Wednesday, December 8, 2010

blog of my posts on 2p2 regarding Reid bill dealing with online poker

I've been discussing and debating the Harry Reid bill relating to online poker in the FTP regs thread for the last day or so. Below are my thoughts on the subject including posts from other players that prompted my response. If you don't know about the bill check on the cliffs in the original post of this thread:

harrahs wants anything that opens a market for them and shuts out as much competition as possible. a blackout, followed by state by state ratification gives them the best chance to become THE (maybe the only) player in the US online poker market. they already have the lobbying force putting money in every congressman's pockets. the blackout is fine by them, and they don't really care about the length of time since as of now they have no market share. they just want to make sure that when it is over everyone else is scrambling, the system is a mess, and their current power in the market and lobbying will set them up.

the more I read about this bill the more I am against it. frankly I don't understand how anyone that isn't a clueless casual player (or someone that derives their income from live games) would support this bill. the down sides of 15 months during which online poker could nearly disappear from the consciousness of the casual US player seems like way to great of a risk in order to get harrah's controlled online sites that only allow US players and may exclude a ton of states (if they choose not to opt in).

I'm really close to calling my senator and telling him I'm against this, but I think he's already against online poker because he's a religious right idiot.

Originally Posted by cheet
a PPA guy said harrahs and other b&m gaming interests will actively pursue a full internet poker ban if this doesn't pass, so they market is cleared for them when they can get a bill through
so I'm supposed to take the poison because if a don't they are going to shoot me in the head? whatever I'll take my chances by not getting in bed with these slime.

frankly seems like a good time to start talking about boycotting the WSOP. Harrah's can go **** a duck as far as I'm concerned.

Originally Posted by PenelopeCruz
Why do you place so much importance on a one year period when the end result is the long term sustainability of your profession? As it stands right now there is nothing but uncertainty, maybe the current system is sustainable but all logical reasoning suggests otherwise...

because the more I read about this bill the less confident I feel that anything resembling the status quo will return after this period. Plus I think that's enough time for the game to be forgotten or lose the luster that it has gained in the last decade. People didn't really talk about poker 15 years ago. Kill the biggest reminder of it in the consciousness for 15 months and who is to say it will come back with the same gusto?

plus why should I believe that the government getting more involved is in anyway I good thing for an industry like poker? they are going to view this industry the same way they view alcohol and tabacco. and unnecessary vice that they can tax or regulate as they please.

plus how many red states do you think are going to opt in when it returns? how long do think it is going to take before the government decides to let international players play? plus how do we know rake doesn't become as ****** as it is in live casinos?

tbh just too much potential negatives with this version of the bill. I'm not saying I don't support full legalization of fund transfers as well as potential regulation of the industry. but the reid bill is not written in the best interests of online players. it is written in the best interests of live casino interests and congressmen who want to get more cash (both in campaign contributions and tax dollars to allocate). I'm willing to hold out hope for something better instead of getting effed in the A now hoping that everything works out in two years.

oh and I don't know if you guys realize it, but they are planning on starting to take taxing poker seriously for recreational players as well. which is a big deal since they can't deduct losses like we do and will end up paying taxes on winnings and then deducting losses from the entire income. maybe the IRS and pokerrooms just ignore this and it doesn't change anything in live games, but they can easily keep track of it online since every online casino will have to be licensed and the IRS and DOJ can easily get all of their records.

how would you like it if every casual player suddenly had several thousand less dollars to play with every year because the government taxed them on their breakeven or losing play?

I'm just basing that on what I read in the leg forum thread, so I could be wrong. but as far as I know the bill changes nothing about how the IRS or states tax gambling wins and losses. which fwiw in most states is terrible for casual players. IE you can't deduct all losses, must pay on all wins, and if wins bump you into a higher tax bracket so be it. I mean most tax laws on gambling are really really bad for casual players. the reason that nobody addresses it is because casual players never pay taxes since they either lose and nobody pays attention, or they are dealing in cash at live casinos. If you put it online in a regulated online industry you can bet the government is going to get their chunk. how many casual players are going to keep playing when their losses are tallied up for them by the site (so they see in writing how bad they suck) at the end of the year and then shipped to them so that they can figure out how much tax they may have to pay on losing money online? my guess is this is more likely to push people away then encourage them to play.

Originally Posted by Reefypoopoo
your points about poker losing it's appeal after the period and opt out states are valid.

However, there is no way recreational players are going to F themselves in the A in regards to the IRS under the retarded system. People just don't do that. Consider the average Joe who makes $50K yr, gambles regularly for $50K wins and $45K losses yearly totals. You think they're gonna pay additional taxes on that 50K? I don't.

if they don't they are subject to audit and fines because they would be committing tax fraud assuming they don't file as a professional gambler. the irs or doj would have the power to request the records of any site and it might actually be written into the bill that these sites are going to be providing 1099 to customers basically prepping the information for the government.

maybe a vast majority of casual players refuse to pay and it goes to courts where the consider changing the absurd laws on gambling taxes in the US, OR maybe people just get scared and quit playing. I don't know. but either way it can't be a positive relating to taxes for casual gamblers in the US that the government is going to have access and information regarding their wins and losses under our current tax code.

Originally Posted by Ditch Digger
Just because 1 or 2 idiots are babbling about this in the legislation forum doesn't mean it's true. 90% of the people in that forum have no clue of how anything is going down so stop taking what they are saying as fact.

If you find a post from a reputable poster that has connections in Washington I'll gladly eat my words in the above paragraph.

I dont really know what youre talking about. all i did was make some logical inferences based on the knowledge of the reid bill that is being presented in the major cliffs in the leg forum. you really think if the IRS has information on every online poker players income and losses that they would move to get some of that money? and how long until the states have access to this information so that they can pursue their own taxing of it? my guess is not long once they realize the potential windfall.

you guys can be all optimistic, and I hope youre right. but understand that the bill that you guys are rooting for was not written by people who give a flying crap about professional poker players or their abillity to make money. it was written by people who want to get their hands on as much poker rake as possible. united states owned and operated casinos that can pay taxes and campaign contributions. aren't you at all concerned about this future licensing process? do you really think that harrahs and MGM are going to sit on the sideline and let FTP and Pstars get licenses when the people with the power have been recieving campain contributions from Harrahs and MGM for years?

I think I have good reason to be pessimistic. I'm just hoping that this bill fails and the next attempt by the PPA or whomever gives some credence to an open and fair market place for all players. basically I want a bill that is written as if it is trying to tax an already functioning industry, and regulate the payment processors that will step up to work with these sites. I'm not interested in a bill that acts as though this industry has never existed and it's passing creates the entire environment for which all future sites should function.

Originally Posted by Nick Rivers
The IRS is going to insist that people pay their fair share of taxes. Some of us already (begrudgingly) do that. Perhaps you are ideologically opposed to paying taxes, but that's neither here nor there with regards to this bill. The government is not overstepping its bounds when it insists on getting access to income records for its citizens so that they can be taxed appropriately. This goes for state revenue agencies as well.

It's a question of which you think is the lesser of two evils. On the one hand, you have the PPA, Caesars, and the MGM coming together to make a ****** bill that hands online poker over to a bunch of scumbags. On the other hand, you have the status quo. Or do you? IMO if you think the status quo is really the alternative to this bill, then I think you're the one guilty of being overly optimistic. And that's saying something, because the status quo isn't exactly all that great. The GOP is coming back into power. These are the clowns who brought you the UIGEA to begin with. Do you think they're just going to sit around and let the status quo continue, or do you think they're going to start in with even more meddling and nonsense? I'm guessing the latter. If this bill does not go through, then online poker is once again exposed to potential GOP corruption and idiocy in the future. CEC can, of course, bribe them as well, but any bill that comes from them would probably end up being even worse.

I don't really like either outcome. Both are fraught with pitfalls, and it's definitely the case that nobody is looking out for the players in any event (and you're out of your mind if you think the PPA will at any point in the future). It's possible this was inevitable and that we live under a pretty awful political regime, or maybe it's possible that we've just been complacent and haven't made any real moves to protect our niche industry. Whatever the case, I'm not an optimist about online poker no matter what happens with this bill. Either way, it looks like things are not going to be as good for us as they have been. If I had to make a gun to the head decision, i guess I would want the bill to pass; I'd rather take my chances with CEP and MGM and pray for a miracle than wait and see what the GOP does next to ruin an already dwindling online poker landscape.

the second part is just agree to disagree, but as to the bolded I am not here to argue whether the government is morally or ethically correct in taking all possible steps to obtain tax dollars and I understand that they have a legal claim to lots of money in the gambling world that they never see. I pay all of my taxes and I always have, but if losing casual poker players aren't paying taxes on their play because they deal in cash and/or don't make enough that the govt notices than I don't really give a crap as it is in my best interest. is that selfish? hell yeah, but I don't give a crap. there are lots of things that people can do everyday that illegal or not supported by our government, but people get away with it. does the US government have a right to prosecute people? sure, but I don't care.

whether or not the government has a legal right to something doesn't mean that I have agree with it on a selfish, moral, ethical, or whatever basis. If the government currently can't get their hands on tax dollars of most casual gamblers I don't give a ****.

cliff notes: I'm against it.

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