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The Reid/kyl Online Poker Bill Revealed


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The Reid/Kyl Online Poker Bill Revealed

A summary of Harry Reid and Jon Kyl’s long-awaited online gambling bill, obtained by pokerfuse, outlines the pair’s vision for strengthening anti-online gambling measures, with an exception for federal online poker in the United States.

 

“The Internet Gambling Prohibition, Poker Consumer Protection and Strengthening UIGEA Act of 2012” looks to reinforce existing legislation including the 1961 Wire Act and 1790 Illegal Gambling Business Act (IGBA) to prevent all forms of unlicensed gambling, but with a carve-out specifically for online poker and off-track horse race wagering.

 

ARTICLE CONTINUED AT LINK ABOVE

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Not a great bill for online poker, only marginally better than no online poker at all. I'm only hoping it passes because I own a decent amount of CZR shares and the price would jump huge if an online poker bill with some of these restrictions passes.

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Not a great bill for online poker, only marginally better than no online poker at all.

 

I disagree, with 14% of taxes going to the states and 2% to the Feds that could induce more states to sign on. The 16% tax sounds like it is going to be on site revenue. I also like there is going to be Federal oversight which will improve the integrity of the game.

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I disagree, with 14% of taxes going to the states and 2% to the Feds that could induce more states to sign on. The 16% tax sounds like it is going to be on site revenue. I also like there is going to be Federal oversight which will improve the integrity of the game.

 

I don't think what the definition of revenue is has been made public yet. If it's gross rake and tournament fees than 16% while high isn't outrageous. It is possible that they will want to take the tax on deposits and if they take 16% of deposits that will be massive which means the sites will have massive rake.

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I disagree, with 14% of taxes going to the states and 2% to the Feds that could induce more states to sign on. The 16% tax sounds like it is going to be on site revenue. I also like there is going to be Federal oversight which will improve the integrity of the game.

 

The taxation wasn't what I took issue with, it's some of the other limitations like strictly prohibiting international player pools and creating opt in measures by state. I'm fairly certain that in states like mine with negligible gambling and zero casino presence, we're screwed but in most states where there are already B&M casino operations the lobbying will probably be enough to push through the opt in.

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I don't think what the definition of revenue is has been made public yet. If it's gross rake and tournament fees than 16% while high isn't outrageous. It is possible that they will want to take the tax on deposits and if they take 16% of deposits that will be massive which means the sites will have massive rake.

I doubt it will be 16% of deposits, that would be ridicuous. It is more than likely 16% of the site's profits from rake and fees.
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  • 4 weeks later...

The full text of the Bill has been leaked to the public.

 

http://www.jdsupra.com/legalnews/internet-gambling-prohibition-poker-con-58305/

A copy of the Kyl-Reid draft bill on Internet poker enabling regulation leaked out late yesterday in the DC Beltway. While my extensive review and analysis of this draft legislation has not yet been completed, those following this internet gaming regulatory issue will be interested to note the following elements in the present draft bill:

 

As currently crafted, (and as foreshadowed in the leaked Bill Summary several weeks ago) it has provisions that would proscribe issuance of of iPoker gaming licenses to poker site operators or anyone else who was involved with accepting real money play in the United States after 2006 -- i.e., following the enactment of the UIGEA.

 

The draft language specifically would prohibit any such business from being licensed for five years after enactment, unless that party could persuade a regulator that such a business had not ever violated either U.S. federal or State gambling laws.

 

Additionally, the draft bill would authorize the U.S. Department of Commerce to recognize certain state or tribal gaming regulatory bodies as so-called "qualified bodies" (similar to provisions in the Reid/Kyl Bill circa 2010) who would be authorized by the U.S. government to issue licenses to internet poker operators.

 

Any iPoker site operator issued a license by any "qualified body" would be permitted to accept real money poker play via the internet from any State that has "opted-in" to participate in the U.S. federal system. However, the draft bill also would prohibit nearly all other internet gaming other than peer-to-peer iPoker within the States.

 

As written, the draft bill would create certain carve-outs. For example, the language currently would exempt sales of drawing tickets by State lotteries and would also exempt certain internet wagers on horse-racing. Virtually all other iGaming activity -- casino games, bingo, raffles, sweepstakes, and most everything else -- even if licensed by a State in the U.S., would also be prohibited by this draft bill.

 

The basic revenue piece of this draft legislation imposes what effectively amounts to a Sixteen Percent (16%) Gross Gaming Revenue tax on iPoker site operators.

 

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Reid/Kyl federal online poker bill reads like a love letter to Nevada

At long last, Senate majority leader Harry Reid (D-NV) has come down from the mountaintop bearing a draft of the US federal online poker bill he co-authored with Sen. Jon Kyl (R-AZ). (Read it here.) The Internet Gambling Prohibition, Poker Consumer Protection and Strengthening UIGEA Act of 2012 – no easy acronym for this puppy – gets right to the point, describing its mission thusly: “to ensure an effective Internet gambling enforcement structure that leads to a substantial and sustainable decrease in Internet gambling.” [Emphasis added.] The Act’s unstated mission is to put Reid’s home state of Nevada in the driver’s seat for overseeing a federal online gambling regime, while sticking it to the other states that want to blaze their own path.

 

In a nutshell, the Act would authorize online poker and horseracing while strictly prohibiting “house-banked games or sports betting.” Intrastate online lottery transactions are to be “limited to sales of tickets and related activities.” Strictly verboten is any lottery product that is “intended to mimic or does substantially mimic a gaming device, slot machine, poker, or any other casino game.” (So no ‘scratch-card’ tickets.) States and tribes would be prohibited from offering any other online wagers that weren’t already on their law books before May 1, 2012 (a date intended to undercut Delaware’s passage this summer of soup-to-nuts online gambling legislation). The Act would also prohibit public gambling in “online poker parlors,” even if such a facility was a restricted club that charged membership dues.

 

States would have to opt-in to the federal poker plan by passing fresh legislation expressing their willingness to participate. Tribes can opt-in if the “principal chief or other chief executive officer or designated authority” submits written notice that they’re okay with the plan. Tribes that don’t want to be a part of the plan can submit written notice stating as much, but simply not submitting an opt-in notice will suffice. Tribes whose lands are located in opt-out states must abide by that state’s puritanical worldview, but that doesn’t preclude these tribes from being designated as license-issuing qualified bodies. Nothing in the Act has any bearing on non-Internet gaming activities authorized under the Indian Gaming Regulatory Act (IGRA). States and tribes that opt-in won’t need to renegotiate any tribal-state compacts.

 

ARTICLE CONTINUED AT LINK ABOVE

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Am I reading this right? It sounds like all states will have to choose opt in or opt out, neither will just be automatic. That's actually not too bad if that's the case. With so much of the tax revenue from ipoker going to the states it will create a huge incentive for states to opt in. GA legislatures have been really pushing for gambling expansion in the state to save the HOPE scholarship and pre-K program so this my be an easy pass for states like GA who have overall been pushing for more gambling revenue. If they could just ignore it and be opted out that would most likely be the case in many states but if they have to act one way or the other then I think many more will likely opt in.

 

I might be softening my view on this bill a bit. I'd love to see a full expert breakdown on it though.

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This bill requires every state to opt-in if they wish to participate otherwise they are opted-out. The federal government can't force them to make a decision other than to create some sort of deadline which I don't think is in this bill. This is far more severe than the Reid Bill of 2 years ago which at least automatically opted-in the states where poker was considered legal. This bill opts-in no one, so if the bill is passed, it will start as nothing but an empty shell with conceivably only Nevada initially opting-in.

 

With the current bill there is almost no chance that even California will opt-in for at least years to come. They very much want to keep their player pool for themselves and will probably make sure any challenges to the amended Wire Act, which is in the current bill, will play out before they even start to consider opting-in. Even then it's unlikely that the different tribal factions will come to any agreements for a long time to come.

 

Last year I made a big issue with the PPA about the opt-in clause just prior to the Washington Fly In. They essentially called me naive in a not so nice way for me insisting that states should be initially opted-in. The Barton Bill which soon after came out did opt-in all the states with an option to opt-out. Without initially opting-in all the states, it will be a long time before anything resembling a viable player pool surfaces. The PPA is cool to the idea of opting-in states out of their reverence for states rights even though the ability to opt-out would probably satisfy any actual legal conflict between state and federal rights.

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I know one of the reasons that conservatives are anti-poker is that "gambling ruins lives". Of course, we know that most of those people fall into the degenerate category that can't follow a budget, and that can't separate real money from gambling money.

 

Does this bill have any restrictions on deposits or on who can deposit based on income? Like you have to provide proof of income in order to make a deposit, and you can only deposit x amount of times per month, and the max deposit per month can only be a certain percentage of your annual income.

 

I think this would prevent seeing any nightly news stories of someone losing their life savings to online poker.

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This bill requires every state to opt-in if they wish to participate otherwise they are opted-out. The federal government can't force them to make a decision other than to create some sort of deadline which I don't think is in this bill. This is far more severe than the Reid Bill of 2 years ago which at least automatically opted-in the states where poker was considered legal. This bill opts-in no one, so if the bill is passed, it will start as nothing but an empty shell with conceivably only Nevada initially opting-in.

 

 

 

I've copied this part about states opting in and/or out below. I seems pretty clear that the states have to rule on it one way or the other. Opting out doesn't seem automatic the way this bill is worded. Also the old Reid bill was an opt in not out bill it was the Barton bill that auto opted the states in. The only way it's automatic is if the state, such as Washington State has a specific law on their books prohibiting online poker specifically. Most states don't have any laws one way or the other so they will have to have a majority of a quorum to vote yes or no. Pretty sure most states will be forced to act on this either way if there are no existing laws.

 

 

SEC. 108. PROHIBITION ON USE OF LICENSES IN

CERTAIN STATES AND INDIAN LANDS.

In General.—Online poker provided by online poker facilities licensed under this title shall

be lawful in the United States only with respect to the acceptance of bets or wagers from

individuals located in States and Indian lands that have opted-in under this section.

State Participation.—

(1) OPT-IN ELECTION.—A State shall be considered to have opted-in under this section if

a majority of a quorum of each chamber of the legislature of the State has

approved a bill, resolution, or similar measure that expresses that bets or wagers

authorized under this title should not be prohibited in such State; and

such bill, resolution, or similar measure is the most recent bill, resolution, or

similar measure approved by a majority of a quorum of each chamber of the legislature

of the State that expresses whether bets or wagers authorized under this title should be

prohibited in such State.

(2) OPT-OUT ELECTION.—A State shall be considered not to have opted-in under this

section if—

a majority of a quorum of each chamber of the legislature of the State has

approved a bill, resolution, or similar measure that expresses that bets or wagers

authorized under this title should be prohibited in such State; and

such bill, resolution, or similar measure is the most recent bill, resolution, or

similar measure approved by a majority of a quorum of each chamber of the legislature

of the State that expresses whether bets or wagers authorized under this title should... this was cutoff where I copied it from

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A state needs to opt-in for poker to become legal in that state. The default is that the state is opted-out whether it officially opts-out or not. It's impossible for some type of limbo to exist. Remember that once a state opts-in it can still opt-out at a later time. The clause that you show simply proscribes the procedure for opting-out in that particular situation. They are simply allowing a state to reverse its decision.

 

As far as the earlier Reid Bill goes. Believe me, I spent some serious time debating the opt-in issue with the PPA. That bill did in fact automatically opt-in the states that already had brick and mortar poker rooms. I am absolutely certain of this. I think it was about 15 states representing over a third of the online poker pool. It was only after I made an issue of the opt-in clause that it was taken seriously and the Barton Bill included it as an integral part of its legislation.

 

Passing the present bill isn't going to make it any easier for states to decide to allow poker than they presently do. The relaxing of the Wire Act really only got states talking about considering online poker. These things take a lot of time. Legalizing online poker is a political hot potato in almost every state. In my state of California it is very contentious. The lobbying group COPA representing the card rooms and casinos has a lot of political say in what is going on. Some rooms think that online poker is in direct competion with their business'. As long as the online players stayed within the confines of California they were willing to entertain the possiblity of online poker but sharing the online California pool with other states would be another matter. At the very least studies would need to be made showing that online doesn't pose a threat to B&M before they would ever even consider signing on. That would take some time. I think that any plan to legalize online poker on a state by state basis will take several years to implement at best.

 

Reid and Kyl were two of the strongest proponents of the UIGEA. They both have vested interests in strengthening that law. Truth be known, the current proposal strengthens the UIGEA, rewrites the Wire Act and reapplies the poker to the IGPA. What the bill doesn't do is make online poker legal in even one single state in the US. The bill is a complete sham.

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Yes you are correct the original Reid bill did auto opt in states with B&M gambling, just not other states.

 

I really think that this Reid/Kyl bill is nothing but a farce to do as you say, strengthen the UIEGA, rewrite the wire act and impose as many restrictions on the states concerning gambling as possible. It is just cloaked to appear to support legal and regulated online poker when what it really does is impose very restrictive conditions for online poker probably ruining any chance of us getting anything beatable or playable for that matter.

 

I feel that the restrictions the bill is trying to put on the states is way overreaching. I honestly feel that all gambling matters whether B&M or online should be up to the states and only the states. I really wish the PPA would stop pushing for federal legislation and work on getting the individual states on board. As long as there is the ability for the states to share player pools and enough competition to keep rake down then I truly believe it's the best way to go.

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  • 3 weeks later...

Good, I'm afraid that bill will do more harm than good. I'm leaning more and more to state by state legislation.

 

and/or **** it I'm going to Mexico....

 

The Mexico plan sounds better and better lately, and not just for Poker reasons...

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  • 4 weeks later...

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