the country’s own fears of increased fraud, money laundering, and even funding for international terrorism?  Shudder.  Go ahead and refute their congressional testimony from a few years ago (2009, Committee on Financial Services).  That’s easy to do, since none of these fears have become a reality in the three states which currently permit online gambling or the many nations in the world where the activity exists and prosper.  Fact is, these are politically precarious times right now, where no politician wants to be on record as having anything to do with the potential for fraud, money laundering, underage gambling, terrorism, or risk the perception of not backing federal, state or local law enforcement.

Bottom Line — RAWA supporters have some powerful arguments in their favor (even if unfounded with facts and logic).  They argue that online gambling poses far greater risks for all sorts of even worse dangers, which may be easy to refute.  But the far safer political move for elected officials is to back what the FBI says and claim they’re standing up to lawbreakers and those who pose a potential threat to national security.

 

(8)  There’s uncertainty as to where President Obama stands on RAWA — If the bill to outlaw online gambling and poker ultimately reaches the president’s desk, would be sign it?  President Obama’s defenders within the poker community cling to optimism and point to then-“Senator Obama” who once reportedly confided that he’s played online poker before.  None of that matters now.  It’s 2015, not 2006.  He’s entering the seventh year of a presidential term and the last consideration will be President Obama’s personal views on gambling and poker.   Want to know exactly how many bills the president has vetoed during his six-plus years in office?  Try this — two.  Given this, is there any justification for confidence President Obama would draw a line in the sand on online gambling and veto RAWA?  I doubt it.

Bottom Line — President Obama has many fights ahead in the next year and a half of his term.  He won’t want to pick one on an issue with relatively little meaning or significance.  This becomes even more worrisome if RAWA supporters attach the bill as an amendment to some other legislation, as happened in 2006, which will force the president’s hand into signing. 

 

(9)  Libertarians and states’-rights advocates aren’t nearly as powerful as the concerted opposition — Some online proponents rightly point to libertarians (Sen. Rand Paul is the most predominant among elected officials) who will likely stand and oppose RAWA.  Trouble is, there aren’t nearly enough  of them in either party to make a difference.  Libertarian-minded activists and voters have become a loud and even influential force in presidential politics, proven during the last “Ron Paul Revolution,” said to make up about a quarter of the Republican Party.  Their impact upon what happens in congress however, remains utterly insignificant.

States’ rights has always been a popular issue, especially among conservatives.  Some states’ rights advocates opposed to federal Big Brother-ism have even spoken out against RAWA (the groundswell was hardly overwhelming).  But this group continues to lose traction, proven by political losses in the ongoing implementation of the Affordable Care Act (ACA) and the states’ authority on issues such as gay marriage.  The states’ rights movement simply isn’t what it used to be, and except for a few fringe groups, stands little chance of making its case effectively.

One must also worry about the silence of these same voices when it comes to reversing the so-called “Bradley Act.”  When this draconian federal law clamped down on sports betting in 1992 under the guise of the Professional and Amateur Sports Protection Act, there was little or no opposition.  While there’s now some serious talk about making some form of sports wagering legal, no one bothers to argue the libertarian or states’ rights case on this issue.

Bottom Line — The 1961 Federal Wire Act supposedly needs to be updated and modified.  It’s reasonable to argue that since that federal law was acceptable then, a similar new law (RAWA) will be acceptable now. 

 

(10)  Online gambling and poker lacks a sympathetic face — Who is the face of online gambling and poker at the moment?  Well, in the mainstream the answer is — no one.  Quick — name our leader.  We lack a compelling national figure nor do we have a sympathetic face which humanizes the fight to play poker and bet sports and gamble leisurely.  Aside from a few poker players, minor celebrities who are only marginally known in the public eye, we have no real leader nor recognizable individual who can effectively counter the opposition’s efforts.  What faces are affiliated with online gambling pretty much consist of college dropouts wearing sunglasses and a hoodie, casino bosses, shady offshore operators, and even potential money launderers and terrorists.  That’s the imagery we’re up against.

Meanwhile, pro-RAWA forces have mayors, governors, congressmen, senators, presidential candidates, preachers, social activists, minority groups, and perhaps most persuasive of all, CHILDREN to personalize their plea.  This contrast in faces and personalities makes for a significant disadvantage in conveying an effective message and defeating RAWA.

 

Conclusion:  I believe Restoration of America’s Wire Act (RAWA) is an overwhelming favorite to achieve congressional hearings sometime during 2015.   I also believe some form of this bill will ultimately pass committee(s) vote and eventually be up for a full vote by the House of Representatives and the Senate.  In that case, I believe the bill still stands as likely to pass.  If the bill finally reaches the President Obama, I believe he will have little choice but to sign it into law.

 

Coming Next:  In my next column, I’ll write about the treachery of the America Gaming Association (AGA), address their flip flopping on online gambling, and explain why they’ve lost both political and public credibility.

 

3 Comments

  1. Excellent analysis. Politics can be tough to predict, but there is no question the current political climate is more favorable to anti-poker / anti-gaming legislation than many in the industry are willing to admit.

    One minor point: Jim Leach was NOT defeated because of his UIGEA support. I know that’s a popular belief in the poker community, but it’s fantasy. I’ve lived in Iowa since 1988. Leach was a moderate Republican who represented an increasingly Democratic district. Leach also famously refused most corporate donations, and was at a financial disadvantage in the 2006 election. That year was a pro-Democratic wave election, Leach was in a Democratic-leaning district, was outspent, and still only lost 51%-49% (such is the advantage of incumbency). Online gaming and the UIGEA were never an issue in the election. In fact, the man who beat Leach also was on record favoring UIGEA. Full debunking from immediately after the election here: http://sunlightfoundation.com/blog/2006/11/13/who-beat-jim-leach/

    • Nolan Replies: This is the first I’ve heard or read about Rep. Leach’s defeat not being linked to poker/UIEGA. Thanks for the clarification.

      — Nolan

  2. Here’s a slogan for you….”A dollar won is twice as sweet
    as a dollar earned.” – Fast Eddie Felson in ‘The Color of Money’

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