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On May 23, 2003 nine men took their seats to play the final table of that years World

Series of Poker Main Event. Several hours later Chris Moneymaker, who had qualified to play
the event online, was crowned world champion of Texas Hold Em, earning the first place prize
of two and a half million dollars. The surge in online poker traffic after his triumph, now known
as the Moneymaker effect, doubled the player pools of the premier online poker sites at the
time, Party Poker and Pokerstars, each year from 2003 to 2006. The spike in the popularity of
Texas Hold Em also prompted a small group of poker pros to form their own site, Full Tilt
Poker, in 2004. On October 13th, 2006, however, online gambling suffered a full frontal assault
from Congress, with the passage of the Unlawful Internet Gambling Enforcement Act. While the
wording of the law does not ban online poker outright, it is a thinly veiled attempt to do so by
attempting to prohibit gambling corporations from processing deposits and payouts for their
websites. Proponents of the law, including congressional sponsor Jim Leach and Senator Bill
Frist, claim that it protects consumers from the dangers of online gambling, does not result in
significant economic loss, and assists in the modern enforcement of the Interstate Wire Act of
1961; however, the Unlawful Internet Gambling Enforcement Act should be repealed and
replaced with legislation that effectively prevents underage gambling and protects compulsive
gamblers.
Uniting under the rallying cry: click your mouse, lose your house, champions of the
Gambling Enforcement Act argue that it protects players money from predatory corporations.
Many cite the National Gambling Impact Study of 1999, which claims that online gambling
corporations are inherently predatory. In reality, however, the laws passage left players in a
more vulnerable position than ever before. When it was passed in 2006, the only publicly traded
company operating a poker site at the time, Party Poker, immediately cancelled real-money

services to United States customers. Party Poker, by far the most popular site in the United States
until 2006, was separated from privately operated poker sites because it was accountable not
only to players, but to shareholders as well. This meant that any mismanagement of player funds
or leak of user information would be met with plummeting share prices and angry customers.
Understanding the implications any mistake could have, Party Poker boasted a flawless record of
user funds and information security. When the Enforcement Act caused it to leave the market in
2006 due to shareholders concerns with legal trouble, players were forced to relocate their funds
and play on what turned out to be unscrupulous, privately operated sites. The reason these
private sites continued to operate in the face of the Enforcement Act is that the law is poorly
written. It only prohibits gambling businesses from accepting payments in connection with any
form of internet gambling that is illegal under any federal or state law. Online poker, however,
has never been federally banned, and at the time of the Enforcement Acts passage there were no
states that outlawed it. Given the possibility of profit from Party Pokers exit, and the lack
shareholder pressure to play it safe in the face of terrible legislation, it was only logical for
private companies to continue service. According to Nate Silver, a statistician for ESPN, the two
most popular sites following Party Pokers exit were PokerStars and Full Tilt Poker; together
they accounted for 80% of the U.S. online poker market after the passage of the Enforcement
Act. Although PokerStars maintained similar standards to Party Poker, Full Tilt did not. On April
15th, 2011, a day known as Black Friday in the poker community, Full Tilt and several of its
executives were indicted for essentially running the site as a Ponzi scheme, cheating players out
of an estimated $440,000,000. Instead of protecting consumers from predatory business
practices, the UIGEA forced the most popular and responsible company out of the U.S. market,
leaving players exposed to crooked, private companies.

Those who support the Enforcement Act also claim that it has not resulted in any
significant economic impact since its passage. Washington State agreed, and passed similar
legislation to the Enforcement Act in 2010. When questioned about the possibility of players
leaving the state to continue pursuing poker, State Senator Margarita Prentice dismissed the idea:
"You mean theyre going to move so they can play poker? Gee, lots of luck in their lives. I'm
sure not going to worry about them. Let them go pump gas." Prentices dismissal appeared
comical as Dan Martin, a highly successful online poker pro, led hundreds of players to
neighboring states to continue their careers. Full Tilt was not the only victim on Black Friday;
Pokerstars was also indicted under the Enforcment Act that day. When the dust settled, Full Tilt
ceased to exist independently and Pokerstars had left the U.S. market. Players were left in
absolute shock. They now had to either leave the country to play on reliable networks, or trust
their money to remaining private sites that did not run a large enough volume of high-stakes
games, were prone to frequent crashes, and acted carelessly with player information. The
resulting exodus of professional online players to Canada and Europe had profound economic
consequences. Although many of these expatriates continue paying income taxes on their
winnings, the government lost millions of dollars of tax revenue from the companies, who paid a
35% corporate tax on earnings from U.S. operations. These profits surely would have increased
dramatically had online poker companies not fallen victim to the Enforcement Act.
Proponents of the UIGEA lastly claim that it reinforces the Interstate Wire Act of 1961,
signed into law by President Kennedy. In his 2010 review of the legislation Dr. David Schwartz,
director of the Center for Gaming Research at the University of Nevada Las Vegas, writes that it
was part of Attorney General Robert F. Kennedys war on organized crime, since interstate
gambling was a standard racketeering practice during that era. Article A of the legislation reads

as follows: Whoever being engaged in the business of betting or wagering knowingly uses a
wire communication facility for the transmission of bets or wagers shall be fined under this title
or imprisoned not more than two years, or both. Without the context of Kennedys war on
organized crime, one might see the purpose of this legislation as a crackdown on any gamblingrelated communication; Schwartz, however, argues that stopping gambling was not the goal:
smashing the interstate rackets was. During the sixties, illegal bets were often placed on
sporting events such as horse racing, over federally operated land lines. Dr. Schwartz clarifies
that poker could not possibly have been intended to be subject to the legislation because at the
time, the idea of playing a poker game remotely would have been risible. The Department of
Justice issued a statement in 2011 agreeing with Dr. Schwartz and concluding that interstate
transmissions of wire communications that do not relate to a sporting event or contest, fall
outside of the reach of the Wire Act. The UIGEAs attempt to connect online poker to
legislation which was written decades before the conception of the internet is ridiculous.
PokerStarss 2011 indictment under the Enforcement Act was plainly an overreach of shocking
proportions.
In 2014 Amaya Incorporated, a publicly traded company, acquired Pokerstars for nearly
five-billion dollars. Although Pokerstars record of player security and satisfaction was already
stellar, the added pressure from shareholders has resulted in even greater strides in such areas. In
March, 2016, the State of New Jersey licensed Pokerstars to operate within the state. Although it
marks a great victory for players there, recreational and professional players in the rest of the
U.S. are still left without reliable options. The fact of the matter is that a state-by-state reintegration of PokerStars is an impossibility. Repealing the UIGEA would allow the site to
resume real-money service to the rest of the country. Such a return would immediately force

dishonest, private sites out of the market without the need for legislation. The elimination of
these sites would result in increased player information security, improved monetary security,
and the elimination of nearly all underage poker play online. To protect gamblers playing normal
casino-games online, new legislation should be passed that addresses the real issues surrounding
online gambling by requiring gambling corporations to follow the lead of Pokerstars on the
controversial issues of underage and compulsive gambling. PokerStars prevents underage
gambling by requiring users to submit a valid social security number before depositing; and
protects degenerate gamblers with an ingenious system that grants them and their families the
ability to exclude themselves from the service for lengths of time ranging from twelve hours to
permanent exclusion. It is high time for Congress to muck the Unlawful Internet Gambling
Enforcement Act and deal America a new hand of effective legislation that protects vulnerable
citizens.

Thank You