A new State Legislative idea

[Skallagrim]

I come up with a new thought recently and am wondering what you folks would think.

Although in no way meant to slow down the major efforts at the Federal level, it occurred to me that the lack of "intrastate" online poker has been primarily due to no company seeing a big enough market in a single state to justify the expenditures. So what if instead of a site, a state legislatively authorized, under its general gambling laws, a specific ONLINE POKER funding financial service? A law would be passed that says playing poker online in state X is specifically allowed provided the players in state X use an approved financial service company to transfer the money (to any poker site in the world that will accept it). The FS company would be required to insure age verification and other legit concerns. And of course it has to give a % of its take directly to the state.
Seems to me totally compliant with Federal law and the UIGEA.

State gets tax revenue from current poker that is impossible to stop, gets some safety assurances, and tax revenue. An FS company of this sort would be pretty cheap to set up too and should have no legal problems with an official stamp of approval.

Comments?

Skallagrim

[JPFisher55]

But are there enough online poker players in any one state for this type of ewallet company to be financially viable? Maybe a group of states could get together and authorize the same ewallet, but I doubt that will happen.

[oldbookguy]

Actually I have been working on something to propose for here in WV since this is a big gambling state.

Reading the UIGEA it does NOT say the poker site must be in the state, only payment made and received in the state.

Someone posted in jest here on 2p2 concerning California and the state being an affiliate.

This actually would work; in-fact the state could be an affiliate of MANY sites. Simply have a state lottery run it, log in to your state, select deposit and where you want the funds credited to; I.E. WV_PartyPoker, WV_Pacific, etcetera.

The individual state would simply be a 'skin' of the site.

This would benefit the state since they could have income NOT premised on a citizen losing, but winning and generating rake.

At this point I am still in the early stages. However, our current Gov. Manchin is a good man and when he was Sec. of State I worked with his office (the rep. from his office is now his chief of staff) to completely overhaul our voting laws, so I have some credibility. In-fact my presentation was presented verbatim to the State Judiciary committee and no changes were made though she presented it as her own.

[Dennisa]

[ QUOTE ]

Actually I have been working on something to propose for here in WV since this is a big gambling state.

Reading the UIGEA it does NOT say the poker site must be in the state, only payment made and received in the state.

Someone posted in jest here on 2p2 concerning California and the state being an affiliate.

This actually would work; in-fact the state could be an affiliate of MANY sites. Simply have a state lottery run it, log in to your state, select deposit and where you want the funds credited to; I.E. WV_PartyPoker, WV_Pacific, etcetera.

The individual state would simply be a 'skin' of the site.

This would benefit the state since they could have income NOT premised on a citizen losing, but winning and generating rake.

At this point I am still in the early stages. However, our current Gov. Manchin is a good man and when he was Sec. of State I worked with his office (the rep. from his office is now his chief of staff) to completely overhaul our voting laws, so I have some credibility. In-fact my presentation was presented verbatim to the State Judiciary committee and no changes were made though she presented it as her own.

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Fantastic idea, but it will never fly in California. There is not enough graft in the world to overcome the power of the following lobbies:
The Indian Casino lobby will kill it, if they dont, then we have the Nevada Casino lobby, the B&M Poker lobby and finally the California State Horse racing lobby.

[oldbookguy]

I used California as an example since the poster did, I am in WV, though it will be a tough sell.

obg

[permafrost]

[ QUOTE ]
Reading the UIGEA it does NOT say the poker site must be in the state, only payment made and received in the state.


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UIGEA says the "bet or wager" must be "initiated and received" exclusively in state. The wording seems definite that the bet is between two resident state parties.

This interesting intrastate "exception" section is very likely to be used by some states to authorize online poker, license sites, and deal wildly popular, lawful games. No new Fed legislation needed, again, it's already right here. If a site had access to tens of thousands of avid players, it could easily justify a small office, a license, server, etc. If a B&M room can make money in state, why can't an internet site?

And many of these avid players would be new to poker...

[oldbookguy]

A 'skin' can reside in any computer server. Thus, it is made and received within the state. It does not say the other person(s) participating have to be in the state as well. Nor does it specify it must be a single state system.

Example: One state sells tickets to a muliti-state lottery online to residents of that state only, however, most participants are not from that state, the states then pool the money. There is no reason they cannot do the same with in other online gaming.
An area I am going to explore a little more.

obg

[Skallagrim]

The UIGEA says that it only prohibits money transfer for bets or wagers illegal under state or federal law. Federal law does not cover poker. Perma is right, I think, about the limitations the UIGEA places on an intrastate gambling site, but the "new" part of my idea is that the legislation to be proposed would specifically say that citizen X in state A placing a bet in an online poker game is perfectly legal so long as the money transfer agent used by X is licensed by state A. Hence it is explicitly exempt from the UIGEA.

JP raises an appropriate concern, and I have no information to know for certain, but my guess is that setting up a mini neteller like operation in a single state would not cost that much, and thus could make a profit off of just one state's players (certainly this must be true in the larger states). Plus, I would not lobby for a monopoly here, but allow any Financial Service provider to get the license. Thus the FS would not be limited to one state, and, if more than one license is issued, players get a choice.

This is obviously not for every state - but for states that would like to see some increased revenue from gaming, a law such as this would provide that revenue. It would also provide the safeguards everybody supports. It would also not lead to any new "gambling" businesses. It would only cover an activity many citizens already engage in (so the other gaming lobbies really couldnt object that much - the only direct competition is with B&M poker, and most B&M poker places realize online play helps bring in customers rather than the other way around). And the cost of the whole enterprise is minimal to the state, one extra desk job in the Lottery office probably is all thats needed to oversee the FS companies.

A cheap easy way to get a cut of the poker revenue stream, that merely allows people to play a game of skill for money in the privacy of their own home. Hell, if the moralists or nanny staters really object, you could even have money limits (like $500 a month unless personally exempted).

I am going to talk to some state reps I know here in NH, and let you know what they think. NH is a good place to try because A) with no income or sales tax NH is always looking for a new money source, B) NH does not have a lot of moralists in its Rep party, and C) gambling is popular in NH, although actual casinos are not - this is new gambling revenue w/o new casinos!

I think there are probably a number of other states where this idea would be viewed favorably, like oldbookguy's WV [img]/images/graemlins/smile.gif[/img].

Skallagrim

[Grasshopp3r]

North Dakota is the best place for this to work as they have a state owned bank. Plus, they have tried in the past to provide online poker.

North Dakota Representative James Kasper was the proponent of the online poker proposal.

On March 8, 2005, the ND House approved HCR 3035, 50 to 44, to allow the people of ND to vote in a primary election in 2006 on an amendment to the state's constitution that would mandate the legislative adoption of an internet poker licensing bill.

The ND Senate Judiciary Committee held hearings beginning March 8, 2005 On March 18, 2005, that committee deadlocked, 3 to 3, on whether to recommend that the ND Senate vote for or against the bill. An Associated Press story notes: "The Judiciary Committee did agree on a set of changes to the Internet poker measure, including more specific language on the attorney general's regulatory power. The amendments also require that the state collect at least $1 million in licensing fees before any poker site may operate.

On March 21, 2005, the ND Senate voted overwhelmingly, 44 against, 3 for, thus defeating this bill.

[DeliciousBass]

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On March 21, 2005, the ND Senate voted overwhelmingly, 44 against, 3 for, thus defeating this bill.

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Thereby saving all North Dakotans from themselves.