The Fight … Regulations Matter

The rules are in place and working

For more than a decade, U.S. online poker players were at the mercy of the foreign companies operating online poker sites and the regulatory bodies of varying credibility that provided oversight.
The lack of real regulations and consumer protections became evident following the passage of UIGEA in 2006, which ended the days of windfall profits for operators. Up until then, everything appeared golden.
Unfortunately, the golden years of online poker turned out to be fool’s gold.
Zero regulations and smaller profits for online poker sites led to the U.S. poker community going through not one but two insider cheating scandals, at Absolute Poker and Ultimate Bet. There were several smaller scandals during this period as well, red flags for sure, but the lack of real regulations only came to a boil following the Department of Justice’s effective shutdown of the U.S. online poker industry on April 15, 2011, dubbed Black Friday in the poker community.

The U.S. poker community was rendered helpless as the days turned into weeks and eventually into months and years, while $150 million of players’ Full Tilt Poker funds sat in limbo.

U.S. online poker players had no recourse; no one to turn to. It was a matter of crossing your fingers and hoping for someone to bail you out.
Fortunately this is changing.

The march of legalized online gambling

Mere months after Black Friday, U.S. Deputy Attorney General Virginia Seitz reversed a previous 2002 opinion by the DOJ that concluded the 1961 Wire Act applied to all forms of online gambling . Seitz’s opinion, that the Wire Act only applied to sports-betting, opened the door for states to pass online gaming legislation, and three states did just that.
Now there is real oversight of the online poker industry in Nevada, Delaware, and New Jersey; not some paper tiger regulatory body that is completely funded by the companies it is supposed to be overseeing.
For the first time, online poker players in the U.S. can take action if they feel they have been wronged by another player or a site. Additionally, players can be prosecuted for cheating or for defrauding an online poker site.

With these regulations, the chances of another Super-User scandal or a site using player funds for operational expenses and/or to pay dividends occurring are slim to none.

We are poised at the doorstep of a real Golden Age of online poker if this legalization continues.

Yet there are people who want to stop this progress toward regulated online poker in its tracks, and send us back to the unregulated online poker industry that is nothing more than a chunk of iron pyrite.

Can online gambling regulations be enforced?

During his keynote address at the 2014 Global Gaming Expo (G2E) Sheldon Adelson made the highly questionable claim that based on his conservations with state regulators in Nevada, there is not a single regulation that land-based gaming must adhere to that can be enforced on Internet gaming.

This is obviously untrue, as the Nevada Gaming Control Board, the New Jersey Division of Gaming Enforcement, and the Delaware Lottery have written hundreds of pages of iGaming regulations, many of which overlap with land-based casino gaming regulations.

Case in point, in November the New Jersey Division of Gaming Enforcement imposed a $10,000 fine on Caesars Interactive for sending promotional material to some 250 players on the state’s self-exclusion list ; Caesars land-based casinos would face similar fines for the same violations.
More proof: In May, Caesars Interactive was hit with a $3,000 fine when the company ran online gambling billboards that failed to legibly include the phone number for the compulsive gambling hotline.
Whether the opponents of online gambling want to admit it or not, the regulations are enforceable and they are working.

What’s your 20?

One online poker regulation that has been undeservedly attacked is geolocation.

Despite mountains of evidence to the contrary, including the real-time geolocation checks that are run in New Jersey, opponents of online gambling refuse to believe states can be ring fenced, and players from outside the state can be prohibited from playing.

Both sponsors of the Restoration of America’s Wire Act (RAWA), Jason Chaffetz (R-UT) in the House of Representatives, and Senator Lindsey Graham (R-SC) in the Senate, have made statements implying geolocation doesn’t work.

In Leah McGrath Goodman’s controversial Newsweek article that pilloried online gambling, Chaffetz expressed his fears that legal online gambling in one locale would lead to legal online poker where it is unwanted due to inadequate geolocation technology.
McGrath wrote:
“Chaffetz is wary of claims that geolocational technology, which works better in cities than in rural areas and vast expanses of desert (due to their reliance on hot spots and cellular towers to triangulate players), can keep poker out of his state…”

In a statement on his congressional website , Senator Graham makes the false claim that the current interpretation of the Wire Act means South Carolinians will have access to legal, state-sponsored, online gambling, even if the state disallows it:
“In 1999, South Carolina outlawed video poker and removed over 33,000 video poker machines from within its borders. Now, because of the Obama Administration’s decision, virtually any cell phone or computer can again become a video poker machine. It’s simply not right.”

Sheldon Adelson made similar remarks during his G2E keynote, when he told his interviewer, Roger Gros, “This is not a state’s rights issue as the proponents would have us believe, because the Internet is all over the country… it’s an over the state, cross-border issue.”

Does geolocation work?

Eric Weiss, the chief of the technical services bureau for the New Jersey Division of Gaming Enforcement told the Press of Atlantic City , “Geo-positioning works.” In the same article the Press of AC detailed the geolocation process run at the DGE control center:
“Colored-coded graphics and maps at the Division of Gaming Enforcement’s control center pinpoint where individual gamblers are located and depict the devices they are using to access casino websites. Blue indicates PCs, white is for Apple-powered devices and green is for the Android operating systems.”

Red dots indicate someone from outside New Jersey’s borders is trying to gain access, “When we first went live, you saw red dots all over the country from people who were trying to beat us,” Weiss stated, later adding, “Fortunately, it hasn’t happened at this point.”

Or more to the point, as group director of Poker for Jeffrey Haas stated, “Despite what the demagogues are saying, there is not a single documented case of someone playing from outside New Jersey.”

December 2014