PokerNews Op-Ed: Congress Has Been Dealt a New Online Poker Hand

Posted at 12:15 2013-07-19 by Maurice “Mac” VerStandig

An expert on the American gaming scene, Maurice “Mac” VerStandig is well-versed in casino management from common issues of fraud and theft prevention to the Unlawful Internet Gambling Enforcement Act and Indian Gaming Regulatory Act. With a strong background in bankruptcy work, VerStandig is also skilled in the strategic valuation and monetizing of complex assets, and applies that knowledge to all areas of his practice, from fraud recoveries to traditional insolvency proceedings. Here, Verstandig offers his opinion on why Congress has been dealt a new online poker hand with Rep. Joe Barton's Internet Poker Freedom Act of 2013.

As Rep. Joe Barton floats legislation aimed at bringing a regulatory framework to online poker in the United States, the ante-paying public is well advised to heed the ubiquitous warning of Schoolhouse Rock that today the Internet Poker Freedom Act of 2013 is “just a bill.” The caustic forces of Washington have long looked upon virtual deals of a deck with prohibitive scorn, and some seven years after passage of the Unlawful Internet Gambling Enforcement Act, this is certainly not the first time one of congress’ five-hundred thirty-five voting members has flirted with the soft allure of poker legislation.

Still, Rep. Barton’s bill strikes as a comprehensive, if not occasionally tangent-ridden, effort at liberating online card rooms from the oppression of collegiate dorm firewalls. Concerned mostly with differentiating poker from other games propagated by America’s increasingly omnipresent casino scene, the legislation provides for a well-mandated Office of Internet Poker Oversight to work with various collateral federal, state and Native American authorities to license – and oversee – a new cache of card rooms with servers based in the United States. Charged with umbrella maintenance by the Secretary of Commerce, this new entity would be ordered to carefully investigate, license and discipline those seeking to operate pixilated rounds of felt.

The bill hinges on the collateral theories that poker pits players against one another, in lieu of a hedge-bearing house, and that skill predominates over any sample size of sufficient breadth. Legally, this is important, as it not only invites the observations recently bound into the voluminous United States v. DiCristina decision – a court order openly referenced in the legislation’s prefatory assertions – but it also quietly begs the sort of differentiated treatment current law bestows upon horse racing. The former theory is, by now, well known to aficionados of sites such as this, and ESPN’s primetime World Series of Poker reruns long ago instilled into the public a veritable belief that fish and sharks rarely trade places for any period of time longer than a pass or two of the dealer button. But the latter point, which is more subtly woven into Rep. Barton’s ink, likely deserves some modicum of attention.

The most prevalent form of government-sanctioned online wagering in modern day America is the engagement of thoroughbred, harness, quarter horse, and Arabian contests. A system of pari-mutuel wagering, tattooed into the ambient glow of tote boards from Santa Anita to Pimlico, has long enjoyed legally niche status. With race results originally brought into the realm of Congressional oversight through the use of interstate wires – in an era when “wire” was the titular designation of an actual message, not merely the medium of its conveyance – contests measured by the furlong stood outside the brick and mortar prohibitions of numerous states even when actual casinos were a rarity largely confined to Nevada. With the progression of time, blackjack found its way from the western desert to the New Jersey shore to native reservations to, odds are, an establishment near you; yet exacta payouts hovered near static status, proliferating only minimally and now struggling to hold a position just barely above that of anachronistic nostalgia. Key to this distinction, and at the core of modern allowances of online race wagering, is that pari-mutuel grid, where bettors essentially form a series of communal pots and divvy post-rake dollars proportionately amongst those holding winning slips.

There is, too, a supposed skill to reading a racing form, and that incentive for methodical study mirrors closely the fruits claimed by those capable of ably raising to a bluff and folding to the nuts. Rep. Barton’s bill seems ever-cognizant of this, working to bluntly exclude from its ambit any inclusion of other casino games. Argumentatively, to the extent draft legislation may be considered a venue for rhetorical persuasion, this seems a well-supported effort to sharpen and darken the oft-blurry lines with which lawmakers have viewed poker since the Internet came of age.

The bill also looks to compensate for any bleary ambiguity with an arsenal of stringent invocations seemingly aimed at enjoying a disproportionate glow of the spotlight. Under the proposed legislative regime, those operating cyber card halls without a license will face a prison term of up to five years, a penal fine, and forfeiture of monies equal to the greater of actual dollars wagered (not raked, mind you, but wagered) or one million dollars per day. The equally sharp backside of the double edged sword that is pulling poker out of a world of legal ambiguity, this bill would leave no question but that operation in the United States – without a license – is contrary to federal law, and subject to that myriad of harshly deterrent penalties.

Less convincingly, Rep. Barton appears to be also marketing this legislation through the inclusion of boilerplate social welfare language. As is now familiarly custom in American gaming establishments, there is a prohibition on the engagement of underage players, an allowance for problem gamblers to seek help, and a vehement announcement that with wagers come jobs. Strikingly, though likely less significantly, the bill also provides that any delinquent child support obligors shall be per se excluded from the world of online poker. Marginally, it bears inquiring what to make a bill that establishes poker to be a game of skill, openly hints that it may be an acceptable forum in which certain people are to earn a living, and yet ignores wholly what to do with the professional hold ‘em player who needs to log forty hours a week to make good on a child support order premised upon that very gaming income. Lest that point seem cynical, it ought to be noted that courts often impute gaming income to those who derive substantial monies from field trips to local card rooms and racetracks.

Other procedural provisions of note include an allowance that every state has the right to opt-out of online poker, and the imposition of a five year waiting period for those licensure applicants previously convicted of violating gaming laws. The former point appears a nod toward principles of federalism, though the demand that states take the affirmative step of opting out – not opting in – should furnish cover for those more conservative outposts of the United States where local lawmakers can duck a controversial topic by simply never putting it to a vote. And the latter point, while likely buzz-worthy, seems little more than a tacit acknowledgement that Black Friday operators will have to wait for the red carpet to be worn. Again, though, there is an inherent contradiction inasmuch as such means that a bill premised upon the theory that current online poker laws are ambiguous and unclear is nonetheless seeking to extend the exile of those found to be in violation of these present day statutes. Still, the tension feels somehow more ironic than hypocritical.

The greater tension, though, is that likely to greet the entirety of Rep. Barton’s draft in the halls of the United States Capitol. The current legislature has a well-reported propensity to agree on little, act only in times of near-unanimity or near-peril, and to regularly task committee members as moonlight pallbearers for the legislation over which they mull. Poker seems an unlikely cause du jour in a town never more than two years away from the next election. And, as noted in the first person prose of that famed classroom cartoon, “I'll remain a bill until they decide to make me a law.”

Maurice “Mac” VerStandig is an attorney with Offit Kurman, P.A., where his practice focuses on the litigation of various commercial and private disputes, including claims of fraud and financial insolvency cases. He has considerable knowledge of the numerous legal issues encompassing the American gaming scene, and is licensed to practice law in Maryland, Virginia and Florida.

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