April 06, 2015

Who Will Give the PPA a Hand?

In an interesting and unintentional homage to the "throwback Thursday" (#TBT) social media meme, the Poker Players Alliance (PPA) last week launched an online petition asking the White House to "pledge to veto RAWA [the Restoration of America's Wire Act bill]." As reported by Steve Ruddock at Online Poker Report: "If the petition can collect 100,000 signatures in 30 days it would compel the White House to address Jason Chaffetz's 2015 Restoration of America’s Wire Act bill that seeks to ban several forms of online gambling including online poker."

The PPA petition created a sense of déjà vu because the PPA had previously filed another petition to the White House in the fall of 2011, asking the Obama Administration to endorse the legalization and regulation of online poker. When the Administration issued a response in 2012, my view was:
"[T]he statement is pretty much a standard political puff piece, a souped up version of a polite blow-off letter from a legislator to a constituent on an issue the legislator doesn't care about. The statement basically restates the current status of the law—federal law bans sports betting, states can authorize iPoker and other forms of iGaming, and violations of state iGaming laws may also be a violation of federal law. The statement then placates any social conservatives or law and order types by ticking off the usual laundry list of concerns—addictions, minors, fraud, and money laundering.


In short, I think this statement is utterly inconsequential, and was intended to be so. Of course, the poker world will seize on it to support their collective delusion that iPoker legalization is a major political issue."
To be blunt, the 2011 PPA petition was politically pointless and an utter waste of time. The 2015 PPA petition is equally irrelevant.

Why the PPA's 2011 Petition Was a Failure

Not surprisingly, the PPA views its 2011 petition as a "success". And, some in the poker community take the view that the 2011 petition was a political win for online poker advocates. This view, as summarized by Steve Ruddock, is essentially that the White House response in 2012 signaled a supportive view of legalized online poker / online gaming (emphasis added):
"President Obama hasn’t made it clear where he stands on gambling (particularly online gaming) issues, but a careful reading of the 2012 response shows the White House strongly leaning towards online gambling regulation being up to the individual states."
Yet nothing in the 2012 White House response supports this conclusion. The White House response merely restated, in lay terms, the substance of the Office of Legal Counsel's (OLC) opinion that the Wire Act applied only to sports gambling, and that state law otherwise generally regulated gambling. In other words, the White House response merely regurgitated the OLC's view as to the current status of the law; it was a statement of legal analysis.

Notably absent from the 2012 White House response was any statement of what the White House believed the law should be with respect to online gaming. In other words, there was no indication of the White House's policy position with respect to online gaming.

So if the 2012 White House response does not provide the Obama Administration's official online gaming policy position. where do poker advocates get the curious view that the current Administration is in favor of online gaming? Certainly not from the Administration's OLC Wire Act opinion, which carried this title:
Though it appears to be forgotten in poker circles, the entirety of the OLC Wire Act opinion was directed to the legality of online lottery sales. Also noteworthy is that the two states mentioned in the OLC opinion—New York and Illinois—are Democratic strongholds, with President Obama and several of his key Administration officials hailing from or otherwise strongly connected to Illinois (including notably former Obama Chief of Staff and current Chicago Mayor Rahm Emanuel). To the extent politics entered the equation, the OLC opinion was a sop to the lottery industry.

So, the idea that the OLC Wire Act opinion is a statement of the Obama Administration's policy position on online poker is unsupported by the language of the OLC opinion, because it is utterly silent on the poker question. Now the OLC's analysis clearly supports a legal conclusion that online poker does not violate the Wire Act for the same reasons that online lotteries do not violate the Wire Act. Nonetheless, the OLC opinion remains merely a statement of what the law is (analysis), not what the law should be (policy).

As I noted back in 2012, the Obama Administration "does not give a flying pig about internet poker or gambling." Nothing that has happened in the subsequent three years changes my view. In fact, the lack of any Administration policy statement regarding online gaming at any point in the past six-plus years only grows more ominous when one considers that the federal online gaming debate has shifted against the pro-legalization movement. At the time of the 2011 PPA petition and the 2012 White House response, Congress was considering an online gaming legalization bill championed by Representatives Barney Frank and Joe Barton in the House, and later that year considered a similar bill sponsored by Senators Harry Reid and John Kyl in the Senate. Now, three years later, Representative Frank and Senator Kyl have retired, the House just held a sub-committee hearing on a bill (RAWA) to ban all online gaming (with notable carveouts for lotteries and horse racing), and Senator Reid has gone on record supporting an online gaming ban. The federal online gaming environment has gone from temperate to downright frigid.

It would not be fair to blame the PPA's 2011 petition for the disintegration of the federal online gaming legalization effort; RAWA is the noxious by-product of a broader set of toxic political forces. Yet, in evaluating the PPA's 2011 petition against its modest goal of advancing the position of online gaming by obtaining a supportive policy statement from the Obama Administration, the 2011 petition was, charitably speaking, somewhere between "inneffective" and "irrelevant". In any event, given the lack of any policy statement, it is foolish to pretend to know how the Administration views online gaming, and it is foolhardy to speculate that the Administration either supports online gaming legalization or is opposed to RAWA.

Why the New PPA Petition Is Pointless

So, if the Obama Administration's policy views on online gaming are unknown, won't the new PPA petition force the Administration to take sides in the debate once and for all? Hardly.

Here's the thing. The Administration clearly has no skin in the game either way. Online gaming is simply not a priority for the Administration, either pro or con. So, even if forced to respond to the PPA petition (which appears a dubious longshot), the Administration is almost certain to put out yet another non-responsive response, taking neither side of the debate. In other words, at best we will get a rehash of the Administration's non-committal response to the 2011 PPA petition.

From the Administration's perspective, there is no political advantage to taking sides in the debate at present. Taking sides now when RAWA or other online gaming legislation appear unlikely to advance simply creates unnecessary enemies, while distracting from the Administration's priority legislative goals. If and when RAWA or other online gaming legislation passes out of one of the Congressional chambers, the Administration will have plenty of time to weigh the most politically advantageous response. The Administration might support a RAWA-style online gaming ban as a reward to Democratic Senate leader Harry Reid, who has done yeoman's work in advancing the Administration's agenda the past six years. Or, the Administration could threaten to veto a RAWA-style online gaming ban as a bargaining chip to extract concessions on issues where the Administration has a stronger interest. The Administration could even agree to sign RAWA into law in exchange for something—say, passage of a bill or approval of a judicial nominee—the Administration truly values, or as part of a compromise package of "must-pass" legislation.

The 2015 PPA petition also is unlikely to gain a supportive reply from the Obama Administration because of a key ideological issue—"states' rights". The PPA petition declares: "Regardless of personal opinions on wagering, the Tenth Amendment directs that states decide such matters, not Congress." The trouble with this language is that it is ideologically charged. In constitutional jurisprudence, "state sovereignty" and the Tenth Amendment have historically been invoked by conservatives seeking to invalidate liberal/progressive economic and social policies. From the Great Depression to present, Democrats' major policy initiatives—e.g., Social Security and other New Deal legislation; the Civil Rights Act; various anti-discrimination laws; wage/hour, and other employee protection legislation; the Affordable Care Act—have been achieved via federal action, generally pursuant to a broad reading of the Commerce Clause. Republicans, by contrast, have tended to resist these laws by asserting those issues were reserved to the determination of individual states. Asking a Democratic President—particularly one whose signature policy initiative (the Affordable Care Act) was nearly invalidated on a Tenth Amendment challenge—to endorse a "state's rights" argument limiting the role of Congress in regulating economic activity such as online gaming is like asking a North Carolina fan to root for Duke in the national title game just because they belong to the same conference. It might happen, but don't hold your breath. [FN1].

The 2011 PPA online poker petition did nothing to clarify the Obama Administration's policy views related to online gaming. There is no reason to expect the 2015 PPA petition to succeed where its 2011 petition failed.

Why the New PPA Petition Is (Probably) Harmless

Now, for the same reasons why the PPA's current petition is destined to fail in its quest to gain support for online gaming from the Obama Administration, the PPA's petition is also unlikely to harm the online gaming cause, either. Essentially, the Administration has an equal incentive to avoid committing to an anti-online gaming position as it does a pro-online gaming position. Again, the most likely—probably inevitable—Administration policy position is a mealy-mouthed non-committal response which allows it to take any position it finds convenient in the unlikely event online gaming legislation (pro or con) ever makes its way out of Congress.

Still, the PPA's petition could backfire in terms of public-relations. Remember, the PPA needs to gin up 100,000 signatures in one month in order to force a response from the Administration. Right now, the petition has just over 3,000 signatures. Yet, in 2011, months after Black Friday destroyed the online poker economy in the United States, when the poker community was presumably most united and most motivated, it took the PPA nearly six months to gather a mere 10,000 signatures for its first petition.

If the PPA falls short of its goal in its current petition campaign, it will walk away with a lot of egg on its face. The PPA likes to brag about its "more than one million members", a membership level it has touted since at least 2008 (and during its 2011 White House petition campaign). The potential problem with the current PPA petition is that failure to generate 100,000 signatures in a month undermines the PPA's narrative of broad public support for its position. Worse, failure to garner the requisite signatures would tarnish the PPA's credibility as an advocacy group. If the PPA fails to deliver signatures for what it considers an important initiative, outsiders will be left to wonder about the cause of the failure: Are there substantially fewer active PPA members than advertised? Are PPA members unmotivated? Is there a disconnect between the PPA's leadership and its members?

Why Poker Players Should Sign the PPA's Petition

There are many political issues which are beyond the influence of individuals or even organized advocacy groups. Many political activities—circulating and signing petitions, attending board meetings, sitting through legislative hearings, contributing to political action committees, volunteering for political campaigns, even the act of voting—are irrational to dispassionate observers who can see that these activities will have no discernible effect on the outcome of the political debate in question. Yet, for some individuals, the mere act of participating in the political process, even if that participation is pointless, provides the salutory effect of making these individuals feel a part of the civic process. For these folks, meaningless action is superior to measured inaction. Raging impotently against the machine is more existential war cry than rational argument.

So it goes for the PPA's latest petition, despite its certain destiny with the trash heap of historical irrelevancy. Signing the PPA petition provides an opportunity for online poker players worked up over RAWA to release some frustration and feel good about themselves, quickly and free from risk, without any long-term commitment. In other words, it's political masturbation.

If signing the PPA's petition makes you feel good, by all means shoot off a signature.

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[FN1].  The appeal to a states' rights argument in the fight against RAWA is a smart decision on a tactical level. Because Republicans tend to favor state regulation over federal regulation (particularly with respect to economic issues), invoking the states' rights rhetoric divides the Republicans into the socially conservative anti-gambling (pro-RAWA) faction and the anti-federal regulation (anti-RAWA) faction (though many Republican legislators fit comfortably into both camps). Of course, the states' rights rhetoric may become detrimental in the long-term if federal legislation authorizing online gaming once again becomes more politically palatable. But in the short term, a significant division in the Republican ranks over the proper forum for legislating about online gaming is a major stumbling block for the pro-RAWA forces, and online gaming advocates are wise to fan the flames of that division ("the enemy of my enemy is my ally").