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Vegas Following Poker Freeze Story Closely

June 16, 2009 (CAP Newswire) — Although few of them are directly involved in the online gambling industry directly — indeed, many regard it as their primary competition, and as one of the main reasons why Vegas revenues have been slumping lately — the Las Vegas casino industry is nevertheless closely watching the story of the U.S. government’s recent freeze of online poker funds, and the general public’s reaction.  

According to an article in the Las Vegas Sun, these Vegas insiders aren’t agreeing on whether or not the extra attention to online poker is a good thing. Some critics say the seizure won’t stop people from playing poker on the Internet, and will just create more legal confusion for operators.  

“I have not heard one person saying, ‘I am through with online poker,’” said one unnamed industry official in Las Vegas, as quoted by the article’s writer, Liz Benston. “It’s just making people more militant and bitter against the government.”

Others think differently. “If I begin to lose players because they’re afraid to deposit with me, then I lose games and the rake they generate,” the article quoted Christopher Krafcik, editor of the trade publication IGamingNews. “If I was a player, I’d consider taking my money elsewhere.”

The main cause for concern in Las Vegas, though, is the angle the government has taken with this action. Instead of focusing on the online gambling companies themselves — which are mostly based overseas — the government has chosen to take action against the U.S.-based payment processors.

These actions against the payment processors cite as their justification Title 18, Section 1955, of the U.S. Code, which prohibits “illegal gambling businesses”. This approach isn’t entirely new; when the government went after Antigua-based online gambling company Bodog last year, it used a similar approach — and was successful.

That past success has observers worried. Arguments that poker is a game of skill, not chance, are not likely to have much effect on Justice Department officials, nor on the FBI or IRS, says Sanford Millar, chief financial officer and general counsel of Centaurus Games, a Las Vegas company that hosts free and subscription-only poker tournaments online.

“The Department of Justice has never agreed with those arguments,” the article quotes Millar. “If they think they are going to outmaneuver the U.S. government they are out of their minds.”

Of course, the PPA and iMEGA think differently, and they are two organizations that have significant clout in Las Vegas.

Also in Vegas is casino powerhouse Harrah’s, which is preparing to enter the online gambling marketplace itself. According to the article, Harrah’s spokesman Gary Thompson is calling the money seizure a “nonevent”, stating that it won’t have any negative effect on online gambling or on Harrah’s lobbying efforts.

“The fact that there are some zealots in the Justice Department that are cognizant of the support for legalizing Internet gambling in the United States and want to try to make a name for themselves before there’s some legislation that passes and some rational approach toward this in this country won’t deter us,” he said.

The Las Vegas Sun article contains much more detail; click here to check it out.