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Senator Reid's Last Minute Crusade for Online Poker Legalization

By Scott Carlson, Rakeback.com Senior Writer

Online GamingNevada Senator Harry Reid is making a last minute push to pass legislation allowing online poker. The 11th hour bill would favor current casino operators in the U.S. but allow current online poker sites a path towards licensing.

Who can be licensed?

The first question to answer is who will be allowed to be licensed under the Reid legislation. The quick answer is everybody, eventually. Right away companies that will be allowed the opportunity to be licensed are current casino operators and companies that provide gaming devices to casinos. This means companies like Caesar's Entertainment could potentially run an online poker site within 15 months, presumably under the World Series of Poker name. If this occurs expect the numbers at the WSOP to increase dramatically.

Current online poker companies such as PokerStars, Full Tilt and Party Poker would eventually be allowed to run online sites with U.S. customers. The time frame for being licensed appears to be around four years after the Reid legislation is passed. Current online sites would have to cease operations with U.S customers within 30 days of the legislation passing. One item to note is current online poker rooms are not allowed to sell operations to entities allowed to obtain a license immediately. This is specifically addressed in the proposed legislation.

Opt In / Opt Out

States would have the option to opt in or out of the legislation. States that currently have brick and mortar poker rooms are in but would have the ability to opt out. States without brick and mortar poker rooms are out but have the ability to opt in. Looking at a state map noting who is in and who is out could prove to be interesting.

Interesting Items to Note

  • There would be no legal online poker in the U.S for a period of 15 months.
  • U.S. players would only be allowed to play against each other for a period of three years before the player pool would be mixed with international players.
  • The tax would equal 20% of the rake and tournament fees.
  • Online poker rooms would be required to report individual player winnings to the IRS.

Hurdles to Passing

Some high ranking Republican Senators lead in part bu Arizona's John Kyl sent a letter to Senator Reid strongly opposing the attempt to legalize online poker. By far the funniest line in the letter reads as follows:

“We have heard reports that certain interests might be pushing the Senate to attach such a bill to a must pass measure because they have calculated that a secretive, closed-door, undemocratic process represents their best opportunity to gain access to the U.S. market.”

So basically the Republican leadership is admonishing the exact same way the UIGEA was originally passed, by attaching the bill to the “must pass” port security bill. That's rich.

As the next couple of weeks pass we will keep you informed on the status of the legislation. What do you think of the proposed legislation? Let us know in the comments below.


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