John Pappas Went to YouTube to State His Case
The Poker Players Alliance is preparing for a congressional battle over the future of Internet gambling in the United States. John Pappas, Executive Director of the PPA and longtime proponent of legal online gambling, posted a video in which he said, “We have a serious fight on our hands.”
The video message was meant as a call to arms for all American advocates of licensed online gambling, along with individual citizens with a similar stance on the issue. Recently, two bills were introduced in the U.S. Congress–one by Senator Lindsey Graham and the other by Congressman Jason Chaffetz–which would make all online gambling in the United States illegal.
The PPA’s Point of View
The bills in the U.S. Senate and U.S. House of Representatives, collectively named “Restoration of the Wire Act”, purports to reestablish the federal laws of the nation to be in line with the 1961 interpretation of the Wire Act. The PPA and others who oppose Graham and Chaffetz argue that the Internet did not exist in 1961, so the politicians’ interpretation of the law is beyond anything the congressmen who passed that law could have imagined. Proponents of iGaming also note that the 1961 Wire Act specifically targeted sports betting, and had little or nothing to do with casino table games or poker. Thus, they believe Lindsey Graham and Jason Chaffetz are suggesting a liberal interpretation of the law to impose their moral code on Americans beyond their constituencies.
2006: UIGEA Law Is Passed
When the Internet first became a mainstream social phenomenon in the 1990’s, online gambling was unregulated. Few laws existed to police computer gaming, and the Wire Act was not applied to Internet activities. The Poker Boom made online gambling popular, and millions of Americans gambled online from the start of the boom in 2003 until new laws were passed in 2006.
In September 2006, the U.S. Congress passed the Unlawful Internet Gambling Enforcement Act (“UIGEA”), which applied the Wire Act to most forms of online gambling, including sports betting, online casinos, and poker rooms. To protect established interests and to avoid offending tens of millions of Americans, exceptions were made for bets on horse racing, lottery bettings, and fantasy sports. Because the Republican lawmakers who wanted the law passed did not have the votes to pass the UIGEA on its own merits, congressional leaders tacked the UIGEA onto the Safe Ports Act, which protected US ports from being administered by foreign companies from the Middle East.
2006-2011: US Gambling Goes Underground
From 2006 until 2011, this became the law of the land. Many of the publicly-traded UK and European online casinos, sportsbooks, and card rooms left the American market. Online gambling software companies, web wallets, and e-voucher companies which supported gaming activities also decided to stop accepting US players. Those US players who continued to gamble online had to take their business to sites which were licensed and regulated in the Caribbean, or sometimes even to unregulated offshore operations which had no legal oversight.
In late-2011, the states of Illinois and New York jointly sent a memo to the U.S. Justice Department, asking for a clarification on the UIGEA, the Wire Act, and what the Justice Department’s attitude was on enforcement of online casinos and poker rooms. The Justice Department replied that they had a more traditional view of the Wire Act, in that they only would enforce federal laws against sports gambling online. This opened the door for intrastate licensed casino and poker sites.
Delaware, New Jersey, and Nevada
In 2012, Delaware became the first U.S. state to legalize online gambling after the UIGEA was passed. Delaware’s model would become the standard for other states wanting to legalize gaming. The already licensed brick-and-mortar gaming interests in the state would be able to get a license to operate one online casino and one poker room apiece. In 2013, both Nevada and New Jersey decided to follow Delaware’s example. In both cases, only the licensed land-based operators would be able to secure a license. This allowed the state to collect revenues and regulate activities easier, while also bolstering their land-based gaming ventures’ business interests.
In all three states, the operators would only be allowed to engage in intrastate gaming: that is, to register in-state gamblers. Software would be used to track which state a gambler was in, therefore making it impossible for someone in New York or Pennsylvania (or South Carolina and Utah) to engage in online gambling with websites licensed in New Jersey, Nevada, and Delaware. In March 2014, Nevada and Delaware agreed to sign an interstate iPoker compact, which did allow cross-state gambling. Once again, geolocation technology would be used to assure only gamblers inside Delaware and Nevada would be able to legally gamble online. Once again, people in Utah and South Carolina or the other U.S. states could not gamble at these websites.
Graham and Chaffetz Introduce Bills
When Lindsey Graham introduced the Restoration of the Wire Act legislation before the Senate in March 2014, he was asked to justify such an expansion of federal power at the expense of state’s rights. Graham answered that he was supporting states rights, because a 1990’s law in South Carolina banned video poker machines, but the online gambling bills in New Jersey allowed any South Carolinian with a cellphone or tablet computer to gamble in New Jersey online casinos or poker rooms. The senator from South Carolina seemed to be unaware of geolocation technology.
This is why John Pappas called for licensed online gambling proponents in the United States to mobilize. Pappas believes powerful money interests are trying to eliminate online gambling for good. If those who believe in privacy rights for Americans stand aside, then a combination of money and ignorance could dictate the policies of this nation. When he says, “We have a serious fight on our hands”, John Pappas is serious.
