**GBGC update on the US Federal position with regard to internet gambling here**
Together with Alfonse D’Amato, the former U.S. senator from New York who chairs the Poker Players Alliance (PPA), Executive Director John Pappas is the archetype of the seasoned political insider the PPA has sought to make it credible and effective as a lobbying force on Capitol Hill for the federal regulation of online poker. Prior to joining the PPA, Pappas was a public affairs consultant in Washington for high-powered political and public relations strategists Dittus Communications and before that served as communications director and spokesman for former Congressman John Shadegg, a conservative Arizona Republican who, interestingly enough, opposed the legalization of online poker.
Named by Bluff magazine as one of the most influential people in poker, Pappas directs operations, strategy, and federal and state lobbying for the million-member PPA. He has testified before several state legislatures and the U.S. Senate and appears frequently on national television and on numerous local news programs to discuss and debate Internet gaming policy. In this exclusive interview, Pappas talks to Global Betting and Gaming Consultants (GBGC) about the recent collapse of California’s online poker bill, the prevailing political winds in New Jersey, and the prospects for national regulation of online gaming in the United States.
GBGC: How do you define the mission of the Pokers Players Alliance and it role in trying to influence policy?
PAPPAS: Our organization’s mission is to provide a safe and regulated environment for Americans to play poker, whether it be online, in a bricks-and-mortar setting, at charitable events, in casinos, etc. We are an organization that represents the interests of all those who are poker players and poker enthusiasts.
GBGC: How do you accomplish this? What is the PPA’s role?
PAPPAS: The role that we take at the federal and state level is to be advocates and motivate our membership to advocate for themselves, as well as lobbying directly members of Congress and other elected officials to ensure that they keep the interest of consumers in mind when they consider these legislative proposals. We look at the online issue primarily because it represents the biggest threat and provides the biggest opportunities for the future of poker play.
GBGC: The threat is?
PAPPAS: The threat for a long time has been an effort to try to eliminate the ability of Americans to play online poker, in some cases to criminalize it, as we see in a state like Washington that has criminal penalties for playing online. And other states have considered that. Utah recently passed legislation saying that under no circumstances will Utah become part of a federal online poker scheme. There is still an effort out there to limit the ability of Americans to play online, whether that’s through the Unlawful Internet Gambling Prohibition Act or by “clarifying” the Wire Act to specifically include poker.
GBGC: Is federal legislation needed to combat these efforts? Or can it be accomplished on a state-by-state basis, as it appears we are seeing now?
PAPPAS: We’ve made it pretty clear that we favor a federal solution that empowers the states to be the regulators, and that’s exactly what Mr. Barton’s bill does [H.R. 2366, the “Internet Gambling Prohibition, Poker Consumer Protection, and Strengthening UIGEA Act,” introduced in the U.S. House of Representatives in June 2011 by Texas Republican Joe Barton]. We just think it makes a lot more sense for there to be an ability for states to share liquidity and share players rather than a state-by-state basis, where you’re going to have bifurcating, and you’re going to have 50 different states with 50 different sets of rules and regulations. That’s not going to be good for the businesses that operate in the states and not good for the consumers that want to play.
GBGC: So the opportunities you mention are at the national level?
PAPPAS: The opportunity, I think, has to do more with where things are trending now, in that not only the federal government, but a number of states, are looking at the failed policies of the past and recognizing the opportunity to regulate Internet poker, not just for all the consumer protection reasons, but as a way to raise some revenue.
GBGC: Can the alliance get behind a state-a-state solution, given that the prospects for federal legislation seem rather dim?
PAPPAS: I don’t necessarily see that the prospects for a federal bill are dim right now. I think that it is as much of a challenge as it is for a state effort. One just has to look at California, which has had its fits and starts, and other states, New Jersey, for instance, where one day it looks like the bill is going to become law, the next day the governor is threatening to veto it. I think getting this done at any level of government is going to be difficult, and the PPA is going to focus its attentions on what is ultimately the best for the players. That doesn’t mean that we’re not interested in seeing any [state] bills passed. Because when all is said and done, there will be kind of a rising tide of things that are going to make this happen. It’s going to be the states pushing it, it’s going to be the ability of Congress to actually get something done. But certainly the Congress getting something done will be helped if they see a number of states already moving in this direction.
GBGC: Do those prospects improve in Congress with the Democrats in control?
PAPPAS: I don’t want to say that one party is better than the other. I think we’ve done a good job of making this more of a non-partisan issue. Historically, Republicans have been our biggest challenge, those who fall in the social conservative camp, whom I generally identify as Republicans. But we’ve made a lot of strides with a lot of thoughtful Republicans who view this in a more libertarian way rather than in a socially conservative way. The PPA is trying its best to make this an issue about consumer protection and the potential to raise revenue. Actually, the two leading bills are sponsored by Republicans [H.R. 2366 and H.R. 1174, the “Internet Gambling Regulation, Consumer Protection and Enforcement Act,” introduced in the House in March 2011 by Rep. John Campbell of California].
GBGC: There are three bills, aren’t there, including Congressman Jim McDermott’s?
PAPPAS: They all do different things. Mr. McDermott’s is a tax title bill [H.R. 2230, the 2011 “Internet Gambling Regulation and Tax Enforcement Act”], which describes how revenue would be raised after regulation and licensing is enacted. The other two bills are diff in that Mr. Campbell’s extends beyond Internet poker: It’s poker plus casino style games minus sports betting. Mr. Barton’s bill is poker only.
GBGC update on the US Federal position with regard to internet gambling here
GBGC: How is this impacted by the fact that it’s a presidential election year? Does that weigh on it?
PAPPAS: It certainly does. Not only because it’s a presidential election year. All of the House and a third of the Senate are up for re-election as well. I think, realistically, you’re probably not going to see any bill of significance done in Congress between now and the election. We’re not just talking about Internet poker but anything of substance. I think what we’re looking at with this Congress is something post-election.
GBGC: What about the Senate? Will we see Nevada Sen. Harry Reid again introduce legislation?
PAPPAS: That’s the million dollar question, when will the Senate work on this? I think there’s been a lot of work behind the scenes the last several months, and I expect that at the right time during this year Senator Reid will see to move his legislation. Unfortunately, I can’t predict when that time might be.
GBGC: How significant is it, then, if it’s Nevada going it alone, for now, as the only state to institute a regime for regulating and licensing Internet poker?
PAPPAS: Well, Nevada is very interesting. The PPA supports the Nevada bill. We think it’s a good bill. But Nevada is interesting because they’ve made it clear, their state legislators have it made clear, as well as the governor, that they will fall in line with a federal solution should one be enacted, and they encourage it. I think what Nevada is really doing is setting themselves up to be the model of what the regulation of Internet gaming, or rather internet poker, will look like.
GBGC: State Sen. Roderick Wright’s bill in California [SB 1463, the “Internet Gambling Consumer Protection and Public-Private Partnership Act of 2012”] appeared to have a lot of support. But earlier this month he pulled it from consideration. That has to be disappointing. What happened?
PAPPAS: Well, unfortunately, what’s happened there is a number of different tribes are all very competitive with each other, and they don’t trust each other, and because certain tribes may have been benefiting more than other tribes, those that didn’t think they weren’t getting equitable benefits decided to killed the bill. That’s exactly what happened. The day before the bill was up for hearings [in the Senate Policy Committee] a number of Indian tribes sent letters in opposition to it, and the tribes hold a lot of influence in the state, so they were effectively able to kill the bill. I think Senator Wright was trying to do the right thing. He modified the bill, crafted it for an industry that is open and competitive, and I think that while it was very good for the consumer, maybe it was not so good for some of those tribes that are looking to have a stranglehold on the market there.
GBGC: You’re referring to the California Tribal Business Alliance? They’re a relatively small group. Hadn’t a number of important tribes signed on to the bill?
PAPPAS: As I understand it even some of the larger tribes, like the Morongo, and some of those that are part of the [California Online Poker Association] were also opposed to the amended version of the bill. They were in support of earlier versions of the bill but opposed some of the later versions of it. It wasn’t just a single tribal entity that you could blame, but a number of tribes that took a position that this was a bill they couldn’t support.
GBGC: Given the power and influence of tribal gaming, is any Internet gaming legislation possible in California?
PAPPAS: I wish I knew the answer to that question. I believe that California, by necessity, is going to have to do something. I’m hopeful that the politicians and the policymakers there can look beyond the specific interests, the self-interests, of certain groups to recognize what’s best for the millions of California consumers. And that’s really the only way this is going to get done. The politicians have to do what’s right. They don’t have to do what they’re being told by their specific tribal constituencies.
GBGC: What’s happening in New Jersey? After vetoing a bill last year, Gov. Chris Christie earlier this year appeared to be in support of an amended version of the same legislation. Now we hear from state Sen. Raymond Lesniak, the bill’s principal sponsor in the upper house, that the governor may oppose this version. What’s the latest there?
PAPPAS: Versions of the bill [A2578/S3019] have to pass both the Assembly and Senate. The Legislature is in recess now and isn’t reconvening until early September. That’s the earliest the bill is going to move again. Then identical versions will have to pass both houses. Which I don’t think will be a problem. The real problem is Governor Christie and the question mark over whether he is going to support the bill or not. I’m not in New Jersey, but from what I’ve read and what I’ve heard from others, there is a hot and cold relationship between [Lesniak] and the governor that could very well have a big influence on whether this bill gets done.
GBGC: Do you see passage in this session?
PAPPAS: I certainly can see a bill getting passed and signed into law.
GBGC: As you look out over the rest of the country, where do you see the best opportunities for online poker?
PAPPAS: It’s difficult for me to say what states are going to go first because there’s still a lot of work to be done at that level. I think this is something that everyone needs to be aware of right now. A lot of people were very optimistic after the Department of Justice ruling in December [validating intrastate online gambling] that states were going to start enacting bills left and right. That’s just not the reality. The reality is this is going to be a slow process. Just look at the efforts here at the federal level. We’ve gone almost six years since UIGEA passed and were now just getting to the point where the odds of a bill getting done are about 50-50. I think it’s foolish to believe within two years that a number of states are going to have passed Internet poker and Internet gaming legislation. What’s more likely is a number of states will begin trying over the next two years. And maybe one or two will be successful. But for a critical mass of states to get off the ground, I think it’s going to be around the five-year mark. … Beyond that you can look at states where the legislatures don’t have to enact something, where the [state] lotteries themselves can take their games online. You’re seeing that in places like Illinois, where the lottery can simply offer them without having to get approval from the Legislature. It really depends on the state constitutions or the agreements the lotteries have with their states on what kinds of games they can offer.
Interview conducted by James Rutherford
GBGC update on the US Federal position with regard to internet gambling here