My micros suggestion

[KingOtter]

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What does that have to do with the price of eggs? They got hammered in the LSE today; if they came out strong and said they had no intention of losing one customer because of this bill, it might not have been such a bloodbath.

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I would have to agree - I've read that Party has a much higher percentage of US players than any other London-traded site; cutting them off will cause profits to plunge and plunge hard.

The issue as far as I can see is non-poker gaming; as the most visible gambling entity in the world, there's probably a lot of fear within Party Gaming that the next CEO to be marched to jail in handcuffs could be theirs.

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If I was worth a gazillion dollars (okay, only a billion), I really think jail would be the last thing in the world I was worried about. Plus they have 270 days from when it is signed to have to worry about it. The reaction was much too quick to be a concern about prosecution.

I think there's something else afoot. I think they think they are 'punishing' the US for their isolationism, and will be looking to buy up a lot of the smaller sites, trying to make sure the US market has as small a window on online gaming as possible.

One analysis I find pretty compelling is from the London Times I think it was. They say that this is paving the way for US gaming companies to enter the online gambling business. US companies that are regulated and pay taxes.

This story is going to be developing for a while, I think.

[KingOtter]

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What does that have to do with the price of eggs? They got hammered in the LSE today; if they came out strong and said they had no intention of losing one customer because of this bill, it might not have been such a bloodbath.

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It's a lot harder to keep your investors confident when most of your business is illegal. With a sole proprietorship all it takes is for the owner to decide he doesn't care.

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Because I'm a nit I have to stress that not a single poker site or online casino's business is illegal. It isn't even illegal for Americans to wager on their sites. The 'illegal'ness comes in when it comes to funding the accounts.

[Xhad]

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If I was worth a gazillion dollars (okay, only a billion), I really think jail would be the last thing in the world I was worried about. Plus they have 270 days from when it is signed to have to worry about it. The reaction was much too quick to be a concern about prosecution.

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The 270 days thing is for the enforcement on the bank end, the owners of sites taking US bets could start taking fire as soon as the bill is signed into law.

(I've been almost exclusively in the Legislation forum since this crap passed)

[Xhad]

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What does that have to do with the price of eggs? They got hammered in the LSE today; if they came out strong and said they had no intention of losing one customer because of this bill, it might not have been such a bloodbath.

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It's a lot harder to keep your investors confident when most of your business is illegal. With a sole proprietorship all it takes is for the owner to decide he doesn't care.

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Because I'm a nit I have to stress that not a single poker site or online casino's business is illegal. It isn't even illegal for Americans to wager on their sites. The 'illegal'ness comes in when it comes to funding the accounts.

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It's not illegal for the players, it is illegal for the owners to accept US funds.

[KingOtter]

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If I was worth a gazillion dollars (okay, only a billion), I really think jail would be the last thing in the world I was worried about. Plus they have 270 days from when it is signed to have to worry about it. The reaction was much too quick to be a concern about prosecution.

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The 270 days thing is for the enforcement on the bank end, the owners of sites taking US bets could start taking fire as soon as the bill is signed into law.

(I've been almost exclusively in the Legislation forum since this crap passed)

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I have read quite a bit too, but I seem to have missed the 'taking bets is illegal' bit.

Edit: I just reread the Paradise statement, the Party Statement, and the 888.com statement, and they all pretty clearly say that the Act doesn't say what is illegal, and what is not. Even the law professor's analysis said the act didn't really clarify the legal/illegal thing.

The only thing the act clearly defines is that gambling operations cannot receive funds for the purposes of bets or wagers from the US.... not making the bets themselves.

Anyway... the entire point I guess is that some sites have plans, and others have others... I still don't think if I was worth a billion dollars I'd worry about jail because I'd walk in the front door and right back out again since I'd have a team of lawyers ready for it. And that's only if they step foot on American soil. If they stay over there we're talking extradition, and since the WTO isn't on our side that might be an iffy proposition, too.

I don't think Party's stance is out of fear.

[TexInAtl]

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One analysis I find pretty compelling is from the London Times I think it was. They say that this is paving the way for US gaming companies to enter the online gambling business. US companies that are regulated and pay taxes.

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I've had conversations with others, and this is exactly what I think is happening, but I don't think it's going to be gambling as a whole but rather poker itself. I believe that poker is going to be seperated from gabling on the basis that it is a "game of skill" such as backgammon. Because of this, poker will become "legalized". This will allow the basis for online poker sites to be hosted here in the US, which, in turn, will allow for regulation and taxation of these sites. The fact that the overseas poker/gambling sites are turning away a vast majority of US customers is only going to help this cause along.

Overall, I think the wins and loses of the poker players as a whole is probably negligable. I think it's THE RAKE! It's the rake that the US wants to tax, but would be unable to do so as long as overseas poker sites control it.

[halpgr]

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One analysis I find pretty compelling is from the London Times I think it was. They say that this is paving the way for US gaming companies to enter the online gambling business. US companies that are regulated and pay taxes.

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I've had conversations with others, and this is exactly what I think is happening, but I don't think it's going to be gambling as a whole but rather poker itself. I believe that poker is going to be seperated from gabling on the basis that it is a "game of skill" such as backgammon. Because of this, poker will become "legalized". This will allow the basis for online poker sites to be hosted here in the US, which, in turn, will allow for regulation and taxation of these sites. The fact that the overseas poker/gambling sites are turning away a vast majority of US customers is only going to help this cause along.

Overall, I think the wins and loses of the poker players as a whole is probably negligable. I think it's THE RAKE! It's the rake that the US wants to tax, but would be unable to do so as long as overseas poker sites control it.

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Good post.

To me this comes across as a cash grab on the rake revenue of the poker sites. Look at all the state lotteries and casinos in the US. They don't care if individual citizens lose some or all their money gambling. As long as the government treasury gets a cut of the action they are content to look the other way to individual losses.

[MrWookie]

Tex,

In the interest of fairness of argument, would you post the last PM I sent you on this subject as to why I don't think this is the case. Unfortunately, I forgot to check the box to save it.

[TexInAtl]

Ok Wook,

I completely agree with fairness of argument, and everyone should hear both sides. FYI, MrWookie and I have bantered on this topic through PM, and while I didn't save my PM's either, I'll post Wook's responses here (Wookie: I'm posting his, too):

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From Tex:

Hey Matt,

You shot down my idea that poker would become legal as a result of all this pretty quickly yesterday, but I noticed that you made a post in a "conspiracy" thread today. Are you starting to think that my idea wasn't so far fetched after all?

Quite frankly, I think the #1 site posed to be the first one on US soil is Full Tilt, although the ideas about Harrah's are interesting too. I still feel like this is a hidden/underhanded attempt for the US to take over the poker market that up til now has been strickly overseas. I don't think they want to make poker itself illegal at all.

The whole thing is just screwed, but I agree with you. If there turns out to be US online poker rooms, I either want to try to be an affiliate early, or I want to get on a really good rake back program.

Later

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Wookie:

I don't there is anything sinister or underhanded going on, and I don't think Harrah's et al. were behind the push to pass this bill. However, I do think it's reasonable to think that Harrah's et al. would jump at the opportunity to profit legally from online poker. That's just good business sense, and they might be looking at this as an opportunity. I'm not convinced, though, that it's legal for them to buy up a poker site, even one that's non-US only. IANAL, but I'd be surprised if that's allowed. If they do manage to buy one legally, though, that would be a TREMENDOUS victory for us, like, even bigger than just straight up having the law repealed. Getting Harrah's or MGM to have a direct financial interest in the health of online poker will begin to put a huge amount of pressure on Washington, both directly in the form of lobbies and campaign contributions, and indirectly, as poker becomes more and more a part of culture. Americans could get word of the purchase and start asking why the Euros are allowed to play there, but not them, especially with a business they automatically will trust more. A Harrahs purchase is the way to regulated and taxed American online poker sites in spite of the current laws. This is correct.

However, I still disagree with the conspiracy. Like I said, if Congress wanted to take over online poker, all they'd have to do is legalize, tax, and regulate. As I said in the other post, that would transform the face of online poker overnight, turning Party into a ghost town and Harrahs or whoever into an overwhelming force. There's no need for all this backdoor crap when the direct approach would work much, much better. Instead, Fristy-poo wants to appeal to the "moral majority" and make them think he's successfully banned gambling in the name of the Father, the Son, and the Holy Spirit, amen. If he wanted to chalk up that victory, there's no way he'd turn right around and legalize it in the US. That would cause a revolt of the only people who really cared about the ban in the first place.

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Tex:

I agree with everything that you said…..almost. I still don’t think that I’m conveying my thinking for why this has to progress this way.

First of all, do you think that if Congress all the sudden said that gambling online is legal that PartyPoker, PokerStars, and 888 would go quietly and release 60-80% of its customer base back to the US? Do you think that they would eagerly work with the US to allow taxation of their business? Personally, I don’t think so. I think it HAD to happen this way, and that someone (or a group of someone’s) carefully thought this out ahead of time.

Second, Frist does not make up Congress. Congress, at least for the time being, is made up of conservative, CAPITALISTIC republicans. These capitalistic republicans are looking at several billions of dollars going overseas, and I believe their main priority was to stop that. What better way to stop it than to make the transfer of those funds illegal, and what better way to make it illegal than to allow some overly zealous short-time senator (It’s my understanding that Frist is not up for reelection) underhandedly attach this legislation, that wouldn’t pass on it’s own merits, to a “must-pass” bill. So now, rather than making gambling illegal (which they had no intention of doing in the first place), they’ve made the transfer of these billions of dollars overseas illegal.
Now that this has happened, these same republicans/congressmen are now going to listen to the Poker Players Alliance claims that poker is a “game of skill” rather than a “game of chance”, and therefore should stand alone as a legal means of entertainment, like backgammon or golf, rather than a degenerate form of gambling. This will probably happen after Frist has left office, but even if it doesn’t, I think Frist will be powerless to stop it.
Now that poker is a legal form of entertainment, there will be no reason why online poker sites can not be hosted here in the US, and now that the online poker sites are hosted here in the US, we can regulate and tax them. All the time, maintaining the stance that transferring funds to offshore (degenerate) gambling sites is illegal, so that we can keep our billions of dollars here in the US, tax them, and take our cut. To some degree I think the PPA knows this and is helping with this.

You still may think that this is some “moral crusade” of Frist’s, but I think there is far more going on here than meets the eye. In the long run, I think it’s about the money, and I think it’s been about the money for a long time now. The one thing I’m pretty sure of is that the government will never come knocking on Joe Q. Public’s door and hauling him off to jail for playing poker online. I don’t think it was ever as simple as congress simply saying that gambling was legal, and I don’t think anything can “transform the face of online poker overnight”. I think it has, and is going to, take a long time and very careful planning for the millions of Americans to be able to play poker legally in their homes, but I think that’s the direction that all of this is heading and the steps that are happening now is just a means to an end.

Sorry this is so long

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Wookie:

I continue to disagree. Every day, Congressmen, state legislators and governors, and the average voter can look to Las Vegas or AC and see the vast sums of money brought to those areas by gambling. And what do they do? They ban many forms of gambling in their own states. They aren't interested in the money when they think gambling is a dirty means of getting it. The gub'ment isn't out to legalize and tax the drug trade, no? Let's look historically. Prohibition wasn't a grand scheme to increase tax revenue and regulation. It was the legislation of morality that failed and increased crime, and then legislators got their act together and realized that regulation and taxation would work better. The billions of dollars going overseas is not lost profit to these guys. It's their constituents clicking their mouse and losing their house, as it goes.

Money is important to the guys in DC, sure, but they care more about votes. They don't get to just pocket the campaign contributions. They have to spend them on campaigns. If they're guaranteed reelection without having to spend a buck, they wouldn't really care much about the contributions. Sure, you can talk to me about backdoor channels and shady dealings, but the fact of the matter is, it's the Congressmen's JOB to care about votes. If they get votes, it means they're representing their constituency.

Third, the arguments that the bill would not pass on its own merits is just plain wrong. The bill passed the house by an overwhelming majority, and, had it been introduced to the senate, it's widely accepted that it would have passed, too. It didn't hit the floor because of holds placed on it by one or more senators that will anonymously let them keep a bill from hitting the floor until there's a super-majority vote to override the hold (not a popular thing to do), or there are some compromises reached. Think about this, why would Frist be trying to introduce a bill important to him if he wasn't sure of it passing, and why would a hold be in place if the senator placing the hold thought the bill would fail?

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[MrWookie]

OK, I'll edit your post and stick your PM's in so people can see the complete debate. Go mod powers!