Nevada SB 40 Will Not Apply to Poker Staking
The poker world recently received a scare when it was discovered that a Nevada bill had been written that could potentially threaten a significant aspect of live tournament poker in the state. Senate Bill 40, prefiled and referred to the Judiciary Committee on December 20th, contains language that would appear to ban all tournament staking, something that is common in the poker community. Fortunately, it now appears that poker staking will be immune to the law, should it pass.
SB 40 was designed to target issues related to sports betting, but as it is currently worded, it does look like poker could be collateral damage. Take a look for yourself:
Except as otherwise provided by law, it is unlawful for a person to receive, directly or indirectly, any compensation or reward, or any percentage or share of the money or property played, for:
(a) Accepting or facilitating any bet or wager upon the result of any race, sporting event or future contingent event without having first procured, and thereafter maintaining in effect, all federal, state, county and municipal gaming licenses as required by statute, regulation or ordinance or by the governing body of any unincorporated town.
(b) Accepting or facilitating any bet or wager that is placed with or on behalf of a person described in paragraph (a).
(c) Transmitting or delivering anything of value resulting from a bet or wager to a person who has placed a bet or wager with or on behalf of a person described in paragraph (a).
The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) Associate Director Jamal El-Hindi wrote a letter to the American Gaming Association’s President and CEO, Geoff Freeman, explaining some of the problems that have been going on with sports betting in Nevada, saying, “FinCEN understands that certain organizations and individuals have been circumventing various laws related to sports betting.”
He continued, “More specifically, criminals are making bets with legally operating sports books, including by using intermediaries to place bets on behalf of unidentified third parties (third-party betting). In these cases, the intermediaries rarely voluntarily disclose to the casino that a transaction is being conducted on behalf of a third party, thereby disguising the third party’s role in the transaction and obscuring the source of funds used to place the bet. This poses distinct money laundering risks for casinos.”
Given that, SB 40 makes sense. But the language also looks like it would nix poker staking, something that is very important to many tournament players. Thankfully, it turns out that poker will be in the clear. PokerFuse.com got in touch with Nevada Gaming Control Board Chairman A.G. Burnett, who clarified that SB 40 only applies to sports betting. And he would know, as the bill was prefiled on behalf of the NGCB.
The reason poker players have been so concerned about tournament staking possibly becoming illegal is that staking is a way for players to participate in expensive tournaments when they might not otherwise be able. In a staking arrangement, a person pays for part of a player’s buy-in in exchange for a piece of that player’s winnings. Typically, the win split is the same as the buy-in split, but the backer and his “horse” (the person who is actually playing in the tournament) can negotiate any arrangements they would like. For example, if the backer gives the player $2,500 for a $5,000 buy-in tournament, the two people might agree that the backer will receive half of the player’s winnings. Of course, the player might not make the money at all, in which case, the backer is out $2,500. But this is poker and it is a gamble.
Staking is an integral part of high buy-in tournaments, such as the World Series of Poker Main Event. $10,000 is pricey, even for many of the world’s best players, so many people buy in to it, partially funded by someone else. The elimination of staking would have the potentially to damage the World Series, not just in the Main Event, but across the board. Plenty of amateur players get help from friends to buy-in to the less expensive tournaments, as well. And high roller events, tournaments that usually cost $50,000 or $100,000, are full of players who are staked. If SB 40 were to apply to poker, high roller events in Nevada could have been killed outright.
One of the best examples of staking playing a role in poker tournaments is with the Big One for One Drop event that is held every two years at the WSOP. It has a $1 million buy-in, a sum usually only the rich businessmen who participate feel comfortable paying. Some of the wealthiest poker players might pony up the buy-in themselves, but most likely have assistance from backers. Antonio Esfandiari, the winner of the first Big One for One Drop, is rumored to have only paid around one-fifth of the buy-in himself, with backers footing the bill for the rest.