THE FIGHT: Nevada Makes Halting Progress as Black Friday Case Ends

Step by step, week by week, online poker inches towards a return in the United States. This week Nevada was back in the news, as it made halting progress towards dealing the first hands of regulated online poker. New York was also in the news, as the feds there prepared to sentence the last of the Black Friday defendants.

Out west, the Nevada Gaming Control Board has begun to publish the public responses it is receiving in response to its request for public comments on regulations concerning interstate agreements for online gaming – so-called compacts for player pooling. As is typical with public commenting processes, many of the comments received thus far have little of substance to add to the discussion.

Yesterday, however, 888 Holdings – recently licensed in Nevada – filed its own public comment. At seven pages long, the comment provided the most in-depth guidance so far. It proposed methods of dealing with issues related to two different cross-jurisdictional scenarios. In the first, which 888 labeled the least complex scenario, players would be allowed to register with sites across state lines (for example, a player in Nevada could register with a site licensed in New Jersey). In the second, players would only be able to register with operators licensed in their own states but could play against players registered at sites licensed in other states.

The public commenting process closes today. It’s likely that other operators will add their voices to 888’s in suggesting ways for the industry to move forward across state lines in the U.S. No operator wants to see states begin to ring-fence themselves from each other. Such moves would make it difficult for a robust, competitive environment to develop online, as player liquidity would be severely compromised.

Back east, the biggest story of the week wasn’t directly tied to online poker legalization and regulation, but will surely have an impact on those efforts. Lawyers for former Full Tilt Poker CEO Ray Bitar announced that Bitar has signed a plea agreement with the U.S. Attorney’s Office to resolve the charges stemming from Bitar’s Black Friday criminal case. Bitar, who turned himself in to U.S. authorities in July 2012, had been facing nine felony charges. Under the agreement, he will please guilty to two of those felonies and forfeit approximately $40 million in assets.

The rub – one sure to leave FTP’s U.S. customers screaming bloody murder – is that Bitar will likely avoid jail due to a severe heart condition. His doctors have diagnosed him with Class IV heart failure, the most severe classification on the New York Heart Association’s scale of heart failure. Without a transplant, Bitar is likely to die within a year.

Due to Bitar’s heart condition and his need for a transplant, Bitar’s lawyers have requested that Bitar be sentenced next week (instead of 90 days after entering his plea, as is customary) and that imprisonment not be included in his sentence. The government has elected not to oppose that request, leaving the decision squarely in the hands of the presiding judge, Hon. Loretta A. Preska. Given the severity of Bitar’s condition and the asset forfeiture judgment he is agreeing to, there’s little reason that Preska should reject Bitar’s request for leniency.

Bitar’s sentencing will finally close the book on Black Friday, two years after the poker world got a rude awakening courtesy of the USAO. Sure, the criminal charges against PokerStars founder Isai Scheinberg, UB founder Scott Tom, and former PokerStars Director of Payments Paul Tate remain unresolved. Scheinberg and Tate will likely never see the inside of a U.S. court, and Tom’s last known address had him living large in Costa Rica. For all intent and purposes, the case will end next week.

Black Friday has been a cloud hovering over U.S. regulatory efforts. For all of the positives that have developed in places like Nevada, New Jersey and Delaware, and the potential positives on tap in California, Massachusetts and Illinois, it always felt like regulation couldn’t really move forward until Black Friday was left behind. After Bitar is sentenced, the USAO will be able to issue a press release talking about how tough it is on prosecuting illegal online gambling and we can all move on.

THE FIGHT started with a devastating blow on Black Friday, but it’s only gaining steam as the case comes to an end.

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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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