HOW the Legislature Should Act on Internet Poker

As we laid out in this previous post, players in Oregon are already playing poker online, and it is safe to say that those players want the Oregon legislature to act to provide a safe and regulated alternative. Over the coming months, we will be working to produce, and encourage the introduction of, legislation to provide that alternative. But here is a preview of how we'd like to see that happen.  

We believe that the best way to approach internet poker in Oregon is through the lottery, similar to the approach taken by Delaware. But rather than selecting and locking in just a single provider, Oregon Lottery iPoker would be available on up to three unique platforms on which those in Oregon may play. Offering up to three different platforms assures options for the players, and good competition to the benefit of those players

  

To implement online poker, Oregon Lottery would solicit bids to provide internet poker service to the players in Oregon, under the Oregon Lottery brand. Oregon Lottery would be authorized to award contracts to up to three (3) unique platforms, that meet all established criteria. Applicants will, at minimum:

1. have been inspected, approved, and licensed in at least one other state
2. have the capability to network skins across state lines to share player liquidity
3. agree to a contract term of not less than two, nor more than five years, to
4. provides all services necessary to run internet poker games, for a fee

All transactions with players will be conducted by Oregon Lottery through its designated agents. Players of legal age can create an account online, through secure servers operated by Oregon Lottery, but those accounts must be funded in person at any Oregon Lottery retailer. All deposits are cash only. All withdrawals from player accounts will be by certified check within 3 business days. Personal information will be required, and kept secure and confidential.

To assure an ample player pool, considered key to having viable games, sharing player liquidity with other states is a must. To that end, Oregon Lottery will negotiate and enter into multi-state agreements to facilitate shared player pools where common platforms allow, such as and including the example set by NV and DE.

Prospective providers include:

888 - Operating in DE, NV, and NJ. Sole provider in DE. Already sharing liquidity across state lines. Decent interface, either 2nd or 3rd, with Pokerstars and Party Poker. Best first choice in our view.

PartyPoker - Operating only in NJ. Agreement with NJ would be a big plus, as 888 is also in NJ. This would be the obvious second choice at this time.

Pokerstars - Not currently licensed in any other state, but NJ is expected to approve them in the immediate future. With an agreement with NJ and Pokerstars in that market, this would be the top choice. As of this writing, it is only a future contingent.

Why the Legislature Should Act on Internet Poker

Internet poker is already here

Players in the State of Oregon currently play poker online, on sites that are headquartered outside the United States, and apparently out of the reach of state and federal law enforcement. Players run the additional risk that their funds could disappear overnight, and have no recourse against fraud and/or abuse.

There is a Public Safety Issue

The state cannot impose or enforce its own rules on offshore sites beyond its authority, and this may appear to be an obstacle to regulation. However, the key to eliminating the offshore sites is to simply take their market away. By providing a framework for in-state interests to offer poker games online, willingly compliant Oregon businesses will provide a safe environment for the players, who will no doubt prefer to play where they know the operator is legitimate, and that a venue would exist for conflict resolution.

With willingly compliant operators, the state can mandate protocols to prevent access to sites by minors and/or those outside the state. Along with age and identity verification, protocols for identifying and addressing behaviors associated with problem gambling would be implemented.

Regulation is a market solution that will work where prohibitions fail. In states that have authorized online gambling, offshore sites have voluntarily retreated.

Consumer Protections are Needed

Most participants in online poker are responsible players, consenting adults engaged in a skill game against each other, not against the odds nor the house. They pose no harm to themselves or their community, therefore it hardly seems reasonable to impose upon their freedom to play the game with sanctions or prohibitions. But playing on sites that have no regulation, no safeguards in place to protect players from fraud, no measures to assure player funds are secure, is inherently unsafe.

Assuring players that their funds in play are secure and always readily available. Smooth transactions are the number one issue among players, and regulations requiring cash on hand and/or adequate bonding are at the top of the list of needed regulations.

Secure transactions to protect against identity theft is another area where regulation is needed. Many players will fear having to enter their social security number to open an account for this reason, but it will be necessary for identification purposes, and players will need to know their personal information is secure.

The Legislature Should Take Action

Simply doing nothing and ignoring the issue is easy enough, but it isn’t good policy. Players continue to play in unsafe environments, and through sound legislation and regulation, the public and the players are protected without infringing on their freedoms.

We are looking for legislators willing to step up for the players, and introduce a bill to regulate internet poker within the state. We will unveil a draft proposal in the coming weeks, and plan to engage legislators on this topic in the lead up to the 2016 session.

Pursuing Legislation for the Regulation of Internet Poker

In our pursuit of  internet poker legislation in the State of Oregon, we will encounter and engage with many interests aligning with and against our efforts. And while many, if not all, of these interests will be focused on their own concerns, there are some guiding principles to which we must hold true.

Player protections -This effort  will be approached from the perspective of the players. Our interests will not always align with those of the industry, or even the government, but we will always hold true that the number one goal of legislation is to provide consumer protections for those adults who wish to participate in online poker. Primary of these protections include:

• Security of player information
• Security of player funds
• Accessibility to player funds
• Fair and honest dispute resolution
• Proper identity and age verification
• Recognition of and access to help from problem gaming behaviors

Access to the best available platforms - In order to assure that players have access to quality software and services, competition should be encouraged among vendors and providers. We believe strongly that legislation should not preclude providers based on an arbitrary date nearly a decade ago, whose sole purpose is to keep out the industry leading platform(s). Of course, I am referring to the so-called 'bad actors clause' that we saw in Nevada, and in pending legislation in other states like California.

Networks over exclusive partnerships - Success of intrastate internet poker will depend heavily on maximizing player liquidity. We must not only prevent the player pool from being splintered by having too many sites with too few players, but also prevent one or two partnerships from controlling the market, leaving all others who may wish to promote their brands online out of luck. Poker networks, with multiple brands on common platforms, with shared player liquidity, is the best way to accomplish these goals. It is also the means by which liquidity can be shared across state lines, a central issue to maximizing player liquidity.

Inclusive market - We want existing card rooms and casinos to be able to extend their brands online, to be able to offer internet poker as an extension of their current operations, to promote and compliment their current operations through promotional games and awards programs. This also allows competition for players among operators on the same platforms, while allowing those players the opportunity to play among a shared player pool to maximize player liquidity.

Taxation - We are not opposed to taxing internet poker. We believe there should be an open debate about taxation of gambling in each of the states. We believe that 

• Taxes should be on all gambling, not exclusive to internet poker
• Taxes need to be reasonable so as not to affect the viability of internet poker operations
• Taxes on internet poker need to apply to Tribal and non-tribal operators equally
• Internet poker should be exempt from local gambling taxes

The details of any piece of legislation, certainly one as complex as this issue will require, are bound to change through the course of the process. But we will fight for these principles to assure that what players are most concerned with is what is first considered by our elected officials.