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Online poker lobby presses its case

By Dan Eggen
Washington Post / May 8, 2011

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WASHINGTON — Online poker fans are calling it “Black Friday’’: On April 15, the Justice Department charged the owners of three of the world’s largest Internet gaming companies with bank fraud and gambling offenses, shutting down their websites and freezing bank accounts around the world.

Now, poker advocates in Washington are attempting to turn the bust to their advantage by renewing a push to legalize online poker in the United States.

The Poker Players Alliance, a lobbying group backed in part by overseas gaming interests, has unleashed a blizzard of telephone calls and e-mails to lawmakers in the past two weeks arguing that the criminal case against PokerStars, Full Tilt Poker, and Absolute Poker shows the need for a legalized system.

The effort has growing support from major Nevada casinos that see an opportunity for a lucrative new market. Advocates are also dangling the prospect of billions of dollars in potential federal tax revenues at a time of fiscal distress in Washington.

“We’re trying our best to make lemonade out of the lemons,’’ said John Pappas, the poker group’s executive director and chief lobbyist. “I think now more than ever, people realize that the status quo is not going to work. We need legislative clarity so that there is a US regulated marketplace for poker.’’

The debate centers on 2006 legislation that effectively bars Internet gaming by prohibiting banks, credit card companies, and other financial institutions from processing online gambling transactions.

In the April 15 indictment, federal prosecutors in New York alleged that owners and founders of the three poker companies tricked — or in some cases, bribed — US banks into processing gambling payments by making them seem as though they were for pet supplies, flowers, or other legitimate products. All three of the companies involved are based in offshore gambling havens.

Opponents say the case illustrates the perils of legalizing poker or other online games of chance in the United States. But to many gaming advocates, the case provides an opportunity — in part, by effectively removing PokerStars and other foreign competitors from the US market.

Executives at Caesars Entertainment Corp. and Wynn Resorts, for example, have suggested that now might be the time to push for legalization and regulation of online poker games. And Senate majority leader Harry Reid, who won reelection in November with strong support from casino interests, appears to agree, telling the Associated Press recently that “I hope we can get something done.’’