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Amid the California online poker legislation talk and the return of Andy Beal to the Bellagio, a small story with the potential for huge industry-wide ramifications has quietly been gaining steam: Nevada Senate Bill SB40.

SB 40 is designed to prevent sports betting proxies from placing bets (either for a fee or a share of the proceeds) without being properly licensed in the state, but based on its current language the bill would ostensibly make staking in poker tournaments a felony in the state, and this has some poker players extremely nervous.

SB 40 was pre-filed on behalf of the Nevada Gaming Control Board on December 20 but just came to light this past week.

What does SB 40 do?

Lawmakers are certainly not above sneaking things into bills, either via amendments or through loose language that offers wide reaching enforcement, but there is nothing about SB 40 that indicates the intent of this legislation is to eliminate staking in poker or destroy the World Series of Poker.

This is an anti-money laundering bill (specifically targeting sports betting proxy services), NOT an anti-poker or anti-gambling bill.

Still, the current language and interpretation of the bill has poker players extremely worried. As Attorney David Gzesh (who first brought the bill to the attention of the poker community) noted, the bill’s current language results in “overreach.”

But let’s pump the brakes for a moment.

The bill states it’s illegal to accept or facilitate “any bet or wager upon the result of any race, sporting event, or future contingent event…”

The sticking point seems to be the term “future contingent event” which could apply to a poker tournament, but as I’ll explain below, the definition of future contingent event would be up to law enforcement – does it include a poker tournament or is it limited to proposition bets offered in sportsbooks?

A lot of pieces that would have to fall into place

First, the bill has simply been introduced. It still has to go through the Judiciary Committee, and then the normal legislative process such as amendments, where it’s likely some lawmaker will point out how its wide reaching approach has the unintended consequence of basically killing one of Las Vegas’ biggest summer attractions, the WSOP – not to mention the hundreds of other tournaments held in the state.

Anyone truly worried about the implications of SB 40 should contact their representatives and ask for the bill to be amended and draw a clear distinction between go-betweens and legitimate poker staking deals. And no doubt Caesars and other casinos that host major tournaments have already pointed out this flaw in the bill’s language.

Secondly, this is not a bill that has a lot of momentum, or is seen as a piece of must-pass legislation. This is a random piece of legislation among many other random bills that will never make it out of committee and/or never pass through the legislature.

Finally, even if the bill does pass unchanged the enforcement of the bill would still be up to the state’s law enforcement, and it’s likely the law would only be used and cited in cases where arrests have already been made. I don’t expect agents to be waiting at the WSOP cages for poker players.

Not the first time an idea has threatened tournament poker

The bill is certainly shortsighted. But this wouldn’t be the first piece of legislation or policy that was so bad it needed immediate correction. In fact, this same “this is the end of tournament poker” already happened once.

In 1992 the World Series of Poker faced a similar crisis when the IRS decreed that casinos must not only withhold 20% of the prize-pool and 25% of entry fees, but each and every entrant must fill out a W2G form BEFORE the tournament begins.

The IRS, feeling they were not getting their cut of these relatively undocumented earnings, eventually compromised after Nevada Senators Harry Reid and Richard Bryan, with help from then WSOP tournament Director Jim Albrecht, exposed the damage this shortsighted approach would cause the state.

Instead of getting their “cut” the IRS’s new policy would likely end tournament poker once and for all, meaning nobody – not Binions, not Nevada, and not the IRS – would get any money.

What we were left with was the Binions Closing Agreement. The BCA was an agreement (not a law mind you) that required Binions to issue W2G’s to any player cashing for $600 or more regardless of the buy-in amount.

While some casinos have augmented the Binions Closing Agreement (which to my understanding is technically only applicable between the IRS and Binions) the BCA is essentially SOP across the country.

Uptake

Yes, poker players should oppose the bill as it’s currently written, but this is not Sheldon Adelson’s RAWAor UIGEA. This is well-intended bill filed on behalf of the NGCB that is either unnecessary or needs a bit of amending.

This is not some lawmaker’s unbending stance on poker staking.

 

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Steve Ruddock

Steve is veteran of the the poker industry, first as a player and now as a writer focusing mainly on the regulated U.S. markets and the politics of poker. Follow Steve on Twitter @SteveRuddock and at Google+.

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