More than 100 of America's top poker players
descended on Washington earlier this week to lobby politicians to rescind the
controversial law that aims to prohibit online gambling.
Repercussions continue apace from the legislation, which
last year sent UK betting enterprises such as PartyGaming scurrying back across
the Atlantic and sparked huge falls in their shares. Earlier this week the
World Trade Organisation and the US announced that they needed more time to
work out the envisaged billions of dollars worth of compensation, as the ban
breaks global trade rules.
At the same time, American legal and banking
experts are attempting to decipher just how the ban will work when the law is
It was last
October the then Senate majority leader Bill Frist, a Republican, pushed though
the Unlawful Internet Gambling Enforcement Act (UIGEA), almost his last
accomplishment before he retired, to protect children and problems gamblers
from going astray.
The UIGEA does not ban online gambling per se but,
when implemented, makes it illegal for banks and credit card companies to
facilitate payments to and from gambling businesses.
anomaly-rich attitude to gambling, which allows online betting on horse racing
and lotteries, has been found to breach global trade rules and the US and the
WTO have been arguing over compensation for months. A deadline for settlement
scheduled for last Monday was pushed back to December 14.
takes on the US The European Union, India, Antigua and Barbuda, Japan,
Costa Rica, Macao, Canada and Australia have all filed for damages. If the WTO
can force a multibillion dollar settlement in this case it will show whether it
has the wherewithal to tackle an offender as big as the US.
suggest that Antigua, which won the test case against the US as well as several
appeals, does not want to negotiate for compensation but wants to litigate for
the $3.4bn it is owed. Word is Antigua wants to suspend US copyright
protections on films, music and software to the tune of that amount.
The latest financials from former FTSE 100 company PartyGaming vividly
show the repercussions of the ban in the EU. A year ago, when it was active in
the US, it reported third quarter revenues of $337m. This week it said its
sales were $115.7m.
Even though the big British online gaming companies
pulled out of the US last year, the UIGEA has still not been enacted and a US
government estimate last year said 63 million Americans around 20% of
the total population bet on the internet. Companies that did not rush
for the exit door are still making good money.
The reason for the
implementation delay is that the rules governing the UIGEA are nowhere near
ready. Earlier this month a year after the law was passed US
authorities announced regulations on enactment. Interestingly those rules do
not hold actual online gamblers guilty.
Nor are the banks and financial
institutions guilty should they process electronic gambling payments. The only
entities which can commit a crime under the UIGEA are online casinos and their
The regulations do, however, place the onus on the banks to come
up with procedures on how they will identify and stop payments; procedures
which are to be implemented by the middle of next year.
Kenneally, director of payments and technology policy at trade association
American Community Bankers, thinks that deadline will be pushed back and it
will be 2009 before anything concrete is ready.
By then, opponents hope
UIGEA will be well on the way to being dumped and there are already two or
three initiatives to that end working their way through Congress.
The Poker Players Alliance, a group that
claims 809,000 members, argues that online poker is simply an update of a
150-year old US tradition. It met with Washington power-brokers earlier this
week, lobbying for its view that online poker should not be banned but
Talking points from the PPA included its estimation that
legalising online poker could bring in annually around $3b in tax revenues to
federal government coffers. It also stressed the anomaly that Congress bans
poker while allowing online betting on horse racing and lotteries.
reception on Tuesday, flamboyant World Series of Poker players mingled with
besuited politicians and their staffs. Vanessa Rousso, the top earning US
female and a full-time law student at the University of Miami, said internet
gambling was important, especially for women.
"Being a woman, playing
on the internet was a great way for me to become comfortable playing the game
before having to sit down with a bunch of older guys in the intimidating
atmosphere of a real casino. I play about 10 hours a week online and as a
professional player, it allows me to constantly hone my game and improve," she
Her rival Annie Duke stressed the game's skill level: "Poker is a
game that is deeply complex, but the complexities don't reveal themselves until
you know a lot about the game."