When federal authorities earlier this month indicted the founders of the three largest online poker companies on charges of bank fraud, money laundering and illegal gambling, many regarded the crackdown as a blow to a five-year lobbying campaign to legitimize the game that has generated millions of dollars for K Street.
But the nonprofit Poker Players Alliance spearheading the industry’s influence effort hopes the setback can become an opportunity to reenergize its crusade.
“This is a galvanizing moment for the poker community, particularly online players who on ‘Black Friday’ [April 15] saw their hobby, avocation and in some cases their profession stripped away from them,” said Executive Director John Pappas.
In the two days after the indictments were unsealed, the alliance’s 1.2 million members flooded Capitol Hill, the White House and the Justice Department with more than 65,000 e-mail messages and the group received tens of thousands of dollars in donations last week, Pappas said. Though the targeted gaming sites, Absolute Poker, Full Tilt Poker and Poker Stars, recently reached an agreement with the government that would allow players to retrieve money stored in online accounts, future games for money remain prohibited.
Pappas wants to expand the group’s reach beyond the sort of overseas companies that in the past contributed a large part of the group’s operating budget. After all, more than 55 million Americans play poker and 15 million play online for money, according to some estimates.
“Maybe now more apathetic poker players have realized that becoming politically active and going to the Hill is something they’d be willing to do,” Pappas said.
The alliance, a membership organization of online and offline poker players, was formed to oppose the application to the poker industry of the Unlawful Internet Gambling Enforcement Act, which Congress passed in 2006. Its public face is former Republican senator Alfonse D’Amato, who represented New York on Capitol Hill from 1981 to 1999.
Since its inception, the amount the group spends on lobbying the federal government has exploded, rising from just $260,000 in 2005 to $1.8 million in 2010. The lobbying shops Ogilvy Government Relations, Park Strategies, Smith-Free Group, Ryan MacKinnon and Barnes & Thornburg were the main beneficiaries of the influence push. The alliance paid each more than $100,000 last year, according to the Center for Responsive Politics.
The c ampaign has found more than a few sympathetic ears on the Hill, where legislation has been introduced but stalled during the last few sessions of Congress. Rep. Barney Frank (D-Mass.), who last week blasted the indictments, reintroduced a bill in March that would amend the act to allow the licensing of online gaming activities and encourage the taxation of winnings. Co-sponsors of that bill include Reps. John Campbell (R-Calif.), Peter T. King (R-N.Y.) and Ed Perlmutter (D-Col.). Onetime opponent Sen. Harry M. Reid (D-Nev.) began shifting his views once established casino and gaming enterprises started showing interest in forming alliances with online poker sites.
In an aptly timed plot twist, the District of Columbia announced just days before the indictments that the city will be installing several dozen online gambling hot spots this summer that allow District residents and visitors to play poker for money. The plan will allow those at the hot spots or using a computer based in the District to access sanctioned poker sites, which will generate revenue for the city and retailers that host hot spots. California, Nevada, Florida, New Jersey, Iowa and Hawaii are among the other states considering similar legislation or voter referendums.
“Right now, we are the only game in town so to speak,” said Councilman Michael A. Brown, (I-At Large). “Other states are looking to do this, so I don’t think we’ll be the only game in town for long, but we certainly may as well take advantage of this while we can.”