The Great Tease of 2010
Last week, the poker world entered into a frenzy on the news that Senate Majority Leader Harry Reid may be trying to legalize online poker in the U.S. News of this broke when Bloomberg reported that three Republican Congressmen were accusing Senate leaders of plotting to legalize some forms of online gaming in a surreptitious fashion. The three Congressmen, Spencer Bachus, Dave Camp, and Lamar Smith, claim that the Senate may attempt to attach a pro-online poker measure to a "must-pass" piece of legislation before the 111th Congress concludes its business sometime this month. The Congressmen stated that such a maneuver would be "a secretive, closed-door, undemocratic process." While they are correct in that assessment, the poker world has enjoyed quite a few chuckles this week over the hypocritical-nature of the concerns of these Congressmen. The "secretive, closed-door, undemocratic" tactics they reference are precisely how their former colleague Bill Frist passed the Unlawful Internet Gaming Enforcement Act (UIGEA) in 2006.
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So for the time being, the poker world sits at the edge of its seat asking: is Harry Reid going to legalize online poker in the U.S. using the same tactics that former Senator Bill Frist employed to send it into the dark ages four years ago? The short answer to this question is: no. In all likelihood, once the dust settles on this episode, it will be remembered as just another one of many occasions in which the poker world become collectively optimistic about the prospects of a legal status in the U.S. only to end up being disappointed. This is, however, probably the best opportunity online poker has had for becoming fully legal in the U.S. since the UIGEA was passed over four years ago.
The grind associated with passing a bill into law in the U.S. is simply too much for a controversial issue like online poker to overcome. Evidence of this can be seen in any of the measures Barney Frank has proposed over the years. The most promising of them all never even made it to a House vote. Indeed, if online poker is to be legalized, taxed, and regulated in the U.S. anytime soon, it will be precisely because of some unforeseen stroke of luck like Harry Reid tacking a measure onto an unrelated bill just before a lame-duck Congress takes over.
Harry Reid's motivation for trying to force through a pro-online gaming bill is quite simple: as the Wall Street Journal pointed out, Nevada casino companies were among Reid's biggest donors in his fierce re-election fight against Sharron Angle last month. Reid's bill reportedly even has a clause that would allow only existing casino outfits to operate an online poker business in the U.S. Other companies would be required to wait two years before they could legally enter the market. The bill would generate tax revenues for both federal and state governments while leaving the oversight duties in the hands of state governments.
Casino group MGM saw their stock rally 5% this week. No doubt part of this gain was on the prospects that they may soon be able to enter the online poker market.
If this bill were to pass, it would certainly be tremendous news for online poker. It would likely trigger something of a "Poker Boom V2.0" in the U.S. thanks to increased advertising exposure for online poker as well as diminished concerns for legality and integrity of online poker rooms servicing Americans. Additionally, it could be assumed that Caesars Entertainment (formerly known as Harrah's) could once again resume accepting direct-registrations for WSOP events from online poker rooms. At the peak of their ability to do so, the WSOP Main event saw 8,773 entrants. In the year following the passage of the UIGEA, just 6,358 players participated.
But the sad reality for poker is, this bill probably won't pass. And with a wave of new Republicans making their way to Washington in the next legislative session, this is probably the last chance poker has of becoming legal in the U.S. for probably several years. Still, the poker world should appreciate this Hail Mary effort in the 11th hour of the 111th Congress. Just don't expect to see any receivers coming down with the ball in the endzone.