Most online gambling websites have pulled out of the United States market, out of fear of prosecution from the Justice Department. Though there is no federal law banning online poker or any form of online gambling, the Justice Department treats the UIGEA, passed in 2006, as a de facto ban. The government uses that law to go after any gambling websites or financial institutions who are involved in gambling transactions with American citizens. Now one poker room has found a loophole and is legally operating in the U.S.

Chilipoker recently began offering a service for American customers that allows them to play online poker for real money. And it is 100% legal. Chilipoker is offering a “subscription-based service.” Basically how it works is that instead of the players paying for each hand of poker, they pay a monthly subscription fee. They then play the games themselves for free, with winners earning cash prizes.

Though the U.S. is growing more and more progressive and anti-business, there’s nothing illegal about operating a website that requires a paid subscription. There’s also nothing illegal about giving away cash prizes. The fact that the website features poker games is irrelevant. It could be solitaire, checkers, World of Warcraft, fantasy football or whatever.

Right now I’m sure the DOJ is looking for a way to prosecute Chilipoker. Just as they found a way to sue a state (Arizona) that made the federal government look incompetent, I’m sure they’re searching for a way to prosecute a poker website that is making them look like fools. Like Arizona, Chilipoker has broken no laws, but that doesn’t stop progressive governments from flexing their muscles and exerting their control over foes. It will be interesting to see how this shapes up and whether other gambling operators follow Chilipoker’s lead to enter largely neglected the U.S. market.

Harry Reid got to keep his job. Yeah, I know. I was as surprised as you were. In an election where Republicans had a historic sweep of Congress – the most one-sided midterm election in 70 years – you had to assume that Harry Reid would be unemployed in January. I mean, he had to be.

This is a guy who is so senile that he often votes against his own bills. That includes the healthcare reform bill, which he considers his crowning achievement. Reid voted against it initially and had to have a colleague remind him that since it is his bill, he probably meant to vote yes. This is a man who said that the entire world would be in a depression if not for him! It’s also a man with an approval rating in the 30s! For Reid to win, that would mean that lots of people who hate Harry Reid would have to vote for him.

Apparently, that’s what happened. It helps that, in a clear violation of federal law, labor unions in Nevada required their members to vote in the election and provide proof to their employer that they had voted. And in case you’re wondering, yes, they were also encouraged to vote for Reid. It also helps that electronic voting machines in Nevada had Reid’s name automatically checked by default. The technicians for those machines are members of SEIU, the largest labor union in the nation, but I’m sure that’s a coincidence.

Fair or not, fraud or not, the sad truth is that Harry Reid gets to keep his job as Senator for the state of Nevada. It is not yet determined whether he will remain the Senate Majority Leader, because a few not-yet-decided races could give the Senate to the Republicans. If the Democrats retain control of the Senate, though, what does that mean for online gambling?

It’s not good. Harry Reid is in the pocket of the Vegas casinos, many of which oppose online gambling. For that reason, Reid has said many times that he didn’t support any of the online gambling bills currently in Congress. He considers them a threat to Vegas casinos and has said that he would not support any legislation that was a threat to them. Since he is the Senate Majority Leader, that carries a lot more weight than if he was just another Senator. If he maintains that position and the Democrats maintain control of the Senate, they are unlikely to push hard for legislation opposed by their leader.

Also, as Leader, one of his jobs (along with the Majority Whip) is to organize his party and unify them on bills. There’s a good chance he would use his persuasion to make sure not enough people vote on a repeal of UIGEA, if such a bill were to come to a vote. In short, Reid keeping his job is bad for the country in a whole lot of ways, one of those ways being that any anti-UIGEA legislation is likely to die in the Senate.

It’s not exactly news when Democrat politicians are involved in tax evasion, corruption and fraud. Really the only thing that makes the Patrice Tierney case worth mentioning is the racketeering charge. Otherwise, it’s old news.

Patrice Tierney, the wife of Massachusetts U.S. Representative John Tierney, will plead guilty to charges of racketeering, money laundering and running an illegal gambling business. She was recently named in an indictment that involves two of her brothers, Robert Eremian and Daniel Eremian. In total, the group was indicted on 422 counts involving five people. Patrice Tierney faces up to three years in prison as well as fines totaling hundreds of thousands of dollars.

According to the indictment, Patrice Tierney traveled to Antigua, where she helped her brother, Daniel, care for his family and seemed to be involved in his business. Part of that business was collecting debts for online gambling businesses owned by Robert Eremian. Much of the money made by the gambling businesses in Antigua was paid out to relatives in the United States. Tierney admitted to paying her brother’s taxes, reporting earnings from the gambling business as “commissions” rather than “illegal gambling” income.

Though the U.S. Attorney’s office has not proved that Tierney knew Eremian’s business was illegal, she has admitted full responsibility for being “willfully blind” to what he was doing. Most likely, it was a situation where she knew the income could not have been coming from where her brother said, but she was unwilling to question him.

In addition to the current indictment, Robert Eremian has a history of tax evasion dating back to 2002. Again, Democrats and their families not paying taxes is kind of par for the course. Patrice Tierney is pleading guilty and cooperating with the investigation in order to receive leniency.

No direct connection between the alleged crimes and Congressman John Tierney has been made. The Massachusetts seven-term Congressman faces Republican Bill Hudak in his re-election campaign this November.

Online gambling proponents in the United States, you might want to sit down, because I have more bad news. Things just aren’t going well for you. I know a lot of you got excited about Barney Frank’s online gambling bill, especially when it passed the House Financial Services Committee, and optimism is a good thing, but there are too many reasons to think that UIGEA will survive 2010.

The biggest obstacle is simply time. As I mentioned before, Congress has a limited time to pass the law. Any bill that isn’t signed into law when the new Congress takes over in 2011 will be killed. Congress then has to start the process over from the beginning. Even if they took the same exact bill, they would still need to get support from the new members of Congress, get new markups from those members, clear committee, have the bill reach the floor for debate, be voted on, passed and signed into law.

Congress recesses on October 8 and from then on is going to be in full-on campaign mode until after the mid-term elections on November 2. Before October 8, few bills will be passed and certainly nothing of a controversial nature, giving ammunition to the opposition.

For all of those reasons, Barney Frank admitted to The Hill that his legislation, the Internet Gambling Regulation, Consumer Protection and Enforcement Act (H.R. 2267) is not likely to become law in 2010. Another problem is that the companion bill, the Internet Gambling Regulation and Tax Enforcement Act (H.R. 2268), is going nowhere. The bill, proposed by Jim McDermott, would set up the tax laws and structure for online gambling once it is legalized by Frank’s bill. Recently, McDermott admitted that he does not think the bill will be marked up before the Congressional recess, meaning the bill would never even make it to committee.

Even if Frank’s bill and McDermott’s bill somehow both got passed by the House, there’s another problem: the Senate. Senator Robert Menendez introduced the Internet Skill Game Licensing and Control Act (S 3616) and companion legislation last year, but it has little support and is drastically different from Frank’s bill. The bill has yet to be marked up and may not have enough support to clear committee. Even if it does, Harry Reid, the Senate Majority Leader, opposes the legislation. Reid, who represents Nevada, is looking out for the interests of the Las Vegas casinos. His office released a statement that said that he “does not support any of the existing bills and he would oppose any proposal that would put jobs in Nevada at risk.”

It’s hard to pass a bill in the Senate without support from the Majority Leader. Even if that happened along with the House passing both H.R. 2267 and H.R. 2268, the bills would be different, so they would have to go to conference committee until there is only one online gambling bill. Then it would have to be signed into law by President Obama before the new Congress takes over in January. Sure, that is possible, but I can tell you that the odds are worse than any game in Vegas.

It was not long ago that seemingly every online gambling news source reported that UIGEA was likely to be repealed this year. They touted accomplishments like Barney Frank’s bill passing the House Financial Services Committee. Meanwhile, I was one of the few people telling you not to hold your breath, that in the limited time left before mid-term elections, it was unlikely that a Congress that is concerned now more with elections than in passing legislation would floor such a controversial bill. Now it seems that Barney Frank agrees with me.

Representative Frank recently told Capitol Hill that he does not believe his online gambling legislation will be discussed on the floor before the mid-term elections. He also does not believe it will be discussed during the lame-duck session. Traditionally, Congress does not pass any major legislation during the lame-duck session because doing so would likely go against the will of the American people, who voted the people out for a reason. Still, some members of Congress have hinted that major controversial legislation such as a climate change bill could reach a vote due to lame ducks having no more fear of losing their job.

Aside from lame-duck legislation, the other dirty trick that could get Frank’s bill passed would be to tack it onto another larger bill, such as a jobs bill or a tax-cut bill. UIGEA was itself tacked onto the SAFE Port Act in 2006 as an amendment and the best chance bill that would repeal UIGEA has is likely to do the same.

Yet even if that happens and Frank’s bill passes the House in 2010, there is still a much bigger problem: the Senate. The closest thing the Senate has to a comparable bill has little support and is also not scheduled for debate. In order for UIGEA to be repealed in 2010, the bill would have to pass the House and then the Senate and if the two bills are different, which is almost guaranteed, it would then have to be combined by a Conference Committee and passed again. It would then have to go to President Obama and signed into law. All of that before the new congressional session in January.

It is for that reason that I think 2011 is the best chance we have for repealing UIGEA. Though Frank may no longer be Chairman of the House Financial Services Committee anymore (and may not even still be in office), Congress should be full of moderate Democrats and Tea Party Republicans that lean toward small-government libertarianism. If that happens, both sides should be able to agree that the government shouldn’t be banning online gambling.

In the same way that businesses have to pay off the Mafia for “protection” in order to operate, Sportingbet just reached a deal with the U.S. federal government. With the feds shaking them down, the online betting site did the only thing that would make the harassment stop: They paid for protection.

Sportingbet, a company based in the U.K., reached a non-prosecution agreement with the United States government. As part of the agreement, the company agreed to forfeit $33 million to the authorities, supposedly as penance for their American online gambling operations that took place between 1998 and 2006. Of course, there was no American ban on online gambling during that time period and there still is no federal law against it, though the passing of UIGEA in 2006 acts as a de facto ban.

So here’s how it worked. The government accused Sportingbet of violating a law that didn’t exist and if they wanted to avoid prosecution and maybe even be able to obtain a license if the U.S. decides to regulate the industry, they would have to pay up to the tune of $33 million. Relatively speaking, Sportingbet got off light. PartyGaming, the only other online gambling company to reach a non-prosecution deal with the feds, had to pay $105 million. Under the deal, Sportingbet agreed to pay $15 million by September 30 of this year, $12 million by the same date in 2011 and $6 million by 2012.

A lot of people think the United States will eventually legalize and regulate online gambling, though it’s doubtful that it will happen this year. If that happens, it’s likely that those who agree to pay off these government thugs will have first dibs at overseas licenses. In that way, perhaps Sportingbet and PartyGaming are making business decisions that will turn out profitable in the long term. However, in the short term, it’s hard to get past the bad taste that caving in to the mob leaves in your mouth. For those two companies, I hope it’s worth it.

This seemed like crazy talk a few years ago, but online poker is coming to the United States. Tribal casinos in more than 30 states have joined together and the collaboration will result in the first interstate online poker network in America.

Atlantis Internet Group Corporation announced today that they signed a licensing deal with Cake Gaming NV that will open up online poker in the United States. The licensing agreement will allow tribal casinos to run online poker networks on their land. The Atlantis Internet Group Corp. will use their Tribal Gaming Network, which was approved by the National Indian Gaming Commission (NIGC).

This deal succeeds where Congress so far has failed. Many in Congress – most notably Barney Frank and Ron Paul – have been trying to get online gambling legislation passed, but it has stalled in the House after passing the Financial Services Committee and no bill with any support exists in the Senate. It seems increasingly unlikely that a repeal of UIGEA will happen this year. Since intrastate activity and activity on tribal casino is exempt from federal laws, the Tribal Gaming Network needs no such legislation.

The Atlantis Internet Group Corporation will run the only online poker network operating in more than one state. With it, anyone on tribal land can access the online poker network, existing on a Wide Area Progressive network (WAP) and play online poker against anyone else that is on the network.

Before UIGEA created a de facto ban on online gambling in the United States, America accounted for approximately two-thirds of the worldwide online gambling revenue. Losing that market meant online gambling operators losing a lot of money. The tribal online poker network will bring much-needed revenue to the tribes.

Donald L. Bailey, the CEO of the Atlantic Internet Group Corporation, said that the new system offers “an immediate and legal solution to Indian casinos nationwide, providing the largest online poker network in the U.S.” He also called the network a milestone and said that they will provide an “economic shot in the arm for tribes and states facing deficits nationwide.”

Visitors to online casinos and other online gambling sites increased during the month of July, according to comScore. The company, which measures all kinds of Internet statistics, stated that online gambling websites had 13.4 million unique visitors during the month of July. That is an 11 percent increase from June.

So what caused a sharp spike in interest in online gambling during the month of July? No online casino visitors were polled, but it’s a safe bet that it has something to do with a little event during July called the World Series of Poker.

According to Jeff Hackett, Senior Vice President of comScore Media Metrix, the World Series of Poker tournament prompted “millions to visit online gambling sites to test their card-playing skills.” It’s not hard to believe that the tournament, which is now thoroughly covered by the likes of ESPN, among other media sources, would lead to an increased interest in online poker.

Not surprisingly, online poker websites saw the largest gains during July. PokerStars saw an 8 percent increase, Full Tilt Poker saw a 14% increase and Ultimate Bet saw an incredible increase of 33 percent more unique visitors in the month of July.

It is not known how many of those online gambling visitors were from the United States, where the World Series of Poker is held (in Las Vegas). The U.S. federal government currently acts on a de facto online poker ban, thanks to UIGEA, even though no federal ban on online gambling exists.

comScore provides digital marketing intelligence by measuring a variety of statistics for websites, online advertising and online traffic. They use statistical research, analytics and survey tools for their research.

It’s getting harder and harder to find people who aren’t mad at Harry Reid. The U.S. Senate Majority Leader, elected by Nevada, seems to be unpopular with everyone. People on the right hate him because of his radical leftist policies. People on the left feel that he hasn’t gotten enough done for them. People in the middle realize that he’s incompetent and possibly senile. After all, several times he has accidentally voted against his own bill and had to be reminded by a colleague that he wants to vote for it. “Hey, Harry, you sponsored and wrote this bill. I think you meant to vote yes.” And then there are the Las Vegas casinos.

A large part of Nevada’s economy is based on tourism and a large part of that is in Las Vegas. For that reason, Reid has always tried to keep the casinos happy. Therefore, when the topic of legalizing online gambling came up, Reid tried to walk the tightrope. Some of his colleagues in Congress have been trying to overturn UIGEA ever since it passed in 2006, but Reid held out as long as he could and avoided giving his opinion on the issue. The reason is simple. Some Las Vegas casinos are against online gambling and others want in on the market. There is also the issue of tribal casinos to deal with.

Earlier this year, Reid – whose approval rating has been listed as low as 8%  –  finally gave in and decided to support a federal legalization of online poker. As a compromise, he opposes any other form of online gambling and only wants to allow poker. It is a stance that was meant to give him more support but instead it guarantees that he will have none.

The Vegas casinos who oppose online gambling are furious, stating that legalizing online poker puts the foot in the door for a wider online gambling expansion that they believe will hurt their businesses. Eric Dale, general manager of Baldini’s Sports Casino, says that legalizing online poker will not only hurt the casinos in Nevada, but it will also hurt the rest of the tourism industry. He says that such legislation would “take money out of the hands of those who play online, money they won’t have to go out to a restaurant, to a movie, to gamble or eat. They won’t need to come out to a physical box (like a restaurant or casino) that employs people and that scares me.”

I suppose it’s the same problem that brick and mortar stores have had with the popularity of Amazon.com and other e-commerce websites. Like those stores, Nevada businesses will have to adapt to online poker. One such adaptation would be to get into the online gambling business themselves, something Harrah’s Entertainment is already doing.

While those who oppose online gambling are mad at Reid for supporting online poker, those who support it are mad that he wants to draw the line there. Barney Frank’s bill in the House, which passed the Financial Services Committee, would legalize all online gambling except sports betting. If Reid developed a Senate bill that only allows online poker, the two bills would be incompatible and no online gambling bill could be passed. In fact, it’s hard to find anyone who agrees with Reid that online poker is fine but all other games need to be banned. So who is he pleasing? Seemingly 8% of his voters. Good luck with that reelection campaign, Harry.

Several months ago, Harrah’s Entertainment became the first American land-based casino to launch an online gambling website. Harrah’s online casinos are based overseas and do not currently accept players from the United States. However, they are now for the first time advertising to U.S. players.

Harrah’s, sponsor of the World Series of Poker, has begun advertising for their online casinos on their WSOP website. Players cannot gamble for real money on the WSOP.com website. Instead, the online poker website can be used as a tutorial to learn the game. Visitors play poker using chips of fake money. The World Series of Poker website has links to Facebook apps, iPhone apps and online casinos. In those online casinos, unlike the other options, players can gamble using real money.

Right now, American customers cannot play for real money at the online casino, but Harrah’s is hoping it will be an option in the near future. The casino company may be thinking that UIGEA will be repealed soon, since the Barney Frank/Ron Paul online gambling bill (Internet Gambling Regulation, Consumer Protection and Enforcement Act) has passed the House Financial Services Committee. However, as I have pointed out, there are numerous obstacles still in the way of that bill becoming a law. Many in the online gambling industry are growing pessimistic of its chances.

Though I doubt there is anything illegal in advertising for their real-money online casinos in the United States, you can expect Harrah’s to get some heat from the government. The Nevada Gaming Control Board is already looking into their online casino deal and determining whether it is proper. By advertising online casinos in the United States for the first time, the casino will bring itself under further scrutiny, possibly by the federal government this time.