Plan to Tax Online Gaming to Finance Healthcare Reform Just Not in the Cards

Last week I blogged about Senator Ron Wyden (D-OR) introducing an amendment to Barney Frank’s bill that sought to legalize and tax online gambling to help pay for healthcare reform.

But it wasn’t long after that Wyden’s staff said the senator did not want to introduce additional controversy into the healthcare debate. As a consequence, he pulled his amendment—which would have taxed online gambling to pay for heath insurance subsidies—from consideration.

“It’s a great idea,” Barney Frank said. “Why should we leave all that money untaxed?”

But this amendment would only serve to rile up the opposition, primarily conservative Christian groups that believe legalized online gambling harms family life and values.

But the financial implications strongly support Wyden’s amendment, and a PriceWaterhouseCoopers analysis estimates that an Internet gambling tax would rake in $62.7 billion in new revenue over the next 10 years.

Frank’s bill, which won’t go anywhere in 2009, now has 58 co-sponsors. Most are democrats but the list also includes Republicans representatives Pete King (N.Y.) and Ron Paul (Texas).

My gut feel is that UIGEA will eventually be repealed or otherwise neutered, but I wouldn’t bet on that occurring in the near future.

Oregon Senator Suggest Using Internet Gaming Tax Revenues to Fund Health Care

An increased focus on the benefits of Internet gambling regulation are expected as the Senate Finance Committee considers a proposal introduced three days ago to use Internet gambling revenue as an offset to the costs of health care reform. An amendment offered by Senator Ron Wyden (D-OR) would dedicate Internet gambling tax revenue generated through implementation of Barney Frank’s currently pending Internet Regulation, Consumer Protection and Enforcement Act (H.R. 2267) to increase low-income subsidies provided through the America's Healthy Future Act of 2009. PricewaterhouseCoopers estimates that collecting taxes on regulated Internet gambling would generate revenue of $62.7 billion during the next decade.

"We applaud Senator Wyden's proposal to collect and put to good use tens of billions in Internet gambling revenue that would otherwise be lost in the underground marketplace," said Michael Waxman, spokesperson for the Safe and Secure Internet Gambling Initiative. "The Senate Finance Committee should approve the resolution, finally putting to an end a failed prohibition on Internet gambling that leaves Americans unprotected and unlicensed offshore operators as the only beneficiary in a thriving marketplace."

The Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2009 would establish a framework permitting licensed gambling operators to accept wagers from individuals in the US, while mandating a number of significant consumer protections that include safeguards against compulsive and underage gambling, money laundering, fraud, and identify theft. Additional provisions in the legislation reinforce the rights of each state to determine whether to allow Internet gambling activity for people accessing the Internet within the state and to apply other restrictions on the activity as determined necessary.

A companion to Chairman Frank's legislation introduced by Rep. Jim McDermott (D-WA), the Internet Gambling Regulation and Tax Enforcement Act (H.R. 2268), would raise revenue for the U.S. Treasury primarily through ensuring that applicable individual taxes, corporate taxes and license fees on regulated Internet gambling activities are collected. Without this legislation, this revenue will remain uncollected while millions of Americans gamble online without consumer protections.

Man Wins Women's Poker Tournament at Borgata

Man, oh man, and I’m not talking about a resurgence of the Tilt Boys again, but Abraham Korotki, 65, of Ventnor City, NJ, beat out 260 women in a $300 buy-in hold’em tournament at Atlantic City’s Borgata to take home the $20,982 first prize in what was otherwise a woman’s poker tournament!

This was not without drama, tears, and heartbreak either. Just ask 40-year-old Nicole Rowe, of West Windsor, NY, who placed second in that event. Rowe—diagnosed with breast cancer—planned on using her winnings to cover living expenses during recovery from a mastectomy scheduled later this month.

But Korotki took home first prize in a tournament he entered after early elimination from another tournament. Rowe, who finished second, took home $11,889.

Borgata’s management did not know that a man entered the woman’s event, but said anyone of legal age is legitimate.

"Borgata offers specialty tournaments, including the Ladies event," said Borgata executive Joe Lupo. "In the spirit of this event, it was our hope that only women would have participated, as has happened in the past . . . However, given legal requirements, we must allow anyone who is over the age of 21 the opportunity to participate."

"When you're a woman and you play poker, 99 percent of the time you're at a table with nine men,” said Rowe, adding that she looked forward to playing against a field of women.

Korotki—a semi retired real-estate developer was quoted as saying that he's donating his winnings to three charities, including one dedicated to breast cancer, and that he just "wanted to get back on the horse," and signed up because he had earlier seen "five to 10" other men in the registration line.

Borgata officials, however, were quick to point out that they were unaware of other male entrants, nor were any other men pointed out by female players.

According to Korotki, no one from the Borgata told him that he couldn't play. He added that he would not have made a fuss if asked to leave. "If someone had said, 'Abe, you can play, but please don't,' I would have said, 'Fine,' and gone home and been bored until the next tournament."

From the casino's standpoint, their only option was to seat Korotki.

Final Candidates for Selection into the Poker Hall of Fame

The list of nine finalists eligible for induction into the Poker Hall of Fame was released a few days ago and a panel of 30—15 members of the Hall of Fame and 15 media members will cast their votes by October 2 to determine the two finalists who will be inducted into the Poker Hall of Fame November 7 at the Rio.

The nine final candidates are:

Barry Greenstein

Dan Harrington

Phil Ivey

Tom McEvoy

Men Nguyen

Scotty Nguyen

Daniel Negreanu

Erik Seidel

Mike Sexton

Each voter gets two votes, and the smart money is on Mike Sexton’s induction. Others with a shot seem to be Greenstein, Harrington, McEvoy, and Seidel. Negreanu and Ivey might be a bit young at this point in their careers, and Men Nguyen and Scotty Nguyen carry a lot of negative baggage with them.

Allegations of cheating and chip-dumping have followed Men Nguyen for years, and Scotty Nguyen’s alcohol-fueled table behavior is likely to turn off a significant number of voters.

A lot of the selection process turns on judgment calls, and there’s just no simple metric or formula for determining precisely what makes for a Hall of Fame career. And while there are guidelines, they’re subjective enough to allow voters significant leeway in making their selections. Here are the guidelines:

Since it began in 1979, the Hall of Fame has honored 37 gamblers, one for each year, with the exception of 1993 and the year 2002, 2005, 2006, 2007 & 2008. All but two, Hoyle and Hickok, were twentieth-century players.

Selection criteria for the Hall of Fame are:

1. A gambler must have played poker against acknowledged top competition,

2. Played for high stakes,

3. Played consistently well and gained the respect of their peers,

4. Stood the test of time,

5. And for non-players, contributed to the overall growth and success of the game of poker, with indelible positive and lasting results.

"Be a Guest on my Radio Show" Contest Winners Announced

We have a winner. Actually, we have four winners for the contest I announced in early August on my Internet radio show, Keep Flopping Aces.

Many more entries were received than expected, and four rose to the top. I couldn’t choose a winner from among them, so I decided to invite each of them on the show, where we’ll discuss poker for an entire hour.

Here are the four winners, along with the date each winner will appear on my show.

September 10: James Foster
September 24: Steve Bortnyk
October 8: Eric Crump
October 15: Eric Nelson

Keep Flopping Aces airs each and every Thursday evening at 9 p.m. Eastern Time (6 p.m. Pacific Time) on http://www.roundersradio.com/. You can listen live, call in to chat with me or my guest, or use the site’s chat window to type questions for us. You can also listen to a Friday rerun, or download the show for on-demand listening a day or so after it broadcasts live.

This contest was so successful in terms of the number and quality of responses I received, that I plan to have more events like it in the future. I’m not sure what kind of contest I’ll conjure up, but the idea of listener interaction is very appealing, and this contest provided a lot of that.

Tune in. Call in. Talk to me or my guests. And stay tuned for the next contest sometime in the not-too-distant future.

Poker's Prime Directive: One Player Per Hand

A recent email from a player in Northern California brought up the issue of unintentional collusion, something common to smaller rooms. Regular groups of local players, who have created friendships over the poker table, are often a little casual with the rules and treat their casino game like a home game in Charlie’s basement.

The player who emailed me—we’ll call him Jasper—described events that transpired during one session of Omaha/8 at his local cardroom. Jasper was in seat seven and folded before the flop. The player in seat eight raised and proudly showed Jasper his four hole cards. Jasper said, “Please don’t show me your hand, it’s not fair to the other players.”

And he was right. If the player in seat eight won the hand without a showdown, only Jasper would know whether he had the goods or was bluffing. If the player seat eight folded before the showdown, only Jasper would know what kind of lay down he made.

The “only Jasper would know” scenarios are too many to list, and Jasper’s complaint was based on the fact that the exact same thing was occurring between seats two and three at the other end of the table.

They weren’t cheating or trying to gain an edge, at least Jasper didn’t think they were, and he knows all the players. Nevertheless, the player in seat three had a blueprint of everything his neighbor in seat two would play, fold, and raise, and knew exactly what gear he was in at all times.

Jasper felt like a sucker because information was available to some of the players, but not to all. It wasn’t fair.

While Jasper could have continuously asked to see the shown hands, that gets old pretty quickly, especially at a table where all the players know one another.

But that’s not the worst of it. Later that same evening, a player who was shown a hand during play stopped his neighbor from throwing his hand into the muck at the showdown. “Wait, you’ve got a low,” he muttered, which was quickly followed by, “Oops, I’m sorry,” to the player who would have won the entire pot, but was now only getting half of it.

Fortunately, there’s a rule designed to prevent this, and it’s one of poker’s prime directives. It prevents players from calling hands that have not been put face up on the table, prevents players from giving information to some players and not others, and prevents players from encouraging or discouraging their neighbor from making a call on the river.

In our book, The Rules of Poker: Essentials for Every Game, Sheree Bykofsky and I talk about this right up front.

One player per hand: "Poker is not a team competition, and each player is responsible for playing his or her hand without advice or assistance, either directly given or provided inadvertently by other players, dealers, or spectators to the game.

The ramifications of this directive are broader than you might imagine at first glance. Not only does this mean that you cannot ask your neighbor, who may or may not be involved in the hand, what you should do or how you might play your hand—that goes without saying—but your neighbor bears a responsibility not to assist you.

All of the rules and punishments for cheating at poker are, in fact, violations of the one player per hand rule. Collusion by two players, marked cards, signals, cold-decks—you know; you’ve seen all the movies—are methods cheats design to circumvent the one player per hand rule.”

Even when players have no malicious intentions, one player per hand—no ifs, ands, or buts about it—is an essential requirement for a fair game and a level playing field.

That’s sometimes tough to enforce when a game has adopted a style where card-showing is the norm, but it’s everyone’s responsibility—players, dealers, and management included—to ensure the integrity of the game.

(No Poker content) Bike the Bay--a trip report

“What kind of schmuck gets up at 2 o’clock in the morning to ride his bike?” That’s my parentally and sober, serious voice posing the question to me, and it’s the voice I’m doing my best to ignore.

I’m not actually going to ride my bike at 2 a.m. I’m getting up that early so I can drive down to San Diego, pick up my registration material and then ride my bike at 7 a.m., as part of the annual Bike the Bay event sponsored by the San Diego Bicycle Coalition.

The ride departs from Embarcadero Marina Park, just behind the convention center in downtown San Diego, crosses the 2.12 mile, 4.7 percent grade Coronado bridge, and traverses the bay. It’s something I always wanted to do ever since I first saw the Coronado bridge. The very first time I saw it, I thought, “Jeez, I’d love to ride my bike over that bridge,” and today would be my chance.

So I’m not listening to that sober, serious voice; I’m listening to the other one—the one shouting, “Dude, this is your opportunity. You can only ride across the Coronado bridge one day a year, and this is it. Show a sense of adventure. Go for it. So what if you have to get up when the rest of the world is sleeping. Don’t wimp out. Go for it.”

So I’m up early. My bike and gear are in my car, all packed and neatly tucked away the night before. I grab a banana and Cliff bar for the road and I’m off, choosing the long way, via I-10 and the 215, because I don’t feel like driving up Hiway 74 and through Anza when the night is still pitch black and I can’t see where the road ends and the sky begins.
When I reach San Diego, the sun is coming up, and the map I downloaded does a pretty good job of getting me downtown. From there I work my way to the convention center, following a car with a couple of bikes on a rack hitched to its back. They lead me right to the Convention Center, where I can stash my car in their garage all day for $10.

Although I registered online, I still have to pick up my bib number and wrist band—my tickets, so to speak, to ride across the bridge. My bib number was 2221. In their promotional literature the Coalition said they will limit the number of riders to 2,500. Since I signed two weeks earlier and I’m assuming they assigned bib numbers in numerical order, I figured they sold out this event, or came close to it.

From the Convention Center parking lot, I ride down the length of the building, turn right and follow a road that leads behind the Convention center and right to the event’s staging area. When I arrived, there were already a goodly number of riders milling around.

I quickly signed in, pinned my bib number to my jersey, and went to queue up in a line of riders on the road leading out of the park.

One of the volunteers told me they send riders out in groups of about 50 or 60, each group accompanied by a ride leader. It’s spaced out to avoid the mass confusion you’d get at the start and at the entrance to the bridge with 2,500 cyclists trying to pedal away from the park and cramming onto the bridge’s on-ramp all at once. The ride leader tells me that once we get to the bridge, the idea of small, separate groups would fall apart and it’s everyone for him or herself, with fast riders challenging the bridge while the slower riders challenge themselves to get over it without resorting to walking.

At 7 a.m. the first group of riders departs, with about a two minute gap until the second group is allowed to go. I’m in Group No. Seven, so we clip in and pedal off somewhere around 7:20. It’s really a short ride to the bridge entrance, and I follow our group leader because he knows the way, and I don’t.

“Once over the bridge,” he tells me, “becomes one long, steady stream of riders all along the course. There’s no way,” he assures me, “that you can get lost or miss a turn.”
You’re really not supposed to stop on the bridge, but the view from the top was so spectacular that I stopped anyway, pretending to be checking out a mechanical issue on my bike. In reality, I was gazing at the San Diego skyline from the top of the bridge. It was magnificent, and the view I always wanted to experience whenever I saw that bridge. The weather was perfect too—a clear day, about 70 degrees, with no wind or morning fog.

The riders were all over the lot in terms of experience and skill, although the majority had no experience when it came to riding in formation. Most appeared to be really casual, recreational riders rather than experienced cyclists. Probably about five to seven percent were walking their bikes at least part of the way over the bridge, which seemed to be about as steep as Hiway 74 but not nearly as long. There were some fast riders, most in cycling club jerseys, but they were only a small part of the 2,500 out for a spin that day.

The descent into Coronado was fast and fun. I got into the fast lane and really flew down the west side of the bridge. Once in Coronado, we were on dead, solid, flat ground heading south to the bottom of the bay. We were routed onto a bike path adjacent to the bay. First we passed single family homes, and then an area filled with high rise buildings which appeared to have spectacular views of the city, the ocean, or both.

There were volunteer course marshals at every intersection coordinating the flow of riders with any cross traffic we might encounter. And they were terrific. They were all well-trained, courteous, and plentiful. It would have been tough to get lost if you tried.

There were also three rest stops, which is a lot when you consider that the entire journey totaled only twenty-seven by the trip’s end. But I’m never one to pass up free cold drinks, bananas, Cliff bars, nuts, and any of the other goodies on hand. I blew by the first rest stop, but did stop at the second and third. One stop even had a mechanic on hand, and one of the local bike shops that happened to be located on the return portion of the course also had a mechanic in the shop’s parking lot ready to offer free help to any rider with a mechanical problem.

Once we got toward the bottom of the bay, the bike path cut through a wetland area, which offered a view that couldn’t be obtained by driving.

The only issue with the bike path was that it was never designed for the 2,500 cyclists using it on that day. I was riding at about 17 or 18 miles per hour and passing at least 25 riders for every one rider that passed me. It was tough to maintain that average speed because of the congestion on the bike path. “On your left” became was the phrase of the day, and I seemed to shout it out constantly. After a while I fell in with a group of five other riders and we rode as a peloton, on the extreme left-hand side of the bike path, and when slower riders made way for one of us, they made way for us all.

The bike path is also used by runners, some of whom were going in our direction while others were heading toward us. The cry of “runner up” to alert riders about the presence of a runner heading his way was the second most popular call heard on the bike path.

Once we reached the bottom of the bay—which was also the bottom of the course—we were back on the San Diego side and headed back up to our starting point. That side of the bay is a light industrial area for the most part, without really anything worth seeing, but the lack of scenic views allowed me to focus on the road surface, which was a lot worse than the road in Coronado. The roads on the return trip are a lot like the old roads in Indio and La Quinta, the roads beyond the newer ones that were built when new gated communities were constructed.

The one kicker is that these roads were traversed by railroad tracks in a number of places. We were always perpendicular to the tracks, so they were really not a problem other than being bumpy, but on the return leg of the trip I passed three different riders who had gone down—one serious enough for the paramedics to be attending him when I rode past.

Back at Embarcadero Marina Park we picked up our event T-shirts and goodie bags, and there was a waiting line for hot food. It didn’t look all that good to me, so I checked out the vendor exhibits, grabbed another banana for the trip home, rode back around to the Convention Center parking lot, dismantled my bike, stowed my gear, and headed home.

The return trip was faster. It was daylight, so I took 163 up through Balboa Park to I-15 and then to Temecula, where I cut off to go the back way via Anza to Hiway 74 and home.

It was really an enjoyable morning, especially since I got to ride my bike over the Coronado bridge, which was something I always wanted to do. The event was incredibly well organized and well staffed by knowledgeable, courteous, and helpful volunteers. In fact, in my humble opinion, it’s probably the best run charity ride I’ve been on, and it’s something other events could learn from.

The only drawback is that it’s only a 25 – 27 mile ride, and that’s not much of a ride when you have to drive 130 miles each way. It would have been nice if they had optional loops, so it could be made a 27, 50, 62 (metric century), and even a full 100 mile ride. At least among riders I talked to, I was the only one who came from a distance to ride there. All the others were either from San Diego itself or its suburbs; in any event, as short a drive for them as it was for me to get to the Tour de Palm Springs.

Would I do it again? Probably … if crossing the Coronado Bridge by bike was that much fun one time, it’s got to be worth giving it at least one more go—even if I have to be idiotic enough to get up at 2 a.m. to do it.

Why Obama Needs to Help Tax and Regulate Online Gaming Now

With bills to regulate online gaming and eliminate UIGEA introduced in both the House and the Senate, most people are feeling optimistic about overturning it sometime during this legislative session. While I hope I’m wrong, I’m not one of them.

I don’t think either of these bills will come out of Congress in 2009 for a number of reasons.

Congress Doesn’t Care: They’re consumed with issues related to our national economic doldrums, a war in Afghanistan and another in Iraq, and health care bill that has done nothing so far but pull down congressional and presidential approval ratings. Consequently, your elected leaders are not paying attention to other issues. Simply put, legislation to overturn UIGEA just isn’t high on their radar screen.

Regulating Online Gaming is Not a Political Winner: Elected officials need to keep getting elected, which is why they tend to avoid confrontational issues—and they especially don’t like taking sides when regardless of which side they support, they’re bound to anger, polarize, and help mobilize the other. Face it, for every ardent supporter of civil liberties, for everyone who realizes that Congress should not dictate to us what we can and cannot do with our own money in the privacy of our own homes as long as we’re not hurting anyone else in the process, there’s another voter somewhere in that legislator’s district who believes that gambling is sinful, and government needs to protect us against ourselves.

It doesn’t matter that nanny-state politics is bad public policy and wrong headed. What matters is counting votes. When confronting as potentially divisive an issue as online gaming, an elected official figures to lose more votes than he’s likely to gain, regardless of where he stands on the issue. Support it or oppose it—when votes are tallied-up, it’s heads you lose, tails you lose!

But What About the Money? One of the strongest arguments about regulating and taxing online gaming is the promise of reclaiming revenue now lost to the US government. And that’s revenue we can use now, can’t we? It’s hard to argue against that, but it’s only one side of a strongly psychological coin.

If our national revenue gap were such that it could be closed, or even significantly mitigated by revenues from online gaming (according to estimates I’ve read, we’re talking maybe $12 billion here), I believe we’d have a law on the books that would tax and regulate online gaming in a New York minute. But when we’re discussing a budget deficit in trillions, we’ve long since passed the misery index, and closing it by a billion here or a billion there—or even one hundred billion—won’t really cause a visible dent.

In other words, even if you and I and everyone else in America played online poker 24/7 for the next year—never sleeping and never eating, just multitabling day and night—we would not generate enough rake that would in turn yield enough in tax revenues to make a dent in our national debt. It would be like Bernie Madoff trying to pay back everyone he swindled with whatever he happens to have in his checking account right now.

Is There a Solution? But there is a ray of hope in all this. What online gaming needs now, more than ever, is a passionate salesman as its hero. We have that salesman, and he’s in dire need of a winning product.

Who is that salesman? It’s Barack Obama. Of course. He a proven master at lining up support behind him. But lately his ratings have been sinking faster than a stone. Regardless of how he spins the congressional health care plan, it backfires on him. Now he’s even going back to the drawing board to craft his own version of the plan, tweaking it to reflect the criticism the current plan has received from seemingly all sides and to give the soon-to-be-announced new plan his personal leverage, which is certainly stronger than any support Harry Reid and Nancy Pelosi can engender.

In poker terms, Obama is on a cooler right now. The economy stinks. His health care legislation—upon which he pinned much of his personal credibility—is dead. The wars aren’t going well, and while he inherited those twin albatrosses from his predecessor, the weight is firmly around his neck right now. The political fallout from aligning himself with such reprehensible characters as Van Jones hasn’t helped either.

Our president is in dire need of a winning hand, and I believe that handled properly, online gaming could be an issue that helps him accumulate chips. More than anybody else, President Obama could sell the American people on the merits of a bill similar to those introduced by Congressman Barney Frank and Senator Robert Menendez. If he does this, he will painlessly raise tax revenues and have at least one needed winner on his resume in the process.

Obama’s popularity is in decline and regardless of whatever other initiatives he might bring forth in the near future, the only one promising to generate revenue is regulated online gaming. All of the others will cost money, and we can’t afford it. The only other way to generate revenue is to raise taxes and it’s pretty clear that America is fed up with the idea of coughing up trillions of hard earned dollars to fund a trainload of debt that’s cascading out of control down an endless track.

Show Some Leadership, Mr. President: Get behind a bill to tax and regulate online gaming. You know that we will tax and regulate online gaming eventually. I’m thinking that it will happen soon, but not before 2010 or 2011. But you can prove me wrong, Mr. President. Instead of following this trend, you can get out ahead of the parade and lead it, and I hope you do.

Beat the drum for the Frank and Menendez bills. Do it now. You’ll raise some revenue. You’ll correct some very poorly thought out public policy. And your approval ratings will go up in the process. Everyone wins. What could be better than that?