A few days ago, Poker Grump asked me what Harry Reid had ever done for internet poker. It wasn’t until I saw this article in the Wall Street Journal that I remembered I hadn’t responded:
Staffers for Senate Majority Leader Harry Reid are circulating a bill to legalize poker playing on the Internet that’s backed by large casino interests.
The Nevada casino companies pushing the measure were among the Democrat’s biggest donors during his fierce re-election fight. They argue the bill would provide consumer protection for poker players and would provide some tax revenue for federal and state governments.
This is a mixed bag, although I believe that in the long run it would be better than nothing, which is what we’re likely to get if there isn’t action in this session. The complication is that
According to the draft of the bill reviewed by The Wall Street Journal, Mr. Reid’s office is considering language that would allow only existing casinos, horse tracks and slot-machine makers to operate online poker websites for the first two years after the bill passes, which could limit the ability of other companies to enter the market.
The bill would also outsource oversight to state regulators, another move supported by existing casinos that don’t want to see the federal government become overly involved in regulating their industry.
The bill as drafted would send taxes on wagers to both federal and state governments.
That could mean no more Poker Stars or Full Tilt for Americans, at least in the short-term. The best-case scenario would be to have something like, “Poker Stars presented by Harrah’s” or something like that, though I don’t think it’s too likely.
Of course this is also bad news if you don’t pay your taxes, but in that case I don’t have any sympathy for you.
I tend to agree. I am happy that there’s some progress, and I believe that making deposits easier can only be a positive for online poker. When I see the skill level of casual poker players live, they’re nowhere near the level of even the micro stakes I play. The injection of money into the poker economy can only be a good thing, although to be honest it’s people at your level who will really benefit, as the $25+ tournaments should explode as people who gladly play a few $50-100 tournaments a week at local rooms move their money online.
A couple of concerns I do have are the taxation and rake. Saying “the bill as drafted would send taxes on wagers” scares me… is this something along the lines of the taxes seen with Pokerstars France? Or a tax placed specifically on each wager? If it’s like 1%, that’d be reasonable, but if it’s in line with even our lowest income/capital gains taxes then we’d be in trouble. Hopefully, they’ll work it out to taxation of profits, as it should be.
The other concern I have is rake, and if Harrah’s puts their live rake rates online I’ll really miss the more reasonable rakes of FTP and PS. Again, this would be a bigger deal for micro players such as myself, but considering the live rakes on $30-100 tournaments I’ve seen at Harrah’s casinos, I’d expect a 20% vig on those as well.
Agreed- all very valid concerns. I think the best we can do is hope that someone competent gets put in charge of the online arm of these companies, someone who won’t go for the short-term plunder but will focus on building a large, sustainable player based the way PS and FTP have done. Sadly, AB/UP have taught the lesson that short-term plunder is at least a reasonably profitable option. They may not make Poker Stars money, but they are doing pretty well for themselves.