April 20, 2011

The PPA Meets Or Exceeds Expectations

"You know, I have one simple request. And that is to have sharks with frickin' laser beams attached to their heads! Now evidently my cycloptic colleague informs me that that cannot be done. Ah, would you remind me what I pay you people for, honestly? Throw me a bone here!"

—Dr. Evil (Mike Myers), in Austin Powers: International Man of Mystery

As the online poker community begins to sort through the rubble left by the DOJ's carpet bombing run last Friday, all eyes turned to the Poker Players Alliance (PPA) for its leadership during poker's darkest hour. The PPA responded with this inspirational message:

Let's gloss over the fact that the head of a supposed national advocacy group can't find a tie or a camera not previously used for Chat Roulette. While we're at it, let's pretend PPA Executive Director John Pappas' subsequent stumbling performance on national TV never happened. After all, nobody puts the "ROFL" in "professional" quite like John Pappas!

Instead of jeering at the messenger, let's laugh at the message. According to the PPA, the DOJ's action against Full Tilt, PokerStars, and UltimateBet/Absolute Poker (a/k/a "the Big Three") was "nothing less than a declaration of war against poker and the people who play it." Strange how the PPA failed to mention the crux of the DOJ's allegations—the Big Three engaged in money laundering and bank fraud. Although the PPA's misguided and overheated rhetoric deserves some skewering, I'll defer to Bill Rini who, as usual, nails the Triple Lindy.

The PPA's reaction to the recent online poker indictments demonstrates conclusively that the organization is worse than incompetent; it is actually detrimental to the cause of legalizing poker. This conclusion is really not all that shocking to me, as I've long been a critic of the PPA. But let's let the PPA's track record speak for itself.

The PPA has attempted to promote legalization of poker through litigation and legislation. On the litigation front, the PPA's strategy has been an unmitigated disaster. Cases in which the PPA played a prominent role have now resulted in appellate courts in Pennsylvania and Colorado rejecting the PPA's pet "poker as game of skill" argument, with the South Carolina supreme court almost certain to join the anti-poker fold in the near future. The Washington supreme court has rejected the PPA's dormant commerce clause argument, upholding the rights of states to regulate online gaming within their geographical boundaries. As I have discussed previously, the effect of those losses is not limited to those states:

By tilting at the litigation windmill, poker advocates have instead worsened the position of poker. There are now binding appellate court decisions in several states explicitly finding that poker is gambling. These rulings reinforce in the public mind—with the imprimatur of judicial decisions—that poker is gambling, while also removing any arguable ambiguity as to the legality of poker (and online poker) for players in those states.

Similarly, following the Rousso decision, I observed:

Because of the PPA's hubris in pursuing this appeal, the Rousso decision will now be available to be cited and relied upon by other courts when they are confronted with the issue of state regulation of online gambling. Much like the ill-conceived "poker is a game of skill and not gambling" line of litigation, the PPA has taken an area of law which was gray and ambiguous, and forced a state appellate court to clarify the law with a definitive decision adverse to the interests of online poker players.* The PPA's attorneys are from a well-respected national law firm, and clearly are not idiots. Absent any better explanation, the cynic in me wonders whether the PPA's litigation efforts are merely a stalking horse litigation strategy testing the legal waters for the PPA's puppetmasters at Full Tilt and PokerStars.

When the New York federal courts begin to consider the "poker as game of skill" arguments certain to be raised by the defendants in the current DOJ action, the courts will be able to draw on these PPA-initiated decisions in finding that poker is subject to regulation as gambling by state law. If the PPA were a basketball player, it would be scoring layups—on their opponents' basket.

But what about the legislative front? Surely the PPA has a serious role to play as the advocate for poker players in the coming battles over the legalization of online poker?

Not so fast. First off, the PPA's John Pappas has acknowledged that the PPA has little clout when swimming with the sharks like Caesars Entertainment, MGM Resorts, or the tribal gaming interests:

"It's not going to be 100 percent of what players want, though I don't know if any bill would be," Pappas said. "There's been a lot of compromise. We're dealing with a lot of powerful interests who don't necessarily have players' interests in mind. The PPA is one of the seats at the table, and we're fighting for every bit we can get."

—Matthew Kredell, "Reid Pushing for Legalized Online Poker By the End of Next Week", Poker News Daily (12/6/2010).

"Frankly, the proposed blackout period is absurd and the PPA opposes it. And we have fought–and continue to fight – tooth and nail against it. But it is a reality. There will likely be a blackout period of some length included in any legislation that is passed, whether it is in this Congress or future Congresses. Our opponents have been throwing their weight around to get a lengthy blackout period included and, unfortunately, I fear they are winning.

That being said, upon significant analysis, review and reflection, we believe that the long- term benefits of this bill to the poker community make the blackout period a bitter pill we have to swallow."

—PPA statement by John Pappas, reported by Brian Ralentide at Part-Time Poker.com (12/9/2010).

Now there's no shame in being the small fish in the big pond of Congressional lobbying. But the PPA's biggest problem is not its relative lack of financial and electoral clout. No, the PPA's Achilles' Heel is its utter lack of credibility because of its significant ties to the Big Three Poker sites. As I have previously discussed, the PPA's board of directors includes Howard Lederer, Chris "Jesus" Ferguson, and Greg Raymer, all closely tied to Full Tilt Poker and PokerStars. The PPA's go-to celebrity poker spokesperson is Annie Duke, until recently also a long-time spokesperson for UltimateBet.

Of course, Duke's connections to UltimateBet were problematic for the PPA even before the recent DOJ indictments. But the PPA's credibility issues have been compounded now that its primary sponsors—Full Tilt and PokerStars—have also been implicated in money laundering and bank fraud. As I have noted previously, the PPA is so tightly connected with the major online poker sites that the PPA can only be assumed to be more concerned with the agenda of its corporate masters than the concerns of its rank and file members:

[A] cynic might wonder if the PPA is merely used by Full Tilt and PokerStars to give a patina of populism to their lobbying efforts. A cynic might wonder if established sites like PokerStars and Full Tilt regard the PPA as a convenient fig leaf to cover their use of the PPA as a de facto lobbying arm, avoiding the legal complications of being foreign companies with significant lobbying restrictions. A cynic might wonder if the PPA is the political perfume used to cover the stench of lobbyists and campaign donations being funded by companies who currently flout U.S. gambling laws. Frankly, given the tenor of the PPA's litigation and lobbying efforts, a cynic might wonder if the PPA truly wants legalized online poker if it doesn't include a Get Out of Jail Free card for established online poker sites.

Color me cynical.

Given the DOJ's indictments of the Big Three, and the close—even radioactive—relationship between the Big Three and the PPA, one has to question whether the PPA can continue to lobby effectively on behalf of ordinary poker players. The PPA already lacked any notable weight in discussions of online poker legalization on Capitol Hill. Now that the Big Three have been indicted, what Representative or Senator will want to be associated with the PPA and its online poker masters / indictees?

In many ways, whether it's litigation or legislation, the PPA is the yahoo who keeps shooting himself in the foot. Is it too much to ask that the PPA put down its gun before it fires a lethal shot?


  1. Your first quote is Dr. Evil. Just FYI.

  2. *Sigh*

    You spend hours researching and writing a post, and then discover you had a brain fart on a throw-away pop culture reference.


    Thanks for the catch.

  3. I should really get the Poker Rights Organization thing moving. No litigation, I promise. Maybe a K street lobbyist

  4. thanks for a great article that I totally wish I didn't have to read! T'was most informative and I will certainly be exploring the rest of your blog, as I have noticed that I have a LOT more time for reading recently...

  5. @ polkaglocks:

    Welcome! Hopefully this is a short-term problem for poker. In the meantime, enjoy the site.

  6. I suspect the PPA will not be in existence (or not in its present form) within the next 3-6 months - if not sooner.

    Al D'Amato was hired (and promised a huge bonus) for a specific purpose. D'Amato's "job" was to use his access to senators and congressmen he had worked with for 18 years to secure legalization of internet poker in the United States - preferably on terms that would ensure the continued market dominance of the existing "Big Three" online poker sites. As was made obvious on "Black Friday," Al D'Amato failed miserably to do his job.

    Now, with their access to the American market abruptly terminated and little hope of ever having that access restored, (not to mention all the other "problems" they are facing), the Big Three have no desire (and no inclination) to continue funding a blowhard ex-Senator who has failed to deliver. The PPA's funding will dry up - and so will the PPA right along with it.