United States poker lobbyist Rich Muny calls on media and players to sound the alarm over concerns that the American iGaming industry faces critical challenges in light of the USDOJ’s new interpretation of the Wire Act. Compliance requirements along with threats of enforcement placed upon banks and statewide regulators will be “Achilles’ Heels” to the once-promising regulated online poker industry in America, warns veteran activist.
Former Poker Alliance executive Rich Muny reached out to U.S. online poker players, media, and fans recently in an urgent plea for an “organized campaign” to contest new government restrictions that could critically impact future and existing shared liquidity internet gambling compacts across the nation.
Regulators won't simply ignore the DoJ. And, banks won't process transactions they feel are unlawful under the Wire Act, even if they meet the letter of UIGEA….
— Rich Muny (@RichMuny) January 19, 2019
The longtime online poker activist believes that American poker media analysts and some players are under-reacting to the news that the USDOJ’s Organized Crime and Gang Section (OCGS) has been advised to formally approve and enforce the new interpretation of the 1961 Federal Wire Act — beginning June 14th, 2019.
URGENT NEWS: DOJ Postpones Wire Act Enforcement until 2020 (OPR – Jun 12, 2019)
Muny suggests that comments surrounding potential prosecution of jurisdictional-based, licensed, shared player pool online gambling operations in a small number of U.S. states “miss the point.”
Operators are unlikely to “run afoul” of the new restrictions on interstate transactions tied to online gambling “because they won’t be able to.” Therefore banks and regulators represent Achilles’ Heels to the pursuits of legal, multi-state online poker games, Muny believes.
Of course, I think some sort of organized campaign of players writing to lawmakers in affected states encouraging such action would be a good thing, but poker media and some players seem more interested in hoping everything will just turn out fine.
— Rich Muny (@RichMuny) January 19, 2019
“I predict states will go to courts for relief,” said the Kentucky native who has lobbied on behalf of government-regulated online poker games for more than a decade. Muny also calls on poker players in America to encourage lawmakers in affected states to legally defend their interests against the latest federal ruling.
READ: Update on Actions Against Wire Act Reversal (Poker Alliance – Mar 4, 2019)
READ: What Did The DOJ Just Do? (Poker Alliance – Jan 17, 2019)
READ: Potential Impact of OLC Opinion on Regulated iGaming (Ifrah Law – Jan 15, 2019)
LISTEN: Pokerfuse Podcast Episode #1 (Michael Gentile & Nick Jones — 9:39 to 17:29)
Poker Lobbyist Sounds Alarm (Analysis)
* IMPORTANT: The following analyst commentary reflects the individual views and thoughts of the author. It does NOT necessarily reflect the views or opinions of poker players, media, operators, this website, or any of the individuals or entities referenced. Furthermore, the analysis is NOT provided from an “expert,” “qualified,” “legal,” or “representative” standpoint — but rather as sole observations extended publicly to be evaluated alongside other opinion pieces on this topic.
The urgency communicated by former PPA President Rich Muny is informed and appropriate. Banks and regulatory mandates represent a critical element to facilitating any formally licensed gambling product, and the veteran online poker world is already well aware of the constraints that compliance with UIGEA and federal government action have historically placed upon the U.S. online poker space.
These concerns have been brought forth on a multitude of platforms in recent weeks, according to VerStandig Law Firm partner Mac VerStandig — who says many of the fears being expressed about U.S. online poker’s future are “greatly exaggerated.”
READ: Reports of Online Poker’s Death are Greatly Exaggerated (PokerNews – Jan 23, 2019)
Despite VerStandig’s beliefs (as a qualified, legal representative who labors on behalf of poker players) that licensed online poker will be fine, it is this analyst’s opinion that — as poker lobbyist Rich Muny alluded to — compliance pressure on banks and regulators does in fact lead one to conclude that “sites won’t run afoul of the DOJ because they won’t be able to.”
And if that is indeed the case, poker players and others who currently patronize state-regulated internet gambling sites or have pending account balances should logically inquire about the future of these services. While seeking clarity from their respective service providers on the status of their funds, and how that status may be affected in 2020 and beyond.
Because of this, we will leave the section below as a ‘placeholder’ to update our readers when/if official communication is relayed from online poker sites that operate in a licensed, statewide regulated environment within the United States. Keep in mind that the licensed brands listed below do NOT owe myself or Part Time Poker a direct response (as poker sites have their own proprietary means of communicating). It is being included as a consideration to our readers who may desire updated info on official communication regarding real money accounts.
Impact on Multi-State Internet Gaming Agreement (MSIGA)?
The extent to which the U.S. Department of Justice is willing to enforce the Wire Act’s restrictions on spreading “wagering-related communications” across state lines is unclear at this time. Barring a court-mandated injunction or other binding government action, it is understood that associated businesses and statewide government interests have until 2020 to come into compliance.
And while the negative impact of the new interpretation could spread beyond online poker to other iGaming verticals, it is also understood that the one legal U.S. online gambling product/service that could suffer critical damage as a result is regulated, statewide, “shared liquidity” online poker.
The Multi-State Internet Gaming Agreement has enabled cross-jurisdictional play for WSOP online poker players in New Jersey, Nevada, and Delaware since May 2018. The compact has been looked upon by a number of regulated U.S. iGaming analysts as a key component to establishing a viable online poker market in America. One in which peer-to-peer gamblers in several U.S. states can compete in real time — in a safe, formally licensed environment across state lines. One which might have included Pennsylvania.
However, those aspirations of linking Pennsylvania to the existing tri-state agreement no longer reflect official information that has been released to the public by the Pennsylvania Gaming Control Board (PGCB) via Online Poker Report.
The new Office of Legal Counsel (OLC) opinion has already prompted the PGCB to declare its position as a sole-state internet gambling market (official launch TBD), while informing land-based casinos in the Keystone State to “ensure that [the state’s main slot machine certificate holders] are in compliance with the Department of Justice’s interpretation of the Wire Act.”
SOURCE: PA Regulators Instruct Casinos to ‘Comply with Wire Act’ (Eric Ramsey – OPR – Jan 18 2019)
But MSIGA Only Includes New Jersey, Nevada, and Delaware
Correct. And there are efforts (which may or may not coincide with granting consideration to online poker lobbyist pursuits) in both Nevada and New Jersey to seek more clarity on the new federal government interpretation — which could ultimately affect all online gambling verticals as well as state-sponsored lotteries.
Former New Jersey State Senator Ray Lesniak:
Regarding the new Wire Act opinion, Ray Lesniak did not mince words. Full interview with OPR: https://t.co/w7GxFMZt1R
— OnlinePokerReport (@OPRupdate) January 18, 2019
U.S. Representative Dina Titus (Nevada):
This reckless DOJ reversal will inject uncertainty into a well-regulated market and push consumers back into the black market. Unfortunately, the Trump Administration only supports states’ rights when it is politically convenient. https://t.co/2Y9M3yST0b
— Dina Titus (@repdinatitus) January 15, 2019
Press Release: U.S. Congresswoman Titus Denounces DOJ Reversal on Online Gaming (Jan 15, 2019)
U.S. Congresswoman Titus, former State Senator Lesniak and others with legislative experience could very well possess unique skill sets and knowledge that enable them to effectively coordinate on behalf of their current/former statewide constituencies.
However, the political liaison power of each may also be limited to their respective states. It is unknown whether an “internet gaming” compact inked by statewide executives can be successfully lobbied for on a federal level due to the new interpretation.
And even if such an injunction or other government action were to preserve the MSIGA agreement, are banks going to follow along and openly service state-regulated online gambling industries? Or would banks in such a scenario still represent an Achilles’ Heel, as poker lobbyist Rich Muny has stated?
And what about Delaware? Would The First State — with its population of roughly 1 million — have any incentive to collaborate on clarifying such matters?
Could the opinion reversal also embolden influential politicians Lindsey Graham, Dianne Feinstein, and others to further lobby for a federal online gambling ban?
Sheldon Adelson Involvement with New DOJ Interpretation?
According to a report by Alexandra Berzon and Byron Tau for the Wall Street Journal, the USDOJ tracked a memo from Las Vegas Sands proprietor Sheldon Adelson‘s lobbyists to inspire its “unusual” reversal of the Wire Act interpretation.
Adelson has an established track record of actively blocking online poker lobbyist efforts to formally legalize the game in America — directly backing the Coalition to Stop Internet Gambling (CSIG) lobbyist group that has labored to stymie regulated, licensed online gambling products since around Black Friday.
This friction between land-based casinos, horse racing, tribal gaming, online gambling, and other interests has created somewhat of a rift among veteran U.S. poker players who enjoyed competing online against a worldwide player pool (albeit in an unregulated market) prior to 2011. A number of adamant online poker supporters have boycotted Adelson-operated properties such as the Las Vegas Venetian to show their disgust with the casino magnate’s hatred of online gambling sites that could one day rival his own corporate empire.
Yet these long-held grudges have gradually faded as service-conscious consumers’ priorities have shifted towards patronizing casinos that fit their own individual tastes, regardless of politics and other legal maneuvering that x-casino may be engaged in.
On top of this, regulators spoke highly of Adelson’s Sands Bethlehem facility in a May 2018 Pennsylvania Category 2 casino licence renewal hearing (TIMESTAMP 33:28), with PGCB Commissioner Kathy Manderino going so far as to commend the casino for the “community support” and “positive impact” it had within the Keystone State. (Sands Bethlehem has since been acquired by the Poarch Band of Creek Indians, with Adelson departing from the Pennsylvania market following the passage of Act 42 of 2017 to authorize regulated online gambling in the state.)
So although Sheldon Adelson does have clear ties to brutalizing the aims of regulated online poker sites in America, that bile does not necessarily carry over on an official level (whether federal or statewide), nor does it carry significant weight with live poker players who haven’t been indoctrinated into despising the entrenched executive since the April 2011 DOJ seizure of popular domains including PokerStars.
U.S. iGaming’s Reliance on (Now-Reversed) DOJ Opinion
The handful of U.S. statewide governments that have formally licensed online poker games have — up until this point — heavily relied on the (now expired) November 2011 opinion offered by the Department of Justice that the Wire Act only applied to sports betting.
In September 2017, representatives from both the Poker Alliance (then-PPA) and CSIG testified before the Michigan Regulatory Reform Committee as to the relevance of the USDOJ’s interpretation of the Wire Act.
WATCH: Michigan Regulated iGaming Study Guide (Feb 6, 2018)
CSIG legal representative and former Nebraska Deputy Attorney General David Cookson told lawmakers during the hearing that “if the opinion is withdrawn…” (it has since been reversed), “…no online casino sites would be grandfathered or protected from prosecution or civil liability, regardless of when they were authorized.”
“Should any gambling sites remain in operation following such a decision, they risk being shut down by the federal enforcement regardless of when those sites were authorized. And as the [Michigan] Gaming [Control Board Deputy] Director [David Murley] pointed out, this would put in peril any attempts to negotiate internet gaming compacts with tribes since they would be prohibited by federal law.” (VIDEO #4 TIMESTAMP 4:30-5:20)
In rebuttal, former PPA Executive Director and poker lobbyist John Pappas reminded the Michigan Regulatory Reform Committee that — ironic as it may seem — Las Vegas Sands’ itself advertises online gambling through its Venetian casino in Nevada, and that government restrictions on iGaming will force unsuspecting gamblers into unsafe, unregulated, and/or illegal products.
“Stopping [legally licensed] internet gaming doesn’t do anything to stop unregulated internet gaming. It doesn’t do anything to stop underage access. It doesn’t do anything to stop problem gambling. All it does to do is shift the activity overseas, offshore, to unaccountable sites.” (VIDEO #5 TIMESTAMP 1:54-3:16)
If the new DOJ opinion’s impact spreads to other forms of (higher revenue generating) ring-fenced internet gambling verticals such as real money online casinos, the time between now and June 14th could represent a do-or-die scenario for the medium-term goals of establishing a viable, regulated online gambling service for U.S. citizens located in states where iGaming has been formally legalized.
Casino Industry Turmoil Continues as Players Ponder Future
The bitter war over who will control land-based and online gambling within the United States has raged on for years with no apparent end in sight — despite knee-jerk government interventions, repeated calls to action, and nonstop promises that casinos and operators are laboring on behalf of their customers’ best interests.
But what can gamblers truly expect from end services when tens of millions of dollars are routinely poured out (possibly at the expense of innovation/marketing/responsible gaming/other initiatives) for these conglomerates to oppose one another on localized levels? When gambling businesses are constantly at each other’s throats? And through those actions, perpetually inflating the costs and barriers associated with poker lobbyist aims?
READ: Florida Voters Grant Effective Casino Expansion Control to Tribal Gaming (PTP – Nov 7, 2018)
READ: Florida Amendment 3 Highlights Casino Lobbying Challenges (Part Time Poker, Nov 7, 2018)
Poker Lobbyist Urges Communication (Conclusion)
The months leading up to June 14th could mark a defining moment in regulated online gambling’s brief existence serving the American market.
And while the overall relationship between poker players and lobbyists has been tepid since the world’s largest poker site refused to sign off on a California online poker deal that would have placed The Stars Group at a significant disadvantage, the Poker Alliance — for its part — has extended an offer of communication to poker players who wish to compete online in their respective states.
Should established online poker players in the United States seek communication with the Poker Alliance or other poker lobbyist groups?
That question is best answered by the players and activists who currently reside in the U.S. and/or play poker online… perhaps with an understanding beforehand that no matter what happens — delayed or otherwise undesirable results shouldn’t be blamed on either party, as it has already been made quite clear that casino interests themselves are the ones allocating massive budgets and resources to quash any viewpoint that doesn’t align with their own.
Regulated online poker in America is in need of either (a) an act of Congress, (b) an injunction, (c) a reinterpretation of federal law, (d) multiple, major acquisitions that can pass regulatory scrutiny, or (e) non-enforcement from the Department of Justice in order to legitimately sell itself as a meaningful product to low and medium-populated states.
Without any of those, banks and regulators WILL be the Achilles’ Heels to formally legalized U.S. online poker. Just like poker lobbyist Rich Muny has stated. And no amount of ignoring the issue or “hoping everything will just turn out fine” is going to alter that reality.
SOCIAL MEDIA CONSIDERATION (TWITTER): @RichMuny, @ppapoker, @VerStandigLaw, @repdinatitus
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