While the poker industry lobbies to legalize online gambling, it could be a nightmare for many U.S. Indian tribes, who fear it could destroy their $28 billion-a-year casino business.
No vote has been set, but poker lobbyists have lined up backing from Senate Majority Leader Harry Reid, D-Nev., who once headed his home state’s gambling commission. They’re banking on Reid to muscle a bill through by the end of the year, reversing the ban approved in 2006.
In New Jersey, a proposal to legalize online gambling in the state was approved by an Assembly committee in June. Bill sponsors, including state Sen. Jim Whelan, D-Atlantic, said in June that they plan to pursue the matter further in the fall, although Gov. Chris Christie vetoed a similar bill last year.
The New Jersey bill would allow people to play the same games they would if they were in Atlantic City. The servers and other computer equipment would be located within an Atlantic City casino, and the games would be regulated by the state Division of Gaming Enforcement.
To help get the job done, the Poker Players Alliance, a lobbying group that represents players across the country, is leading a national grass-roots campaign, urging its 1.2 million members to flood Congress with letters, emails, phone calls and tweets. In May, the group joined nearly 20 members of Congress at a retreat for House of Representatives Republicans in Florida, hosting a poker and casino night and posting photos on its website that showed lawmakers crowded around a table learning the finer points of Texas Hold ’Em. Rep. Joe Barton, a Texas Republican who’s a respected poker player in his own right, is leading the House effort to pass a bill.
Poker players scored a win in December when the Justice Department said it would apply the major anti-gambling statute, the Wire Act, only to sports events and races, clearing the way for states to begin legalizing online gambling without having to worry about federal laws.
Two states, Nevada and Delaware, already have done so.
Legalization is a worrisome prospect for many tribal officials, who predict that most gamblers would be less likely to drive to casinos, often found on isolated tribal lands, if they could play for money on their home computers.
On Capitol Hill, where congressional committees have been debating the issue for months, tribes have been busy trying to line up votes.
“We see legalization of Internet gambling as a direct threat to the economic growth in Indian country, and we do not support any proposals that legalize Internet gambling,” said Glen Gobin, an officer with the Tulalip Tribes in Washington state.
Others are moving to make sure the tribes will have the upper hand in running online poker. On Thursday, Hawaii Democratic Sen. Daniel Akaka, the chairman of the Senate Indian Affairs Committee, unveiled a draft of the Tribal Online Gaming Act of 2012, which would allow federally recognized tribes to apply for licenses to operate online poker.
Akaka, who’s regarded as a close ally of the tribes, is seeking reaction from tribes and other senators before deciding whether to formally introduce the measure.
Critics say it would be a big mistake for Congress to scrap the 2006 federal law, the Unlawful Internet Gambling Enforcement Act.
“Online gambling is the very worst-case scenario, and the reason is because if you open online gambling, there are no rules anymore. There’s no stability,” said John Kindt, a gambling researcher and professor of business and legal policy at the University of Illinois.
Kindt, who testified before Congress in 2006 when members approved the ban, said electronic gaming was particularly addictive, calling it the “crack cocaine” of gambling. He said tribes were hedging their bets by opposing online gaming in Congress, but he predicted that they’re unlikely to take a financial hit and will be on the leading edge of the movement if it’s approved.
“It would be huge for every gambling establishment,” Kindt said.
The issue will force Congress to confront questions of whether tribes should be allowed to accept bets from gamblers who aren’t on Indian land. Many tribes already are pushing to buy new property and open casinos off their reservations, taking advantage of looser rules the Obama administration approved last year.
But critics say the 1988 law signed by President Ronald Reagan was intended to allow gaming only on Indian land as a way to promote jobs and economic development.
Some say that’s now an outdated idea.
“Such a limitation would be ludicrous and incompatible with the very nature of the Internet,” said Alex Skibine, a professor at the University of Utah’s S.J. Quinney College of Law in Salt Lake City. “The Internet is not land-based. It does not have geographical boundaries.”
On April 15, 2011, dubbed “Black Friday” in poker circles, the Manhattan U.S. Attorney’s Office announced the indictments of the founders of the top three online-poker companies doing business in the U.S. The government seized the bank accounts of PokerStars, Full Tilt Poker and Absolute Poker and charged their officials with bank fraud and money laundering.
Alex Fitzgerald, who’s been playing professionally since he was 18, said he’d lost $150,000 on Black Friday and that he held out little hope of getting it back.
“I really liked being an American up until this point,” he said. “But it’s just very difficult to tell your family, ‘I can’t live near you anymore: I can’t conduct my business. I will have to completely change my life to play.’ And all I do is play a card game. I can understand if I was selling a drug or if I was doing something else a little suspect.”
Fitzgerald, who attended Inglemoor High School in Kenmore, Wash., now lives in San Jose, Costa Rica, where he’s come to appreciate the country’s people and culture and his proximity to the rain forest, mountains and beaches. And after meeting his girlfriend there, he said, he’s not about to leave. Besides, he’s not expecting Congress to approve online gaming anytime soon, saying that lawmakers will have a hard time overcoming the power of the tribes.
“The Republicans are hypocrites when they do not defend my right to conduct my own business yet claim big government is the root of all our problems,” he said. “And Democrats are just incredibly naive and impotent.”