On June 1st, the financial services industry in the United States must fall into line with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA). What the lay of the land come the first day of June will be is anyone’s guess. In recent days, the Poker Players Alliance (PPA), the industry’s primary grassroots lobbying organization, shared its take on the June 1st compliance deadline.
PPA Executive Director John Pappas appeared on camera from the organization’s headquarters in Washington, DC and stated, “As you know, the Poker Players Alliance was successful in delaying implementation of these final regulations.” Officials from the U.S. Treasury and Federal Reserve granted a six-month delay in compliance to June 1st back in November. In the interim, the regulations of the UIGEA were to have been discussed and clarified. However, only one committee hearing has taken place and no movement has occurred.
Pappas admitted, “Unfortunately, we haven’t had much success legislatively, but the PPA hasn’t stopped. We have filed another petition [that has] the support of 22 members of Congress. We’re working to get broader support. This petition isn’t a delay, per se, but it would exempt poker and other peer-to-peer gaming from the enforcement of the UIGEA.” As of the time of writing, officials from the Treasury and Federal Reserve have not yet responded to the PPA’s petition, which was submitted on May 5th. Its endorsers include Congressmen Steve Cohen (D-TN), Shelley Berkley (D-NV), and Ed Perlmutter (D-CO).
Pappas remained optimistic that even if the UIGEA regulations were to come to fruition on June 1st, the industry would not see the same fallout as what occurred four years ago following the law’s passage: “We don’t suspect this to be a doomsday scenario for online poker. To be clear, it is not going to be unlawful for you, the poker player, to play internet poker. Nothing in the UIGEA makes it illegal for individuals to play.” Following the passage of the UIGEA in 2006, publicly-owned online poker sites like PartyPoker and Pacific Poker vacated the market entirely.
Other players have rushed to withdraw their money for fear that major banks won’t process online poker transactions following June 1st. Pappas contended, “Nothing should stop you from getting money off of an online poker site. In fact, the UIGEA prescribes that it would not affect payouts to players. Deposits [are] the open question and we believe that there will always be a mechanism for players to deposit money through responsible channels online.”
Next Wednesday, May 19th, the House Committee on Ways and Means will hold a hearing to review various tax proposals related to internet gambling. The hearing was originally scheduled to kick off at 10:00am ET, but has since been moved up to 9:30am ET. Witnesses for the hearing will likely be announced on Monday and the proceedings will take place in Room 1100 of the Longworth House Office Building.
Potentially discussed during Wednesday’s hearing will be Congressman Jim McDermott’s (D-WA) HR 4976, the latest incarnation of the Internet Gambling Regulation and Tax Enforcement Act. The bill boasts three co-sponsors and allocates internet gambling revenues to state and tribal authorities as well as the Federal Government. In addition, HR 4976 dictates that a portion of the proceeds raised will benefit those currently or formerly in foster care as well as American heritage programs.
Last week, Account Services chief Douglas Rennick pled guilty in New York to processing $350 million in illegal gambling transactions, according to Forbes and other news outlets. He now faces up to a year behind bars and will learn his fate in a September sentencing hearing. Rennick, a Canadian, has become the latest victim in a string of payment processor crackdowns under the Obama Administration. A grand jury investigation of Full Tilt Poker may also be in the works.
