GPWA Times - Issue 21 - May 2012

sponse to you affected by what happened on Black Friday? PAPPAS: It’s been mixed. Those who were against us, they saw Black Friday as the exact reason why this should be banned and prohib- ited, but then you saw people like Joe Barton. It wasn’t until after Black Friday that he intro- duced his Internet poker regulation bill, and that’s because he felt that Black Friday was a key triggering point. It’s ridiculous that this was going on in an unregulated fashion, that players and American consumers didn’t have any access to the courts and the operators weren’t held ac- countable. His response was, “This is why we need regulation,” while others thought, “This proves why this is a bad industry,” and I think that’s really shortsighted thinking. I think what Mr. Barton’s viewpoint, and I think the view- point of most members of Congress has been since Black Friday is that clearly this is an indus- try that’s best regulated [rather] than left to the status quo. And I think a lot of people thought when Full Tilt, PokerStars and Absolute Poker went down that Internet poker would just cease in the U.S., but that’s not the case. It’s obviously not as big a market as it was a year and a half ago, but slowly but surely, other players are fill- ing that void, and if we let it go unchecked for an- other two or three years, they’re going to be just as big as Full Tilt and PokerStars were. I think that’s also driving lawmakers to realize that do- ing nothing is not the solution. VN: Do you feel that we’re further along in the legislative process to get online poker now than we were before, not just as a function of time, but because of Black Friday itself? PAPPAS: I think it’s more of a function of time. I think Black Friday helped hurry things along. We’ve been pushing this issue now for almost six years. And that’s about the amount of time it takes to get something done in Washington, somewhere between that six- and eight-year timespan in terms of building support, building momentum. And we’ve got to remember we’re coming from a position where Congress voted for the UIGEA. There’s a misconception that UIGEA passed without any consideration and whatnot; there was a vote on a UIGEA bill in the House earlier in the summer of 2006, and it passed something like 317-92. We’re talking about a 3-to-1, 4-to-1 margin saying we should be outlawing this. So we’re going from a posi- tion of 3-to-1 or 4-to-1 against, to now where I think we’re drawing even. We probably have a 50-50 split in the Congress, which I think is a pretty good move in the needle over a five-and- a-half-year period. We’ve got certainly a lot more work to do, but I think we’re on the precipice on the federal level of getting it done, and certainly we’re seeing it already going to be happening in the states. Nevada is going to happen – I believe by 2013 people will be playing Internet poker in Nevada for money. I believe that to be the case in New Jersey. California seems a little less clear just because it’s a screwed-up state and they’ve got a lot of screwed-up internal politics there. VN: The tribes and the cardrooms have to get together there. PAPPAS: Some of the tribes and the card- rooms are together. The problem in California is they don’t want competition. The tribes and the cardrooms, the COPA coalition, the California Online Poker Alliance, quite honestly they’re looking for a monopoly in California. The most recent bill that was introduced in California by Senator Wright and Senator Steinberg, who is the president of the Senate there, is actually a good player-friendly bill. It opens a competitive marketplace, not just for tribes and cardrooms, but for others to get into the market there, so it would be more of a competitive marketplace. It also has lots of very strong player protec- tions and regulations in the bill that weren’t spelled out in previous bills. So from a players’ perspective, it’s a better bill, but because it is now a more competitively balanced bill, the big influence-makers, i.e., some of the big tribes in California, are now opposed to it. California’s got a long way to go, I think. They like to say they’re going to be on the leading edge on this, but it’s hard to believe that they’re going to come to some sort of compromise anytime this year. Next year I think is more likely. VN: So by 2015, we’re looking at three states for sure, realistically. PAPPAS: If it goes state by state. Obviously under federal legislation, I think you’re going to see states quickly adopting policies to allow them to offer or allow them to be the regulators in this space very quickly. VN: So let’s turn to the federal discussion, then. What needs to happen to the environ- ment at the federal level to really get online poker legislation moving? PAPPAS: As someone once famously said, “Can’t we all just get along?” I’ve been work- ing in D.C. for almost 15 years, and Congress is as politically charged and partisanly charged as I’ve ever seen it. Getting anything done in Congress is going to be difficult, and that’s re- ally the challenge for Internet poker this year, [as] is getting the vehicle in which to pass Internet poker legislation. The cyber-security bill is supposed to pass in the House this week, but everyone is saying it’s dead when it gets to the Senate. So there’s a vehicle that would have been a good vehicle for Internet poker, which is probably not going to happen. There’s a few tax bills that we’re looking at that have to get done before the election this year, which could serve as vehicles, but again, Congress could find a way to screw those up. My hope is that some- thing can get done before Congress adjourns before the elections this year, but my realistic streak says that perhaps the lame-duck ses- sion would be the most opportune moment to get a bill done this year. And a lame-duck ses- sion for those who don’t know is the session of Congress between the elections and when the new Congress is sworn in, so the old lawmak- ers, even those who may have lost their elec- tions, would still be part of that session. And as some may recall in 2010, that’s when the last real push was, when John Kyl and Harry Reid were seriously looking at attaching it to the tax bill and that fell through in the 11th hour. VN: I’m not going to delve too deeply into the procedural politics now, because Reid’s not re- ally in control of the Senate necessarily when it “ Nevada is going to happen – I believe by 2013 people will be playing Internet poker in Nevada for money. I believe that to be the case in New Jersey. California seems a little less clear just because it’s a screwed-up state and they’ve got a lot of screwed-up internal politics there.” 25 Where to now in the U.S. – and who’s driving ?