Capitol Hill and Internet poker: Too little, too late (as usual)

Despite support from an unlikely coalition that includes the American Gaming Association, the National Fraternal Order of Police and the National Association of Convenience Stores, federal legalization of Internet poker seems no closer in the 2012 lame duck session of Congress than it did at the same juncture two years ago — the famous moment when Gary Loveman proclaimed it to be just around the corner. It’s been a helluva long corner and Sen. Harry Reid (D-NV) is far less optimistic than he was in 2010. Democrats can’t muster more than 45 votes on their side of the aisle, sayeth Reid, and with the possible exceptions of  Sens. Dean Heller (R-NV) and Jon Kyl (R-AZ), there aren’t any to be found on the other side.

Practically the only vestige of progress is that Reid and Heller are at least temporarily on the same page, after trading charges of “Liar, liar, pants on fire” and then calling an uneasy truce. Reid and Kyl are, for differing reasons, pursuing a strategy of containment whereby poker and lotteries would be the only legitimate forms of online gambling — and Uncle Sam would get a “rake” off the top, of course. Even casino companies that have momentarily forsworn Internet wagering in deference to Reid, like MGM Resorts International and Boyd Gaming, can’t be expected to wait forever in the face of a supine Congress. A “jail break” at the intrastate level appears imminent.

Attempting to jolt the two parties in action, AGA President Frank Fahrenkopf adopted the rhetoric of the cops and Kwik-e-Marts, “if Congress doesn’t act quickly, it will be the largest expansion of gambling in the nation’s history,” he prophesied. Yes, the casino industry’s lobbyist is saying that in order to prevent (more) gambling we must allow (some) gambling. That sounds pragmatic coming from the police federation but has a decidedly Alice in Wonderland quality when uttered by Fahrenkopf: ‘Stop my industry before it expands again! Save us from ourselves!’ However, a caution flag is being waved by an unexpected party, the Poker Players Alliance. It commissioned a study of the constitutionality of the Reid-Kyl bill and found it wanting. In particular, provisions that tilt the playing field toward U.S.-based operators and keep the likes of PokerStars in a multi-year “penalty box” were looked askance by ex-Solicitor General Paul Clement. Casino executives watching this latest round of Capitol Hill follies playing out would be forgiving for taking the (intrastate) bird in the hand over the two (federal) ones in the bush.

Sick as it may seem, there are Web sites that take odds on things likelihood of U.S. military action against Iran by next summer (19% probability). Popular electoral predictor Intrade is one of them. Such “investment contracts” have run afoul of the Commodity Futures Trading Commission, which is suing Intrade on the grounds that prediction markets are, in fact, selling options. The CFTC charges Intrade with taking wagers on commodity futures from U.S. punters over a five-year period. So if you wanted to place a wager with Intrade on last night’s Dancing with the Stars outcome, you would have found the cyber-wicket slammed in your face. As Ambrose Bierce (above) observed, many decades ago, “The gambling known as business looks with austere disfavor upon the business known as gambling.”