Poll Favors Poker Legalization; Top 5 Stories in Gambling 2013; Cassavetes Suing Over Poker Debt?

legalize online poker

  Poll Shows I-Poker Legalization Favorable

Reason: 65 Percent of Americans Say Online Poker Should Be Allowed


by Brian Pempus  www.cardplayer.com  


A new poll has found the legalization of web poker to be a favorable idea among Americans.

The question Reason.com asked was: “Do you think the government should prohibit people from gambling in online poker games, or should the government allow people to do this?”

The survey was a nationwide telephone poll conducted between Dec. 4-8, and it interviewed 1011 adults on both mobile (506) and landline (505) phones.

Now, online poker legalization efforts exist on both federal and state levels, so the reference to “government” is somewhat broad in the question. It is worth noting that federal

initiatives to legalize online poker are widely considered by the industry to be drawing stone-cold dead. In other words, astronomically low chances. Thus, the hope for online poker

firms and casinos who want to offer those games lies solely at the state level.


From Reason.com:

“Majorities of all partisans favor allowing Americans to play online poker, but independents who lean Republican were even more likely to favor (75 percent) allowing people to play

online poker and Democrats were the least likely to favor (58 percent). Regular Republicans (66 percent), non-partisan Independents (68 percent) and independent-leaning Democrats (65

percent) also favor legalizing online poker.


Lower-income Americans and those with a high school degree or less are most likely to favor banning online gambling (41 percent), but still 56 percent would favor legalization. In

comparison, only 21 percent of post-graduates and 31 percent of high income Americans favor the ban, (73 percent and 66 percent favor legalization respectively).


Support for legalized online gambling decline with age; roughly 70 percent Americans under 55 favor legalization compared to 56 percent of those over 55.”

It is also worth pointing out that while the federal government doesn’t explicitly “allow people” to play online poker, online poker is running in the United States not only from state

sanctioned-sites in Nevada, New Jersey, and Delaware, but also still from smaller offshore online poker sites. Online poker will happen in the U.S. regardless of what lawmakers do.

Some of the largest online poker sites in the world — Ultimate Bet/Absolute Poker, Full Tilt Poker and PokerStars — were forcefully kicked out of American cyberspace on Black Friday in

April 2011. Other sites had left in the years prior, due to the unclear nature of U.S. law.


The aforementioned three each paid a big price for continuing to offer games after the 2006 Unlawful Internet Gambling Enforcement Act.

Die hard poker fans almost might be a little perplexed by the Reason.com poll question, since it is widely considered that poker is a game of skill and does not constitute gambling.

Reason’s results contradict some of the findings from U.S. casino boss Sheldon Adelson, who is vehemently against online poker. The owner of Las Vegas Sands Corp. commissioned a survey

that found in California, Kentucky, Virginia, and Pennsylvania there was “overwhelming opposition to web poker.” The average distaste for casino games on the web between the four was a

whopping 66 percent, with a margin of error of about four percent.


legal poker13

2013 Gambling Year in Review – Top 10 Stories Part 1


By: Hartley Henderson – exclusive to OSGA.com


Since the inception of online gambling nearly two decades ago, there are always big stories, every year. This past year saw the advent of legal online gambling in the U.S. (finally)

and the end to a one-time industry leading sportsbook. Hartley Henderson lists his Top 10 Gambling stories of the year. This is Part 1 of two, check back for the rest of his list!

2013 Gambling Year in Review – Top 10 stories Part 1

1. Legal Online Gambling comes to the United States.

Even though laws were passed last year which would legalize online gambling in New Jersey, Delaware and Nevada there was some skepticism as to whether online gambling would ever really come to the U.S. any time soon. Campaigns to stop online gambling were started by some Congressmen and Senators as well as high profile individuals like Sheldon Adelson and even New Jersey Governor Chris Christie seemed uncertain if he was in favor of supporting the online gambling bill which he signed. Don’t forget that Christie originally vetoed the New Jersey gambling bill which had passed the Assembly there prior to him being voted in as Governor and he only agreed to support it if various concessions were made, specifically a requirement that licensees have an Atlantic City physical presence, that deposits be made in Atlantic City or at an agent thereof and that all betting take place on Atlantic City servers. Numerous companies that didn’t have an Atlantic City presence tried aimlessly to acquire one and Caesars was still pushing for a federal law in place of a New Jersey online gambling state sanctioned one, although they were one of the first to go online with Caesarscasino.com. As the New Jersey start date grew closer it was evident that online gambling would indeed take place in New Jersey and on November 26th several sites, including Caesars Casino, Ultimate Casino and Party Poker New Jersey, went live. Other sites went up shortly thereafter and by all accounts online gambling has been a great success for the month the sites have been operating. There have been a few issues including problems with geo-location which negated some New Jersey residents from signing up for sites like Tropicanacasino.com as well as the refusal by some credit card companies to process transactions for online gambling but those issues are minor and can be overcome. To date just over 100,000 New Jersey residents have signed up to online gambling sites.

While New Jersey was the biggest news relating to legal online gambling in the United States it was notable that Delaware and Nevada also legalized online gambling. Nevada introduced

online poker with a beta of Station Casino’s site UltimatePoker.com and a lack of any issues convinced the state to allow other sites to go forward as well. Caesar’s site WSOP.com

launched shortly thereafter and took virtually no time to surpass Ultimate Poker in players despite the fact that Ultimate Poker launched earlier. Players have cited better software,

better brand recognition and a better loyalty program as the reason they chose WSOP.com. It can be expected that WSOP.com will continue to pull away from UltimatePoker.com in the quest

for online poker superiority in the state. It should be noted that less than 300 people have been playing online poker at its peak for either site.

Several states are closely monitoring the continued success of Delaware, Nevada and New Jersey since they are interested in state sanctioned online gambling as well. To date

California, Massachusetts, Hawaii, Illinois, Iowa, Mississippi, Pennsylvania and Texas have online gambling bills on the table while Oklahoma, Michigan, Maryland and Washington have

introduced legislation regarding online gambling as well. It’s not inconceivable that at some point every U.S. State except Utah will at least consider offering online gambling.

2. PokerStars owners are snubbed in New Jersey:

While companies like Caesars, Station Casinos, Trump and MGM are set to make a big stand in New Jersey, the same can’t be said for Rational Group, which owns PokerStars and Full Tilt

Poker. Last year, the Rational Group bailed out the DoJ by purchasing the defunct Full Tilt Poker for a ridiculous amount of money while also paying a hefty fine to the U.S. government

and agreeing to pay back U.S. and non U.S. customers that were owed money by Full Tilt. The benefit to the Rational Group of doling out over $700 million was unclear until it became

known that the purchase would also dissolve them of any wrongdoing, thereby allowing them to apply for a license when online gambling was legalized in the U.S. Without question the

Rational Group had New Jersey in mind when making the deal. This was confirmed when the Rational Group offered to buy the Atlantic Club Casino at the end of 2012 for an estimated $50

million to meet New Jersey’s requirement that online operators must have a physical presence in Atlantic City. The casino itself was of no use to the company although they agreed to

keep it going as part of the agreement. The Rational Group apparently paid installments of around $11 million from December 2012 to April 2013 which allowed the Atlantic Club Casino to

continue operating but at the end of April the Atlantic Club announced that the Rational Group missed a deadline and hence defaulted on their opportunity to purchase the casino. The

Atlantic Club also said it had no intentions of returning the $11 million. Eric Hollreiser, Rational Group’s media spokesman, stated that there was an agreement in place which should

have extended the deadline and that the only reason the deal was reneged on by the Atlantic Club was because the American Gaming Association was adamant that the Rational Group should

not be allowed to operate in New Jersey due to past wrongs. The AGA also stated that giving them a license would “would dramatically undermine public confidence in gaming regulation

and could cripple the industry’s public image.” Naturally companies that are represented by the AGA agreed.

The deal must have had the Rational Group feeling that they were dealt a bad hand, since they only agreed to purchase the worthless Full Tilt Poker from the DoJ and pay the fine on the

provision of immunity from further persecution. So the decision by Atlantic Club not to proceed as a result of AGA’s statement and the inaction by the DoJ to intercede on their behalf

was likely seen as bad faith on the $700 million deal with the DoJ.  As for whether the backing out of the deal was in the best interest of the Atlantic Club Casino, the answer is

clearly no. The casino shut its doors on December 20th and sold off the land to Caesars and the gaming tables and slots to Tropicana Atlantic City Corp. All employees that would have

been retained under the PokerStars agreement are now looking for work.

3.  New Jersey and the PASPA challenge.

A few years back I wrote that all gambling changes would go through New Jersey and now it seems quite prophetic. Most states are looking at New Jersey’s success over the next year with

regards to online gambling before deciding how to proceed and any chance of overturning the 1992 Professional and Amateur Sports Protection Act (PASPA) wrests with the state as well. A

few years back New Jersey Senator Ray Lesniak teamed up with iMEGA to challenge the legality of PASPA claiming that it violates numerous sections of the U.S. Charter. In particular it

discriminates against 46 states since it allows only 4 states (Nevada, Delaware, Montana and Oregon) to offer sports betting. In fact when the law was passed, the Attorney General at

the time stressed that he was concerned it violated the constitution. Nevertheless, the bill passed and New Jersey, which was given the option to opt-in to offering sports betting,

chose at the time not to.  Two decades later, with the economy in shambles and horse racing reeling, they need sports betting to survive. The attitude towards gambling in the U.S. was

becoming more relaxed, so New Jersey decided it did indeed want to offer sports betting and the answer by the DoJ and the sports leagues has been “too bad.” Chris Christie called for a

referendum on the issue and after it passed by a 2/3 margin he went on the offensive to get the law changed.  He lost his challenge in 2 lower courts but in the 3rd Circuit Court of

Appeals, Justice Vanaskie issued a dissent. In his ruling Vanaskie stated that gambling has always been a state issue and that the federal government had no business introducing a law

(PASPA) that was a state’s decision. He also believed that the decision to maintain PASPA despite New Jersey’s referendum violates the principles of federalism and that the law was

indeed unfair. Needless to say the other two judges disagreed suggesting that it wasn’t their job to decide on the fairness of a bill and they weren’t prepared to overturn a law that

was passed legally in Congress. Nevertheless all 3 judges did point out that there was a precedent where the Supreme Court has overturned a federal statute.

This comment clearly punted the ball to the U.S. Supreme Court and Christie picked up the ball announcing that he would be taking the case to the highest court. No doubt he is also

looking for other states to join him in the fight (since other states have indicated they would like to introduce sports betting as well) although he is prepared to have New Jersey

fight it alone if need be. As to whether he can win the case, two lawyers and one industry expert I spoke to suggested it is possible if they play it right. If New Jersey challenges

the law on fairness they probably won’t win, but if they use the issue of federalism and state’s rights as the main focus for their appeal the Supreme Court justices may feel obligated

to hear the case, particularly the issue of state’s rights in the era of Obamacare is such a hot topic. And if the Supreme Court does agree to hear the case on the merits of the law,

it is hard to see the judges not ruling that the law is indeed discriminatory and unconstitutional.

4.  The end of WSEX and the coinciding suicide of Steve Schillinger

World Sports Exchange (WSEX) was one of the pioneers in the offshore industry. Started by a group of Pacific Stock Exchange traders, in 1997 WSEX introduced a way to bet on sports the

same way one plays the stock market. People bought “shares” of a contestant at a given price and could then hold them until the end of the game or tournament or sell them when the

price got right – similar to a stock market. The idea was revolutionary (before the days of Betfair and Betdaq) and transformed the way many people bet on sports. Instead of betting

before the game many people chose to buy shares of teams or contestants in game and traded them throughout the match. WSEX was a top rated book by all watchdog sites and received an

Elite rating by OSGA. The company made headlines in 1999 when Janet Reno, the Attorney General at the time, issued warrants against several individuals including the owners of WSEX.

Jay Cohen decided to return to the U.S. and fight the charges only to lose and spend time in jail. WSEX was also instrumental in convincing Antigua to challenge the United States by

claiming the U.S. were violating a WTO agreement which required them to allow gambling services from foreign jurisdictions.

Things went well for WSEX until 2006 when the UIGEA passed and more specifically when NETeller stopped processing transactions to American customers. The company started to have

difficulty processing transactions and turned to new processors, many that were less than honest. Consequently WSEX often saw money they sent to those processors disappear into thin

air. For that reason along with others including a failed internal poker site, a failed fantasy site and a partnership with a player to player site, WSEX began to face financial

difficulties. Around 2009 withdrawals became very slow (often taking months). The company withdrew their Antiguan license for a cheaper Cyprus based one and the company’s high ratings

dropped like a stone. The company sought new investors but they were unable to turn things around and the end was inevitable. In April WSEX stopped updating lines and on April 20 WSEX

closed its doors for good. Two days later it was reported that Steve Schillinger, one of the founders of the site had taken his own life with a shotgun. According to sources close to

WSEX, Schillinger took the loss of the company very hard and stated he could not live knowing that people who deposited funds in good faith would not be paid back.

5.  The decision by Antigua to finally use the decision given to them by the WTO.

There was much excitement in the offshore gambling world in 2005 when Antigua won their WTO challenge against the United States which required the U.S. to allow gambling services from

other jurisdictions but that excitement was toned down in 2007 when the amount awarded by the WTO only $21 million per year – the amount the WTO reckoned Antigua could have made if the

U.S. allowed them to offer horse racing from the U.S.  Nevertheless, the amount was significant when the WTO ruled that Antigua could apply the award by ignoring the TRIPS

(intellectual property) agreement which is what Antigua asked for.  With that ruling Antigua was able to sell copyright protected movies, software and music for a fraction of the cost,

which Antigua hoped would force companies like Sony, Microsoft and Disney along with the RIAA and MPAA to demand that the U.S. settle with Antigua.  That never happened, however and

Antigua sat on the award given to them. The U.S. steadfastly refused to sit down with Antigua to work out an agreement both sides could live with and in fact warned Antigua not to use

the decision given to them or else they could face repercussions. Many in the industry including myself encouraged Antigua to call the USTR’s bluff and immediately start offering the

copyrighted materials for pennies a copy but they failed to do so. Talking with Antigua’s attorney Mark Mendel it was clear that Antigua was worried about retribution by the U.S.

targeting its tourism industry plus they had hoped that cooler heads would prevail and that something could be worked out diplomatically. Of course the U.S. continued to ignore Antigua

and the WTO ruling and at the beginning of 2013 Antigua announced that it would be using the TRIPS agreement given to them. The thought was that by Christmas of 2013 Antigua would have flooded the U.S. market with extremely cheap copies of iTunes music, DVDs and Microsoft Office products but to date no site has ever officially launched. The U.S. told Antigua’s

government that if they were to move forward with their threat it would hurt the ongoing discussions (of which there were really none) and Antigua seems to have backed off.

The question that I and many in the industry wonder is whether it is really significant now even if they go through with the award.  After all, most offshore gambling companies have

left Antigua for greener pastures, the industry in Antigua is all but dead and legal online gambling is starting to occur throughout the U.S. If the United States indeed tells Antigua

to go ahead and offer their products to U.S. citizens (although it’s highly unlikely), how many new signups will occur? It’s doubtful any banks will deal with Antigua even if they are

sanctioned by the U.S. government so payments will continue to be an issue and if Americans can gamble online legally in the United States why would they bother to use a foreign site?

In essence this is like a parent telling their child at the beginning of the year to smarten up and obey or else they’ll have their video game rights taken from them and then on

December 30th saying “ok you lost those rights for the rest of the year.” Sure it may invoke a bit of upset but the real benefits which would have occurred had the punishment been

carried out months before when the threat was most relevant are all but lost. It will be interesting to see how this plays out from here although it’s safe to say that Antigua’s

gambling economy will never be what it once was regardless of how the U.S. reacts should Antigua indeed carry out the decision given to them.


The mosr recent article about the Antigua and it’s use of TRIPS can be viewed at: http://www.osga.com/online_gaming_articles.php?Antigua-s-platform-for-suspension-of-U.S.-intellectual

-property-rights-is-too-little-too-late.-12842 !

Check back soon for Part 2 of Hartley Henderson’s 2013 Gambling Year in Review.


seated: Doyle Brunson, Barry Greenstein, standing: Daniel Negreanu, Eli Elezra, David Benyamine, Peter Eastgate, Ilari Sahamies, Tom Dwan























Nick Cassavetes Says L.A. Businessman Stopped Payment On Gambling Debt Check   Hollywood Director Is Going After Kevin Washington For $217K

by Brian Pempus 



TMZ has reported that Hollywood director Nick Cassavetes, who has appeared on GSN’s popular “High Stakes Poker”, is suing a L.A. businessman over a massive gambling debt.   Cassavetes

is going after Kevin Washington, after the latter gave the former a handwritten check for $72,600 and then allegedly contacted the bank to stop payment.

According to the report, Cassavetes is suing him for $217,800 — three times the value of the check. TMZ indicated that Cassavetes obviously believes the “stop payment” to be deliberate

and malicious.   Washington’s dad reportedly owns Montana Rail Link — the largest privately owned railroad company in the U.S. The younger Washington is also a partner in an aviation

company. In other words, he should have had the money to pay; but who knows with degens.   It’s unclear what kind of gambling debt is involved here, but it might be safe to guess that it’s

coming from a home poker game. Cassavetes is known to be a frequent player in high- stakes underground games involving other celebrities, businessmen and athletes.


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