THE FIGHT: Delaware Inches Closer; PPA Slides Farther Away

It’s a new day of the week for THE FIGHT. Now and forever we’ll be bringing you the latest regulatory updates of American poker legalization on Tuesdays. Hopefully with a new day, we’ll be able to start giving U.S. poker players some good news.

That’s not the case this week. The two main threads of the week involve delays in the launch of real-money gambling in Delaware and John Pappas providing armchair pundits with more ammunition for their belief that he should be replaced as the Executive Director of the Poker Players Alliance.

We start in Delaware, however, where the state’s three casinos launched free-to-play social casino games on their websites through IGT’s DoubleDown Casino. The move is more than a bit odd, since the state’s online games are going to be provided by a partnership of 888 Holdings and Scientific Games, whose soon-to-be WMS subsidiary is a direct competitor of IGT in several ways.

It makes little sense for the states to launch a social casino game as a “test” of their real-money preparedness, especially when the social casino platform is run by a company that won’t be involved directly in the real-money games. The freeplay games were the puppet meant to distract U.S. gamblers from the man behind the curtain – the man who announced that real-money games would be delayed in the First State until October 30th, pushing it dangerously close to New Jersey’s anticipated Thanksgiving go-live date.

As far as social casino games go, IGT’s DoubleDown Casino is one of the most successful. It offer slots, blackjack, roulette and video poker that can be played using soft currency that can be collected every few hours for free. Players can also buy more soft currency if they run out and don’t want to wait, but they can never turn their soft currency back into hard currency.

Real-money gamblers may ask “What’s the point?” regarding such games, but they are becoming a big business around the world, especially as land-based casinos begin to experiment with new revenue and marketing channels. The total revenue attributable to social casino games for 2013 is expected to exceed $2 billion. That’s a drop in the bucket compared to online RMG – PokerStars by itself was believed to have about $1.5 billion in revenue prior to Black Friday – but it does represent a way for sites to get their feet wet while the real games continue to be prepared for launch.

John Pappas

John Pappas

Overall, the launch of DoubleDown on Delaware casino websites isn’t so much a step forward as it is a step sideways. It’s not a step backwards, however, which is more than can be said for poker legalization efforts in California (dead) or the PPA’s baffling insistence on pursuing the DiCristina case.

I told you about DiCristina a few weeks ago. The solid thrashing that DiCristina’s arguments received at the hands of the 2nd Circuit should have spelled the end of the case and the “poker is a game of skill” argument. The skill game argument has never carried any serious water on either the legislative or the judicial sides of the regulatory ledger, despite six or seven years of trying by the PPA.

New Jersey lobbyist Joe Brennan, Jr. summed up the quixotic nature of the strategy in a post to Twitter on August 26.

“W/ NJ iGaming law, no politician ever asked me if poker was a skill. What they wanted to know: Can it be regulated, create jobs & be safe?”

The skill game argument is a 2006 strategy designed for an end run around the UIGEA and doing the hard work of lobbying for legislative change. It was put forth by online poker sites like PokerStars and Full Tilt Poker, sites that used the strategy to provide cover for their ongoing U.S. operations.

The problem now is that we’re living in a 2013 world. Seven years after the UIGEA, the skill game argument has gone nowhere. Meanwhile the hard work of lobbying for legislative change has produced a couple of wins and seems poised to produce more.

That’s why it was so vexing to read on Gambling Compliance that Pappas, the PPA, and DiCristina are considering a request for the entire 2nd Circuit to review the case or even petitioning for the U.S. Supreme Court to review the case.

“I think it’s safe to say there is more to come, whether it is a review of the decision by the entire 2nd Circuit Court of Appeals or the U.S. Supreme Court,” Pappas is reported to have said.

Pappas’ credibility seems to sink with every new sound bite. The chances of receiving en banc review from the 2nd Circuit or being allowed to appeal to the Supreme Court are slim to none. The 2nd Circuit panel was unanimous in its decision and solid in its judicial reasoning. There is no serious question of law in this case that merits review. DiCristina clearly satisfied all three requirements for a violation of IGBA to be found.

More to the point, the argument that poker is a game of skill is a dead horse. It’s time for the PPA to stop beating it. THE FIGHT to online poker isn’t going to be won by using judicial smoke and mirrors. It’s going to take more time and more legislative hard work.

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Kevin McGrady

Legislative and Politics Beat Writer: Kevin McGrady practiced corporate law in New York City for eight years before moving to Las Vegas in 2008 to join the gaming industry. Kevin is a graduate of New York University and Columbia University School of Law.
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