The Patriot-News is a leading newspaper out of Harrisburg, Pennsylvania—the state capitol—where political matters make the headlines more often than Cat Williams says the “F” word. On Friday, the Editorial Board published a dogmatic op-ed in which they urged state legislators to pass an online poker law, not just because it would greatly benefit PA’s enormous budget deficit, but ‘because they can’.

“Pennsylvania legislators should pass an online gaming bill in June both because the state needs to close a seemingly insurmountable budget gap in the next fiscal year, and, simply, because it can,” read the op-ed.

The editorial quickly pointed out that Pennsylvania is facing an estimated general fund deficit of $2 billion in the coming fiscal year. The board referred to the deficit as “troubling for its potential impact to the state’s current and future debt.”

While the writers claim to be under no false pretenses that passing an online poker law will suddenly fix all of the financial problems in Pennsylvania, they do believe it will “help ease the deficit.” However, they also pointed out that, even if a bill were passed this month, online gambling wouldn’t likely generate any revenue until “late next year or 2017”.

The op-ed compared probable revenue from online gambling in PA to that of the existing market in New Jersey. We all know that iGaming was a disappointment in the Garden State, harvesting a mere fraction of the tax dollars that Gov. Chris Christie had anticipated. However, the state did pull in $18.5 million from regulated online poker and casino games.

“The Garden State’s revenues are rising this year, though, and Pennsylvania, with 43 percent more state residents 21 years of age or older, stands to gain more tax dollars with similar legislation,” read the publication.

The Editorial Board noted that Pennsylvania is greatly lacking in public pension funding, and there’s not nearly enough left in the budget to pay for the much-needed reconstruction of crumbling roads and bridges. “Although Pennsylvania will not realize huge benefits by entering online gaming, it cannot afford to ignore a legitimate revenue source.”

The op-ed went on to criticize legislators for ignoring what could have been a vast source of state income in the way of severance taxes on natural gas extraction. “If Pennsylvania continues to refuse to realize tax revenue on a finite resource, one for which significant profits are earned daily by companies outside the state, it must find revenue elsewhere.” The editorial went on to call online gambling, “a resource Pennsylvania should mine now.”

Most Viable PA Online Poker Law

There are currently four propositions on the table to get an online poker law in place. The one that’s expected to receive the most attention (i.e. voted most likely to succeed) is HB 649, introduced by House Gaming Oversight Committee Chairman and State Representative John Payne. That also happens to be the online poker law most strongly endorsed by the newspaper.

“Legislation sponsored by Rep. John Payne…would legalize and regulate online gaming and it is worthy of consideration.”

The writers noted a report by GamblingOnline.co in which the analytical website said online gaming “is not legalized but Pennsylvania residents that gamble online are not likely to be prosecuted because the state is very lenient about their online gambling laws.”

The underlying problem therein is that PA residents are gambling online, but they are doing so in a potentially unsafe, unregulated environment. Plus, their dollars are flowing into offshore websites that aren’t subject to taxation that could be benefiting the state.

Passage of an online poker law to enforce regulations that include “geolocation, technology that permits a website to see the physical location of a computer, tablet, or smartphone, and restrict access if the user is outside Pennsylvania,” could change all that.

“Pennsylvania has the means, the motive, and the opportunity to pass online gaming legislation before the end of this budget cycle,” wrote the Editorial Board. “Its elected state representatives should pull the trigger so the state can capture tax dollars it is losing to external operators while protecting its youth.”

After seven long years of online gambling debates, California’s web poker bill AB 431 has more potential than any related measure the state has ever seen. According to the Poker Players Alliance (PPA), it could progress even further today with a vote by the Assembly Appropriations Committee.

Web poker bill AB 431 was introduced in February 2015 by Assemblyman Adam Gray, and made history two months later when it became the first online poker related proposal to ever go to a vote. The Assembly Governmental Organizations Committee voted in favor of AB 431 by a margin of 20-0 on April 27.

From there, it was passed on to the Assembly Appropriations Committee, who held their first reading of the web poker bill yesterday. The Committee will meet again today, where the PPA is hopeful for another affirmative vote.

Yesterday evening, just hours after the Appropriations Committee adjourned, the PPA tweeted (@ppapoker):

“CA Internet #poker legislation very much alive. Approps could move bill out of Committee tmrw. Next step would be full Assembly vote. #AB431”

That message gave California’s online poker fans great hope for the future of online poker, but there are still several obstacles the legislation must overcome before it hits the Governor’s desk.

As Chris Krafcik of Gambling Compliance pointed out earlier in the day (@CKrafcik), sources had confirmed to him that “#CA #iPoker bill AB431 will clear Approps. Comm. Thurs. but will be held on Assembly floor until after June/July iPoker hearings.”

Progression of California Web Poker Bill AB 431

Having passed by a 20-0 vote in the Assembly GO Committee last month, AB 431 now needs the approval of the Assembly Appropriations Committee. If that group votes in favor of the web poker bill today, as industry analysts predict, there’s still a long road ahead for California online poker.

The next step would be for the entire Assembly to review and vote on the measure. However, as Krafcik previously stated, it will be at least two months before that happens.

There are two more web poker hearings scheduled in the California Assembly. The first is a Joint Senate/Assembly hearing on “The Legality of Internet Poker-How Prepared is California to Regulate It?”, slated for Wednesday, June 24, 2015. Next up is a GO Committee hearing in which the Assembly will debate two other web poke bills; Assemblyman Mike Gatto’s AB 9, and Assemblyman Reggie Jones-Sawyer’s AB 167.

The review of those web poker measures could prove highly successful in filling in some of the blanks in AB 431, which is still considered a “shell bill” at this point. Committee members will likely pick apart the positive and negative aspects of each, inserting the legislative guidelines they are most comfortable with, such as licensing fees, tax rates, bad actor/tainted assets clauses, eligibility for horse race tracks, etc.

If all goes well up to that point, the California Senate would get ahold of the web poker bill. And if approved on a senatorial level, AB 431 would finally land atop the desk of Gov. Jerry Brown for final legislative approval. Finally, the measure would be presented to the public for a vote, and if approved, online poker would finally become legal in the state of California.

California iPoker regulation has been an annual issue for the last seven years, but constant in-fighting between tribes, commercial card rooms and legislators has kept all relative bills from ever going to a vote with each legislative session. This year, the largest issue has become whether horse race tracks should be allowed to participate, and while tribes say they have enough clout to band together and prevent race tracks from participating, Union reps for the tracks say otherwise.

Barry Broad is a long-time advocate for Labor Unions in California. He is a lawyer and Managing Partner at Broad & Gusman LLP, a steadfast union lobbyist, and also happens to be a top-selling author of crime mysteries like Eve of Destruction (2008) and Requiem for the Damned (2012).

More importantly, Broad is a representative of the Teamsters and Service Employee International Union (SEIU) workers within the state’s horse racing industry.

According to Broad, there’s simply no way a California iPoker bill can gain enough traction without allowing horse race tracks to participate in a regulated online poker market. “It would be very hard to move a bill out with a two-thirds vote that doesn’t include the tracks,” said Broad.

“They’re not going to get a two-thirds vote,” Broad stated flatly. “They’re not. These are some very big unions.”

3 Groups seeking Variable California iPoker Regulation

At the moment, there are three major groups who want to see a California iPoker bill passed, and they all have different interests at heart. The Pechanga Coalition wants horse race tracks excluded, the PokerStars Coalition doesn’t care whether race tracks participates, so long as Amaya isn’t omitted under a ‘bad actors’ or ‘tainted assets’ clause, and the horse racing industry, of course, wants a slice of the pie.

Pechanga Coalition

The Pechanga Coalition is currently made up of 6 confirmed tribes that strongly oppose permitting race tracks to participate. They are standing on a long-time policy of limited gaming in the Golden State that has historically restricted the racing industry from dipping its toes into land-based casino / poker gambling.

The tribes were staunchly opposed to allowing PokerStars to operate in a California iPoker market, but may be willing to loosen up on that issue in an effort to get the PokerStars Coalition on their side versus horse race tracks.

Horse Racing Industry / Union

The horse racing industry believes it has every right to partake in a California iPoker market, and whether that’s true or not, the industry’s 50,000+ employees-strong Union will fight tooth and nail to make sure they get it. And if they don’t get it, they’ll fight to make sure no one else does either.

Broad thinks that because the race industry operates all throughout the states, with Union reps located in just about every district, having such dominant political clout could draw the PokerStars Coalition over to their side.

PokerStars Coalition

Made up of Amaya Gaming (parent of PokerStars), the Morongo Band and San Manuel Band of Mission Indians, and California’s three largest commercial card room, Bicycle Casino, Commerce Casino and Hawaiian Gardens, the PokerStars Coalition has one goal in mind. They have all teamed up to launch internet poker in the state, if an when it becomes legal to do so.

Members of this coalition want bad actors and tainted assets clauses to be removed from California iPoker legislation, or at least slackened enough that Amaya Gaming / PokerStars will be permitted to receive a license. However, they could become the middle man—the swing vote, if you will—in this debate, and will likely have to choose to side with either the Pechanga Coalition of horse racing industry.

Broad Says PokerStars and other Tribes will Choose Race Tracks

Believing Union opposition is simply too strong to get California iPoker passed without horse tracks, Broad says the most likely outcome will be a new alliance between the PokerStars Coalition and tracks, with three more tribes joining the ranks; the Auburn Indian Community and the Rincon and Pala Bands of Luiseno Indians.

Broad compared the Pechanga Coalition to a “paper tiger”, saying they don’t have nearly as much sway as they are making themselves out to have. He said the casinos run by the Pechanga, Agua Caliente, Viejas, and other allied tribes are “medium-sized businesses”, and are collectively “only a few tribes that are opposed to tracks.”

If PokerStars joins Pechanga, Broad believes the race tracks’ Union has enough clout to deny a two-thirds vote. On the other hand, if PokerStars and tracks team up, garnering the additional support of those other tribes, California iPoker regulation might have a chance at a two-thirds vote, with or without the support of Pechanga.

Online poker has been a legally regulated activity in the state of Nevada for two years now. Just recently, an interstate compact to share liquidity between players in Nevada and Delaware was implemented. Now, via AB 414, the state is taking steps to ensure that online poker is the only form of internet gaming shared between players across state lines.

On Friday, members of the Nevada Assembly met to discuss AB 414, a legislative measure scripted to prohibit shared liquidity compacts with other states for the purpose of any online gambling activity outside of poker.

AB 414, backed by casino magnate Sheldon Adelson, was only introduced a month ago on March 19, and has moved rapidly through state legislature. It was passed by a slim margin of 23 to 17, with 2 excused from the vote.

The fate of the interstate compact measure is now in the hands of the Senate. It received its first reading in the Senate Committee on April 20 and was referred to the Committee on Judiciary. The deadline to pass the bill is May 15, 2015.

AB 414 and Online Poker in Nevada

Nevada chose to only legalize interactive peer-to-peer games (i.e. poker) when pressing for internet gaming regulation. Delaware and New Jersey took a different route, having authorized both online poker and house-banked casino games like blackjack, roulette, video poker and slots.

In early 2013, Nevada and Delaware came together in agreement on a shared liquidity deal that would see their online poker players merged into a single, networked player pool across all 888-powered operators, which include all three of Delaware’s authorized gaming sites (DelawarePark.com, DoverDowns.com and HarringtonRaceway.com) and Nevada’s WSOP.com. New Jersey has chosen to go it alone, at least for the time being, declining to share liquidity with any other states.

Of worthy note, the interstate compact signed by the governors of Nevada and Delaware took more than a year to go into effect. During all that time, no bill to prevent shared liquidity across internet house-banked games was introduced. It wasn’t until mere days before player pooling became a reality on March 24 that the measure surfaced.

Adelson’s Crusade to Stop Online Gambling

As for why Sheldon Adelson is has been so adamant about in his support of AB 414 and the need to hold interstate compacts to online poker only remains a bit of a mystery. As one reporter for CardPlayer put it, he may be “hedging his bets”.

Though not for lack of effort, the billionaire CEO of Las Vegas Sands Corp (LVS) has thus far been unable to reach his ultimate goal of prohibiting all forms of online gambling in the US. He’s signed countless checks of untold value, all thrown at politicians and organizations willing to support his cause. Currently, his primary focus is lobbying for the passage of a federal bill known as the Restoration of America’s Wire Act. If passed, RAWA would effectively criminalize any and all forms of internet gambling, shutting down iGaming markets in Delaware, Nevada and New Jersey, as well as the online lottery sales in four other states.

It’s also worth mentioning that Nevada permits mobile betting within authorized casinos; something Mr. Adelson has taken full advantage of, despite his outward aversion to online gambling. For example, a guest of the LVS-owned Venetian Hotel can log into the casino’s mobile betting site and place wagers on sporting events, so long as the individual is physically located within the confines of the property at the time the bet is placed.

AB 414 will not affect property-restricted mobile betting, and Adelson doesn’t seem to mind profiting from that internet gambling niche one bit.

Thanks to an all-inclusive PA online gambling bill introduced by Rep. John Payne earlier this year, the Pennsylvania House Committee on Gaming Oversight—Chaired by Payne—held a public meeting yesterday to discuss the pros and cons of regulation. As usual, Sheldon Adelson’s crony, Andy Abboud, was on hand to spread trepidation throughout the room, but testimony from industry experts and technologists prevailed.

Andy Abboud churned out his all-too-common, long winded fear mongering speech, warning of the harms online gambling would bring to society, the inability to successfully thwart underage gambling or regulate the industry, and of course, Sheldon Adelson’s favorite, ‘click your mouse, lose your house’ spiel.

He even tried insinuating that the reversal of the Wire Act opinion in 2011 by the Department of Justice was bought and paid for by the gambling industry. One must wonder how many attendants of the PA online gambling hearing had to hold back audible laughter at that ridiculous implication, ironic because the federal anti-online gambling bill, RAWA, would not be circulating congress right now if it weren’t for Adelson’s deep pockets.

But one after another, witnesses at the PA online gambling hearing shot down Abboud’s arguments. Heading up that campaign was John Pappas, Director of the Poker Players Alliance, who found so many holes in Abboud’s testimony that he produced an 8-page document refuting 18 of his claims, cleverly titled “Andy Abboud’s Testimony of Myths”.

“Sands’ testimony today is a house of cards that is more about fear mongering than providing the Committee with meaningful insights on how to best protect consumers,” Pappas told the panel. “It’s clear that they are not really concerned about Pennsylvania citizens’ safety, but rather the corporation’s bottom line.

“The PPA will continue to share the facts with Pennsylvania lawmakers on why a licensed and regulated online gaming market is the best and only way to ensure citizens are protected through a system that is accountable to regulators and the government.”

The Director continued pounding away at Adelson’s crony by pointing out that his Pennsylvania casino, Sands Bethlehem, has come under fire, and penalty of fine, on multiple occasions for permitting underage patrons to gamble at the establishment. Pappas went on to highlight the fact that Adelson’s Las Vegas Sands (LVS) properties in Nevada proudly advertise mobile sports and casino gambling to visitors.

Panelists were quick to respond to the numerous accusations against Abboud’s testimony. Rep. Tina Davis, who introduced one of three PA online gambling bills in 2015, inquired of the Sands’ representative what fines LVS has paid to state regulators.

In his response, Abboud made no effort to actually answer the question. In fact, side-stepping questions became a distinct pattern for Adelson’s crony, so much so that Rep. Payne eventually reprimanded him, requesting that he keep his responses specific to the subject of each question.

A representative of geo-location service provider GeoComply, Lindsey Slater, offered a stellar hands-on presentation of how her company is able to precisely pin-point the physical location of online gambling account holders. In a real-time demonstration of the high-tech systems, she validated the supreme accuracy of the technology by identifying two internet gamers at a Starbucks in New Jersey, seated on opposite ends of the coffee shop.

“We have it pretty much down to a building level. You can see what part of Starbucks you logged in from and, yes, we also know what you did last summer,” quipped Slater.

That raised another question aimed at Abboud in regards to how the Sands’ can promote mobile betting within its Nevada casinos, yet oppose online gambling in the rest of the country. In typical fashion, he avoided giving a straight answer, but did concede to the fact that Sands is able to use geo-location technology to determine without a doubt whether players are located within the boundaries of an LVS property.

Testimonies in favor of PA online gambling continued to flow in. Michael Pollock of Spectrum Gaming Group presented the panel with successful regulatory experiences from New Jersey, David Satz of Caesars Entertainment heralded online gambling for its ability to document, monitor and audit all aspects of the games, and Chris Sheffield of Penn National Gaming proclaimed the myriad job opportunities regulation would provide the state.

Kevin Mullaly, VP of Government Relations for Gaming Laboratories International, praised the strength of the online gambling industry’s security measures, identifying them as the same form of security implemented by online banking websites and other financially driven markets.

In fact, Mullaly offered one of the most rational assessments ever made at any state or federal hearing revolved around the issue when he said, “Online gambling is simply a modernization of the delivery of content that your land-based casinos already have the legal right to offer.”

When all was said and done, it was obvious that supporters of PA online gambling clearly won the day’s battle. A second hearing to discuss PA online gambling regulation is scheduled for May 6, 2015.

More than two years ago, Illinois residents Kelly and Casey Sonnenberg filed a loss recovery suit against PokerStars in an attempt to recoup losses suffered while playing at the online poker room. PokerStars filed a motion to dismiss the case, and on Tuesday, the judge sided with the defendant.

While the decision was gratefully welcomed by PokerStars, it was not an unexpected outcome. The plaintiffs had already failed in their first attempt at a class action lawsuit against PokerStars, which was dismissed last March by the same judge, the Honorable David Herndon. Similar to the first case, there were a multitude of problems with the Sonnenbergs case.

The lawsuit was filed based on the Illinois Loss Recovery Act (720 ILCS 5/28-8). According to Illinois law, gambling is illegal (unless it falls under the guidelines of an authorized activity, which online poker clearly is not). And anyone who loses $50 or more as a participant in an illegal gambling activity is able to file civil action against the “winner” for recovery of those losses. Once the amount of loss is determined by the court, “the court shall enter a judgment of triple the amount so determined”.

In short, the Sonnenbergs filed for loss recovery in hopes of receiving 3x the amount they had lost while playing online poker at PokerStars.

The plaintiff apparently failed to realize that a number of required factors in a loss recovery case had not been sufficiently met. Namely, losses may only be recovered from the “winner”, and as Judge Herndon pointed out in both dismissed cases, PokerStars was not the winner of the gambling activity in question.

Judge’s Ruling in PokerStars Loss Recovery Case

The judge said that, while the plaintiff was able to identify Casey Sonnenberg as the “loser”, they were unable to identify a “winner” in their allegations. PokerStars was deemed a service provider, simply hosting the game and collecting a rake. The online poker operator could not be deemed a winner because it did “not have a stake in how the game is decided.”Additionally, the judge declared that the “plaintiffs failed to identify a single cognizable loser or a loss” and that they failed to “plead basic facts, including: when the purported loss was incurred, to whom…the loss was sustained, and what is the amount of the loss in question.”

As such, Judge Herndon decided, “The Court agrees with defendants and again finds that plaintiffs have failed to plead both loser and loss sufficiently.”

Furthermore, the judge said that the loss recovery statute in Illinois is only a viable complaint if the lawsuit is filed within 6 months of the incurred gambling loss. He said the Sonnenbergs case cannot possibly fall within the law’s statute of limitations due to PokerStars being eradicated from the US market by the incidents of Black Friday.

“April 15, 2011 was the last conceivable date on which any “losers” could have sustained any gambling losses,” read the judge’s decision. “The original complaint in this case was filed on August 24, 2012”, which happens to be near 15 month after PokerStars was shut down by the US Department of Justice.

PokerStars’ Attorney Responds to Dismissal of Loss Recovery Case

PokerStars’ lead council, Jeff Ifrah, called the dismissal of the loss recovery case against PokerStars a “significant” win for the online poker operator. “In what is traditionally a plaintiff-friendly court, the judge dismissed with prejudice the outlandish claims of two defendants who were motivated to file by their mothers.”

Ifrah went on to say that, “Helicopter parenting doesn’t fly in the Seventh Circuit and our client is delighted to put this nonsense behind them.”