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Sunday, January 29, 2012

What the DOJ’s reversal on the Wire Act really means. (Answer: The Barton Bill).

The U.S. Department of Justice (DOJ) recently surprised everyone with a written legal opinion on the meaning of the Wire Act.  It was a surprise because the DOJ has been saying for years that the Wire Act prohibits all forms of online gambling, including poker. This is what it has been telling the major U.S. banks in its war against online poker, while “asking” them to block online deposits. But it now says that the Wire Act only applies to sports betting. Why the reversal?  

After all, the words of the Wire Act are not inscrutable. It simply makes it illegal to place electronic bets “on any sporting event or contest.”  See 18 U.S.C. 1084(a).  So how is it that the DOJ suddenly became literate enough to read these words? 

At the same time it was pressuring the banks to block online  poker deposits, the DOJ surely knew that the federal courts have ruled that the Wire Act only applies to sports betting and that poker is not a sporting event. All of a sudden it finds religion right before Christmas by finally admitting what it knows to be true?    

The DOJ also must know that the related Unlawful Internet Gambling Enforcement Act – the dreaded UIGEA – is probably too vague to be successfully used to convict anyone of a crime. This is why the pending Black Friday indictments are based mainly on money laundering and bank fraud charges.   

It is interesting that the DOJ pressured the banks to block online deposits, which put the squeeze on such deposits, which led the major offshore poker sites to hide their true identify to facilitate deposits, which led directly to the Black Friday indictments for money laundering and bank fraud. 

As part of its war of fear against online poker, the DOJ threw the much-feared UIGEA into the Black Friday indictments to confuse and intimidate both offshore websites and online poker players, placing great emphasis on the UIGEA in its press release. But the DOJ arranged things so it would not  have to turn over its real hand. The Black Friday indictments will not be decided based on the UIGEA. Instead, the defendants are pleading guilty to conspiracy and bank fraud charges. In recently accepting a plea deal on those charges, Brent Buckley, co-founder of Absolute Poker, told the judge: “I knew it was illegal to deceive the banks.” The Denver Post, December 21, 2011 at 11B. 

It is in this context that the DOJ suddenly reverses itself on the very meaning of the Wire Act. This is a significant legal event. It has significance not just for the Wire Act, but also for the UIGEA. This is because the UIGEA relies on and references the Wire Act definition of unlawful online gambling. One refers to the other, so the two laws are interrelated. 

So what is behind the recent DOJ reversal on the Wire Act?  Has the DOJ abandoned its war on online poker? 

This brings us to the Barton Bill. 

The answer to all these questions may be a simple one.  If the currently pending Barton Bill becomes law, the DOJ no longer has to rely on the Wire Act or the UIGEA to shut down all offshore gambling and poker sites in the U.S. Thus the DOJ’s reversal on the meaning of the Wire Act probably reflects its belief that the Barton Bill (or similar federal legislation) will become law in 2012. 

The DOJ’s goal is too shut down all offshore gambling and poker websites operating in the U.S. If the Barton Bill becomes law, the DOJ doesn’t need the Wire Act or the UIGEA as currently written.  The Barton Bill makes these two existing laws obsolete and gives the DOJ the law it needs to shut down all the remaining offshore poker websites that still accept U.S. players every day.

The Barton Bill “strengthens” the UIGEA. This “strengthening” is reflected in the very title of the Barton Bill: “The Internet Gambling Prohibition, Poker Consumer Protection, and Strengthening UIGEA Act of 2011.”  (Emphasis added).  

The Barton Bill strengthens the UIGEA with a much broader definition of unlawful online gambling than the Wire Act or the current UIGEA. It defines “internet poker” as a form of “unlawful internet gambling” and would make internet poker illegal without a U.S. license. Unlike the vaguely worded UIGEA, this is fairly clear and enforceable. 

There is more. The Barton Bill requires the government to create and maintain a list of all offshore gambling and poker websites targeted for shutdown. And given the broader and clearer definition of illegal gambling in the Barton Bill, there would no longer be any significant legal doubt that those offshore sites are illegal under U.S. law. 

At the same time it shuts down all unlicensed offshore sites, the Barton Bill would authorize any U.S. state or Indian tribe to issue online poker licenses. The licenses, however, are quite restrictive.

The Barton Bill only allows licensed operators to accept bets from players located in the U. S. This isolates U.S. poker players from international play. While offshore sites like PokerStars would be eligible for a U.S. license, the Barton Bill prohibits them from accepting bets from any non-U.S. players. To operate in the U.S., offshore sites would therefore have to offer entirely separate poker games just for U.S. players.   

This is a relatively small online poker market. PokerStars only lost 28% of its total worldwide market as a result of Black Friday.  Since the entire U.S. online poker market is much smaller than the rest of the World, this means fewer online games, fewer players and less variety of games if the Barton Bill becomes law. 

But because of other restrictions in the Barton Bill, the numbers of online U.S. players will be much smaller than you might think. The Barton Bill only allows U.S. licensed poker websites to accept bets from players located in the licensing state or in other states that permits its residents to legally play poker. 

States where poker is illegal have the right under the Barton Bill to “opt-out” by forbidding its residents from paying online poker.  If you live in a state that opts out, you cannot play on U.S. licensed websites, which would be required by law to block all bets from such states. All it takes for a state to opt-out is a letter from the governor saying that state residents are not allowed to play on U.S. licensed poker websites. While nobody knows how many states will opt-out, it is a fact that poker is illegal under the laws of most U.S. states. Unfortunately, if you live in an opt-out state, you may have to move to another state that has not opted out if you want to play poker online.  You would no longer have the option of playing on existing or new offshore sistes, which would be shut dwon completely if the Barton Bill works as intended.

Under the Barton Bill, the U.S. will become like France, which only allows its players to play online at French liencsed webstites located in France. some French players do play on international poker sites, but only as outlaws using proxies and virtual private networks (VPN's) to hide their IP addresses.  If they get caught, however, Poker Stars and some other sites will confiscate their deposits and close their accounts. This is the future of  U.S. online players if the Barton Bill becomes law. If U.S. poker players want to play internationally, we will have to become outlaws.  

It seems un-American to prevent adult U.S. citizens from playing online poker with players from other nations. But this Iron Curtain of online poker will descend if the Barton Bill becomes law. 

While claiming to be a friend of U.S. poker players, it is evident to knowledgeable observers that Joe Barton is really a wolf in sheep’s clothing who is suckering poker players.  See “Poker and Joe Barton,” I. Nelson Rose, Poker Player Newspaper Online (Dec. 12, 2011).  After all, Barton voted for the UIGEA and now wants to “strengthen” it. 

Is the Poker Players Association (PPA) a sucker?  It likes Joe Barton and supports the Barton Bill, believing it is the best it can get. But its commitment to the Barton Bill will eventually hurt most online poker players.  I currently play online poker on a variety of websites that accept U.S. players and I don’t want the PPA and the Barton Bill to take that away from me.    

With a copy of the DOJ’s written reversal on the meaning of the Wire Act in its hand, the PPA should declare victory in the online poker war.  It should also abandon its support of the Barton Bill and urge U.S. poker players to return to online play.  If it does this, currently existing online poker sites will have more players and better games. And more and better poker sites will likely arise to fill the hole in the online poker market left by Black Friday.   

Because of its recent reversal on the Wire Act, which the UIGEA largely depends on to define what is illegal under federal gambling law, the DOJ needs the Barton Bill. But poker players no longer need it and should oppose it.       

Preston Oade for calvinayre.com,  December 30, 2011

Drinking the Tebow Kool-Aid.

Shannon Sharpe, who has never been a Tim Tebow believer, interviewed him in Denver for CBS Sports the week before the Chicago Bears game. Sharpe asked Tebow what he thought was a penetrating question on his lack of passing skills. "Doesn't a quarterback get paid to throw the ball," asked Sharpe. Tebow instantly replied that "a quarterback gets paid to win.”
Shannon Sharpe was almost speechless and you could see he didn't know what to say next.

Sharpe, a Hall of Fame tight end and broadcast journalist, is a really glib guy. He always has something to say and never hesitates to say it. When he was playing for the Broncos, he picked up the sidelines phone in a game at New England to call the National Guard to get "immediate" help for the Patriots, who were being "massacred by the Broncos."  Before Tebow did it in the interview, I have never seen anyone leave Shannon Sharpe at a loss for words. 

After interviewing Tebow, Sharpe picked the Broncos to beat the Bears, which they did.  When questioned about his pick on the CBS morning pre-game show, Sharpe explained that he "has been drinking the Tebow kool-aid." 

The Broncos success since Tebow became a starter, when the team had 1 win and 4 losses, is widely viewed as an unexplained phenomenon of nearly divine proportions.  Many print and broadcast commentators just can't understand how Tebow can be successful given his sloppy footwork, imprecise throwing mechanics and many badly thrown balls.  ESPN analyst Merrill Hoge, for example, basically pronounced on both ESPN and Twitter that Tebow was not and never would be a legitimate starting NFL quarterback.
But Tebow's success is no mystery to informed observers who closely follow the Broncos. He is a highly effective leader who knows how to win. He inspires his teammates and seems to make everyone on the team a mentally stronger player and a better player. His teamates not only believe in him, they believe in themselves. Confidence is a huge part of sports success, and the Broncos know they can win and expect to win. They are winning as a team, including offense, defense, special teams and coaching. 

Tebow makes his teammates believe in themselves. When receiver Demaryius Thomas let a long nicely thrown pass slip though his hands, missing a clear touchdown, Tebow didn’t flinch.  He sat down next to Thomas on the bench, put his arm around his shoulders, and told him not to worry because he is a great receiver and would catch the winning touchdown pass. Late in the fourth quarter, Thomas caught a touchdown pass to bring the Broncos within 3 points of the Bears. He drank the Tebow kool-aid. 

The Broncos then kicked a long field goal with only seconds left in the game to tie it up and win in overtime. The kicker was apparently drinking the Tebow kool-aid.    

Former NFL coach Herm Edwards gets it. He warned other teams not to "let the Broncos hang around until the fourth quarter because Tim Tebow will find a way to beat you."  Everyone on the Broncos believes this. They all drink the Tebow kool-aid. 

Preston Oade for Bleacher Report.  All quotes are based on televised interviews or reports and the NFL Network audio of Tebow, who was “miked” during the Bears game.

December 21, 2011.