Trying to overturn a 2006 U.S. ban on online poker, gamblers have started a lobbying group, established a political action committee, and promoted their effort to politicians by holding poker tournaments at the Republican and Democratic nominating conventions.

“Up until this point, the minority of the public that is anti-gambling has yelled louder,” professional poker player Andy Bloch said.  “We’re trying to change that.”

The Poker Players Alliance, which claims 1 million members, has invited lawmakers and celebrities to a charity tournament Sept. 3 in Minneapolis, across the Mississippi River from St. Paul, where Republicans are meeting to formally nominate John McCain for president.

Before President George W. Bush signed the Republican- backed gambling ban in October 2006, the U.S. accounted for about half the market on Internet gambling sites operated from countries where betting is legal. Inserted into unrelated port- security legislation by then-Senate Majority Leader Bill Frist, a Tennessee Republican, the law forbids credit-card companies to process online-wagering transactions.

The ban hammered Internet gambling stocks in London; PartyGaming Plc fell 58 percent, and Sportingbet Plc plunged 64 percent, on the first trading day after Congress passed the measure. At the time, Gibraltar-based PartyGaming alone said it had 900,000 American players. PartyGaming and Sportingbet still trade for 80 percent less than their prices before Congress passed the ban.

Internet Gambling
House Financial Services Committee Chairman Barney Frank has sponsored legislation to allow and regulate online gambling, including poker. Frank, a Massachusetts Democrat, said he expects the measure to pass next year in a Democratic-controlled Congress.

Frank, Bloch, and actor Ben Affleck were among almost 200 participants during last week’s Democratic National Convention at a tournament benefiting the Paralyzed Veterans of America.

The Washington-based lobbying group set up 20 tables with cards, chips and professional dealers in a second-floor room at Coors Field, home of the Colorado Rockies baseball team. Players got buttons reading: “Reduce your carbon footprint. Play online poker.”

Larger Political Force
“We’re trying to make this a larger political force,” said Toby Moffett, a lobbyist and former Connecticut Democratic congressman who represents the poker group and urged it to sponsor the convention events. “It shows our supporters we’re not going away.”

Gamblers say the law violates individual rights. “It’s a bad idea for legislators to tell people what they can and cannot do in the privacy of their own homes,” said poker pro Chris “Jesus” Ferguson during a lobbying trip to Washington last fall.

Online poker also is a potential source of tax revenue. “We’re facing this really horrific financial situation,” said Annie Duke, another poker pro.

The poker players face opposition from other political forces, including Christian conservatives.

“You can’t make public policy out of a group of individuals’ desires,” said Chad Hills, an analyst for gambling research and policy at Focus on the Family, the Colorado Springs-based group founded by Dr. James Dobson. “You have to say, `How is this impacting our culture? How is this impacting our children?”’

Alfonse D’Amato
The poker alliance, headed by former New York Republican Senator Alfonse D’Amato, spent $729,750 on lobbying during the first half of 2008, after spending $900,000 in all of 2007. Its political action committee, PokerPAC, began April 11 and raised $43,226 through Aug. 12.

In the presidential race, the Republican platform supports the ban on Internet gambling.

Hills, saying the Internet functions like the public library of previous generations, said gambling shouldn’t be allowed. “Some activities are not appropriate in the public library,” Hills said. “This is one of those things.”

The poker players may benefit from growing celebrity, as popular televised contests make stars of professionals like Bloch, Ferguson, Duke, and Duke’s brother Howard Lederer.

“People sitting in their homes, watching top professionals playing a game of skill, allows us to have this conversation,” Lederer said. “If I can use my celebrity to help further the cause I truly believe in, I will do it.”

Bloch and Lederer are among those who’ve given the maximum individual contribution, $5,000, to PokerPAC. “We realized we had to have a voice in Congress,” Bloch said.

“It always helps when you have someone who’s very well known,” said Representative Steve Israel, a New York Democrat and one of 48 co-sponsors of Frank’s bill. “When I’m at home, it always give me a thrill when someone approaches me and says, `I read about what you’re doing on Internet poker.’ That tells me how effective this cause has become.”

The lawsuit filed in U.S. District Court in Manhattan said “these unlawful investments suffered significant losses when the government began arresting principals of the gambling enterprises,” but it did not provide a specific amount.

A spokeswoman for Vanguard Group in Malvern, Pennsylvania said the investment fund management firm had not yet been served with the lawsuit and she could not comment.

An attorney for the two plaintiffs, Tom Sheridan, said the exact amounts would be revealed in the discovery process, but he estimated Vanguard’s losses exceeded $10 million.

“The investments by the plaintiffs are not worthless, but they are less than they would have been if the money had not been invested in offshore gambling companies,” Sheridan said.

The U.S. cracked down on offshore betting companies in 2006 that included the arrests of executives from British online companies such as Sportingbet and BetOnSports Plc.

Large public companies lost billions of dollars in market value and millions of customers when they shut down their Web sites for sports betting, poker and other games in the United States.

Friday’s class action lawsuit brought by Deanna McBrearty of New York, New York, and Marylynn Hartsel of Boca Raton, Florida, makes claims under the Racketeer Influenced and Corrupt Organizations Act (RICO) and seeks a jury trial, compensatory and punitive damages.

A similar lawsuit was filed in U.S. District Court in San Francisco on Thursday against American Century Companies Inc.

The funds named as defendants in the New York lawsuit include Vanguard International Equity Index Funds, Vanguard European Stock Index Fund, Vanguard Horizon Funds and the Vanguard Global Equity Fund.

McBrearty first purchased shares in Vanguard European through her individual retirement account in May 2005, the lawsuit said. It said Hartsel bought shares before July 1, 2006 for investment purposes.

The lawsuit does not name any of the online sites. The largest sites such as PartyGaming and Sportingbet earned most of their money from the United States. PartyGaming suspended its U.S. business after President George W. Bush signed the Unlawful Internet Gambling Enforcement Act on Oct. 13, 2006.

Other defendants named in the lawsuit are Alliance Bernstein LP, Acadian Asset Management LLC, Marathon Asset Management LLP.