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Copyright © 2006 Chicago Tribune.
HEADLINE: Poker players battle crackdown on
Internet gambling
Author: Richard Clough
Body:
Online poker
players are nervously awaiting President Bush's expected signature
this week on legislation that would kick them out of their virtual
casinos.
The measure, designed to block the financial transactions that
have fueled Internet gambling, was quietly attached to a port
security bill in a flurry of last-minute activity before Congress
adjourned in late September.
The legislation threatens to cripple the $12 billion online gambling
industry, cutting off about half of the world's Web-based gaming
revenue. It has already forced the suspension of several Internet
gambling companies' lucrative U.S. operations and has sent shock
waves through the gaming world.
"Who is Congress to tell people what to do in their own
home when it doesn't bother anybody else?" asked Mike Sexton,
a professional poker player and commentator for the World Poker
Tour. "We feel like our rights have been violated."
Most of the 2,300 gambling Web sites currently operating are
based outside the United States, often on Caribbean islands or
in Central America and Europe, to avoid U.S. law, which prohibits
many types of gambling under the Federal Wire Act. Enforcement
of the law is difficult, however, and the companies have made
billions of dollars annually from American bettors.
The bill that Bush is expected to sign adds considerable enforcement
muscle, prohibiting banks and credit card companies from processing
online gambling transactions based in the U.S.
Chad Hills, a gambling research analyst for Focus on the Family,
a conservative group, applauded the bill's passage, saying the
laws in place had been flouted for too long. Online gambling operations,
he said, "were making a mockery of our U.S. policy, they
were making a mockery of our Congress, they were making a mockery
of our ability to enforce this legislation."
But gamblers aren't buying in on the idea. On the gambling Web
site Cardplayer.com, poker professional Thor Hansen called the
passage "a bad day for poker" and Shannon Shorr, a professional
poker player, called the measure "both frustrating and devastating."
Michael Bolcerek, president of Poker Players Alliance, said outlawing
online gambling will just push it underground rather than eliminate
it. Leading the charge against the legislation, the Poker Players
Alliance has begun to focus its efforts on securing legal exemptions
for online
poker.
Poker, some players argue, is a skill sport and should be afforded
an exemption from gambling bans, like those currently given to
fantasy sports, horse racing and state lotteries.
In advance of the bill's signing, major betting firms have taken
severe financial hits.
The British online gambling firm World Gaming, which derives
as much as 95 percent of its revenue from U.S.-based gambling,
asked the London Stock Exchange on Monday to stop trading its
stock over fears for the company's future. The value of the company's
stock declined by 88 percent last week.
Many publicly traded online gambling companies have also seen
their shares crumble in the past week, draining the industry of
an estimated $8 billion in market value.
On Tuesday, European online
gambling outfits Fairground Gaming and FireOne announced the
immediate suspension of their U.S. operations.
London-based Fairground, which derives a large percentage of
its profit from the U.S. market, said in a press release that
it is "attending urgently to appropriate cost-cutting measures"
to offset the significant losses it expects to incur as a result
of the legislation. Similarly, Dublin-based FireOne said in a
press release that it "has embarked upon a restructuring
of its operations and cost base" as its awaits Bush's bill
signing.
The world's largest Internet gambling company, Gibraltar-based
PartyGaming, which derives about 80 percent of its $1 billion
annual revenue from the U.S., said it will end its U.S. operations
if the bill is signed.
"This development is a significant setback for our company,
our shareholders, our players and our industry," Mitch Garber,
chief executive of PartyGaming Ltd., said in a statement.
But not all companies are closing up shop in the U.S.
The gambling Web site Poker.com, based in Brisbane, Australia,
said the legislation would have little or no effect on its U.S.
operations.
"We will not be stopping U.S.-based players from playing
at Poker.com and all player account balances are 100 percent safe
and will always be readily accessible," the company said.
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