Q&A with PPA exec director John Pappas

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Is there any reason online poker players should worry about prosecution from the UIGEA? No. The UIGEA does not make playing online poker for the player an illegal or unlawful activity. There is this gray area for the processing of the payments: Should the bank process the payment for an Internet poker transaction? And what you are going to see is that many of the online poker sites already have what they call “well-reasoned legal opinions” that they’re providing banks that say, “Hey, we offer a skill-based, peer-to-peer game online that should not be considered unlawful under any state or federal law, therefore our payments should be processed as normal.” Some banks will accept that and some will not. There will always be a responsible pathway for people to deposit money on the online poker sites.

And because of how hard it will be to properly identify “illegal” transactions, how real do you think the possibility is that the government will sue banks? That’s a good question. The interesting thing on the law is banks have been given what they call “overblock” protection. If they overblock a perfectly legal transaction … (then) the player, the website, no one has recourse. The bank is completely immune for that. It’s only when they underblock that they are subject to any kind of penalties. … And I don’t think (the banks) have a whole lot of risk, at least criminal risk or civil risk, by processing payments.

Legislative opponents often use societal ills such as higher divorce rates or bankruptcies as their reasons for opposing online gaming. But virtually every state has a lottery. How does the PPA respond to lawmakers who play that card? It’s fear-mongering really. There are a lot of activities that adults engage in that can provide problems at home and problems in the community, and we aren’t seeking to outlaw those issues. And in reality gambling addiction, and the problems related to gambling, are few and far between. I think the percentages are between 1 and 3 percent of Americans are identified as problem or pathological gamblers. That is a very small percentage of adults. And the idea that we’re going to prevent (the other 97-99 percent of) Americans from enjoying an activity because a few have a problem with it doesn’t seem like a very sensible public policy. What we ought to be doing is focusing our energies on how do we help those few Americans who do have a problem. How can we make sure that there’s a mechanism in place so that they aren’t addicted to gaming or that they aren’t doing things that are detrimental to themselves or their families. And then allow for a safe and regulated marketplace for the responsible adults who want to enjoy this as a form of recreation or a profession.

The House Ways and Means Committee recently held a hearing on possible regulation of online gaming. How well do you think the hearing went, and is Congressman Barney Frank’s bill still on track to be marked up in July? Everything seems to be on track for a July mark-up. I thought the (meeting) went well. … We also saw one member in particular, Bob Goodlatte, who was there to kind of serve as the antagonist against Internet gaming, and you really saw him face some very difficult questioning from his colleagues, both Republican and Democrat, really questioned his opposition. Is it really based on sound policy or was it kinda based on moral religious reasons. And I think it came out that his opposition was morally based, and not necessarily public policy based. I think lawmakers recognized this isn’t something that they are going to have to make a moral decision about but what is the best federal policy for online gaming.

Many players had hoped that action on the UIGEA might slow down under an Obama Administration. Is the PPA surprised that it appears that it hasn’t slowed down? I wouldn’t say surprised. I just don’t think that this is something that has really been on the top of the president’s agenda. … You know we did see this administration provide a six-month reprieve of the law, which I don’t think should be lost on anyone. That is a really strong signal from the president and the agencies that they view flaws here. Now the fact that it’s going to be finalized under their watch, I don’t think it means that they are in one way pro- or anti-Internet gaming. I just think it just means this law is going to go into effect and we continue to build momentum behind any sort of legislation that will mute it through licensing and regulation. I don’t put the Obama Administration in one camp or the other. I think there’s still an opportunity to get them to come out on this issue, but I think Congress is going to have to act first. And once Congress acts in a real substantive way, then I think you’ll see the Obama Administration come out, I believe, in support of license and regulated poker.