Nevada House Bill 40 Might Put an End to Poker Tournament Staking Agreements
A new Nevada gaming law could put an end to the kind of poker staking agreements which dominate the top end of the professional poker tournament circuit. In many events, the most famous and popular pro players do not pay the stake to enter an event. Instead, a corporate sponsor pays the stake into the tournament. In some cases, one or more private sponsors fund the players entry into a high-entry tournaments.
That is true especially in the high rollers events, when a player isn’t likely to accept the risk of a $1,000,000 buy-in or even a $100,000 buy-in. In those cases, backers put up a portion of the money, in exchange for a percentage of the winnings, if and when that gambler wins the event (or finishes in the money at all). In many ways, such agreements are the only way an event like the Big One for One Drop, a $1 million entry event organized each year for the One Drop Foundation, which helps people in developing countries find water sources.
HB 40 Would Ban Staking Agreements
Now, players are concerned that such staking agreements might be outlawed in Nevada, home of the greatest number of professional tournaments. House Bill 40 has been pre-registered in the Nevada legislature on behalf of the Gaming Control Board.
Money Laundering Being Targeted
The ostensible reason lawmakers might write such a law is an overriding concern about money laundering in organized gambling. In particular, the bill is meant to combat money laundering in sports betting.
One problem the US federal government asked states to address is third-party betting at legal sportsbooks. Organized crime is known to use third party individuals to place wagers for them, in hopes of laundering money that was generated through organized crime activities.
How Criminals Launder Money
What criminals do is place large bets on either side of a sporting event. They wager dirty money on these events, knowing they would win back the vast bulk of that stake in “clean money”. The amount they would lose on the odds would be well worth the ability to launder the money, making it hard or even impossible to trace by legitimate authorities.
The bill makes it illegal to facilitate or accept wagers on “the result of any race, sporting event or future contingent event” without having the proper licensing to do so. The bill also would make it illegal “to transfer or deliver payments” on such bets, whether the third party used either cash or other means to make that transfer. Thus, it would be illegal for money launderers, their third party proxies, or the sportsbooks to become involved in such wagers.
Punishments for Such Crimes
Those guilty of such crimes would be convicted of a category B felony. Such crimes are punishable by up to 6 years in prison and a $5,000 fine. A casino involved in such a transaction might receive a stiff fine.
Such a law would be hard for casinos to police, but it would also do collateral damage to big money organized poker tournaments. If pro gamblers had to stake themselves in the Big One for One Drop event held at the World Series of Poker every year, not many of them would be likely to enter. In fact, enough might stay away that the event itself might no longer exist.
Events Effected by HB 40
In 2014, eventual Big One for One Drop event winner Daniel Colman was rumored to have been staked by a small number of wealthy individuals. Since the talented Mr. Colman’s career winnings had not exceeded a million dollars in total, he was unlikely to be staking himself. When he won $15 million-plus on having won the event, it was thought a significant portion of that money went to his bankrollers.
Colman created a stir by leaving the casino that night quickly, without giving interviews. In explaining his actions, Colman later explained that poker is a “dark game” and he did not want to advertise it. Some suggested he wanted to avoid notoreity on the part of the ones who staked him, but of course, his quick departure drew far more attention than answering a few simple questions about how he won and what his emotions (on winning) were. The conversation eventually resolved on the idea of problem gambling, and not mysterious benefactors.
Lobbying Effort Needed
The bill has not been discussed in committee yet, much less on the floor of the Nevada state legislature. Before the bill is discussed in earnest, the Poker Players Alliance and other proponents of the gambling industry will need to lobby lawmakers on the need for a carve-out.
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