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By Karoun Demirjian (contact) 
Monday, Oct. 10, 2011 | 2:01 a.m.
VEGAS INC archives
Beyond The Sun
It took years to get gaming lobbyists, poker enthusiasts and sympathetic lawmakers to join in an effort to legalize online poker in the United States. But just as they appear close to success, their union is fraying.
The online poker community has been reeling from federal charges against some of its biggest operators. Last spring, the Justice Department walloped three major poker sites — PokerStars, Full Tilt Poker, and Absolute Poker — with charges of bank fraud, money laundering, and other illegal gambling offenses; last month, it added running a $440 million Ponzi scheme to the accusations against Full Tilt.
Those developments highlight, poker lobbyists say, why online poker operators and some 25 million American aficionados must be regulated by U.S. laws and officials.
“These indictments make the case for regulation and legalization in the United States,” American Gaming Association president Frank Fahrenkopf said the day the Justice Department released its Ponzi scheme charge against Full Tilt. “In many ways the actions of the Justice Department, which we fully support, really sort of focus on the need for this legislation more than anything we could say.”
But since the accusations were leveled, there’s been a falling-out between the gaming community and its most dogged advocate for online poker legalization: the Poker Players Alliance.
The main financiers of the alliance — before the scandals exploded — were members of the Full Tilt board.
It’s a relationship the alliance is seeking to distance itself from. The AGA declined to comment on it.
When the allegations against Full Tilt were revealed two weeks ago, Rep. Barney Frank, the top House Democrat on the Financial Services committee and a supporter of legalizing online poker, pledged not only to return the campaign money he’d received from board members, but also the money that he’d gotten from the PPA.
Shelley Berkley
Dean Heller
Nevada Reps. Shelley Berkley and Joe Heck and Sen. Dean Heller followed suit, pledging to give their Full Tilt and PPA contributions to charities. (Sen. Harry Reid has pledged to donate the money he received from Full Tilt board members, but is keeping the PPA’s money.)
So far, the division hasn’t caused destructive infighting — as PPA Executive Director John Pappas put it, “everyone’s rowing in the same direction.” But, he admitted, it’s because everyone’s in the race, not because everyone’s obeying the same coxswain.
The PPA, AGA, and lawmakers don’t agree on how to get an online poker bill through Congress.
They’re coming off a very public failure: Last Congress, the gaming community generated enthusiasm for including Internet poker in a must-pass tax bill — but there was only a draft bill, never a deal, and the effort fell apart.
The PPA tried to renew the effort this summer, throwing its weight behind a House bill to legalize poker headlined by Texas Republican Joe Barton and Berkley — but the AGA passed on adding the heft of its own endorsement, as did Reid, whose support is a must for any legislative poker effort.
Now the PPA has been gunning for a new package: the deficit reduction bill.
“We’ve been putting a lot of grass roots pressure on the deficit reduction committee,” Pappas said.
“I respectfully ask that you seriously consider recommending sensible licensing and regulation of online poker within the U.S. in your deficit reduction report to Congress and the President,” reads the sample letter that the PPA has been encouraging its members to send to lawmakers on the 12-member joint select “super” committee.
Prospects there seem tenuous at best.
The key to any deal on online poker appears to be an agreement among existing supporters and Arizona Sen. Jon Kyl, the Republicans’ Whip, and a member of the deficit committee. It was Kyl’s rejection of Internet poker in the tax bill that quashed the gaming lobby’s enthusiasm last year, and his teaming up with Reid to ask the Justice Department to better police the industry this year that revived it again.
But he’s not encouraging the PPA’s proposition.
“I don’t think that would happen,” Kyl said flatly at the suggestion of including an online poker provision in the deficit reduction bill. “And I wouldn’t support it.”
There are good reasons why the deficit committee looks promising to the PPA: the committee is to find ways to offset the national debt, and whatever bill they produce is guaranteed a straight shot at a vote, no filibusters allowed. Online poker, through the licensing fees that would be collected as part of the regulatory process, will make money that could be applied to the deficit without cutting programs or raising taxes.
But that doesn’t address a deeper issue shared by many Republicans, including Kyl: They just don’t want the federal government getting into the business of gambling.
The AGA seems to be angling for a different route than the PPA.
The companies of two AGA board members, Caesars and MGM, are backing a new crew: Fair Play USA, whose chief lobbyists are former Department of Homeland Security chief Tom Ridge and former FBI director Louis Freeh. The group is emphasizing the enforcement platform over the potential for revenue; they barely even mention the money anywhere on their website.
“We’re hoping that there will be another piece of legislation introduced in this Congress that will be more definite,” Fahrenkopf said. “We hope to see additional legislation sometime in the next month.”
It’s a tight schedule: once the calendar turns to 2012, the primary season starts, and every step in Washington becomes a potential issue for the election — an election in which Reid needs to keep most of his Senate Democrats safe.
Waiting until after the elections is also risky business: recent experience suggests lame ducks are not the best time to strike complicated deals; and past that, there’s no guarantee that Reid will remain the majority leader. After next year, Kyl will be gone: he announced his retirement long ago, and the poker lobby doesn’t have that many influential Republican prospects it can call on as a replacement.
That leaves only a few options — the deficit reduction package or Obama jobs bills. But there, Reid has put a damper on speculation as Kyl did with the deficit bill.
Though Reid’s called online poker a proposal that could create “jobs, and lots of jobs,” but that it’s not something they’re working on. “Online poker, frankly, is way back in my head,” he said.
Harry has a lot on his plate today,the internet poker deal will get shot down again, Looks like Caesars and MGM will be the next big casino companys to go BK, To much DEBT.
Fools and their money are soon parted.
I have seen a lot written about those that had funds in Full Tilt Poker when it was shut down, but I have seen nothing written about those who lost funds on Full Tilt due to organized cheating in tournaments such as myself.I stopped playing tournaments on Full Tilt because many times toward the end of long tournaments too many strange things happened. Players that would of had to of been pretty solid players to still be in the tournament all of a sudden played Queen Three off suit with a place in the money just a few hands away. Then they just happened to hit two queens and a three on the flop. Or they kept calling with a really long shot hand and hit on forth and fifth street when they obviously should have folded. Now you expect this crap early in a tournament, but the kind of players that do stupid things like this are long gone in tournaments that last for several hours. So why has nothing been reported about this. I am sure the money stole this way far exceeds any other way that these crooks took their players. Some of these tournaments were for anywhere from fifty thousand to over a million dollars each to the winner. Yet nothing has been reported about this. I quit playing on their site because of this, but I feel I am owed thousands of dollars that I was blatantly cheated out of. It seems to me that this type of cheating would create electronic footprints and be very trackable by experienced computer investigators. So why hasn't it been done? This would not be the first online site that cheated its players in such a way. Anyway, I am not holding my breath until the FBI sends me my money.
If you played on these sites you needed to go into it with your eyes wide open and expect that cheating can and does take place - and not cry about getting any form of repayment when the truth comes out - My husband played on Full-tilt for a long time and I always knew it was probably a 'scam' but he enjoyed himself and played anyway - in spite of the realization that it's just way too easy to cheat on these sites - He tried, in vain, to cash out his last $300 but of course that never happened - lesson learned. If you decide to play, with all its' obvious flaws, you can't cry and whine after the fact.
Its all Howard Lederer and Chris Fergusons fault as the owners of Full Tilt Poker
It's already legal... I see plenty of people gambling online all the time, they get paid, and often times, especially for football, they get better spreads than I do going to the casino.
This country and the word freedom, should never be used together... Everything has become illegal accept working 60 hour weeks and buying corporate garbage... Just about everything else is illegal.
You cant even go to a park anymore without paying a fee to get in... Ridiculous.
RW89052,
What you are describing is correct tournament play as the blinds become very large in relation to the stacks. Making such plays early in the tournament would be wrong. I am sure you feel cheated since you don't seem to understand the basics of tournament poker.