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Congress
Deals Poker Fans a Hand They Can't Bet
By
Liz Benston, Our Partner at the Las Vegas Sun
Fallout
from the Unlawful Internet Gambling Enforcement Act of 2006
may land hard on two of Las Vegas' biggest gaming companies,
Harrah's Entertainment and MGM Mirage. Each has tapped poker
fans who love Internet play and then turn to Vegas for the real
action.
When those
gamblers try to log onto their PartyPoker.com account, they'll
soon discover they can no longer place a bet. And that will
chill tournament play on the Strip.
For nearly
a decade, the campaign by conservative members of Congress to
outlaw online gambling remained on the fringes in Washington.
But with
Republican lawmakers nervous about the Nov. 7 elections and
eager to find issues that will please conservative religious
groups, Senate Majority Leader Bill Frist and other Republican
leaders saw an opportunity to adopt the ban. They attached it
to an unrelated port security bill, which was approved by Congress
on Saturday.
Once a small,
tight-knit group of hard-core sports bettors, Internet gamblers,
attracted by celebrity players and incessant television coverage
of poker tournaments, have grown into a largely mainstream group
of amateur bettors. But in the eyes of the U.S, they have joined
the ranks of people who transport illegal drugs or sell unregistered
firearms.
Online operators
had largely ignored the Justice Department's opinion that all
forms of online gambling are illegal. It was a weak legal position,
they said, that was unsupported by federal law and largely unenforceable
because online betting operators are based outside of the United
States.
With the
bill, a "gray area" of gambling just got a lot clearer
by making it a felony to process Internet bets generated by
Americans.
British
operator Partygaming, which owns PartyPoker.com, said it would
cease operations in the United States by blocking American bets.
Other companies publicly traded in Europe, trying to salvage
shares that have already tanked by more than 50 percent, could
follow suit.
That means
American players could soon be gambling on black market Web
sites and reverting to a time when no-name sites operated in
an online Wild West of sorts.
A more likely
outcome will be an increasingly creative cat-and-mouse game
between the remaining Internet gambling sites and regulators
who now have the authority to shut down Web sites and go after
third parties. Those include Internet service providers that
link to gambling sites and a growing number of affiliate sites
that make money from referring business to Internet casinos.
Nevada interests
have been ineffective in fighting the legislation. State regulators
don't want to run afoul of the feds. The state's most powerful
legislator, Sen. Harry Reid, opposes Internet gambling on the
basis that it can't be adequately regulated. Even Nevada casinos,
which have reaped the benefits when online gamblers are teased
to real poker rooms, weren't willing to go to the mat on a prohibition
bill.
The American
Gaming Association, which represents the largest land-based
casinos, says the bill's passage won't mean much for its members,
which aren't in the business of online gambling.
That may
be true for most members that aren't profiting much on poker.
They may rather fill those rooms with more profitable slot machines.
But that's
probably not the case for the association's two biggest members,
MGM Mirage and Harrah's Entertainment. Both companies host the
world's largest poker tournaments and have lobbied for regulating
and taxing Internet gambling.
As many
as half of the entrants in Harrah's latest World Series of Poker
qualified for their $10,000 buy in to the final event by playing
satellite tournaments hosted by online gambling sites. Similarly,
MGM Mirage hosts some events for the World Poker Tour, a global
poker tourney that attracts big money from online bettors who
qualified for the events online.
Both tournaments
will likely now attract fewer entrants.
The ban
will have further implications in Las Vegas, the de facto hub
for online bettors and support industries such as magazines,
Internet portals and other businesses that made money catering
to the online poker and betting industry.
"It's
like a death," said Jan Fisher, a poker writer, tournament
announcer and partner in a company that produces a cruise ship
tourney for online operator PartyPoker. "This didn't just
stop people from playing online. This touched literally everyone
I know. I'm afraid for the industry."
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