New Thread on 2+2's Statement Re the PPA

[iH8poker]

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So the only solution for the transparency issue is for the PPA to take $100K of our money and hire staff that can appropriately disseminate the numbers.

The goods and bads of doing this are obvious.

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It would be hard to run any business, without knowing whats coming in and whats going out... so the information must already exist... there is almost zero additional cost to making that information publically available... especially considering they already have a web site [img]/images/graemlins/wink.gif[/img]

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The one thing I've learned in the "real world", is that 90% of what professionals are paid to do is stuff that others should theoretically find easy, if they had the time, inclination, and ability to think of the issues in an organized way.

Sounds like a ripoff, but without it being somebody's job, it just doesn't happen.

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Unfortunately, you are unknowledgable about business [img]/images/graemlins/cool.gif[/img] and fortunately are not in charge [img]/images/graemlins/frown.gif[/img]

1. You could knit your own sweater, but you'd rather pay $20 to have someone else do it. Same with accounting. THROUGH MAGIC, someone makes money off the $20/sweater equation (or it could be, gasp, SKILL).

2. Accountants often save companys more money than they costs. This is, in fact, a regulation by the IRS, that the cost of accounting should not out weigh the benefit.

If you give 5 people a credit card with a common balance of $5k and say 'only emergencies' but never track it, then one will undoubtly spend funds on non emergency items. In this case, let's say we have $500,000+ given to, what seems to be, 1 man whom answers to no one but himself. First of all, is he really smart enough to run a $500k business by himself? I doubt it, and this would not happen in the 'private enterprise' world. Secondly, the 100,000 plus have no way of seeing what these 'activities' are, or estimating their costs (and funds atributed). The most important, IMO, are the salaries to donations received payout and also 'travel & entertainment' expenses. It is HIGHLY likely that this man pays for 100% of his vacations & dining out through PPA funds (although in reality there is no coorelation). It is also HIGHLY likely that this man earns a rediculous salary, for a non-profit of that size, through a loop-hole in tax law that I believe he is exploiting (through intuition, based on limited facts, I will not discuss further). It is also VERY common for the CEO's to hire their wives or family members OR to buy new computers more often than necessary and selling the old ones to themselves (like a bonus, imagine having 1 year old CPU's and printer every year, top of the line...and possibly more often). That being said, if the shareholder is the CEO and the board of directors, he in NO WAY profits from having an accountant on board.

I would estimate that one accountant could handle ALL the transaction on a part time bases (30 hr/wk) for $40k/yr. This is not a business, but a non-profit. There are much fewer transactions involved.

I would love to be involved in something like this, but I have bad feelings about the PPA too. Not terrible mind you, but I know if I was involved I would most likely be repramending the owner severely within the first month. It is very common for owners to engage in illegal activity, as it is not as simple as 'don't murder'.

[Sniper]

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So the only solution for the transparency issue is for the PPA to take $100K of our money and hire staff that can appropriately disseminate the numbers.

The goods and bads of doing this are obvious.

[/ QUOTE ]

It would be hard to run any business, without knowing whats coming in and whats going out... so the information must already exist... there is almost zero additional cost to making that information publically available... especially considering they already have a web site [img]/images/graemlins/wink.gif[/img]

[/ QUOTE ]

The one thing I've learned in the "real world", is that 90% of what professionals are paid to do is stuff that others should theoretically find easy, if they had the time, inclination, and ability to think of the issues in an organized way.

Sounds like a ripoff, but without it being somebody's job, it just doesn't happen.

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dis,

I can asure you that I have "substantial" real world experience... which includes, being on the board of directors of a 501c org.

[MagCFO]

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"any other highlights from the conference worth sharing"

Basically, there were some good insights into the regulatory quagmire that would bog down any internet gaming regulatory effort. These are over and above the financial and screening barriers to entry one can expect from a regulatory approach.

I got a "from the front lines" idea, consistent with my past experience with gaming regulators, in the US and offshore.

The online poker industry flourished in an atmosphere of little or no regulation of any real substance. Since moving into the public capital markets, and pushing a "regulation" is best agenda, it has floundered .... aside from momentum it had going forward.

There will be serious delays associated with crafting a regulatory approach or adapting current regulations to internet gaming. For example, in Nevada, a truly gaming-friendly state, in order to change a chip in a single machine on the floor, gaming authorities must be notified. Each State will present different, idiosyncratic requirements ..... (hence force behind the Dormant Commerce Clause")

There are companies and interests, reported in the press, who are hard at work to formulate some standard approaches to technical issues, consistent with operational functions. That is a very tough row to hoe and I hope they succeed.

(Age verification and locational screening are really minor technical issues, albeit major political ones. The host of regualtory technical issues will be mind-blowing. You really need to question whether the market or regulation works best ....)

I had always been puzzled by the 18 mos. window proposed for the Study Bill, but it makes sense in that context.

In contrast, a market-based approach, which is where the industry grew up, has proven fairly protective of customers and certainly has placed few barriers to development of the game.

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I'm not sure exactly what you are saying about the "bog down" that will happen during the legislative process.

Are you saying you now understand why the study bill calls for 18 months?

I definitely think getting a regulating internet would be a process that would probably take 3 years in my opinion.

There would be a study bill that would take 18-24 months, then it would take probably another year to "digest" and implement the results of the study bill.

Now, 3 years sounds like a long time, but the good news IMO would be that once the process starts, the enforcement of current regs would probably be pretty nil. That's just my opinion, but I don't see the DOJ making a huge push to shut people down if there was a bill in process to possible legalize and regulate the industry.

TPCEO - did you expect regulation to be faster or slower? I couldn't tell if the 18 month study bill was something you think is feasible or maybe you think it will take even more time.

[permafrost]

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They will have to hire an accountant and an attorney

[/ QUOTE ] Someone please confirm that they certainly, surely, absolutely, undoubtedly, already, must have an attorney.

[Russ Fox]

As a tax accountant, the PPA could be in trouble (as Sniper mentioned) by not having their Form 990 available for public inspection. It's a requirement for a 501(c)(4) organization, that it be available for inspection by the public during business hours at the organization's offices. Now, the PPA may not have had to file the form yet (if 2006 was their first year in operation), but the WHOIS for them shows the domain was created in April 2005. Thus, the PPA should have filed a Form 990 for 2005 by some date in 2006 (this will depend on their fiscal year; if they're a calendar year organization the deadline was May 15, 2006).

Given the investigation by TwoPlusTwo's attorney, and my two-minute investigation, I have serious qualms about them. Nonprofits are supposed to have transparency in their operations. The PPA may know what's going on, but it appears that the poker-playing public doesn't and won't anytime in the near future.

Finally, a check of their website found that Greg Raymer is no longer on their board of directors. Additionally, I sent an email to the PPA asking them to reply in this thread.

-- Russ Fox

[disjunction]

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Unfortunately, you are unknowledgable about business [img]/images/graemlins/cool.gif[/img] and fortunately are not in charge [img]/images/graemlins/frown.gif[/img]


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Untrue on the second account. The first is rather broad. I have never recently been in charge of something intended to make a profit (spending money is more fun), but that's not the PPA either. I have been in charge of several projects and know in general what it takes to get things done and how hard it is to do "easy" things.

I have not attacked the credentials of anyone on this thread so I would appreciate it if you don't attack mine.

[MagCFO]

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As a tax accountant, the PPA could be in trouble (as Sniper mentioned) by not having their Form 990 available for public inspection. It's a requirement for a 501(c)(4) organization, that it be available for inspection by the public during business hours at the organization's offices. Now, the PPA may not have had to file the form yet (if 2006 was their first year in operation), but the WHOIS for them shows the domain was created in April 2005. Thus, the PPA should have filed a Form 990 for 2005 by some date in 2006 (this will depend on their fiscal year; if they're a calendar year organization the deadline was May 15, 2006).

Given the investigation by TwoPlusTwo's attorney, and my two-minute investigation, I have serious qualms about them. Nonprofits are supposed to have transparency in their operations. The PPA may know what's going on, but it appears that the poker-playing public doesn't and won't anytime in the near future.

Finally, a check of their website found that Greg Raymer is no longer on their board of directors. Additionally, I sent an email to the PPA asking them to reply in this thread.

-- Russ Fox

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I didn't think Raymer was ever on the board. He and others went to DC to speak to Congress, but I don't think he was on the board.

I'm sure at some point he'll reply to this thread.

[MagCFO]

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As a tax accountant, the PPA could be in trouble (as Sniper mentioned) by not having their Form 990 available for public inspection. It's a requirement for a 501(c)(4) organization, that it be available for inspection by the public during business hours at the organization's offices. Now, the PPA may not have had to file the form yet (if 2006 was their first year in operation), but the WHOIS for them shows the domain was created in April 2005. Thus, the PPA should have filed a Form 990 for 2005 by some date in 2006 (this will depend on their fiscal year; if they're a calendar year organization the deadline was May 15, 2006).

Given the investigation by TwoPlusTwo's attorney, and my two-minute investigation, I have serious qualms about them. Nonprofits are supposed to have transparency in their operations. The PPA may know what's going on, but it appears that the poker-playing public doesn't and won't anytime in the near future.

Finally, a check of their website found that Greg Raymer is no longer on their board of directors. Additionally, I sent an email to the PPA asking them to reply in this thread.

-- Russ Fox

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[disjunction]

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[ QUOTE ]
So the only solution for the transparency issue is for the PPA to take $100K of our money and hire staff that can appropriately disseminate the numbers.

The goods and bads of doing this are obvious.

[/ QUOTE ]

It would be hard to run any business, without knowing whats coming in and whats going out... so the information must already exist... there is almost zero additional cost to making that information publically available... especially considering they already have a web site [img]/images/graemlins/wink.gif[/img]

[/ QUOTE ]

The one thing I've learned in the "real world", is that 90% of what professionals are paid to do is stuff that others should theoretically find easy, if they had the time, inclination, and ability to think of the issues in an organized way.

Sounds like a ripoff, but without it being somebody's job, it just doesn't happen.

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dis,

I can asure you that I have "substantial" real world experience... which includes, being on the board of directors of a 501c org.

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Great! Then you should be aware of what happens when one person needs to wear many hats.

[TruePoker CEO]

Sorry, I should have written more clearly. The quagmire referred to was once a law was passed. The startegy behind 18 months seems to be to drain that swamp before the industry has to wade across it once the law is passed.

I thought the regulatory hurdles, i.e. getting a specific something, (program, system, software) approved once it is legal, were interesting. If a law passed January 31st, saying online poker is legal for licensed companies to the US market, but we first need to promulgate regulations to qualify them and their systems, then the results would be disasterous, especially if states adopt conflicting standards.

I do think a bill to "study" will pass. What I had not considered was why the study then needed 18 months. Upon reflection, and after hearing from "server-based" gaming efforts under the current State regulations, it became clear that 18 months would be needed just to settle upon regulatory standards.

So, I certainly can agree your 3 year projected timeframe seems reasonable.

The othe point was that I see no reasonable political chance for a "poker" exemption at the Federal Level, but nothing to prevent a State from leaping aboard the gravy train, as technology and regulatory aims converge.

As someone like Harrah's pushes development and State level Regulatory approval of server-based games, which is going on now, I think there may be some State which will seize the day, and try and jump on the revenue then available for Intra-State gaming under the UIGE Act. States are very protective of two things, control over state issues like gaming and potential revenue from gaming.

The impetus for an aggreagtion of State sites into a good sized player pool would follow, as the States would see no reason to wait to lose the potential revenue once some Federal body weighs in. Remember, there is no Federal Lottery, but there is Powerball.

States can, and should, move more quickly to expressly legalize that revenue stream into their coffers, than wait for a 3 year Federal timeline; whether they do remains to be seen.