Congress

PPA Offers Confusing Anti Gambling-Ban Statement… Again

(Author’s note: The opinions expressed herein are those of the author specifically, and do not necessarily represent the opinions of FlushDraw or its publishers — hh.)

Leave it to the Poker Players Alliance to make a mess out of an easy political situation.  The PPA, which purports to be the political voice of the United States’ poker-playing public, popped up courtesy of a recent piece at PokerNews, in which it declared its brand new, sorta-maybe-solid-backbone-but-not-quite-as-solid-as-it-looks stance regarding federal legislation that’s still being discussed, which if passed would expand the US’s Wire Act to ban all forms of online gambling, including online poker.

congressThat’s as good an intro as the story deserves, before it devolves into the usual tale of political profiteering one expects from a lobbying organization trying to please its primary corporate benefactor in preference to the population it claims to represent.

The PokerNews piece declares that the PPA will fight against a poker-only carveout in the federal legislation being supported by Sheldon Adelson dollars, the Restoration of America’s Wire Act bill, or RAWA.  That’s the bill currently being discussed in Congress, with some apprehension being present in the poker and gambling industries that RAWA will end up being attached to a must-pass piece of legislation, much as what happened with the UIGEA back in 2006.

Let’s also include all of the quotes offered to and printed by PN by PPA Executive Director John Pappas, as the base for what follows:

“I think the way the industry is developing, our best-case scenario is for Congress to do nothing during the lame duck,” said John Pappas, executive director of the PPA. “There’s certainly opportunity for some shenanigans to happen, and everyone in the gaming industry should be keeping a close watch on what Congress may do.”

“We as a poker community need to recognize that the success of poker often is built on other forms of gaming,” Pappas said. “If you cut off all other games in the U.S. market, investment and interest would shrink considerably. We’re going to fight tooth and nail to protect the interests of poker players, but poker-only in the U.S. might not be a sustainable model to benefit players long term.”

“We need a concerted effort to make sure that nothing happens in the lame duck, and we need to brace ourselves for 2015 at the federal level,” Pappas said. “Should the Republicans take hold of the Senate and Reid is no longer the majority leader, I think that puts poker in an even more precarious position.”

Elsewhere in the piece, readers learn that a poker-only carveout to RAWA is one of the options on the table, and it might be presented as a way to negotiate the bill’s passage through the control of Sen. Majority Leader Harry Reid, whose home state of Nevada is one of the three US states to date to legalize some forms of online gambling.  However, unlike New Jersey and Delaware, Nevada has legalized only online poker, hence the palatable nature of the carveout for Nevada-specific interests.

However, the quotes from Pappas indicate that the lobbying organization wants to fight for all of online gambling, referring to those key quotes in the middle paragraph of the above.  And as any number of commenters quickly noted, placing poker-specific interests second to online-gambling in general is rather antithetical to the PPA’s stated goal of fighting for the rights of poker players.

Numerous people noticed the inherent problem, including industry writer Steve Ruddock, prominent California gaming attorney Ian Imrich, and your faithful scribe.  Ruddock, among a handful of dependable pro-PPA flag wavers, quickly reached out to the PPA and spoke with Pappas before writing a “clarification” story, while paving the way on Twitter with his own series of Tweets.  Here’s a sample:

Steve Ruddock @SteveRuddock · Oct 9
@QuantPoker Not as bad as it sounds… I just spoke with PPA, they are only against a poker carveout that does not legalize it.

Steve Ruddock @SteveRuddock · Oct 9
@ijiLaw PPA told me they are only against a poker carveout that does not legalize online poker, they support one that legalizes game

Steve Ruddock @SteveRuddock · Oct 9
@ijiLaw @ipokerwa @Haley_Hintze @ppapoker @twoplustwoforum spoke with them earlier, the position is sound imo

Steve Ruddock @SteveRuddock · Oct 9
@ijiLaw @ipokerwa @Haley_Hintze @ppapoker only speaking to their position against a poker carveout that doesn’t legalize poker

Steve Ruddock @SteveRuddock · Oct 9
@Haley_Hintze @ijiLaw @ipokerwa @ppapoker same reason I contacted PPA to get clarification, seemed antithetical to their mission statement

Steve Ruddock @SteveRuddock · Oct 9
PPA Clarifies Stance Regarding Rumored iGaming Ban With Poker Carveout http://www.nj.com/onlinegamblingnj/index.ssf/2014/10/ppa_clarifies_stance_regarding.html …

As for Ruddock’s piece at NJ.com, let’s also provide a few outtakes:

The Poker Players Alliance (PPA) hasn’t decided to monumentally shift their position on online poker legislation.

This afternoon, John Pappas, the Executive Director of the Poker Players Alliance told me, “if there was a bill that banned online casino games, but legalized online poker at the federal level, we would support that all day long.” Pappas made it clear the group would never actively promote banning other forms of gambling, except as a last ditch compromise. “The PPA is going to stand with supporting poker over other forms of gambling,” Pappas said.

Pappas rightly called a bill that bans casino games and leaves poker untouched (but exempted from a ban) an extension of the status quo for poker players, and at the same time it’s a setback to iGaming legalization. Legislation that is progressing in multiple states, which is why the PPA would rather see the status quo remain than allow an unnecessary ban on online gambling to occur.

First and foremost, the PPA desires the legalization of all forms of online gambling….

Thus, “clarification” means a re-selling of the concept.  Four days later Ruddock appeared as a guest on the PPA’s “Poker Advocacy with Rich Muny,” a quick case of return back-scratching if one occurred.  But as for the original outcry over the reversal, the PPA was quick to attack anyone who wasn’t safely in their camp.  Check out this Tweet from Pappas, also from October 9th:

PokerPlayersAlliance @ppapoker · Oct 9
1/2 Haley & Ian, glad you think trolling the PPA twitter page will get you more followers, but you assume too much and think too little. -jp

Well, LOL to that.  On Twitter, I’ve blocked more PPA staffers and blind adherents than I can count; the last thing I want is more of them, and I don’t promote my personal Twitter feed as something anyone should follow.  Instead, it’s there for people to access if they wish, and I don’t even maintain a Facebook presence, another example of my social-media neutrality.  As for Imrich, as an industry lawyer he’s very unlikely to want to go “trolling” for Twitter followers in that manner.

What this was instead was the PPA’s latest example of quickly flinging public smears at anyone in poker who’d like to explore all sides of a story that might examine the PPA’s motives, or somehow endanger the PPA’s financing stream — e.g., John Pappas’s paycheck.

It’s not the first time time this writer has been smeared thusly by Pappas, an articulate and intelligent man who, nonetheless, is a professional lobbyist.  Being a lobbyist means being paid to say whatever someone else wants and lying / spinning / obfuscating unendingly to preserve access to proven revenue streams, thereby continuing the cycle.  Here’s an example of what happened when Pappas and the PPA were involved in the lobbying effort in Utah to try and create legal cover for the ongoing SunFirst payment processing, the central component of the “Black Friday” online-poker indictments..

In that episode and the factual reporting of it that followed, Pappas used another pro-PPA outlet, PocketFives, to spout: “It is disgraceful that the PPA’s name has been inserted in this supposed ‘news story’ by an editorial writer who has a history of being critical of our organization.”

Disgraceful it wasn’t.  Further evidence soon surfaced that Pappas and SunFirst processing kingpin Jeremy Johnson had communicated extensively in advance of the meeting with the then-Utah AG and Deputy AG, Mark Shurtleff and John Swallow, who have ended up facing charges as a result of that illicit processing and lobbying along with other political shenanigans.  Pappas proudly boasted by way of spin that he’d only met Johnson once, briefly, at Las Vegas fundraiser for Harry Reid; it later turned out that Johnson was also supposed to be present at that same lobbying meeting, but was prevented from flying in by a spring snowstorm.

The PPA wasn’t responsible for Black Friday’s occurrence, but it did the US poker world no favors with its Utah activities, and those that know, know.  Sotto voce lesson in integrity (or lack thereof) thus delivered, we move on.

The latest PPA statements about supporting all of I-gaming first, and poker second?  The gist is that unless the federal RAWA legislation specifically legalizes online poker, then it can’t be tolerated.  Note the fallacy there, as no online-poker carveout exists in any form or rough draft of RAWA that’s emerged to date.

Still, let’s run with the concept.  Let’s pretend for discussion’s sake that a poker-specific carveout could be inserted into RAWA, and that the PPA would accept this as a “last-ditch” position if RAWA were to approach federal passage.

First, that stance will be irrelevant.  If RAWA has already reached the point where the bill is likely to pass, it’s going to be way too late to shove a poker carveout into it at the last moment.

Second, RAWA plus an online-poker carveout is functionally equivalent to what the failed Reid-Kyl bill would have accomplished.  Reid-Kyl would have outlawed all intrastate and interstate gambling with the exception of horseracing and online poker, banning even lotteries.

RAWA, assuming it had an exemption for online poker, would accomplish exactly the same thing.  Here’s a brief exchange between us on this point:

Haley Hintze ‏@Haley_Hintze Oct 9
@ppapoker @ipokerwa @ijiLaw Still, IMO, RAWA plus a poker carveout is roughly equal to the original Reid-Kyl. #stillsucksasstoo

PokerPlayersAlliance ‏@ppapoker
@Haley_Hintze @ipokerwa @ijiLaw Haley, they are vastly different. R/K would federally authorize INTERstate iPoker. RAWA carveout = no change

Remember that the PPA was dramatically in -FAVOR- of Reid-Kyl all along, despite the fact that it would have banned all other forms of online gambling and even included civil and criminal penalties for players, where none exist today. We’ll come back to this, because it’s the key point.

The second point is that Pappas is flat-out lying about the “INTERstate” stuff, and he’s spinning it that way to obfuscate the greater flip-flop by the PPA.  Technically, RAWA plus a poker carveout would actually be one tiny tick friendlier to poker interests than the original Reid-Kyl, in that it would cede authority in online-poker matters to the states.

To clarify, under US law, an activity is presumed legal unless expressly made illegal, and if online poker is exempted, that would apply to INTERstate as well as INTRAstate as long as the two (or more) states participating have legally authorized it themselves.  This is exactly the same legal principle that allows such things as the multistate Powerball lottery to operate as it does.

Which brings us to the why of it all.  The PPA is 99% funded by corporate donations, and in recent years, that’s been PokerStars.  In 2012, PokerStars parent Rational Group was a poker-only concern (Stars and Full Tilt) that saw a poker carveout as being an acceptable federal compromise, given that PokerStars had already settled its ongoing legal issues with the DOJ.

In 2014, that emphasis has shifted.  PokerStars has been sold to Canada-based Amaya, and the parent firm is no longer poker-only.  Full Tilt has already launched an online casino as part of its platform, and Stars may well follow.  Amaya is eyeing the US market as an outlet for all sorts of online-casino offerings, even if that would start in New Jersey with a poker-centric platform.

The PPA, meanwhile, has to be concerned about its ongoing funding after the sale of PokerStars to Amaya.  If Amaya decides that the PPA is less useful than before, then John Pappas’s paycheck goes away.  This latest PPA flip-flop has nothing to do about what’s best for poker, and everything to do with what’s best for the PPA.

That said, there’s no particular fault — either with PokerStars in the past or Amaya in the present — for attempting to and being able to purchase the PPA’s name for use in its corporate goals; the problem is with the PPA for historically defying its own mission statements and declared reasons for existing, and selling itself so cheaply.  Several other outlets noticed the befuddling nature of the PPA’s turnabout and reported on it, even if they didn’t necessarily explore the motives therein.  But for “clarification,” such an exploration is necessary.

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  1. Martin

    You state, “To clarify, under US law, an activity is presumed legal unless expressly made illegal, and if online poker is exempted, that would apply to INTERstate as well as INTRAstate as long as the two (or more) states participating have legally authorized it themselves. This is exactly the same legal principle that allows such things as the multistate Powerball lottery to operate as it does.” However, this ignores a big legal distinction between multi-state lotteries (like Powerball) and interstate poker.

    For a lottery, the wagering always takes place in-state only – for instance, a Florida consumer always buys a Florida Powerball ticket, not an Iowa Powerball ticket. It is only the pooling and distribution of the prizes which are interstate.

    In online poker, the wagers themselves occur between players in varied states. The wagering itself is inter-state. This can raise federal legal issues in regards to interstate commerce and federal gambling laws that aren’t germane to the lotteries.

    A poker carveout in RAWA is not sufficient to resolve any such legal concerns. It leaves the status quo for state authorization of intrastate online poker, but also leaves the status quo for the untested legal waters of interstate online poker. Without a federal law that specifically authorizes interstate, any sea change in the White House administration could result in a new anti-gambling stance in the DOJ which could move to stop interstate online gambling operations, including state-licensed poker sites.

    1. Martin, this part of your statement is absolutely incorrect:

      “For a lottery, the wagering always takes place in-state only – for instance, a Florida consumer always buys a Florida Powerball ticket, not an Iowa Powerball ticket. It is only the pooling and distribution of the prizes which are interstate.

      “In online poker, the wagers themselves occur between players in varied states. The wagering itself is inter-state. This can raise federal legal issues in regards to interstate commerce and federal gambling laws that aren’t germane to the lotteries.”

      The servers for any legalized interstate online poker will have to be located in one state, thereby becoming the nexus state for the action. While all participating states are likely to legislate that the wagers by that state’s players are occurring in the state of residence, the pot or prize fund as a whole has to be calculated for all players, and then reconciled on a per-state basis.

      Therefore, all bets into the pot on any given hand or tournament will be calculated in the state where the gaming servers reside, and then redistributed according to whichever player wins what. That’s similar to how multistate lottery prizes are calculated, in that the big prize is an accumulation of the sales generated in all participating states.

      What do you think happens when a single winner pulls down one of those $300 million lottery prizes? The single state in which the winning ticket is sold will not have generated enough in sales to cover that prize, and a reconciliation process involving all states occurs. Note that even though Powerball is run by the “Multistate Lottery Association,” it’s still incorporated in just one state — Iowa.

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