News Category: Poker Player Newspaper 1983-2016

GCB Packs a Powerful Punch

The UIGEA aims to stop U.S.-based players from making bets over the internet. Commencing June 1, the UIGEA requires U.S. financial institutions to block debit and credit card transactions destined for online gambling sites. Once the UIGEA regulations were finalized and in effect, the Nevada Gaming Control Board (GCB) publicized its role as the arbiter of suitable business relationships between Nevada casinos and online gaming entities.

The GCB chose May 28th, the first day of the 2010 WSOP, to reply to an unidentified lawyer’s inquiry concerning the permissibility of a business relationship between the Venetian Las Vegas Hotel and Casino and the North American Poker Tour presented by PokerStars.net. The Venetian/NAPT inaugural event in Las Vegas last February was sponsored by PokerStars.net.

The GCB response was posted on its website by board member Randall Sayre, immediately after the June 1 deadline, for financial institutions to implement the regulations under the UIGEA. The Board’s letter addressed, in particular, the lawyer’s question as to the regulatory body’s distinction between Internet gaming company dot-com and dot-net websites. The GCB’s reply puts a bull’s eye on its developing policy in the face of “blurred” lines between dot-com websites which take bets and dot-net websites which do not take bets.

Venetian Casino Retreats

In its letter the Nevada GCB infers that the unidentified lawyer advised a client not to do a deal like the one between the Venetian and NAPT. Mr. Sayre applauds the lawyer for having rendered appropriately conservative advice, even though it purportedly put his client at a competitive disadvantage. More broadly, Sayre warned casinos to stay away from questionable business relationships with Internet gambling companies. Mr. Sayre also highlighted plans for increased scrutiny on proposed business partnerships between Nevada licensees and Internet gaming companies, going forward. He promised to level the playing field, but hedged on the GCB’s position by insisting it would still make decisions on a case-by-case basis.

The Venetian reportedly had obtained explicit permission from the Nevada GCB prior to proceeding with plans for the inaugural NAPT. By all accounts, throughout the tournament, Venetian personnel and Poker Stars fans were aglow over the initial collaboration. Venetian and NAPT–related personnel told folks in the waning hours of the inaugural NAPT that they were raring’ to do an encore.

A government affairs lawyer in Carson City has explained, “A few days after the February NAPT event last February, Nevada casino regulators politely and quietly informed the Venetian that permission would not be granted for a second event anytime soon, given the current environment.”

The Makings for a Perfect Storm

The GCB’s post-tournament chat with the Venetian occurred against the backdrop of a clashing timetable between the NAPT event in Las Vegas and the World Poker Tour event in Los Angeles. The discussion played havoc in expansion plans of the NAPT in Las Vegas and effectively eliminated the prospect of a clash occurring this summer—an NAPT Festival at the same time as the WSOP. The mysterious lawyer and his client have not been publicly unidentified except as exemplary complainants.

Over the past three months, the firestorm created by competitive backstabbing of uncertain origin and velocity led to promises by the GCB to level the playing field. During this period the GCB expanded its deliberations on relationships between casino licensees and online gambling entities, keeping the specifics of their discussions under tight wraps.

The GCB Takes Center Stage

The GCB’s May 28 “advisory,” put casinos, online gaming companies and poker players of all stripes—on notice of the extended reach of Nevada regulators as enforcement agents on issues arising from competition among casinos and online gaming partnerships. The GCB suddenly showed itself as bent on taking into new account the relevance of the UIGEA, particularly including the position of the United States Department of Justice.

Historically, many other states have looked to Nevada for guidance in setting up rules and regulations. Nevada’s GCB has made clear in no uncertain terms it intends to change course, significantly altering its previous laissez-faire attitude toward relationships between Nevada casino licensees and internet gaming companies in the current environment of UIGEA regulations.

The Saber Rattling Accelerates

On one issue, Mr. Sayre was emphatic: “The U.S. Department of Justice has shown no indication of relaxing its position that Internet gambling in any form is illegal in the United States.” Lest anyone wondered about the relationship between the GCB and the U.S. Department of Justice, Mr. Sayre resolved that question too, saying, “As you are aware, this Board will not disregard the Department of Justice’s interpretation of federal law and the effects that interpretation has on existing state law… I anticipate that the Board’s increased attention directed at this issue will level the commercial playing field as current and proposed relationships are assessed on a property by property basis.”

In recent days, gaming industry lawyers have expressed increasing concern over the GCB letter —— noting that the regulator has made nothing clear except the possibility of a dramatic change from the status quo of the past three years.” (The UIGEA was passed in 2006).

Harrah’s and the PPA Cooperate

Opponents of UIGEA notably include Harrah’s, which owns the WSOP and has a business-to-business deal with 888 Holdings. 888 Holdings operates several substantial gambling websites. 888’s B2B division, Dragonfish, supplies technology and services to facilitate online gaming operations.

Harrah’s registered to lobby for online gaming in early 2009, and since then has made no secret of its game plan: to be in the best possible position to secure a license to operate online gaming activities when, as, and if it becomes legally permissible to do so.

The Poker Players Alliance (PPA), which boasts a million+ members, including strong support of some of the biggest online poker sites — has opposed the UIGEA since its inception. Harrah’s and the PPA have worked cooperatively for the past fifteen months in an effort to obtain a “carve out” of poker from UIGEA and/or a more palatable statute that would result in licensed, taxed, and regulated online poker.

Federal Legislation May or May Not Move

A legislative bill favored by both Harrah’s and the PPA has been introduced into the United States House of Representatives by powerful House Financial Services Committee Chairman Barney Frank. It is HR 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act. His committee, however, has been slow to move it forward.

Latest word from friendly lobbyists is that the bill will be “marked up” by mid-July. They say moving the bill out of Committee is more complicated–a pick’em bet. US Representative James McDermott (WA) has also submitted a companion bill that would require internet gaming companies to pay a federal licensing fee of 2% of customer deposits—monthly. This bill should head toward the Ways and Means Committee, if the Frank bill gets off the ground.

More recently, there has been a whole lot of buzzing about United States Senate Majority Leader Harry Reid’s current position toward online gaming. The senior Senator is up for re-election; campaign advisors are said to be divided on the political wisdom of his supporting online gaming legislation this year.

Meanwhile rumors of support have been flying furiously of late. In the past couple of days two casino executives have gone so far as to suggest the Senator may either introduce a bill “favorable to commercial casinos in Nevada or possibly take the Frank bill to the Senate.

However, the general consensus among gaming and regulatory lawyers consulted for this report, is less promising. There is widespread concern that UIGEA is going to have a last hurrah before favorable online gambling bills make their way into enacted federal law.

The GCB Remains on Stage

In the meantime, the evolving stance of the Nevada Gaming Board is more unsettling, as Nevada regulators move to establish more stringent state regulations to address relationships between casinos and online gaming entities in the environment of UIGEA.

For the second time in recent weeks, a foreboding message of peril has been sounded—the last one by an FBI agent, this one by the Nevada GCB. Echoing the FBI agent’s position almost verbatim, GCB board member Randall Sayre said, “The lack of federal criminal prosecutions under UIGEA should not be interpreted by the gaming industry as a lack of interest by state and federal law enforcement and regulatory agencies on this issue.” He added, “As you are aware, this Board will not disregard the Department of Justice’s interpretation of federal law and the effects that interpretation has on existing state law.”

NAPT Diverts Attention From Previous Announceement of Mid-Summer NAPT Event

Gaming indusrtry lawyers contacted for this article report recent conversaitons with regulators outside Nevada, explaoining states in addition ro Nevada are taking a hard look at the dot.com dotnet distinctions as applied to casino partnerships with onloine gaming entities.

According to the NAPT website in early June, its next event was to take place mid-summer. There is no longer any indication of such an event taking place as evidenced by the napt.com countdown clock which shows its next event 148 days hence at the Bicycle Casino. The NAPT has not issued an explanation for the apparent change in the schedule for the next NAPT event.

Meanwhile, howewver, the inimitable World Series of Poker is in full swing, the Venetian’s top rated card room is packed for its usual Deep Stack summer tournament and the NAPT/ Bicycle Casino’s partnership is gearing up with plans for a home run in the capital of the poker world come November.

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Writer’s Note: This article has been updated and corrects the dates for the NAPT/Los Angeles/Bicycle Casino event and clarifies that the NAPT sponsored by PokerStars.net. The NAPT operates under the banner of Global Poker Tours Ltd (gptl).

Editor’s Note: Ms. Eolis is the CEO of Eolis International Group, an internationally recognized legal/business/government affairs consultancy. She has 40 years of experience in the worldwide gaming industry and in her spare time she has cashed 7 times es at the WSOP; including the first ever for a woman. She was also the first woman to win a No Limit Event at the European Open (1990).

In an exclusive report last Friday, Poker Player Newspaper reported on NAPT’s advanced discussions with the Bicycle Casino, “NAPT Hovers Over the Bike,” but at the NAPT website, the “Next Event Count Down Clock” was showing delays – one day at a time – for a whole week. The countdown meter last Friday indicated 58 days. By Tuesday it had increased to 62 days. Speculation started to develop as to the reasons.

It was time to dig deeper. The digging was fortuitous and the results were surprising. Checking the tournament calendar, the August time-frame for an NAPT event at the Bicycle Casino began to look as bizarre as the strange workings of the NAPT website clock. The long running World Poker Tour / Legends of Poker festivities are on every poker-loving California dreamer’s dance card the whole month!

One conundrum at a time, the mysteries have been unraveled. In a telephone call early yesterday afternoon, Jeffrey Haas, the Managing Director of Global Poker Tour Ltd. (GPTL), reported on the NAPT clock. He figured out the problem almost instantly, explaining there was technical glitch. Apparently, the clock has been ticking off the number of days since the last NAPT event at Mohegan Sun, instead of the number of days until the next NAPT event.

Mr. Haas arranged for the clock to be taken down for repair promptly. Later in the day he assured, “This issue has now been fixed and the responsible programmer appropriately punished.” He continues, “On behalf of our programmers and the NAPT, I apologize for upsetting the space time continuum and causing any undue consternation. I assure you the NAPT is alive and well, and we look forward to sharing some bright news very soon.”

Bright news may or may not materialize momentarily, but, there is no doubt that the peripatetic Managing Director Jeffery Haas has plans to fast-track the growth of the NAPT around the country.

It is time to re-check the NAPT’s progress with the Bicycle Casino. Marketing Director Kelly O’Hara has just returned from vacation. When asked about the Casino’s dealings with NAPT, she says, “The prospect of an NAPT event is a very exciting opportunity. I think it has a lot of potential.” Ms. O’Hara acknowledges, “Yes, we have had serious discussions with the NAPT, but at this time I can assure you that nothing has been inked.” When pressed as to whether “wheels up” in August might mean a signed deal for a future NAPT event, you can feel her smile. She makes clear, at the Bicycle Casino in August, we will be “wheels up” with the fabulous World Poker Tour/Legends of Poker event throughout the month.”

As of this writing, the NAPT Website Countdown Clock is out of sight, and the website remains mum as to the next venue. There has been no explanation for why the clock was ever operational while the venue identity was left blank.

The spotlight on this issue at the GCB was apparently fueled by complaints from various casino licensees and their lawyers over the questionable partnership between the Venetian Hotel and Casino with Poker Stars, for the inaugural of the North American Poker Tour in Las Vegas, some three months ago.

According to a Carson City government affairs lawyer, “A few days after the North American Poker Tour (“NAPT”) event last February—the Nevada GCB politely and quietly informed the Venetian, permission would not be granted for a second event, anytime soon.” The dots were well connected in the GCB posted letter on the regulatory authority’s website, yesterday.

The Venetian reportedly obtained permission from the Nevada GCB prior to proceeding with plans for the inaugural NAPT. By all accounts, throughout the tournament, both Venetian and Poker Stars honchos were aglow over the initial collaboration. Word around town was that they were rarin’ to do an encore this summer.

Meanwhile, the highly regarded Venetian Poker Room is packed for its popular Deep Stack summer tournaments and online giant Poker Stars appears to be fully engaged in preparing for the next NAPT event.

A well-informed gaming official asserts (on the condition of no attribution) that “Poker Stars has embraced the Bicycle Casino and Card Club for its next NAPT Festival.” He says it is slated for “wheels up” on or about August 1st. The NAPT countdown meter shows 58 days until the next event. The website remains mum as to the venue.

Look for my eye-opening report on the current state of affairs of online gambling issues and the inside scoop on why the status quo may soon be turned on its head—one way or the other in the June 21st cover date issue available in poker rooms everywhere on June 8th.

Editor’s Note: Wendeen H. Eolis is an internationally recognized legal/government affairs consultant with extensive experience in the gaming industry. In her spare time she has cashed seven times at the World Series of Poker.

As Chairman of the House Financial Services Committee, Mr. Frank is one of the country’s most visible lawmakers. He is also widely regarded as online poker’s best friend. PPA members of suitable pedigree and/or cash were invited to rub shoulders with him.

A Newsworthy Party

A grassroots organization that includes online and offline poker players from all walks of life, the PPA organized a fundraising reception as part of Chairman Frank’s visit to the 2009 World Series of Poker and the Rio Hotel in Las Vegas. I had previously interviewed the Congressman and had met him at other gatherings. I found him to be a straight shooter.

As a PPA member and a supporter of Mr. Frank’s stance on civil liberties, I have opened up my checkbook to him and said, “Count me in.” I attended the fundraiser for Mr. Frank as a guest; I left inspired to write about the link he has made between online poker and politics. I concluded he was the WSOP Nation’s most compelling newsmaker of the day.

UIGEA History

In October 2006, President Bush signed the Unlawful Internet Gambling Enforcement Act (UIGEA) into law. In 2007, Mr. Frank introduced a bill that would effectively undo UIGEA, but it never made its way out of Committee. In late 2008, regulations to implement UIGEA were promulgated; compliance was set for December 2009.

Following the 2008 presidential election, Mr. Frank became Chairman of the House Financial Services Committee. He continues to champion legislation that highlights civil liberties. And in keeping with his commitment to attack governmental interference that suppresses Constitutional rights he continues to embrace the rights of adults to play poker online.

New Plan of Attack

Mr. Frank is the author of two bills of special interest to online poker enthusiasts: H.R.2267, the Internet Gambling Regulation Consumer Protection and Enforcement Act of 2009 that would effectively turn the Unlawful Internet Gambling Enforcement Act of 2006 on its head (except with regard to sports bets), and H.R.2266, the Reasonable Prudence in Regulation Act, which would delay industry compliance with UIGEA regulations that are currently set to become effective at the end of this year.

Politician’s Dance Card

The Chairman’s full day WSOP visit was a whirlwind of activity. The crowd in the Palazzo Suites was presumably his last stop and reflected a strong showing of pros associated with Full Tilt Poker and Poker Stars. Sources close to the PPA say these two companies are the movers and shakers behind the PPA’s various lobbying efforts and their players are key supporters of Mr. Frank’s current online poker-related bills.

Earlier in the day, Congressman Frank visited the WSOP’s Amazon Room. Introduced by WSOP President and Commissioner Jeffrey Pollack, the Harvard-educated lawmaker gave a short pep talk to the day’s main event players on the politics of online poker. He ended his remarks with the “Shuffle up and deal,” command that starts each WSOP tournament.

Moving on to a scheduled press conference, Frank drew only a small group of reporters, presumably because a more hyped press event was about to take place. 1989 WSOP Champion and eleven-time bracelet winner Phil Hellmuth’s anticipated grand entrance to the Main Event’s Caesar was expected during the same time slot.

Frank described his two bills that would interest online poker players. The more publicized bill, H.R.2267, calls for licensing, taxing, and regulating online gambling operations. The other bill is H.R.2266, which delays enforcement of UIGEA regulations. Of the two bills, Mr. Frank expressed more confidence in near-term passage for H.R.2266.

Throughout his visit, Frank exhorted online poker players to become activists for their cause. He urged them to vote and to support elected representatives who are on the right side of the online gambling debates. He was blunt in insisting that poker players must do the work to move these bills forward. He hammered the point, declaring he will not stump for passage of H.R.2667 all by himself.
Frank Hits His Stride

Sporting a short-sleeved shirt outside his trousers, Chairman Frank orated, pontificated, cajoled, and pressed poker players to get involved in preserving their civil liberties, using online poker as a platform for his mantra.
At the late afternoon fundraiser the New Jersey born Congressman, who has long called Massachusetts home, drew immediate applause with his pronouncement of UIGEA as both “stupid and wrong.” The staunch civil libertarian espoused the importance of preserving basic freedoms.

Mr. Frank then shifted gears, clarifying that he has no current intention of supporting the PPA’s desire for a ‘poker carve-out’ in his current bill. He didn’t do so in his last bill, either. He spoke of his solid commitment to tie online poker and casino games together in his quest to undo the constraints of UIGEA.

Disappointed with his stance, one agitated player began to opine on poker as a game of skill and suggested it might be easier to get a bill passed that focused only on poker. Barney Frank’s face turned beet red. The Chairman pounced on the opportunity to challenge his critic, suggesting that he rethink his values and support the goals of a sincere civil libertarian while virtually dismissing the argument of poker as a game of skill. The Chairman declared that no one he knows cares about online gambling legislation that distinguishes poker from casino table games.

Taking the rhetoric down a notch, Mr. Frank suggested that it made sense, at least for the moment, to relax dogged pursuit of special treatment for online poker, in favor of a ‘poker plus’ strategy that would respond as positively to the civil liberties issue that affects online gamblers in table games, as well.

Charging up the hill once more, Chairman Frank pushed the PPA to send a veritable army of voters to call, write, and visit their representatives in search of support for the H.R.2267. He returned to his central theme of the day online poker enthusiasts will help the bill to succeed only by joining his fight to protect civil liberties under attack by UIGEA.

Reminding everyone of the urgent economic issues that occupy the preponderance of his time, Mr. Frank also warned that he is not going to chase after his colleagues to get this bill rolling. It will be up to the players to lead the way in marshalling support.

The Bottom Line

Before leaving his audience, the sober talking Chairman put out some good news. Barney Frank reassured his supporters that he is truly on their side, ready to pay serious attention to H.R. 2267. He even offered up a timetable to move forward with Committee hearings, hopefully in the early fall. And his eyes twinkled again as he expressed hopes for passage of his bill in the not too distant future.

In the interim, Mr. Frank has his eye on H.R. 2266 which delays compliance with the UIGEA regulations for at least another year. He reminds his listeners that passage of H.R.2266 will protect online gamblers from a tightened noose while long term legislative solutions can be locked into place.

His tough-love message notwithstanding, Barney Frank departed the Palazzo Suites as online poker’s most powerful friend. Chairman Frank apparently felt no special need to prod the industry to wax poetic about the economic benefits to the government of H.R.2267’s provisions to license, tax and regulate online gambling. It was the civil liberties issue he was intent on driving home.

Editor’s Note: This story has been updated and may be a part of material Wendeen Eolis uses in an updated publication of Power Poker Dame.

Ms. Eolis is the CEO of Eolis International Group, a legal/government affairs consultancy that recommended special counsel to a federal government agency reviewing midnight regulations of late last year, UIGEA among them. EOLIS has since authored a related report in conjunction with advice the law firm is providing to the Obama Administration. Ms. Eolis was the first woman to cash in the final event of the World Series of Poker She had her 7th cash at the 2009 WSOP.

As the new leader of the online poker industry, Alfonse D’Amato has taken command in forming the battle plans to free poker from the constraints of the Unlawful Internet Gambling Enforcement Act of 2006.

As Chairman of the Poker Players Alliance, and its chief lobbyist, he is charging forward on behalf of the largest single poker association, representing the particular interests of the online poker community. Senator D’Amato comes to his new role on behalf of the PPA as an experienced politician, savvy in the ways of Washington, though he is a New Yorker through and through.

Born in Brooklyn in 1937, and raised on Long Island, he earned his college and law school degrees from Syracuse University. He worked his way up through the ranks of Republican politics of Nassau County, and then made his play for the Senate against an ailing Senator Jacob Javits in the 1980 Republican primary. He went on to serve three terms in the United States Senate where he held the prestigious posts of chairman of the Senate Committee on Banking, Housing and Urban Affairs, and as a member of the Finance Committee.

D’Amato switches gears easily

These days, when not in Washington whooping it up with cronies from his eighteen years in the Senate or carrying messages to legislators high on the Hill, Alfonse D’A’mato travels far and wide in search of strategies for his clients and is seen all around town in New York. He moves easily from power breakfasts to dinners with compatriots. A few months back he met with Hillary Clinton and former Mayor Koch; he reportedly stirred the pot with mumblings of a McCain/Rudy presidential ticket. At night he shows up in places where it is important to be seen. (think Rao’s). And he is loyal to his friends like heavyweight Republican fundraiser Charlie Gargano and political consultant Arthur Finkelstein.

The peripatetic former senator has a full plate as the managing director of Park Strategies, LLC. He founded the company, a lobbying and business consultancy, with partner Wayne Berman, shortly after he was delivered his electoral comeuppance by the more intellectually polished Charles Schumer.

The “Pothole “Senator turned politically incorrect in 1998, for the use of an offensive slang Jewish term. According to close friends, Senator D’Amato realized the errors of his ways – even before the election returns were in. Mr. D’Amato is still better known in many Jewish communities for his rambunctious support of Holocaust survivors in claims against Swiss banks. His verbal misstep and resulting ouster from office was seen in many quarters as a worse penalty for Jewish interests than it was for the former senator.

Mr. D’Amato proved almost instantly resilient after his fall from elective office. In addition to his new role as an entrepreneur, he held down a short-term stint as a practicing lawyer with a well established New York firm. His only problem with the bifurcated new career was that the company’s bulging rolodex of contacts and the law firm’s significant client base collided into too many potential conflicts. Senator D’Amato stuck with his new born baby, Park Strategies.

Beyond the world of legislators in Washington, Mr. D’Amato has become a fixture on cable news with a weekly show on New York 1 and regular contributions on Fox News. And his longstanding sphere of political influence continues in New York, virtually unabated from his days as Senator and supporter-in-chief of George Pataki’s first gubernatorial election campaign.

D’Amato for Governor

In 1994, Mr. D’Amato went head to head with Rudy Giuliani over the Republican former mayor’s decision to endorse and campaign for the Democratic incumbent, Mario Cuomo in the Governor’s race. In the end it was Alfonse D’ Amato who prevailed (as much as Mr. Pataki). Attacks by Cuomo supporters that suggested a vote for Mr. Pataki was a vote for a mere puppet of the Senator, fell on deaf ears.

The evening of the primary election, weeks before Rudy Giuliani announced publicly that he would throw his support to Cuomo, Senator D’Amato expressed his unhappiness with my friend, Rudy, in no uncertain terms.

The Senator and I were part of a small group of friends that sat with Governor Pataki in a hotel suite, early in the evening on primary night. We congratulated the next governor in advance of his nailing down the Republican nomination. But Mr. D’Amato wasted no time with niceties toward me. He demanded that I call Rudy and persuade him to leave another political gathering in Brooklyn to revel in George Pataki’s suite instead.

The unrelenting senator insisted that my failure to deliver the Mayor (for whom I was a special advisor at the time), would be proof positive of Mr. Giuliani’s plans to betray the Republican Party. Mr. D’Amato’s nose proved right, as to the Mayor’s decision to back Mr. Pataki’s opponent. His presumption that my advice or friendship (or anyone else’s for that matter) might have persuaded the independent Mayor to change his mind was totally nuts,as anyone who knew Rudy Giuliani then or now could attest! I demurred that evening. Mr. D’Amato and I have never chatted up a storm since.

On election night, Governor Pataki took to the podium of a jam-packed ballroom for a victory speech to the crowd. With uncharacteristic flair, almost immediately, he tipped his hat to D’Amato. In a not so veiled reference to the Mayor’s claims that he would be a puppet of D’Amato, the new Governor smiled wryly at the Senator and told the crowd, “You can call me, Al.”

D’Amato is Assembling Ammunition for Battle

Nearly a decade since he left elective office, Senator D’Amato walks the streets of New York more recognized than when he served in the Senate. His commentating positions serve as perfect bully pulpits for his pet projects and pet peeves. And this past week he chose to begin his march for the rights of online poker in the media,scoring a profile in the New York Times.

In addition, he has already crossed the pond to meet with government regulators on the Isle of Man together with online operators, including a few select members and associates of the Poker Players Alliance and a poker magazine publisher. The American-based contingent,especially including Mr. D’Amato,is trying to get a handle on management principles of legal online poker operations in Europe. This education is critical to making the case back in Washington for a possible poker carve-out from the Unlawful Internet Gambling Enforcement Act.

Senator D’Amato has bought into the PPA’s high stakes poker game with a good -sized bankroll in hand, but he’ll be pounding the pavement for the support of more than a million online poker players. He is not likely to take “no” as an answer from anyone, if he can help it.

The anti gambling activists will have their hands full with the Pothole Senator from New York. Alfonse D’Amato is more street wise than wise guy. And lately, he has become positively statesman-like as he opines in interviews about the virtues of online poker for Americans with disabilities. Mr. D’Amato talks of the plight of the handicapped poker aficionados who would be deprived of the joy of a little cyberspace poker to brighten their day, if the Big Brother effort of UIGEA were to take hold. Mr. D’Amato is gearing up to fight for the right of adults to play poker in pajamas, if they please, from the comfort of their homes.

Companion pieces by two-time Pulitzer Prize winning reporter Gilbert M. Gaul appeared in the Washington Post on November 30th and December 1st. Gaul fleshed out the 60 Minutes presentation and laid out the case for and against legalized online gaming operations in the United States.

A day after 60 Minutes aired its investigations of the scandals, I journeyed to Washington, D.C. for client meetings, never anticipating that practically every lawyer, and just about everyone else with whom I was about to cross paths, had either seen the program or had read Gaul’s companion pieces in the Washington Post.

Mr. Kroft, the experienced 60 Minutes correspondent who two weeks earlier was seen in a spiffy business suit chatting up President elect Barack Obama, hunkered down for his presentation of the online poker scandals in more casual attire. He moved quickly into what he described as “the shadowy and murky world” of lucrative, off-shore online poker businesses.

Strolling through the World Series of Poker’s Amazon Room, he explained that the cavernous tournament arena that houses the biggest and most prestigious poker tournament in the world pales in size to the virtual real estate that is consumed by players in the online poker world.

The 60 Minutes producers had negotiated use of the WSOP arena as the backdrop for a series of interviews with several poker luminaries, including longtime ambassadors of the poker industry, as well as with several hip and highly educated online players who had starred in the investigation that uncovered the cheating scams at Absolute Poker and Ultimate Bet. By the time the 60 Minutes program aired, Kroft focused on the young online poker players but left the interviews conducted with the older industry leaders on the cutting room floor.

While toiling in Washington for the better part of the week, I was unable to resist occasional respites from my legal consulting duties. I periodically segued into probing discussions regarding the investigation undertaken by Kroft and his team.

Law firm partners, lobbyists, Congressional staffers, a division chief from the Department of Justice and three members of the Obama transition team were in the eclectic mix of lawyers who talked to me about their take on the 60 Minutes program. They offered informal but penetrating insights. Most were at least vaguely familiar with the enactment of the 2006 Unlawful Internet Gambling Enforcement Act which attempts to ban bets on Internet sites by United States players. All of them were aware of various midnight regulations that have been put into place by President Bush’s staff, but none of them realized that UIGEA regulations were among them. Judging from the effusive feedback, the program had plenty of impact on viewers.

An associate from one big firm who plays poker in a home game and occasionally dabbles in online tournaments said he was “freaked out” when he learned the amount of money pocketed by the cheaters, and “more astonished by the methodical and unyielding investigation of the online poker players.” He later commented, “The online players with law degrees are more invested in the game than I want to be.”

The managing partner at another firm whose son drives to Atlantic City for an occasional poker fix said he had always been wary of online poker games.” He added “It was a shock and awe moment to learn that the players busted the cheats.”

A division chief from a federal agency proved the least knowledgeable about online gaming, quite certain that the Justice Department had a right to ban American players from signing up at any Internet gambling site. Upon further reflection, he modified his position, saying, “I’m sure 60 Minutes checked on the legality issue before explaining that the online poker industry is illegal here.”

A lawyer with Covington Burling, who is also a colleague of Attorney General Nominee Eric Holder, summed up the predominant view expressed among the lawyers I queried, following the twin efforts of 60 Minutes and the Washington Post: “The instant scams might be isolated abuses, but the investigation offered broad, fact-based warnings that cannot be ignored.” He continued, “Effective regulation of online gaming is a lot more complicated than the protective oversight that has been largely achieved in brick and mortar casinos.”

Members of the Obama transition team abound in Washington these days. Most are pretty tight-lipped about substantive matters on the table, but as long as no identifying information is provided, they’re not shy about describing the landscape. According to one Obama intimate, “It will be an uphill battle, but not necessarily impossible, to convince the next Congress to repeal or modify the present Unlawful Internet Gambling Enforcement Act.”

Another Obama confidante, a Chicago-based lawyer who occasionally competes in tournaments, ticked off the points he gleaned from the 60 Minutes broadcast and the Washington Post articles:

(1) Respect for the smarts and perseverance of the online poker sleuths,

(2) General suspicion toward online poker operators,

(3) Distrust of the off shore regulatory body that oversees Absolute Poker and Ultimate Bet,

(4) A high level of concern for the prospects of integrity in online gaming, and

(5) A major concern for the personal rights that are abridged by banning online poker.

These five points, in various combinations, resonated far and wide.

Several lawyers who claim to have ties of one sort or another to the President–elect tell me not to get my hopes up to high or too soon on repealing or modifying UIGEA. One Senate staffer put it to me bluntly: “The President-elect and the Congress have a full plate of emergencies to deal with and this is not one of them.”

The high-powered Covington lawyer with whom Holder has worked gives a glimmer of hope: “When Holder talks, Obama listens.” The informative attorney whispers, “Holder likes poker. He used to play with cronies from his old office—the U.S. Attorney Office in Washington, D.C.”

President-elect Obama has talked about his fondness for poker with many friends and publicly, too. As I was leaving a roomful of folks who were still yakking about the 60 Minutes program, one of the President-elect’s old time poker buddies let me in on a secret: The new president’s past poker games amounted to wins and losses that rarely reached $50 either way. Rumor has it that Mr. Obama considered winning sessions a function of skill and losses a function of temporary bad luck!

Back in New York, I scoured the internet for comments about the program by avid online players. Most agreed that former computer scientist-turned poker pro Todd Witelles had provided 60 Minutes with a magic moment for the producers and a headache for the industry. Witelles was a victim of the Absolute Poker/UltimateBet cheating scandal and was involved in uncovering the scam.

People will remember his powerful warning that cheating such as had occurred at Absolute Poker and Ultimate Bet could happen anywhere, emphasizing that it could be happening right now on other sites. But he never shared on air a shred of such evidence in any game known to him currently.

Only time will tell if the sensational 60 Minutes presentation has tainted the entire industry or whether it will motivate serious efforts to license, tax and regulate online gaming. The industry leaders who were summarily cut from the program were expected to recommend that course.

Will WSOP or 60 Minutes Play Second Fiddle?

The WSOP finale will air “nearly live.” The final nine players will duel November 9th until they are down to two players. The last two players will return November 10th to determine the winner and runner up, and the event will be broadcast by ESPN November 11th.

Meanwhile, insiders in the poker world are holding their collective breath wondering if the WSOP festivities may be upstaged by Mr. Kroft’s highly anticipated piece, which may be slated for November 9th, the same night the final table players (“November 9”) reconvene for their final duels. Rumors of the November 9th airing date are hot and heavy—not only in poker circles but also in at least one CBS corridor.

Writer’s Disclosure:

In the interest of full disclosure, CBS has been a client of a company in which I have an interest. Friends at CBS have provided various off the record information and comments that have been helpful to my presentation of this article. Both investigations to which I refer are instructive in understanding the mindset of news organizations and the trickiness in participating in a story over which you have no control.

Online Cheating is Publicly Exposed.

Last summer, Mr. Kroft was openly on the prowl, with an apparent plan to nail down a compelling story about the multi-billion dollar online poker industry, and more particularly about various claims of large-scale cheating scams in online poker rooms. CBS asked WSOP officials for access to its fabled Amazon Room to shoot interviews for the proposed piece. Harrah’s obliged. One Harrah’s executive has said, “It was not a comfortable situation, but what else could we do?”

The Kroft team set up shop, welcoming several well known poker personalities to the interviewing table. Over several months—before and after Kroft’s WSOP visit—60 Minutes investigators reportedly talked with a wide range of sources. Most of them were anxious to remain off-camera and out of the limelight.

The Makings for a Show.

Among those interviewed by 60 Minutes was Nat Arem, an internet player and key re-searcher in both the Absolute and Ultimate Bet scams. He is generally credited with having unearthed the smoking guns that brought public admissions by Tokwiro Enterprises of its own discovery of cheating at both sites. Tokwiro Enterprises, a tribal gaming company domiciled near Montreal, is licensed by the Kahnawake Gaming Commission. Tokwiro also conceded that it had delayed telling its customers of these findings, and has since been severely fined by the Kahnawake Gaming Commission.

Even with proof positive of crucial information, approval for production of a 60 Minutes segment apparently does not proceed on automatic pilot or at the whims of a correspondent. It is reportedly a laborious process in which vetting the extensive information obtained in an investigation is one part of it and analyzing potential interest by the mainstream public is an important second part.

Cheating Claims Pre-Date Online Sites.

This is not the first time that 60 Minutes has been intrigued by alleged cheat-ing in poker games. Several years ago, two renowned cheaters—calling themselves the Gambling Cheaters Analysts (GCA)—contacted the program, offering to reveal the unseemly underbelly of the poker world and rampant cheating schemes, particularly in California mega-card rooms.

In the case of 60 Minutes’ GCA investigation, their researchers poured through thousands of internet poker Usenet group postings, not only from the cheaters, but also by other protagonists, including a highly respected player turned investigatory sleuth. A 60 Minutes team hopped planes to California and Washington State to interview the cheaters and other players for a bruising exposé. They returned home poised to go forward, but higher-ups slowed down the process. The program’s bosses were intent on scoring top names, in a high stakes game, at a ritzy casino in Las Vegas for on-camera interviews. The proposed segment was summarily dropped—without ever completing investigation of the cheaters’ allegations, once it became clear the desired glitz wasn’t going to fall into place.

60 Minutes Gets Lucky.

In contrast to the obstacles that the 60 Minutes reporting team faced last time around, this year’s investigation of poker cheating has been a walk in the park for Kroft and his crew. CBS not only secured the glamorous WSOP venue as a backdrop for filming, but also a parade of high profile poker personalities who were champing at the bit to speak their piece on national television. They also lucked out with a bevy of brilliant researchers for free—internet poker players who were wizards in analyzing statistics and motivated to do the work and publicize it.

The poker celebrities that have agreed to participate in filmed interviews all have had historical business connections with online poker sites—Linda Johnson and Mike Sexton with their associations with Party Poker, WSOP Champion Greg Raymer, a current member of Team Poker Stars, and Mark Seif a long time time sponsored player at Absolute Poker. Seif was apparently unfazed by the unpleasant scrutiny he has faced on online poker forums questioning his ties with Absolute Poker. Instead, Seif took the lead, long before Kroft showed up in town, to opine publicly on the “wonderful opportunity” that the 60 Minutes segment would provide—a chance for online poker industry representatives to make the case for taxing and regulating online gaming.

Poker Players Alliance Has a Plan.

Most of the poker participants, including many of the internet players who helped to bring pressure on Tokwiro to insure a full, credible internal investigation, actively support the goals of the Poker Players Alliance. The PPA seeks “to establish favorable laws that provide poker players with a secure, safe and regulated place to play.” Johnson and Raymer are members of the PPA’s Board of Directors.
It is not yet known whether Kroft’s on-camera interviewees outplayed their host so as to turn potential bad press into a golden opportunity for advocacy of congressional legislation that will allow online gaming in an appropriately taxed and regulated environment.

Harrah’s Gambles Too.

At the time that Harrah’s welcomed the 60 Minutes crew to the WSOP there was not yet any hint of searing evidence of cheating by a former World Series of Poker Main Event Champion. Earlier this month, however, Tokwiro Enterprises publicly fingered 1994 WSOP winner Russ Hamilton as the chief perpetrator and beneficiary of a multi-million dollar cheating scam at the Ultimate Bet site.

This is the kind of material for which 60 Minutes salivates—a glamorous venue, a powerful link between the venue and the story line, a group of high profile participants and a top name in the thick of the intrigue. The story has powerful legs and is better than a good bet to air—sooner rather than later.

Hopefully the collective cooperation of responsible members of the poker community with the 60 Minutes investigation will prove beneficial, by promoting the very sensible mission of the Poker Players Alliance.

Pollack Hunkers Down to Upgrading Customer Experience

In January 2006, WSOP Commissioner Jeffrey Pollack launched the Players Advisory Council (PAC). He promised, “No topics are off limits.” The group met frequently before the 2006 WSOP to discuss such basic issues as — food quality, offensive smoke in hallways, and much more about the potential for the new collaborative relationship. The WSOP team quickly saw a goldmine of advice and expertise in the initial group.

Nevertheless, during the summer of 2006, the WSOP team lost ground in player satisfaction with Harrah’s/Rio Management. Pollack saw the bright side while focusing on improvements; the tournament itself drew unprecedented player participation, “positive vibes” flowed among thousands of mesmerized customers, and the WSOP also earned staggering income for Harrah’s.

The Commissioner walked the halls regularly, expanding his outreach with WSOP executives and staff and also with players. Behind the scenes the WSOP team was brainstorming ways to extend the brand and “enhance the customer experience” with broader help from the Players Advisory Council.

A visit from Pollack while he was in New York after the WSOP, led to my joining PAC and helping to organize a sister Council for European players (IPAC) in the spring. PAC added several additional representatives and advanced dramatically in 2007, with players offering input on structures, payout changes and rules.

WPA Becomes Organized

Although Jesse Jones successfully recruited hundreds of members during the 2006 WSOP, it was not until spring of 2007 that a WPA Board of Directors was elected. Upon learning I was one of the nine elected directors, I decided to review the organization’s website. Some of the content gave me pause. Jones was speaking only for himself, but presenting material as if the board had fully ratified every aspect of his personal vision. I called Jeffrey Pollack who had also run for the board and had just been elected. I suggested that he review the website. He withdrew the next day — prior to the first Board meeting. I decided to proceed after receiving assurances from Jones that he would work collaboratively in policy making and decisions.

The first meeting of Directors took place in April. Jones was elected Chair. Yours truly was elected Vice Chair. The devoted group labored for more than seven hours trying to get a full understanding of Jones’ personal vision which was as unfamiliar to most of the Board as it had previously been to me—until I toured the website.

It turned out that Jones had a grand plan for tournament poker players (and only tournament poker players)—to empower them like never before through a governance system that would put tournament poker, worldwide, under WPA’s ruling umbrella.

Strife

Within a few months it was clear that Jones was not only a fervent supporter of his personal vision but also reluctant to participate in modifications recommended by other board members.

The WPA Board was increasingly hampered by conflict arising from Jones’ desire to pursue his ideas strictly on his own terms and fast track his proposals into done deals, regardless of other opinions.

In December 2007, Jones resigned from the Executive Committee. He remained as a Board member and critic. In February 2008, Jones gave up his position as an officer. He was accorded the title of Chairman Emeritus. Yours truly stepped into the Chair.

Once in the hot seat, I moved quickly with two initiatives for the remaining three-month term: 1) WPA’s first annual conference with a membership meeting and elections of officers and additional board members and 2) development of a highly capable board to meet the challenges of membership retention and growth and the expertise to create a viable long term business plan.

The 2007-2008 Board sent to the membership a sterling slate of Board candidates for the 2008-2009 year; expanding the Board’s number, diversity and collective poker prowess and business skills. The new Board was elected May 28. I was reelected as Chair. I looked forward to a collegial group building on the mission of promoting poker as a sport with improved playing conditions and concrete membership benefits. However, shortly after the elections, Jones was in the halls of the 2008 WSOP, promoting his personal vision mostly through criticism of the leadership—especially the Chair.

WPA Board Unravels

Among the estimated 1400 members listed in the WPA membership directory, an estimated 1100 voting members were asked to make renewal dues payments in 2008, but only 135 (estimated) elected to do so as of mid-June for the June 2008-2009 membership year.

At the June 10 Board meeting I resigned, after concluding that Jones’ views on how to handle critical membership issues, coupled with his pervasive negativity would be a recipe for probable failure of the association. For the record, I should say here that I tendered my notice of resignation before I considered the consulting assignment I am doing in connection with the upcoming presidential election. Jones “warmly accepted” my decision to resign, and immediately announced his desire to be reinstated as Chair asking the others to remain— with a passionate plea for their continued loyalty.

Return to “Jesse’s Organization”

My last act as Chair was to nominate Jones to retake the reins of the association. I urged the full support of his nomination after the Board voted (unanimously except for Jones’ abstention) to return membership dues payments made for the 2008-2009 year. Nine of the 11 voting board members walked en masse, returning the WPA to its roots as Jesse’s Organization.

After his month-long membership drive at the 2008 WSOP, Jones took in only nominal dues revenues. In July, he declared that all unpaid renewals would be converted to lifetime memberships, effective immediately. It is yet to be seen how and whether he can attract voting Board members to assist him in a bid to empower poker players based on his personal formula. At this time, the WPA is an inconsequential organization.

PAC’s Winning Formula

In contrast, PAC has matured productively. Issues of personality are checked at the door. Intellectual differences are bridged by a commitment to progress. Pollack and his team rarely exercise management prerogatives summarily, ever-mindful of retaining respect for the collaborative effort.

By all accounts the 2008 WSOP was the best-run tournament in its history. WSOP Management opened the access door. PAC Participants have been encouraged to provide input. And WSOP’s PAC has gained visible influence in charting the future course of the WSOP. The comparative analysis of WPA and the PAC provides a history lesson for future poker player advocacy.

Two years later, I serve on the WSOP’s constructive PAC and am Immediate Past Chair of the World Poker Association, having resigned my post as Chair and member of the board this past June. History is instructive in what can work and what is destined to fizzle, as poker players, tournament organizers and card room executives continue to plow the course of player-management relations.

WSOP Commissioner Forms PAC

In 2006, Harrah’s Vice President and World Series of Poker Commissioner Jeffrey Pollack established a Players Advisory Council, consisting primarily of marquee players; most had ties to online poker sites. According to Pollack, it was Daniel Negreanu who approached him about the idea of a PAC in the fall of 2005.

The commissioner seemed to have a soft spot for high profile players, chatting them up since his arrival on the scene in August of 2005, but at the opening bell of the 2006 World Series of Poker, players found little evidence yet of Pollack’s grand plan to improve the customer experience. Poker pros and loyalists who had made the annual pilgrimage for years, railed at the hikes in tournament costs and bristled at the lack of attention to customer service. Players were ripe for an organized effort to change the rules of engagement.

Jesse Jones Pushes to Organize Poker Players

Directly outside the WSOP arena, Jesse Jones was holding court at his premiere positioned exhibit booth, stirring disgruntled players into battle. It was here that Jesse’s Organization came to life as the World Poker Association.

A successful poker pro and three-time cancer survivor, Jones had previously shown interest in organizing poker players. A couple of years earlier, he was an officer of the fast-failed WPPA (which was publicized as a unionizing effort). Jones resigned from the WPPA amid friction immediately following the first tournament.

Soon after, he helped develop plans for another poker player association, the IPPPA. He was reportedly eased off the steering committee of the IPPPA because colleagues perceived his philosophy as too rigid, too extreme, and too close to a union organization plan. The IPPPA never got off the ground.

“Jesse’s Organization”

Jones had recently sunk thousands of dollars from his own pocket to return to the business of uniting poker players and related poker entities. Pointing to increased tournament fees, higher-priced rooms, and unprecedented food costs, Jones promised to promote professionalism in poker competition, improve playing conditions, fight against corporate greed and balance the power between tournament organizers and players. He studiously avoided any references to building a poker player’s union.

His pitch attracted supporters like flies. Approximately 80 players anted up $1,000 apiece as founding members, including the likes of Phil Gordon and Daniel Negreanu who were part of the WSOP’s new PAC. Several hundred additional poker enthusiasts raised their hands with smaller bills.

Shortly after the WSOP, Jones contacted me, soliciting support for his cause. We discussed his needs for legal counsel and then moved to his plans: establish a Board of Directors, appoint committee chairs devoted to upgrading professionalism in poker competition and advocate for improved playing conditions. I was hooked.

Poker Player Groups Are Hot Commodities

The promotion of poker industry advisory boards and poker player associations had been fierce and frenzied for the better part of the past two years. In 2004, the World Poker Tour’s CEO, Steve Lipscomb, established a Player Advisory Board though the Committee was criticized as subjectively biased in selecting and excluding various participants for the Inaugural Professional Poker Tour.

During the same period, Louis Asmo, an experienced poker player and businessman formed the WPPA with visions of a poker player’s union and a “play for pay” policy. Jesse Jones served as his treasurer. The WPPA inked a deal with GSN for televised tournaments, but according to players involved there was little appetite for Asmo who promoted strife and mistrust in the burgeoning organization. Jones resigned after the WPPA’s first and only tournament. Both the WPT Player Committee and Asmo’s WPPA went down the tubes.

Other entrepreneurs came crawling out of the woodwork, too, attempting to unify poker players. The chant was becoming familiar: “The time hath come for the poker player to have a voice.”

Among the wannabees were Dallas–based entrepreneur Tommy Eubanks and a long established Denver-based speaker bureau, Brooks International, headed by Maureen Brooks.

Eubanks connected with Texan poker queen Clonie Gowan who in turn helped attract a potential Board that was to include Matt Savage, Tom McEvoy, Robert Williamson, Mike O’Malley, and Eric Morris. The poker personalities were impressive but ultimately players backed away as they came to believe that USPA’s founder would chew up membership dues in salaries for a few.

Brooks first reeled in David Chiu and then the likes of Johnny Chan, Jennifer Harmon, Marcel Luske, Daniel Negreanu, Annie Duke, Amir Vahedi, Alan Cunningham, Mark Seif, Phil Gordon, Phil Hellmuth, T. J. Cloutier, and Chris Ferguson and Chiu for a meeting.

A smaller steering committee included Jesse Jones. One Brooks executive recalls with admiration Jones’ passion to empower players but considered his views too extreme to work effectively in the group. A key meeting to lock in a management team was scheduled. Jones was not invited to attend the meeting. Later the business plan faded away.

In November 2005, Jones incorporated the WPA but it wasn’t until the 2006 that it gathered steam. Throughout the halls of that year’s WSOP players referred potential recruits to “Jesse’s Booth” and talked animatedly about Jesse’s Organization.

WSOP Starts “the List”

At the same time that the WPA was taking shape under Harrah’s nose, WSOP officials were actively responding to players’ biggest complaint: customer service had evaporated into thin air. Pollack and his team convened for a post-tournament debriefing with plenty of notes in hand.

In the next issue, Eolis traces the rise and subsequent unraveling of the WPA, and the PAC’s successful formula.