Bob “The Coach” Ciaffone Weighs In On The UIGEA

Bob Ciaffone has an interesting take on the UIGEA. His view is that this is all a precursor to legalized gambling in the US. Though he doesn’t think we’ll see it before 2009, what gives him hope was the way that this bill was drafted.

The law is going to put a big dent in poker for now, but it is far from the worst possible bill that could have been written. It does not make it illegal to play Internet poker, and it allows states to still have the freedom to set their own gambling laws within their own boundaries, as long as they do not allow anyone under 21 to play. If one were assigned the task of writing a bill to legalize Internet poker in the USA so government could make money off it, the following content would be likely:

1. Eliminate or greatly reduce outside competition from other countries.
2. Do not link poker with the wire act.
3. Do not criminalize the bettor who uses either a legal or unlawful Internet playsite.
4. Do not handicap any state’s ability to offer Internet poker to players within its boundaries or players in another location where the Internet gambling is lawful.
5. Make sure the main objection to playing Internet poker of offering the game to underage players does not take place.

The above has all been done in this new bill, despite the fact there were many other options in wording the bill to make Internet gambling unlawful. For the above reasons, I believe that any meaningful change to this legislation will not take place, and that states will move to take advantage of this new potential revenue source.

I have to admit that I’ve pondered whether or not the UIGEA didn’t go after players for specifically this reason. As I’ve noted previously, the way the law was written really have two goals:

1. Up the ante for online gaming companies. You’re not just violating a state law where some attorney general has no desire or resources to enforce the laws, but you are violating a federal law and the full resources and power of the US government can be brought against you.

2. Starve existing online gaming sites to death. The major money transfer sources are going to go out of business or quit taking US transfers to gaming sites. Some shady operations will spring up here and there but most reliable and trusted forms of money transfer will dry up. Players will still be able to get money on and off sites via those other methods but they will likely be a big enough burden that the casual gambler (e.g. most fish) won’t go to the trouble. Then as the games get tougher more and more players will go from winning to losing players with less incentive to keep playing. Wash, rinse, repeat a few cycles and game liquidity will go all to hell.

This is why I thought that one goal of the bill might be to pave the way for Harrah’s or some other casino to open US gaming operations. Harrah’s has lined Bill Frist’s pockets so that was always a possibility. But in my previous thought process I never pictured the intrastate rollout that Ciaffone discusses. The more I think about it though, the more his ideas make sense.

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