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May 20, 2008
Washington Says NO - New Hampshire Raises the Tax

wo decisions in closely watched cases would affect poker players in times to come. One was taken by a county judge in Washington and will affect online players.

The other was taken by the New Hampshire Senate and will affect land based charity games.

After hearing the Poker Players Alliance (PPA) and the State, Judge Mary Roberts threw out the petition filed by the PPA that sought to overturn the legislation that declared online poker to be illegal. In 2006 the 1973 Washington Gambling Act was amended to ban online gambling and to make a violation of this law a felony that would enable seizure and forfeiture processes. In 2007 Lee Rousso, the state director of the PPA and an attorney himself, filed a petition seeking to overturn the law.

Rousso placed two arguments before the judge. He said that this law discriminated against interstate businesses, of which online gambling was an example, and thus violated the constitution. He also alleged that the amendment was designed to protect the interests of brick and mortar casinos most of which were located in the district of Sen. Margarita Prentice, the sponsor of the amendment. Reader would recall that a similar issue was raised in Norway when laws were passed against online gambling allegedly to protect the state owned gambling monopoly Norske Tipping. The State Attorney General argued that the states have authority over their criminal laws. He said the question was where the online gamblers were located and not where the online gambling company was located. Judge Mary Roberts dismissed the complaint citing the following reasons. Rousso had been unable to prove his charges of discrimination. And the Washington community has been historically against gambling. Outside the court Rousso told the online poker supporters that the fight was not over and that he would be approaching the Supreme Court.

In New Hampshire a 2007 bill that would tax land based poker games had cleared the Senate sub-committee earlier this month and was now passed by the Senate with a 16 to 8 majority. The tax would be effective from January 1, 2009. This tax is expected to reduce the State deficit by $3.5 million. The bill imposes a 10% tax on net house earnings of organizations that hold poker games for charity in the case where chips have monetary value. Where chips do not have monetary value, as in poker tournaments, the tax would be 3% on the amount collected from the players. 

During the debate Gov. John Lynch justified the tax on the basis that bingo and Lucky Seven gambling were already paying this tax and there was no justification in leaving poker out. Sen. Robert Odell countered the argument that the charities that run such poker games would now get less. Perhaps he was referring to the fact that this bill had raised the bet limit from $2 to $5. Perhaps the mantra of the state government is gamble more and pay the state more. Because after approving this bill the Senate discussed the possibility of allowing slot machines at horse and dog tracks. This move can generate revenue of $300 million annually, which can be taxed later.


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