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FAQ Updated 12/17 3:00 PM EST.

Reid’s bill appears to be dead -for now. Regardless, his bill will now provide a critical framework for the debate ahead over the regulation of online poker in the US.

We’ve assembled a quick fact sheet, along with answers to common questions surrounding the story and resources for learning more. Please note that 99% of the information available on this issue involves hersay and speculation and should be interpreted and analyzed accordingly.

The Cliffs: On December 3rd, a bill that would regulate online poker in the U.S. was leaked from Harry Reid’s office.

Various drafts of the bill emerged over the next few days, but the basics didn’t seem to change much: Once the bill passes, there will be a 15 month “blackout” where no operators will be able to offer online poker legally in the US. After that period, licenses will be available in a manner that seems to highly favor Las Vegas and New Jersey casinos. The timeline for rooms such as PokerStars to get back into the market is a subject of some debate and ranges anywhere from 15 months to over three years.

The bill would also explicitly criminalize the act of taking bets or wagers from US residents and prescribes very harsh penalties ($1 million per day) for those who do so via provisions of the law that strengthen and clarify the UIGEA and the Wire Act.

If the bill passes, it will do so as part of a larger bill – the taxs cut bill is the potential vehicle most commonly cited.

Commonly Asked Questions

Short answer: Current speculation points to the end of this week (12/14).

If the bill is going to be passed, it will be passed as a tack-on to another, larger piece of legislation that is expected to pass easily – most observers believe a bill extending the Bus Tax Cuts will be the legislative vehicle.

Now the PPA and sources say there’s little or no chance this will get into the tax bill. Tricky procedural maneuvering of an unspecified nature seems to be the last option for the bill.

Legislative tack-ons explained here.

Reports (12/6) indicate that the GOP and Dems have reached a compromise, so expect a tax bill to hit sooner than later. As for the online poker regulation aspect of the bill, PPA head John Pappas told PokerNews (12/6) that “We’ll know certainly by the end of next week whether Internet poker will be part of any package that passes,” Pappas said. “Either it will be law or not by the end of next week.”

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The bill won’t be voted on as a stand-alone bill. It probably won’t be “voted” on at all. Instead, it will be attached to another bill via a complicated legislative process.

For the specifics of that process, give this post from F-Train a read.

Current word (12/14) is that the omnibus bill is the best remaining vehicle.

Tricky procedural maneuvering of an unspecified nature seems to be the last option for the bill (12/16).

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A new draft of the bill was released 12/14. Details here.

The LVRJ has published an initial draft of the bill (12/3) that you can review here.



Latest draft (12/7) here; summary here.

Note that a review of this draft contradicts some conclusions circulating widely over the weekend.

Please note that both reports represent drafts and that the eventual legislation could easily look very different. That said, the drafts still represent our best understanding of the broad outlines of how the law will eventually look, if passed.

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No. No one has published the current state of the bill or spoken officially on its contents, and the legislative process is hyper-dynamic, especially given the “compromise” nature of a bill like this. You could easily see major provisions added or subtracted based on the need to gain support of a key player at a late stage.

Anyone who says they know something is in the bill “for sure” is probably stretching the phrase a bit.

That said, it does seem to be a matter of consensus that there will be a “blackout period”, that operating a US-facing room post-bill will be more difficult, and the barrier for entry for foreign companies and former operators such as Stars will be higher than it will be for US land-based casinos.

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The PPA has said over and over on 2+2 that this bill is now out of their orbit, and that no amount of feedback, cajoling or complaining will change that. There also seem to be no “new” versions of the bill floating around today or yesterday, as opposed to the flood of chatter regarding revisions over the weekend.

Does that mean the last draft we saw is the final draft (edit: obviously no, since a new one emerged 12/14).

Not necessarily, but it seems like the bill is pretty locked down on the points that Harrah’s favors (blackout) and players oppose (strengthening UIGEA).

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The freshest news is definitely coming out of Twitter – search the #reidbill hashtag for the latest. Another place you’ll find breaking news is the main thread on the issue in the 2+2 leg forum, link here – beware, it’s at once addictive and disgusting to ride along on that thread.

We also think Pokerati has great coverage, and FTrain’s blog is the home for complicated legal questions regarding the bill getting answered.

Here’s our coverage center, which combines a lot of sources.

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Here’s our most current tally of who’s where on the Reid Bill

For it

Against it

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About as close as Texas Hold’em is to Omaha. The basic ideas will probably be the same, but the details could vary wildly based on the negotiations surrounding the bill and the give-and-take between competing interests possibly required to get the bill off the ground.

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Short answer: 15 month blackout on legal online poker in US, steep barriers for entry to anyone but major US land-based casinos, strengthening of UIGEA.

Longer:

The draft forms of the bill we’ve seen would basically create a licensing body that would issue licenses to operators that would allow the operators to run online poker rooms servicing US customers in states that “opt-in” to the system. State regulators would do the heavy lifting in terms of day-to-day regulation.

The barriers to applying for a license would be steep; only existing operators with a certain number of years of operation would be allowed to apply for the first two years, and the language of the bill draft seems to intentionally exclude the possibility of a company such as PokerStars simply buying a small card rooms or casino in order to qualify.

A revised version of the bill, as reported by Andrew Feldman, removed the 2 year waiting period that would have applied to operators such as PokerStars, Party, and so on.

Barriers to entry for current operators such as Stars and Full Tilt appear to be very steep. However, a recent version of the bill (12/14)seems to suggest that Stars and FTP could in theory license their software engines (sans logo) to operators such as Harrah’s.

The payoff for states and the USFG would be a cut – 20% 16% – of the revenue taken in by the rooms. States not opted in to the system wouldn’t receive any revenue.

According to the draft, licenses would not be issued until 15 months following the passage of the bill. Read more about the “blackout” period here.

The law would also strengthen the UIGEA, making the acceptance of poker wagers explicitly criminal making it much more difficult (in theory) for unlicensed operators to continue to accept US players.

Here’s our summary of Reid Bill v3 highlights.

For a more detailed breakdown of the bill (12/3), check out Pokerati’s summary here.

Read a breakdown of the current draft here.

Another summary with analysis.

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One of the more controversial aspects of the bill for poker players is the so-called “blackout” period. From the bill:

No Qualified Body may issue a license under this Act prior to the date that is fifteen months after the date of enactment of this Act. Qualified Bodies shall, to the extent possible while meeting all requirements and standards in this Act, issue multiple licenses on the date of first issuance 15 months after enactment in order to Page 52 of 75 ensure a robust and competitive market for consumers and to prevent the first licensees from gaining an unfair competitive advantage.

The 15 month period is, technically apparently, a 14 month period; for the first 30 days of the blackout, players could still (in theory) be playing at Stars and Full Tilt, as sites have 30 days to wind down their US operations from the date the bill passes.

The PPA says they’re aggressively moving to have the 15 month period reduced. The PPA says there’s nothing they can do about this now.

That aspect of the bill, combined with the strengthening of the UIGEA and a semi-clear path for foreign operators to gain access to the US market, has led more than a few players to construct the follow scenario: The bill passes, Stars and FTP pull out of the US market within days ala Party Poker post-UIGEA, but US operators such as Harrah’s don’t come online in the US for 15 months, leaving US players with only the option of playing at sites that defy US law in the interim.

It’s important to note that nothing in any draft cited so far criminalizes playing poker online. If some sites continued to serve the US market, they would be breaking the law by doing so, but it appears that players would not be on the hook. Obviously, individuals should consult the laws of their local jurisdictions before making decisions about what is / is not legal.

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No one knows for sure besides the owners of those companies, but both companies did stop operations in Washington State once the legality of online play became a matter of settled law.

According to a PPA rep on the 2+2 forums, the latest draft of the bill gives rooms 30 days to cease operations in the US and another 30 days to facilitate the return of customer’s money (no worries if you don’t get it in that window – sites will have longer if they can’t contact you and eventually the money goes into escrow).

General speculation is at least one, if not both, would pull out of the US immediately and hope to pursue a path to entry into the regulated market down the line in 15 months down the line? down the line as an operator, but perhaps right away as a service provider? Both rooms have international bases that would provide more than sufficient support in the interim.

The period they would have to remain out of the US market is a matter of intense debate currently. There has yet to be a definitive answer on whether or not the sites would be able to enter the market earlier via a sale / acquisition – credible voices on both sides of the issue have offered opinions.

The current draft (12/14) appears to shorten the so-called “penalty box” for current operators to 1.5 years.

The possibility of either room leaving the US market should not be a cause for panic for players with funds on those sites if history is any guide – Washington State players have reported little issue with the winding down of their accounts and US players with funds in Party Poker had little trouble withdrawing them after the company left the US.

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Again, hard to say. Several rooms have continued to accept players from Washington State despite the law there, so speculation goes that the same rooms will continue to ignore US law and allow US players on their sites.

No site has come forward yet and stated that this will be their policy. Names commonly floated in the discussion include Bodog and the CEREUS network (AP/UB), but that’s just speculation.

It does seem that if the bill passes, offering poker to US customers will be a much more difficult endeavor, due to the strengthening of the UIGEA and the steep penalties that operators face for working in the US without a license.

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Taking the long-view, one would be compelled to agree that this bill is inevitable – good and bad don’t really even play into it. The US will have to regulate online poker at some point if major casinos are going to be able to play ball, and the introduction of regulation will, by definition, send serious shockwaves throughout the industry.

As an unavoidable and unfortunate impact of that disruption, there are no doubt scores of individual players who would be impacted negatively by this bill in the short-term.

That said, we believe this bill is critical to the future of a stable, sustainable online poker industry in the US. The bill may also represent a unique political opportunity that supporters of online poker regulations are unlikely to see again in the foreseeable future.

Click here to support this bill by emailing your Senator.

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No one knows. Speculation suggests that the aggressive competition for players among various US casino interests would result in a lower effective rake, at least in the short term.

Casinos will also be able to run their online poker rooms at thin or negative margins for quite some time, given the relatively small slice of revenue online poker would represent for a company such as Harrah’s.

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Your state can already do that – read more about the State of Washington’s criminalizing of online poker players.

As far as the “opt-in” aspect of the bill, the 15 states that currently gambling (roughly speaking) are automatically opted-in to the bill. They can request to be opted-out. The remaining states have to actually opt-in to the bill; the process for doing so depends on an individual state’s laws.

States who offer intrastate online poker cannot opt out can now opt out of the bill.

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Supporting the bill at this point is easy enough. If you’re not already, become a member of the Poker Player’s Alliance, the leading lobbying group for poker players in D.C..

Click here to support this bill by emailing your Senator.

Finally, engage in the public debate. This issue is getting a lot of media attention, and we need poker players to participate in the public discussion currently raging on various forums and in the comment sections of various articles. We’ve prepared a list of facts and talking points for players would would like to help correct common misperceptions surrounding poker.

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No, this is a misperception caused by poor technical wording in the bill draft. Players will not be subject to any sort of “deposit tax” under the current circulating draft.

Rooms will pay a 20% 16% fee on their revenue.

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No. The bill only regulates online poker rooms operated by US entities serving US customers.

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The drafts of the bill currently circulating would not criminalize playing online poker. The bill does include several provisions that strengthen the UIGEA and clarify the Wire Act, making the operation of a poker room that accepts US customers an explicitly illegal activity.

For players nothing seems to have changed. For operators, the stakes seem to be definitely raised.

We have a clearinghouse for info here.

Elsewhere, lots of places (feel free to do battle in the comment sections where applicable):

>> Christopher Beam at Slate endorses reg

>> The Atlantic writes about the “poker blackout”

>> AGA Head Frank Fahrenkopf Discusses Reid Bill

>> Pokerati has great ongoing coverage with solid analysis

>> Here’s the 2+2 legislative thread on the issue

>> John Stossel at Fox hates the UIGEA

>> Michele Minton at the CEI supports Reid’s bill

>> Why Rand Paul and the Tea Party should support Reid

>> Eli Lehrer supports Reid’s bill, read why

>> Read the draft of the bill

>> Time magazine points out the UIGEA parallels

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If you feel there is something we should add to this article, contact us.

Article by Chris Grove.