Poker crackdown: "An incredible waste of resources"

Barney Frank, the senior Democrat on the US House Financial Services Committee has accused the Obama Administration of wasting time and resources in targeting online poker sites, reports the Washington DC publication The Hill.
“What an incredible waste of resources,” Frank said in an interview with The Hill in discussing last Friday’s Department of Justice crackdown, which saw the seizure of the .com domains of the world’s three largest online poker sites and indictments against 11 executives .
Frank mocked the seizures as “protecting the public from the scourge of inside straights,” and lamented that the Justice Department is more focused on prosecuting online poker sites than those responsible for the mortgage crisis and financial meltdown.
“Go after the people responsible for empty houses, not full houses,” Frank added. “I’m not saying violate the law, but to give this priority in law enforcement over some other things I think is a terrible idea and I think the administration is wrong on this.”
Frank recalled that he has been trying to repeal laws disrupting financial transactions with online gambling operators since the UIGEA passed in 2006, calling it “exasperating.” He accused the author of the UIGEA, former Republican Senator Bill Frist of inserting the law into a spending bill to win the votes of the religious right.
“I know the GOP is under a lot of pressure to back off on this,” Frank said, adding that he hoped the backlash from the most recent DoJ action would help build momentum for his latest attempt to legalise online poker at federal level.
In a subsequent interview with the New York Times on the indictments and the UIGEA, Congressman Frank again referred to the mortgage crisis, commenting: “It is a bad law. How is it possible that a United States attorney in New York does not have anything more to do than indict people for a full house?
“He should be indicting people for the empty houses we have around.”
In other developments, news reports noted that the three sites involved in the sting; Full Tilt Poker, PokerStars and Absolute Poker, saw around $16 billion in wagers from U.S. players last year, and that the crackdown impacted thousands of lives including casual and professional players and their backers, programmers and investors.
The ESPN television sports channel, which is owned by Walt Disney Co., has announced that as a consequence of the DoJ action it will remove poker advertising and programming.
“We are aware of the indictment only through what has been announced publicly,” a statement from ESPN asserted. “For the immediate future, we are making efforts to remove related advertising and programming pending further review.”
In Nevada, where Pokerstars has been prominent in pushing for legalised intrastate legislation, a debate is ongoing regarding political campaign contributions of around $272 000 made by the poker company through a political action committee.
Apparently some (unidentified) recipients of the contribution have been persuaded by the gravity of the charges to distance themselves from the company, and have said that they will return the money received.
State Senator Greg Brower, a Republican and a former US Attorney for Nevada, called for an investigation of the political funding over the weekend, and he has continued to apply pressure for this with Ross Miller, the state Secretary of State.
Brower claims that contributions by foreign entities to federal, state and even municipal political campaigns are not permitted by federal law, and that he plans to tighten up on this aspect by introducing state law specifically banning foreign donations.
It has been alleged that the Isle of Man-based Pokerstars made contributions ranging from a thousand up to ten thousand dollars to a total of 68 politicians seeking election to the state legislature, constitutional officers of the state and political parties and action committees.
Brower’s call for an investigation may have been pre-empted by the Nevada elections secretariat, which reportedly commenced an enquiry on Monday into the Reel Political Action Committee regarding a $299 970 donation from Pokerstars late last year.
Secretariat official Scott Gilles said that such a donation may not be in compliance with US federal law, but that in terms of Nevada regulations there does not appear to have been a violation.
The enquiry continues, with state secretary of state Miller recusing himself as the recipient of $5 000 from the PAC in October last year for his re-election campaign.
Other recipients of funds from the PAC reportedly included Assembly Speaker John Oceguera ($10 000 and Nevada governor Brian Sandoval ($10 000) and his rival for the post Rory Reid ($10 000).
Reports indicate that the contributions had been returned when the candidates realised a foreign entity was involved.
On Monday a St George banker named in the federal indictments, John Campos (57) appeared in a Utah federal court on charges of violating the UIGEA, operating an illegal gambling business and money laundering.
Magistrate Judge Robert T Braithwaite released Campos on condition that he surrender his passport, report to pre-trial services as requested and appear at future hearings in New York, where the indictment was filed.
Campos is vice chairman and part owner of SunFirst Bank.
News has also surfaced that the DoJ action against Full Tilt Poker will likely impact the United Fight Club martial arts scene, which apparently benefits substantially from Full Tilt Poker financial and business support that includes sponsoring MMA (Mixed Martial Arts) events and fighters.
Sam Spira, owner of Xtreme Couture management said: “This is a disturbing development. Full Tilt was one of the remaining pro-fighter sponsors that has strongly supported MMA over the past few years. The importance of the ongoing interplay between supporters and fans of poker and supporters and fans of MMA cannot be underestimated.”
Ken Pavia of MMA Agents said that a Full Tilt withdrawal would in the short term severely impact fighters’ sponsor revenue.
“I would venture to say the poker industry is equal to the apparel industry as the No. 1 sponsor of fighters outside the UFC,” he said.
Jene Gene of Magnetic MMA pointed out that for now at least the “.net” versions of the poker sites, which sponsor and support the promotions and fighters, are safe, because these are for educational and entertainment purposes, not for gambling.
Full Tilt’s reportedly substantial pending deal with the MMA promotion Strikeforce may also be under threat, with reports that the operators are assessing how the DoJ action might affect the potential of an agreement.
The Poker Players Alliance has renewed its call for players to communicate with their political and media contacts to protest against the continued persecution of online poker, providing talking points and contact details to assist in the effort.
The New York Times reports that John Pappas, the executive director of the Poker Players Alliance, delivered $51,200 worth of bundled campaign contributions to Frank’s re-election campaign in late 2009. These contributions follow up at least $30,000 more that Frank took in from the industry in the prior two years, including contributions from some of the industry’s most famous players, like Annie Duke, Howard Lederer and Andy Bloch.

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