"It's a huge shit sandwich, and we're all gonna have to take a bite."
—Full Metal Jacket
Today was supposed to be a big day for online poker, with Rep. Barney Frank holding a House Financial Services committee hearing on his bill to legalize and regulate online gaming (HR 2267). On the panel testifying for the Poker Players Alliance (PPA) was Annie Duke. The PPA has posted video footage online for the hearing; it clocks in at over two hours total, but with a 30-40 minute intermission in the middle, the actual hearing time is a much more reasonable length.
As I feared, questions were raised about Duke's connection to Ultimate Bet and the "superuser" scandal (video ~ 53:00 mark). Duke did parry the question and used it as a pivot to explain the need for legalization of online poker to provide better regulatory oversight of online poker, as well as effective legal remedies for players who feel they have been wronged by an online poker site, and even criminal prosecutions in appropriate cases where cheating or fraud are discovered. However, it seems that the PPA could have made the same arguments with a spokesperson unconnected to the Ultimate Bet scandal, who would have had more credibility.
Duke didn't help her credibility when she stretched the truth, if not outright misrepresented, a couple of facts. First, when questioned about her connection to Ultimate Bet, Duke quickly cut in to clarify that her connection was to "UltimateBet.net" which she characterized as a free, non-gambling site. Although her description of the ".net" site was correct, it takes little effort to see that Duke is also a member of "Team UB" over on the real money ".com" site. Duke also testified that "most courts" who have considered the "game of skill vs. game of chance" argument have ruled that poker is a game of skill. Unfortunately, there is currently no state where an appellate court has issued a decision adopting the "game of skill" argument; in fact, the appellate courts which have ruled to this point on the issue have all held that poker is a game of chance governed by state gambling laws. I am baffled by why Duke would make these kinds of misrepresentations to the committee.
Now, in fairness to Duke, I do feel she made strong points about the advantages of having online poker regulated in the United States to better protect Americans from fraud and cheating, and to better control access by minors, problem gamblers, and criminal elements. But those same points could have been made by any number of other possible spokespeople without the credibility baggage Duke added to the mix. However, the person raising the Ultimate Bet scandal, Republican Rep. Spencer Bachus of Alabama, likely would have found an opening to discuss the issue in any event. So, in the grand scheme of things, Duke probably did no real harm to the legalization cause. But the PPA still looks a bit like an ad hoc amateur hour outfit in failing to find a better spokesperson.
While on the topic of Ultimate Bet, Duke testified forcefully that the superuser fraud was committed by "one person", presumably Russ Hamilton. If Duke knows this for certain, then why is Ultimate Bet so slow in revealing all it knows about the scandal? Alternatively, if more than one person were involved in the scandal, then either Duke was not fully honest with the committee, or Ultimate Bet was not fully honest with Duke. It might have been interesting if the committee had pressed Duke for additional information about the scandal while under oath. Regrettably, the online poker community will have to continue waiting for those answers.
Frankly, though, I found other aspects of the hearing much more interesting than Duke's PPA talking points. It is fairly clear now that many industry forces are in favor of legalizing gaming, but are also in favor of barring companies that are currently violating state or federal laws by offering online gaming or online poker in the United States. Gaming industry rumors long-reported by Bill Rini and Pokerati's Dan Michalski suggest there is a strategy being pursued by leading brick-and-mortar casinos to legalize online gambling in a manner that clears the field of competition from established online poker sites, notably sites like Full Tilt, PokerStars, Ultimate Bet, and Bodog. From the committee's questioning, it seems that some of the representatives are inclined to support this approach, voicing opinions that companies that are violating the law should not be rewarded by legalization of online gaming. This again raises concerns that the PPA, dominated by directors associated with established online poker sites, might face a serious conflict of interest between the interests of its membership and the interests of its leadership.
Of more immediate concern to the online poker legalization efforts was the palpable hostility toward the bill from Rep. Bachus, who is the ranking minority member on the panel. Rep. Bachus is not only opposed to legalization, he openly supports the UIGEA and expressed frustration that its implementation was delayed for two years! This is not necessarily a deal breaker at this stage of matters, as the House operates in a manner where a majority can push through virtually any legislation it deems a priority, particularly when the bill is supported by a powerful committe chairman like Rep. Frank. But, there is no indication that the current legalization bill is a priority, and there is precious little time for any real progress towards a vote between now and the fast-approaching reelection campaign season. Of even greater concern is the real possibility that the Republicans will take control of the House after this fall's elections, which would flip chairmanship of the Financial Services Committee from Rep. Frank to Rep. Bachus. Under such a scenario, Rep. Bachus would be able to singlehandedly kill any online gaming legalization bills. To be blunt, if Republicans take control of the House, online poker legalization will stall for at least two more years.
So, the real lesson of the day for online poker legalization proponents is to support Democrats in the upcoming Congressional elections. Time for the PPA to organize some "money bomb" fundraisers for key Democratic campaigns.