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Tuesday, October 03, 2006

Bust Out?

The growth of poker over the last few years has been phenominal. Even I'm playing Texas Hold 'Em online a bit. But poker may be about to take a hit given the US Congress approving legislation over the weekend that will make it illegal for US financial institutions to make payments to online gambling enterprises. The actual online casinos may be based in other countries, but the majority of the 12 billion dollars spent on online gambling each year comes from the US. The possibility of losing a large hunk of their customer base caused online gambling related stocks to fall heavily on Monday. It's reasonable to assume some online gambling firms may go under without US revenue. Others will reportedly be less at risk because their primary markets are Europe and elsewhere.

The US legislators claim they're trying to protect innocent Americans from gambling their savings away. But you'll forgive me for being cynical and suspecting some of them are more worried about online gambling cutting into the business of "brick and mortar" casinos located in their jurisdictions. After all with online casinos you can play any time you want without leaving the comfort of your computer room.

In fact you don't need money to play poker online. Various companies offer play money tables, where all you are wagering are poker chips with no real world value. These are the kind of tables I play on, as I'm far from confident enough to play with actual money yet. But the future of these tables will be in jeopardy if the money gambling sites they're associated with hit hard times. The companies may decide to drop these non-revenue earning features to cut down on costs. There is also the obvious question of what effect the new legislation will have on play money "freerolls" that offer the winners the chance to compete in real money tournaments without putting up any money. You may have seen the ads PokerStars have been running for several months for their Moneymaker Millionaire promotion, which is an example of such a freeroll.

This also brings up the question of what if any dangers there might be for America poker celebrities associated with various sites. Some, such as World Series of Poker Main Event champs Chris Moneymaker and Greg Raymer, are the public faces for sites like PokerStars. Others, such as Chris "Jesus" Ferguson, have direct involvement with the operations of a gambling site. Of course the money gambling sites are already technically illegal in the US even without the legislation, and no one has gone after these people.

On the other hand they have tried to go after the execs of offshore gambling sites, including one with a Saskatchewan connection. Calvin Ayre is the head of Costa Rica based Bodog Entertainment Group, and has faced US attempts to go after his online gambling business. Ayre was born in Lloydminster and grew up here in Saskatchewan.

It's a given that someone will challenge this legislation in the US courts. There is too much money and too many people involved for it not to happen. Some have even suggested the new regulations may be in violation of World Trade Organisation agreements the US has signed on to. Folks will also try and find ways around the bans, one obvious method being to get a credit card and/or bank account in a bank operating outside the US. And the gambling sites themselves may come up with clever ways to get around their inability to use US financial institution. But whatever happens the companies will still take a hit, and it remains to be seen what spinoff effects this will have on poker's current popularity.

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