More Signs That Online Poker Is Going Legit

Two developments last week suggest that online poker is moving closer to legalization in the United States. On Thursday the Nevada Gaming Commission approved a partnership between Caesars Entertainment, which owns more than 50 casinos around the world and runs the World Series of Poker, and 888 Holdings, a British company that operates online casinos and poker rooms. The initial focus of the partnership will be Caesars-brand gambling sites in the U.K. and free sites in other jurisdictions. But it is notable that Nevada regulators were not deterred by the fact that 888 used to serve the U.S. market—illegally, in the eyes of the federal government—and stopped taking bets from Americans only after passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006.

On the same day that the gaming commission approved the Caesars/888 deal, Wynn Resorts announced a partnership with PokerStars, a privately held company that continues to welcome American players and is therefore, according to the Justice Department, a criminal enterprise. In fact, prosecutors such as U.S. Attorney Preet Bharara maintain that merely helping companies like PokerStars process payments is a crime that can send you to prison for the rest of your life. But where the Justice Department sees felonies, Wynn Resorts CEO Steve Wynn sees a business opportunity:

One of the first goals of his merger is to seek passage of federal legislation that will regulate Internet gambling.

"We are convinced that the lack of regulation of Internet gaming within the US must change," Steve Wynn, chief executive officer of Wynn Resorts, said in a statement. "We must recognize that this activity is occurring and that law enforcement does not have the tools to stop it.... It is time that the thousands of jobs created by this business and the potentially significant tax dollars come home to the U.S."

The ultimate plan for the new alliance is to create a joint venture between the two companies, called, that will provide online poker in the U.S. This ia a bold new direction for the Vegas-based casinos which had, until recently, looked at online poker as their sworn enemy and had worked hard to thwart efforts to legalize and regulate internet poker in the U.S.

Caesars also wants online poker legalized at the federal level. But in the meantime, it opposes state legalization, including a bill that is now being considered in Nevada and a bill vetoed last month by New Jersey Gov. Chris Christie. Although online poker (unlike sports betting) is arguably prohibited by federal law only to the extent that it is prohibited by state law, Caesars thinks a federal approach offers greater legal clarity and a less complex regulatory environment.

If they do legalize online poker, legislators will have to decide how to treat companies that already take bets from Americans (or did so prior to the UIGEA). A bill proposed last year by Senate Majority Leader Harry Reid (D-Nev.) would have discriminated against such companies by making it more difficult for them to obtain licenses. By contrast, notes gambling law expert I. Nelson Rose, Nevada's legalization bill "would expressly prohibit denying a license to an operator who is now taking online poker bets from the U.S."

I don't think it's fair or wise to punish foreign-based onlike poker companies with a track record of satsifying American consumers, which seems like an easy excuse for protectionism. At the same time, it is not exactly fair that people like Neteller's founders and Daniel Tzvetkoff of Intabill can be arrested and threatened with prison simply for helping those companies take bets from Americans—transactions that may be considered perfectly legitimate by the time Tzvetkoff gets out of prison.

I considered the fallout from the UIGEA in a 2008 Reason article.

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  • Old Mexican||

    More Signs That Online Poker Is Going Legit

    "The cards tell all."

  • ||

    We are convinced that the lack of regulation of Internet gaming within the US must change

    How is "Its illegal" a "lack of regulation"?

    Unless, of course, Wynn means "regulation" as originally conceived by the Founders, in which case he has an excellent point.

  • Gregory Smith||

    Well, that is certainly good news. While we're at it:

    1. Tell Harry Reid to keep prostitution legal- A working girl is better than a welfare girl.

    2. Stop banning smoking in private apartments.

    3. No more war against obesity. Like skinny people? Go to Somalia.

    4. If the ATF needs to exist, could they imprison criminals who try to buy guns instead of turning them away as if they were fish?

    5. Impeach Obama for going to war against Libya without congressional approval (yes, I know it's been done before, but it has to stop).

    When black isn't beautiful: The PC nonsense and real-life prosecution of Golliwogs.

  • KMA||


  • ||


    Hey Grego, is being a complete tool painful?

  • "rectal"||

    I hear "Grego" is really "rectal." Is that true?

  • Fist of Etiquette||

    If porn sites have to use .xxx, then online poker should get a .♣♣♣ top level domain.

  • ||

    I think .aaa would be better. (Assuming we're restricted to 3 characters.)

  • Jerry||

    How about we just use a .$$$ TLD?

  • Old Mexican||

    Re: First of Etiquette,

    If porn sites have to use .xxx, then online poker should get a .♣♣♣ top level domain.

    My keyboard does not have clubs, only tiny hearts and Hello,Kitty faces. I will have to reject your idea.

  • Fist of Etiquette||

    I will have to reject your idea.

    Why else do you think I suggested it?

  • omg||

    Holy fuck, the regulatory capture happens before the regulations are even in place. I'd like a liberal to explain that one, but I don't think they would get it.

  • Mike M.||

    "Let's forget the bullshit, I don't want to stay here any longer than I have to. You can have the license for two hundred and fifty thousand in cash, plus a monthly fee equal to five percent of the gross of all three Corleone hotels."

  • ||

    Its that god damn Christo-Fascist Sharia loving GOP that banned on-line gambling back when Frist was Senate leader and Bushy-boy was leading the crusade against stem-cell research.

    Why do Christians hate freedom? Why can't I but a 12-pack on Sunday?

    (words you will never hear Rush - King of the Rednecks - utter)

  • ||

    shriek, are you by any chance related to rectal?

  • ||

    You're like the Perez Hilton of Reason, Episiarch.

    Gossip, innuendo, slurs, and no content.

    Consider hooking up with him.

  • ||

    So you are! You're brother and sister and first cousins, am I right?

  • "rectal"||

    Is it true that "shrike" is really "Episiarch" who is really "rectal?" I'm very disillusioned. If I can't trust H&R, who can I trust? Maybe Schmoopy can provide a limerick. Schmoopy?

  • DNS||

    Gossip, innuendo, slurs, and no content.

    The irony, it burns!

  • Restoras||

    Is rectal an idiot? If so then yes, they must have been separated at birth.

  • Colonel_Angus||

    ""We must recognize that this activity is occurring and that law enforcement does not have the tools to stop it.... It is time that the thousands of jobs created by this business and the potentially significant tax dollars come home to the U.S.""

    What he said.

  • ||

    Governments are banning things from their citizens as a means to asert their authority or in order to identify an external enemy that the government is "protecting" the public from. The alcohol prohibition was the latter whilst the online gmabling prohibition is the former. It is a sheer joy to watch the empty reasoning collapse once politicians are interested in the dozens of billions in tax money from online poker and casino wagering. If you want to keep up with the progress of this arduous process, check out


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