Archive for July, 2012
Full Tilt players have been waiting anxiously to recoup their winnings. Since the FBI arrested CEO Raymond Bitar, some players are starting to wonder if they will ever even see their money again.
According to the United States prosecutor, Bitar alleged lied about the fact that the firm had placed money in separate accounts to ensure players would be paid on time. However, Full Tilt paid over $400 million in bonuses to its executives, thereby failing to satisfy its financial obligations to players.
A couple of firms have proposed mergers with Full Tilt Poker. If a merger goes through, the firm may have the resources necessary to repay the $350 million owed to players around the world. However, the outlook for players isn’t very high at this time.
The Department of Justice wants to do whatever it can to discourage another scandal from arising. Some lawmakers are starting to feel that players are going to be more likely to put themselves at risk as states clamor to legalize online gaming. However, others feel that the newest Full Tilt scandal is an indication that online poker needs to be regulated.
For better or worse, many experts believe that the Bitar case is going to play a critical role in the future of online gaming legislation. The federal government has clearly been powerless to prevent millions of Americans from trying their hand at online poker.
As many players have lost money playing through foreign gaming providers, lawmakers are starting to realize that the legal environment is going to need to change in some way or another.
Congress is preparing to review two online poker bills in the coming months. Senators Reid and Kyl have been working together to get a bill through Congress. One of their biggest challenges has been convincing Republican lawmakers to endorse it when it goes to a vote.
The exact details of the bill haven’t been disclosed to the public. However, a few key details have been leaked. Reid and Kyl have reportedly inserted some conditions which will make the bill more appealing to the holdouts from the GOP.
Although many federal lawmakers do not want to legalize online gaming, they are beginning to feel powerless in their efforts to delay or prevent a bill from being passed. Opponents of online gaming feel DOJ’s new interpretation of the Wire Act has opened up Pandora ’s Box. Many lawmakers indicate that since online gaming is now legal at the state level, their best option is to pursue regulation at the federal level. Some experts feel this is one of the reasons Kyl has become a proactive supporter and author of an online poker bills.
Reid and Kyl are using their fear to encourage Republican Congressmen to support the bipartisan bill. More lawmakers are looking for a uniform set of online gaming regulations.
Kyl is a Republican lawmaker from Arizona. He was adamantly opposed to online gaming legislation until June of 2011. However, when he announced that he planned to retire soon and was willing to diverge from his party’s position on online gaming. He hopes he will be able to help other Republicans to share his perspective.
As several states have already passed online gaming bills, Reid said Washington lawmakers are going to need to take drastic action to create a uniform set of online gaming laws in the near future.
Lawmakers are starting to run out of time as they try to pass a bill that would legalize online gaming. According to some rumors circulating, Native American tribes may be starting to pass their own online gaming bill. The Senate Committee on Indian Affairs announced that it would be hearing a proposal from them on Thursday.
According to John Pappas, head of the Poker Players Alliance, the tribes want to do everything they can to protect their stake in online gaming. Pappas said they may not feel the other bills making rounds through Washington are in their best interest. If they are trying to make sure they get a fair shake at online gaming, they may feel they need to offer up a bill of their own.
The hearing was scheduled to take place around 2 pm EST. A number of influential figures in online gaming legislation will be attending the hearing, including lobbyist and former Congressman Jon Porter and representatives from a number of Native American tribal communities.
This will be the third time the committee meets over the last nine months. The PPA has asked representatives to attend each of the hearings.
The hearing is announced about a week after Senators Reid and Kyl have indicated they may have come to agree on terms for online gaming legislation. This leaves the poker community wondering whether the bill the tribes are proposing will delay regulation.
While the Senate is getting ready to pass a vote on online gaming legislation, the PPA is taking measures to ensure the bill would be well received in the House of Representatives. Pappas said they are gaining support from both houses. Many lawmakers are beginning to see the light that online gaming will continue to expand in a dangerous way if they do not regulate it.
Full Tilt Poker CEO Ray Bitar has surrendered to the FBI. According to sources, he is being held in New York state as he awaits arraignment.
Bitar has been staying in Ireland ever since his indictment last year in the Black Friday scandal. Federal law enforcement officials allege that he has engaged in an ongoing conspiracy to cover up the fact that the company is facing significant financial challenges. Prosecutors allege that the firm does not have the money to repay its players.
Bitar is facing many counts of fraud over the fallout of Full Tilt Poker. If convicted, he could spend up to 145 years in a U.S. federal prison.
Bitar said that it was inexcusable that things got as bad as they did. He said he knew many people were going to be very upset with him, but suggested it was a management issue rather than an attempt to defraud Full Tilt players and affiliates. Assistant U.S. Attorney Arlo Devlin-Brown said he disagrees.
Devlin-Brown said that Full Tilt only needed $350 million to meet the financial obligations to Full Tilt players. If Full Tilt executives hadn’t paid themselves $430 million then they would have had no trouble repaying their players.
The outrage over the new case dwarfs anything that arose from the Black Friday scandal. Prosecutors said that Bitar and the other players in the Black Friday indictment would have only faced a few years in prison if they had been convicted of last year’s charges. However, they are taking these new charges much more seriously. The new indictment made it clear that Bitar could be in prison the rest of his life.
Bitar maintains that he is doing everything he can to help repay Full Tilt players. He claims that he returned to the United States to make amends and hopes that Full Tilt players will have their money back shortly.
Time is running short for federal lawmakers hoping to legalize online poker within the next year. Many proponents are starting to get nervous by some complications in Washington. However, lawmakers are still optimistic they can legalize online poker within the next year.
Texas Representative Joe Barton is among the lawmakers hoping to legalize online poker in the coming year. Barton said that playing poker in Cyberspace isn’t a crime and shouldn’t be treated like one. He is the author of one of two bills to legalize online poker which he hopes will pass in one of this year’s sessions.
Senate Majority Leader Harry Reid’s bill would give the Secretary of Treasury the responsibility of overseeing the issuance of online poker. Barton disagrees with Reid’s approach, but both bills are currently making their rounds through Congress.
Barton said his bill is essential to regulating the online gaming industry. He said that Americans are currently being targeted by swindlers all over the world. Many advocates of his bill are likely to point to the recent arrest of Full Tilt CEO Raymond Bitar to show why online gaming needs to be properly regulated.
However, many of Barton’s supporters don’t share his optimism. They feel that time is running out and they continue to face more complications. Some feel that it would be impossible to pass any controversial bills during such a heated election year.
John Pappas, head of the Poker Player’s Alliance, shares Barton’s view on the importance of regulating online poker in Washington. Pappas points out that it would be extremely irresponsible to allow a fragmented system where every state was allowed to have its own regulations. He echoed Barton’s statement that the federal government needs to create a uniform set of regulations and hopes that system will be in place later this year.
Sheldon Adelson has been actively involved in this year’s elections. He has said that he is willing to pay up to $100 million lobbying to prevent online gaming from being legalized in the United States. He is starting to make due on this threat after spending nearly $30 million.
Proponents of online gaming legislation are concerned by the political influence Adelson’s resources afford him. As of April, Adelson had pledged over $20 million to former House Speaker Newt Gingrich in his campaign for president.
Adelson has recently shown an interest in participating in Nevada’s United States Senate race as well. However, his influence in that arena may be limited. One of the contenders is Adelson’s long time enemy, Shelley Berkeley. Her opponent, Dean Heller could benefit from Adelson’s contributions if he was willing to show interest.
Heller has been an advocate in favor of online gaming. He has even worked closely with Harry Reid in efforts to draft a bill that would regulate online gaming at the federal level. However, some experts believe Heller may change his mind if Adelson contributes enough to his campaign.
Most lobbyists are trying to convince lawmakers that online gaming would bring a number of benefits to the state. However, some people are beginning to think that the real strategy should revolve around Adelson himself. They argue that if lobbyists worked on convincing Adelson that online gaming would be the key to getting a bill through Congress.
Most lobbyists don’t believe there is any hope of getting Adelson’s support. He has grown more opposed to online gaming legislation in recent months and is working more aggressively to prevent it.
Nevada and Delaware have both passed laws that have legalized intrastate online poker. Online gaming enthusiasts eagerly await the battle that is ensuing as both states struggle to be the first to launch an online gaming platform.
Nevada has a head start in the race as it passed its own gaming legislation several months ago. The state’s regulator has already begun approving licenses to applicants. This puts Nevada in a competitive situation to set the framework for online poker legislation throughout the country.
However, Delaware is fighting fiercely to dominate the new market. Although the state lags Nevada in its efforts to win a stake in the online poker market, it is the only state that has broadly legalized online gaming. Therefore, it will likely be in a strong competitive position if online gaming is legalized at the federal level.
However, some experts feel that Delaware doesn’t stand to gain as much from online gaming legislation. The state has fewer than a million citizens. Nevada is more than three times larger and has many connections with gaming firms throughout the world. These firms are willing to invest a considerable amount of resources in Nevada, so many experts don’t feel the short-term race between the two states will be particularly significant.
Many states feel that competing in the online gaming industry should be a priority. The states that are able to win a strong share of the market are going to be able to generate more revenue to fix their deficit problems and create more high technology jobs.
While Delaware and Nevada are the current contenders in the race to legalize online poker, California legislation may play the biggest role yet. With nearly 40 million citizens, California stands to be the largest market for online gaming and would probably be the premier destination for gaming firms throughout the world.
The Nevada Gaming Commission spent over a week reviewing applications for online poker licenses. After some intense discussions, the board has approved the first two licenses to gaming companies interested in launching intrastate gaming platforms.
Both Bally Technologies and International Game Technology received unanimous approval from the NGC last Thursday. Neither company will be launching an online gaming portal of their own. Rather, they are going to be providing the technology online gaming firms will be using for their own websites. Nevertheless, this is a major step for gaming firms hoping to operate in Nevada.
Gaming firms are likely to be encouraged by the fact that two such respected manufacturers of online gaming technology are ready to service their needs. Some experts have speculated that IGT or Bally may launch their own online gaming sites at some point in the future. However, the firms have insisted that they are not interested in competing with their future partners and will limit their services to providing the equipment they need to operate smoothly and effectively.
Both firms have been developing slot machines and other gaming equipment for land based casinos in Nevada for years. Their familiarity with Nevada gaming regulations has assuaged the NGC that they are going to be able to follow their regulations. In addition, they have already been developing online gaming software in Spain, Italy, Canada, France, Australia and other countries throughout the world. Unlike other firms trying to gain access to the market, they aren’t going to have to spend months of R&D developing an online gaming system.
Executives from both companies said they are pleased that the NGC has given them the opportunity to compete in the online gaming marke
Senators Reid and Kyl continue to work together to draft an online gaming bill that will make it through Congress. The Poker Player’s Alliance is confident that their bill has a good chance of being signed into law. However, the November elections are creating uncertainty on the future of online gaming legislation.
Senator Kyl was one of the supporters of the Unlawful Internet Gambling Enforcement Act. Most experts were completely taken off guard when Kyl said that he wanted to work on a bill that would legalize online poker. However, they now have a clearer understanding of his motives.
Kyl is supporting this bill because it would limit online gaming legislation to online poker. If the bill doesn’t go through, Kyl fears that all forms of online gaming can be legalized. He feels legalizing online poker would be better than risking legalization of other forms of gaming.
In order to have the best chance of passing this bill, the PPA argues that they will have to wait until after the November elections. However, some experts don’t feel that is the best solution.
If the bill doesn’t make it through Congress this session, Harry Reid may author a different bill after the election. Experts don’t know what that bill may entail. However, many of them believe that the bill could include a number of provisions that would legalize other forms of online gaming. Therefore, they are advocating that Congress make a ruling on online poker now, even though the PPA wants to hold off for strategic reasons of its own.
Many Republicans opposed to online gaming are banking on the odds that Mitt Romney will win the election. If that is true, he may try to strengthen the Wire Act, but Reid is expected to block any legislation that wouldn’t exempt online poker from the ban.
Representative Joe Barton believes it is highly unlikely that Congress will make a ruling on online poker over the summer.
John Campos is the former vice-chairman of the Board of Directors for SunFirst Bank. Three months ago, he pled guilty to his role in the case of United States v. Scheinberg (more commonly known as Black Friday). On Wednesday Judge Lewis Kaplan announced his sentence. Campos will be spending three months in federal prison.
Judge Kaplan also gave Kaplan three years’ probation. The former banking official had to endure a round of criticism from the judge for his role in the Black Friday case. Kaplan was particularly upset after he listened to testimony from a former attorney at SunFirst who claims he advised Campos processing payments for online gaming sites would be against the law.
Campos and his attorney requested that he receive a plea bargain that did not involve jail time. However, Kaplan refused the deal as he was outraged that Campos knowingly violated the law. The judge gave Campos some consideration for the fact that he did not take a substantial amount of money from the arrangement himself. However, he said he felt the need to make an example out of the former banking official because he participated in a criminal conspiracy.
Campos played one of the smaller roles among the defendants in the Black Friday case. However, he transferred nearly $200 million in gambling proceeds during the two years he was with SunFirst before the Justice Department indicted him under United States v. Scheinberg. Some sources said Campos colluded with Full Tilt Poker and PokerStars because the two gaming firms offered to invest $10 million in his bank. However, Campos said those rumors are untrue.
Part of Campos’s plea bargain also stipulates that he will have to resign from his role with SunFirst.