Laurence H. Tribe, a renowned Professor of Constitutional Law at Harvard, and Barack Obama’s mentor when he was a Law undergraduate there, has branded “bad actor” clauses in two California poker bills flaky and “unconstitutional”. The bills, both of which seek to establish a framework for the legalization of online poker in California, won’t stand up to federal legal scrutiny, he says, due to the strongly worded and non-severable “bad actor” clauses contained within them.
For those late to the party, “bad actors” refer to operators who continued to accept bets from American citizens following the passage of the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), a sneaky piece of legislation that was smuggled through Congress tagged onto an anti-terrorism act (the SAFE Port Act) on the last day before it adjourned for the elections of that year.
The act prohibited gambling businesses from “knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law.”Â The list of “bad actors,” therefore, has included industry giants PokerStars, who are thus frozen out from the newly regulated US markets. The relatively new jurisdictions of Nevada and New Jersey also have made stipulations against the inclusion of bad actors, as have the draft California bills and a new bill to legalize online poker in Pennsylvania, drafted only this week.
The only problem is, the most prominent expert in Constitutional Law in America believes this legislation violates the constitution. The bills, says Professor Tribe (and we should note, he has only looked at the two in California), “should not, and would not, survive federal constitutional attack.”
The first problem, he says, is they “are, and would probably be found by a courtÂ to be, constitutionally prohibited bills of attainder.” A bill of attainder is a piece of legislation that accuses an individual or a group of a crime without giving them the benefit of a judicial trial. It’s against the constitution, because it’s there to protect the civil rights of Americans and to prevent persecution of individuals and groups.
“The Senate and Assembly bills both contain provisions clearly designed to exclude readily identifiable (even though not expressly named) entities such as PokerStars from the California online poker market,” said Professor Tribe. “These provisions fly in the face of the US Constitution’s command that “[no] State shall … pass any Bill of Attainder.
He continues: “A court should also have little difficulty recognizing the harm to PokerStars’s intangible property, including harm that takes the form of rendering that property valueless as an object of sale or licensing to others — as actionable under the Takings Clause.”
And finally Tribe believes the Equal Protection Clause “invalidates the Senate Bill’s strikingly arbitrary cutoff date [i.e., the passage of UIGEA]- a date which has the unusual effect of excluding entities like PokerStars that are most established in the market …the inapplicability of traditional rationales for the temporally inverted cutoff date, and the discrimination against a single out-of-state company all come together to create a significant prospect that a court could be persuaded to invalidate the cutoff date under the Equal Protection Clause.”
With the news that PokerStars has been acquired by Amaya Gaming in a carefully orchestrated tactical maneuver, it’s clear that they are determined to find a back door into the regulated US markets. But it may not be too late to stroll in through the front door, either.