High Stakes: Toby Moffett, online poker, billions in tax revenue and liberal ideals

Once upon a time, he was one of this state’s most liberal firebrands: a devotee of Ralph Nader, a founder of the Connecticut Citizen Action Group, a post-Watergate Democratic congressman proud of his efforts to help stop funding for the Vietnam War.

Today, Toby Moffett is the lead lobbyist for online poker and a devout apologist for a popular gambling website that the feds are calling “a global Ponzi scheme.”

“There’s nothing I’m doing now ... that’s out of character with anything I’ve ever done,” Moffett says. “This is a liberal issue, this poker thing.”

His argument is that online-poker-playing Americans are simply “a mass of millions of people exercising what they regard as their natural liberties.” It’s also a liberal issue, he says, because it would mean strong government regulation to protect consumers and a painless way to raise billions in new tax revenue.

Moffett, 67, is head of the Washington, D.C.-based Moffett Group, which includes among its many clients the Egyptian generals who used to support Hosni Mubarak’s regime and are now running that nation. (“We would never have continued with this if we thought for a minute they would fire on their own people,” Moffett explains when asked about the Egyptian thing, quickly adding that Mubarak was “never our client.”)

This former lefty congressman insists he’s still a strong Democrat and a supporter of Barack Obama, even though he believes the president’s administration is making a huge political blunder by opposing online poker and indicting its biggest players. Moffett’s been pushing for years for federal legislation to legalize, regulate and tax online poker, but has been blocked by a peculiar combination of right-wing Republicans and left-wing Democrats.

According to Moffett, the federal government’s brutal money problems are likely to boost the odds in favor of legalization of online poker, if only because of forecasts that it would produce billions in new tax revenue over the next decade.

Online gambling is illegal in the U.S., a fact blithely ignored by millions of Americans who regularly wager on websites in other nations and even on some sites in this country. Casinos like those run in Connecticut by the Mashantucket Pequot and the Mohegan tribes are warily watching and wondering how online gambling will affect their bottom lines.

Last April, federal prosecutors indicted the heads of the world’s three biggest online poker operations (Full Tilt Poker, Absolute Poker and Poker Stars) on charges ranging from illegal gambling to money laundering. Earlier this month, the operators of Full Tilt were the target of a federal civil suit claiming the website had taken in $390 million in player money it was supposed to be keeping safe and had in fact funneled most of that cash to its owners and managers.

Players who used Full Tilt would put money into accounts on the website, which they would then use in online poker games. The company promised to keep the money in accounts that the players to access or close out at any time. Since the federal indictments, Full Tilt payouts or reimbursements to players have lagged or stopped completely.

“I don’t believe those guys do this sort of thing,” Moffett says of the accusations against the top people at Full Tilt. He admits he doesn’t have any hard evidence of what went on at the Ireland-based poker website, and that it’s possible there “could have been illegal behavior, depending on how you define illegal.”

“At worst, maybe they weren’t vigilant or not diligent enough,” he adds.

Moffett has used his Connecticut connections to help line up most of this state’s congressional delegation in support of online poker legalization. He lists among the supporters U.S. Reps. John Larson, D-1, Joe Courtney, D-2, Jim Himes, D-4, and Chris Murphy, D-5, all of whom have gotten some campaign contributions from Moffett’s client, the Poker Players Alliance.

According to Moffett, Obama’s anti-online poker policy is alienating a whole bunch of “techie white guys” who could well end up voting Republican over this issue. Moffett says the U.S. is bound to legalize online poker just as Britain, most of Europe and many nations around the globe have already done.

“It’s gonna happen,” he says confidently. “It’s just a matter of when.”

In the meantime, this former anti-establishment liberal will gladly keep raking in big gobs of the lobbying cash the Poker Players Alliance is laying down on the congressional roulette table.


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