Last week at the Global Gaming Expo in Las Vegas, American Gaming Association President and CEO Geoff Freemen conducted a media conference to discuss plans for promoting a further crackdown on illegal online gambling in the U.s. Part of the AGA’s effort to further this goal is to leverage the new fictional movie, “Runner Runner”, both to engage the public in further discussion and to educate policymakers across the country for the need to safeguard Americans from illegal operators like those depicted in the movie.
AGA: Fiction is Close to Reality
Runner Runner, starring Ben Afleck and Justin Timberlake is a fictional account of what happens when a college student goes broke from online gambling and decides to chase down those that he feels are responsible. The movie is opening in theaters this week in the U.S.
According to the AGA, Americans spent $ 2.6 billion on illegal gambling websites in 2012 and represent almost 10 percent of the $ 33 billion worldwide market. The research used by the AGA (via H2 Gambling Capital) reinforces the need for protection of Americans from illegal online operators like those depicted in the film said Freeman.
The movie, according to Freeman, is “all too close to reality” and shows why its necessary for further legislation. To date, only three states Nevada, Delaware and New Jersey, have enacted laws to allow online gaming. Nevada has two sites active, New Jersey and Delaware are expected to follow with launches later this year.
Freeman makes note that the AGA preference was, and still is, to see federal legislation in force. Despite federal bills being introduced several times over the last few years, none have been able to make it into law. State by state legislation seems to be the alternative, with more and more states considering legislation and watching the progress in those with laws on the books. When talking about various intrastate launches, Freeman noted “We will not be left behind”.
The AGA wants to very aggressively promote their message and have put an commercial advertisement together to do so. According to Freeman, movie theatres have declined to include the ad at movie showings, but the organization will find other ways to promote their message, including an online web showing dedicated to do just that.
What the AGA is looking to do is assure that there are minimum standards in place for age verifications and responsible gambling, that tribes are included in regulatory framework, and to give law enforcement the tools necessary to keep out “bad actors”.
It’s no secret that the AGA and its members lobbied for a “bad actors” clause in Nevada and were successful in seeing that a five year ban was placed to disallow licenses to online operators that continues to operate after December 2006. In New Jersey, despite those efforts, no bad actors clause was inserted into the law itself. The decision to determine licensing recommendations rests with the NJ Division of Gaming Enforcement, who conducts all necessary investigations to determine suitability.
Moves Against the Competition
Within the past year, the world’s largest online poker company, PokerStars of Isle of Man, took steps to purchase a casino in New Jersey. (Licenses for online gaming must be tied to brick and mortar facilities in the state.) Once the potential acquisition was made public, and months later when the Governor of New Jersey signed online gaming into law, the AGA petitioned the Casino Control Commission to ask permission to speak against PokerStars receiving approval. They petitioned for legal standing to make those arguments as well. The acquisition agreement fell apart in late April, and eventually PokerStars instead partnered with Resorts Casino, to provide online gaming for them. The petitions of the AGA were moot once PokerStars withdrew its application for an interim casino authorization, the license necessary to own and operate a casino. While the license for suitability of PokerStars to operate with Resorts is pending like all others at this time, it’s now confirmed that the AGA took further action by contacting the gaming authorities in New Jersey to still press their agenda to deny a license to the Isle of Man operator. The DGE does not comment publicly about outstanding applications.
When I asked Freemen about the AGA’s actions against PokerStars, he would not comment on any related litigation matters but he further said that their position is that the company operated illegally and should not be licensed. When I asked further about other companies that also offered online gaming prior to current legislation specifically making it legal in certain states, he reiterated that the AGA’s stance is that companies that operated post 2006 (after enactment of UIGEA) should be denied licenses. He did further admit however, that the reason for taking the stance is the competitive edge that AGA members feel PokerStars would have if they came to market in NJ. While its been speculated for months that this was the real reason for the action, this is the first time that the AGA has admitted their motive, although still asserting the illegality of PokerStars operation since 2006.
PokerStars was named in a civil forfeiture suit in April 2011, and in 2012, the company settled with the U.S. Department of Justice. They admitted no wrongdoing in their settlement, nor did the DOJ demand that they do so. The DOJ did receive admissions of wrongdoing from other companies that operated in the US prior to 2006, some in the form of non-prosecution agreements with felony admissions. The Unlawful Internet Gaming Enforcement Act (UIGEA) of 2006 is an enforcement act that relies on predicate offenses already on the books in various states before 2006. The AGA issued a white paper in 2011 specifically saying that UIGEA does not define illegal online gambling, yet the AGA and its members use the 2006 as a line in the sand for determining who operated illegally.
AGA Wants Players on Their Side
Freemen went on to say that the AGA wants players, their customers, on their side. I spoke to Freeman after the briefing. He insists he was sincere in hoping to get customers to understand and stand with the AGA, and he again confirmed that it was the competition for AGA members that brought about their actions against PokerStars. I will give him due credit for admitting the motives that most players knew were in place, and plan to meet with him soon to discuss the AGA’s relationship with the players.
What is important to realize is that the players have learned to be more vigilant in their trust of online operators. It was the players that unearthed a huge scam that took place in online gaming several years ago by Ultimate Bet/Absolute Poker. Many thousands of US citizens make their living playing online poker. Many of those have left the country to continue to play post Black Friday, including on PokerStars. Players have made conscious decisions after being burned on who to trust and who they want to have their business. Players have gotten a lot smarter than anyone gives them credit for.
Competition is part of doing business, any business. It’s my opinion that it should not be feared, but embraced, as an incentive to provide what the customers want and need. The player advocate side of me hopes to be able to show the AGA that players, especially poker players, are smart adults, capable of making decisions on their own on where to play. The best possible world for those players is to have as many choices as possible available to them. Players will choose to do business with whom they trust, the companies that offer what they want. They will avoid those companies that don’t fit those categories. Players also want protection against the bad guys, we just disagree on who the bad guys are. No one wants their money stolen from them, or a game that isn’t fair. We also want age verification and we want as many choices as possible available to us.
Maybe we can find a way to all be on the same page.