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UNLIKELY ALLIANCE CONTACTS A.G. ON INTERNET POKER

Monday July 18, 2011 : And you thought that Jon Kyl had retired?
 
In a story first broken by the Congressional Quarterly but now achieving wider coverage, an unlikely alliance between Senate veterans Democrat Harry Reid and the GOP Whip Jon Kyl is reported.
 
Unlikely, because anti-online gambling crusader Kyl was instrumental in shooting down last year's attempt by Nevada Senator Reid to federally legalise online poker.
 
Now it appears the two have combined in a plea to US Attorney General Eric Holder that has evoked several interpretations on motive.
 
The letter the duo has sent to Holder reads thus:
 
"As you know, several weeks ago, the U.S. Attorney for the Southern District of New York indicted various individuals associated with online poker sites for violations of various laws. Additional indictments were unveiled in Baltimore at the end of May.
 
"These indictments came after many years in which the entities operated Internet poker websites to Americans in an open and notorious way with apparently no repercussions from law enforcement. Leading up to the indictments, this lack of activity by law enforcement led to a significant and growing perception that operating Internet poker and other Internet gambling did not violate US laws, or at least that the Department of Justice thought that the case was uncertain enough that it chose not to pursue enforcement actions. In turn, this perception allowed this activity to spread substantially, so that at least 1,700 foreign sites continue to offer Internet gambling to US players. We think it is important that the Department of Justice pursue aggressively and consistently those offering illegal Internet gambling in the United States.
 
"In addition, we have two further concerns: the spread of efforts to legalize intra-state Internet gambling and the spread of efforts to offer such intra-state Internet gambling through state-sponsored lotteries.
 
"We believe that the Department of Justice’s longstanding position has been that all forms of Internet gambling are illegal — including intra-state Internet gambling, because activity over the Internet inherently crosses state lines, implicating federal anti-gambling laws such as the Wire Act. Yet efforts are underway in about a dozen states to legalize some form of intra-state Internet gambling. In many cases, Internet gambling advocates in those states cite the silence of the Department of Justice in the face of these efforts as acquiescence. In fact, we have heard that at a major conference in May, several officials from various state lotteries boasted that they have obtained the Department of Justice’s effective consent by writing letters of their plans that stated that if no objection was received they would proceed with their Internet gambling plans — and no objection has been received despite many months or years.
 
"This is troubling. We respectfully request that you reiterate the Department’s longstanding position that federal law prohibits gambling over the Internet, including intra-state gambling (e.g. lotteries). Conversely, if for some reason the Department is reconsidering its longstanding position, then we respectfully request that you consult with Congress before finalizing a new position that would open the floodgates to Internet gambling.
 
"Finally, we would like to work with you to strengthen the penalties for those who violate the law and to see what modifications would be helpful to the Department to enhance its ability to fight Internet gambling."
 
Analysts and industry observers are variously interpreting the motives of Reid and Kyl into several categories:
 
a) The closing of a not-so-virtuous circle that seeks to exclude all competition, and especially foreign competition, from an American scenario in which political and commercial interest in online poker has never been higher, and in which the land companies, working through the AGA, seem about to launch a federal legalisation, and probably protectionist, drive.
 
b) A move to put the brakes on accelerating intrastate legalisation initiatives in Washington DC, California and New Jersey (where the date for a state referendum on legalisation is looming). Nevada has already tasked its regulator with preparing for any federal legalisation of online poker, and major land gambling operators are known to prefer a federal initiative - the AGA is to submit a measure this autumn that will rival Rep. Joe Barton's current proposals.
 
c) The Reid-Kyl alliance simply seeks an explanation for the Black Friday and subsequent enforcement moves by Holder's Department of Justice, along with a firm and unambiguous high level policy statement on federal enforcement's view of internet gambling.
 
Covering the original story, Congressional Quarterly's Niels Lesniewski observed that the alliance may be an indication that Kyl "may take a softer line" on some future online poker legalisation bill envisaged by Reid, either in concert with, or separately from, the AGA.
 
Lesniewski notes that Kyl's website includes a policy statement that may indicate this softer line on legalisation and declares: “Efforts to carve out an exception for games like poker, which many believe is a game of skill, may be considered later this year.
 
“Until I have the chance to review them, I cannot make a judgment about their merits. But I will consider them carefully as long as they leave in place the broader proscriptions against online betting."



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