Online Poker Could Fold Under Law Enforcement

Treasury Department officials announced Wednesday that they are moving forward with implementation of a law aiming to effectively end online poker in the United States.

But advocates of online poker are pushing to keep the cards on the screens.

“Our view is this is another attempt at a...last-ditch midnight rulemaking effort by this administration to push through this issue that they’ve been overly fond of for too long,” said John Pappas, the executive director of the Poker Players Alliance, which lobbies against attempts to prohibit online poker.

President-elect Barack Obama has acknowledged that he enjoys “a little friendly game of poker,” but it’s unclear whether he’ll actively seek to reverse the recent regulations.

Obama mentions his love of poker in a recent speech.

In the waning hours of the 109th Congress in October 2006, lawmakers attached the Unlawful Internet Gambling Enforcement Act to a port security bill.

The rule announced by the Treasury Department Wednesday will force financial institutions to enforce the law by establishing procedures to prevent payments in connection with "unlawful Internet gambling."

Although poker is not specifically defined by the Act as unlawful gambling, the effect of the law and subsequent regulations could severely cripple the ability of Americans to play poker online for money.

“They passed the bill under the cloak of secrecy, dark of night in 2006,” Pappas said.

“They thought they were doing something to kind of throw a bone to the Christian right before the elections,” he added. “It turned out to work against them, and now they’re just trying to hold on to this legacy.”

Poker has exploded in popularity since 2003, when Tennessee accountant Chris Moneymaker won the World Series of Poker after securing his entry into the $10,000 tournament by winning an entry on an online site.

This week, Peter Eastgate took home more than $9 million after winning the 2008 World Series, which aired Tuesday night on ESPN, emerging from a field of 6,844, many of whom qualified for the tournament by playing online.

Several lawmakers, including Sen. Robert Menendez (D-N.J.), have introduced measures that would exempt poker from the restrictions imposed by the unlawful gambling act, classifying it instead as a "game of skill."

Video: Games like this could be in jeopardy.

On Nov. 10, Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, wrote Treasury Secretary Henry Paulson to protest the department’s decision to announce the rule implementing the 2006 act.

“I am deeply disappointed to hear that your agency is proceeding with what I consider to be unseemly haste in issuing regulations implementing the Unlawful Internet Gambling Enforcement Act,” Frank wrote.

“This midnight rulemaking will tie the hands of the new Administration, burden the financial services industry at a time of economic crisis, and contradict the stated intent of the Financial Services Committee.”

However, supporters of restrictions against online poker argue the industry is much more pernicious than poker advocates suggest.

“They do this for the sole purpose of monetary gain,” said Chad Hills, an analyst for gambling research and policy at Focus on the Family Action, a conservative group, speaking of online gaming sites. “That’s exploitation.”

The anonymity and accessibility offered by the Internet, he added, make online poker sites particularly dangerous, especially for young people.

“It’s a toxic recipe for deep-seated addiction,” he said, adding that “gambling addiction leads to the destruction of families.”

Pappas, however, disputed the idea that online poker is decimating the savings of American families.

“For the vast majority of people who play online, this is a hobby in which they spend $10 to $20 a week,” he said.

What’s more, Pappas said, regulation would not only allow for safeguards against abuses, but also create a new source of government revenue.

“What we’re asking for is even more regulation,” he said. “We want to see the U.S. step up and become involved in the regulation of the industry and then also reap the benefits of taxation.”

Hills, though, is skeptical that regulation is practical, and is particularly critical of Frank’s attempts to regulate the industry.

“He’s wanting to get in a car without any brakes, basically,” Hills said.

Online poker players, though, remain hopeful.

“We believe with the new majorities in Congress, with a new White House, we’ll have a new, clean slate to present our case,” Pappas said.

“And I think we win on the policy; it’s just a matter of getting past the politics.”