Letting the Chips Fall

They have been dealt a bad hand.

Online poker players who had turned to overseas providers are now out of luck in the wake of the recent government crackdown on these foreign operations.

While the elimination of online poker outlets would presumably force players back into traditional casinos, Caesars' Entertainment CEO Gary Loveman told Varney & Co. it is actually having the opposite effect.

Loveman, who owns the World Series of Poker, says the elimination of online poker is going to drastically eliminate the number of participants in this year's tournament. Last year 7,319 players entered each paying $10,000. This year Loveman anticipates that number will drop to 5,000.

"Three of the large illegal offshore providers of internet poker were indicted and their sites were shut down by the federal authorities. These sites have historically run tournaments where the winners receive proceeds to play in the World Series of Poker."

According to Loveman, the benefits of online poker extend beyond the tournament, the most obvious being a lesser cost. Loveman says online poker "is much cheaper than building these multi-billion dollar facilities that we do in Las Vegas."

In addition, it provides a service that 15 to 16 million Americans consume safely each week, he says.

The idea that "American companies cannot provide it is currently one of the most paradoxical situations one can find," said Loveman.

While Loveman admits the world of online poker is a controversial industry, he says they have received a lot of support from advocates such as Senate Majority Leader Harry Reid (D-Nev.).

"I don't support everything the senator supports, but I certainly support his leadership of the interest of our state and of our industry."

With such backing Loveman thinks there is a good chance that online poker will be made legal.

"It is a game politicians play and are comfortable talking about playing including our president, so unlike other casino games that have a more controversial nature poker is something that is widely understood. People play it from my mother's retirement home to high school grad parties. I think it is something we can get done."