Myths about UIGEA from "semi-pro"

[Piece of Cake]

Please tackle this myth.

Online poker is extremely profitable. Decisions in Washington are driven by money. Thus, once domestic corporations (i.e. Harrah's MGM) position themselves in the online market and realize it is profitble, they will throw money at Washington until it gets carved out succesfully.

[bcubed72]

I agree with much of this, but two points of contention:

1. Prohibition of pleasurable vices NEVER work. As for the argument that B+M is a close substitute for internet poker; plenty of people do not have the luxury of living near a casino. Home games are an option, but they have the disadvantage of still being illegal (usually--depends on a few factors) and subject to cheating in a way that the internet isn't usually. I've found a nice, seemingly honest, semi-private game, and it was a major PITA to uncover.

I would think B+M poker is a "substitute" for the 'net in much the way that booze is a "substitute" for pot. Doesn't stop potheads; won't stop poker players.

2. Predominately skill vs Predominately luck.

As any statistician will tell you, variance increases at the sqare root of nuber of hands, where the skill edge (ceteris paribus) increases linearly. Thus, the luck factor in 10,000 hands is 1% of that in a single hand. Taking a sufficiently "long run" approach, one could argue poker is almost entirely skill. It's all a question of how long you're willing to wait to let skill predominate.

[Billman]

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Some thoughts on a few of his myths, the rest seem pretty Ok to me (some stuff already stated):

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Fact: Just because Republicans passed the UIGEA doesn’t mean that Democrats love gaming. Some of the biggest opponents to online gaming are powerful Democrats like Sen Dianne Feinstein of California ...

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Is this really a myth? Do people believe this? The takehome message is the Republicans and Frist in control in 2006 were very bad for online poker. Of course we have no way of knowing, but if the Dems had control last year I don't think Feinstein would have gotten the bill passed, since the Dems have no nanny state values agenda that they are beholden to.

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Unfortunately it is. Go do some searching around these forums around election time. Republican = bad. Democrat = good.

That was one of the beefs I raised with Michael B at the PPA. I told him that not posting a voting guide was basically a license to label everyone in the Republican party as an enemy of poker while many anti-poker Democrats got a free ride.

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Myth: We have 270 days

Fact: The UIGEA went into effect the second President Bush signed it. The 270 days was for the Treasury to put together a plan (e.g. recommendations) for enforcing what was in it. And even then, the law said that the Treasury had to submit recommendations *within* 270 days.

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In terms of the banking regs I think it's been shown elsewhere on these forums that we have likely much longer than 270 days, with several stages of review/appeal, delays in implementation, etc. Of course aggressive prosecution may shorten U.S. online poker viability less than 270 days, but that is not really the "myth' Bill was attempting to debunk.

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Again this was a response to people who felt absolutely shocked, I mean shocked, that the DOJ acted before the 270 days were up. Literally people thought online gambling was still legal for 270 days.

I don't know how long it's going to take to fully implement the UIGEA but I do know that there's nothing stopping the DOJ from picking off the low hanging fruit. They could have started prosecuting one second after Pres. Bush signed the bill into law.

[Skallagrim]

[ QUOTE ]
Please tackle this myth.

Online poker is extremely profitable. [Generally speaking, true }
Decisions in Washington are driven by money. {Usually true; Some, maybe most, BUT NOT ALL Washington decisions are driven by money }
Thus, once domestic corporations (i.e. Harrah's MGM) position themselves in the online market and realize it is profitble, they will throw money at Washington until it gets carved out succesfully.

[/ QUOTE ] <font color="blue"> </font> Maybe. This is a prediction, not a myth - but there are other factors working against: Some B&amp;M companies still fear competition and oppose this; many religious groups - who donate lots of money when you add it all up and produce a good number of votes reliably - and a few others for various reasons. Hard to say who will win in the long run.

[Billman]

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I agree with much of this, but two points of contention:

1. Prohibition of pleasurable vices NEVER work. As for the argument that B+M is a close substitute for internet poker; plenty of people do not have the luxury of living near a casino. Home games are an option, but they have the disadvantage of still being illegal (usually--depends on a few factors) and subject to cheating in a way that the internet isn't usually. I've found a nice, seemingly honest, semi-private game, and it was a major PITA to uncover.

I would think B+M poker is a "substitute" for the 'net in much the way that booze is a "substitute" for pot. Doesn't stop potheads; won't stop poker players.


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I would amend the previous point I made that IMHO I think many people will just not play anymore. B&amp;M is an option. Home games are an option. But the reality is that 90% of the people who play this game lose money. If you subtract out the gambling addicted, the 10% who are profitable, and those who via bonuses and such can turn a modest profit or small loss, I think what you have is mostly people who play the game as a form of entertainment. Maybe it would have been more accurate for me to say that going out with friends is a valid alternative or getting a girlfriend. The fact that it brings someone pleasure only matters if there is no substitute or greater pleasure to be gained elsewhere.

[ QUOTE ]

2. Predominately skill vs Predominately luck.

As any statistician will tell you, variance increases at the sqare root of nuber of hands, where the skill edge (ceteris paribus) increases linearly. Thus, the luck factor in 10,000 hands is 1% of that in a single hand. Taking a sufficiently "long run" approach, one could argue poker is almost entirely skill. It's all a question of how long you're willing to wait to let skill predominate.

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Then why have so many states failed to recognize it as a game of skill? Why did the UK just last month decide against Gutshot?

[Nate tha\\\' Great]

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Again this was a response to people who felt absolutely shocked, I mean shocked, that the DOJ acted before the 270 days were up. Literally people thought online gambling was still legal for 270 days.

I don't know how long it's going to take to fully implement the UIGEA but I do know that there's nothing stopping the DOJ from picking off the low hanging fruit. They could have started prosecuting one second after Pres. Bush signed the bill into law.

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Up to this point, DoJ actions have had nothing -- I repeat, nothing -- to do with the UIGEA. The investigation into Neteller for example began in July, three months before the UIGEA was passed. They're prosecuting people under old statutes. It's a two-front war that we've been fighting.

I happen to think the DoJ actions are the far more serious concern. e.g., if the UIGEA had passed, but the DoJ never lifted a finger, then I think we'd better off than if the UIGEA hadn't passed, but DoJ attempted to enforce existing statutes vigorously. Now we have both, of course, which isn't good.

I'm not trying to rip on you -- I agree with 90% of what you wrote in your blog. But you're flat wrong on this issue.

[whangarei]

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Unfortunately it is. Go do some searching around these forums around election time. Republican = bad. Democrat = good.

That was one of the beefs I raised with Michael B at the PPA. I told him that not posting a voting guide was basically a license to label everyone in the Republican party as an enemy of poker while many anti-poker Democrats got a free ride.

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Republican = bad, Dem = good. This is true for the most part when it comes to online poker. The way you worded your "myth" made it sound as if the Dems will necessarily save online poker, which is not the case. But the Dems are by far less bad than the Republicans, and when it comes to keeping the status quo this is very important indeed. Again, Dems in control in 2006, no UIGEA, most likely. Dems in control now, the legislative scene not nearly as likely to get any worse than if the Republicans were still in control.

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Again this was a response to people who felt absolutely shocked, I mean shocked, that the DOJ acted before the 270 days were up. Literally people thought online gambling was still legal for 270 days.

I don't know how long it's going to take to fully implement the UIGEA but I do know that there's nothing stopping the DOJ from picking off the low hanging fruit. They could have started prosecuting one second after Pres. Bush signed the bill into law.

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What Nate said.

[Billman]

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JP - I dont know of anything that stops a state from passing a law that says "its a crime to play poker on the internet." That is different from a law saying "if you play poker on the internet it must be at a site licensed by us or its illegal." If you have a theory about why they cant pass the first type of law LET ME KNOW! I respect your opinion.

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Listen, I'm more than willing to listen to views on this but as was pointed out earlier I did base my post on folks like Chuck Humphries who specializes in gaming law so I don't claim to be an expert here. The highest I went in my legal education was several semesters of business law.

I will say this though: The claim that the federal government has not passed laws banning poker is . . . questionable. While most legal experts do agree that the wire act does not apply to poker the feds have indicated that they do believe it does. Now, you might win the battle but you'll likely lose the war on this one if you're an online poker company because once you agree to step foot in front of a judge to make your case the DOJ will hit you with a sack of bricks on other charges.

And another important point is that you admit some states expressly outlaw online poker. Yet the online sites continue to offer poker to citizens of those states. The crux of the UIGEA was that if it's a state crime it's now a federal crime. So Stars, Tilt or anybody else offering poker in any state where the laws expressly prohibit online poker is defacto guilty of a federal crime.

So the relevance of that is that even though, according to the previously stated argument, offering online poker may be legal in CA, because XYZ Poker is also offering gaming in Washington state they are federal criminals and the DOJ can use its full power to stop their operations for all US residents by prosecuting them on federal charges.

Also, I'm not 100% sure I buy the interstate commerce argument completely. At best it gives online poker sites grounds to challenge in the form of a defense. And the problem is that until someone willingly submits himself to prosecution then the state and federal governments are free to implement things like the UIGEA to attack them.

And maybe that was Stars' reasoning for staying in the US. They felt that the commerce clause would swing any verdict in their favor if prosecuted but Stars didn't recognize that the DOJ had no intention of ever letting such a case go before a jury. The DOJ is more than happy to let Lee Jones run free as long as they can continue to use the lack of a ruling on the commerce clause as a license to enforce other rules which will cripple them.

Anyway, I thank you for bringing that up. It's an interesting angle that probably deserves its own thread.

[Billman]

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Republican = bad, Dem = good. This is true for the most part when it comes to online poker. The way you worded your "myth" made it sound as if the Dems will necessarily save online poker, which is not the case. But the Dems are by far less bad than the Republicans, and when it comes to keeping the status quo this is very important indeed. Again, Dems in control in 2006, no UIGEA, most likely. Dems in control now, the legislative scene not nearly as likely to get any worse than if the Republicans were still in control.


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We may have to agree to disagree.

I know plenty of Republicans who are essentially Libertarians and I know plenty of Democrats who would love nothing more than to be able to regulate your entire existence. And, I'm not a Republican so I'm not defending them or trying to make Dems look bad. I distrust all politicians equally :-)

The point I was trying to make though is that while Republicans were the a-holes who pushed this bill through, a better indication of who our friends and enemies are would be to look at how people voted on similar bills when they were put up for a vote on their own merit. Not all Republicans were for it and nor were all Democrats opposed. Let;s not assume that the Democrats are rabidly waiting to give us our online poker back.

A Republican controlled Congress minus Leach, Kyle, and Frist would have been as much of a win for us as a Democratic controlled Congress who has no reason to repeal the UIGEA.

[whangarei]

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A Republican controlled Congress minus Leach, Kyle, and Frist would have been as much of a win for us as a Democratic controlled Congress who has no reason to repeal the UIGEA.

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Agree we'll have to agree to disagree. It's a question of priorities. UIGEA made it into Speaker Hastert's Top 10 list (American Values Agenda) of to-do items since it panders so well to their religious-right, values, nanny-state base. Leach, Kyle and especially Frist were just pawns in this larger "values" agenda. The current Democratic leadership has a much different set of priorities.