BY RUSS SCOTT
RELEASE: TUESDAY, DEC. 7, 2010
New Bid to License, Regulate Online Poker in U.S. Stirs Up Fuss
The online poker world was buzzing late last week after mainstream media reported that staffers for freshly re-elected Senate Majority Leader Harry Reid, D-Nev., were circulating one or more versions of a bill to legalize and regulate online poker in the United States.
Speculation was that Reid and other political supporters of the proposed legislation — mostly Democrats — intend to fast-track the measure with the possibility of passage before the current lame-duck Congressional session ends in a few days.
If formally introduced, Reid’s 57-page bill seen by reporters largely would mirror legislation pushed by U.S. Rep. Barney Frank, D-Mass. Frank’s H.R. 2267 easily cleared the Democrat-controlled House Financial Services Committee in July but has yet to be addressed by the full House.
When last month’s election gave Republicans the House majority heading into 2011, the odds against Frank’s regulatory bill increased.
By the weekend, it appeared that a possible option for Reid’s bill would be to attach it to a “must-pass” piece of legislation that Congress will vote on during the lame-duck session.
Many online poker players likely would find satisfaction in such a move because that’s how the Republican-pushed Unlawful Internet Gambling Enforcement Act was passed late in 2006 — as a last-minute attachment to an unrelated port security bill.
Led by U.S. Rep. Spencer Bachus, R-Ala. – likely successor next month to Barney Frank as chairman of the Financial Services Committee — Republican opposition to Reid’s possible bill surfaced quickly.
In a Dec. 1 letter, Bachus and other leading House Republicans told Reid and Senate Minority Leader Mitch McConnell, R-Ky., they were opposed to this “secretive, closed-door and undemocratic process” to legalize online poker.
Citing the “social and economic harm” to Americans from Internet gambling, the letter closes with: “Is addicting the Federal government to Internet gambling taxes really worth it?”
The answer to that question depends on your point of view, of course.
Despite the UIGEA, online poker provided by offshore sites continues to flourish in the U.S. The UIGEA set up legal roadblocks to money transactions between players and online sites, but did not make it illegal to play poker online.
Although financial institutions face penalties for facilitating such transactions, millions of players still find ways to fund their accounts and keep playing.
That means tens of millions of potential “sin tax” dollars continue to slip away from federal and state governments every year. It also means that citizens don’t have the presumed added security of playing under U.S.-designated regulations protecting against fraud and under-age participation.
Most current online players likely are watching developments in both the House and Senate with skepticism.
Multiple media reports, for example, indicate Reid’s measure initially would benefit major campaign contributors, such as MGM Resorts International and Caesars Entertainment Corp. (formerly Harrah’s Entertainment), by allowing only established U.S. gambling entities to “immediately” host online sites.
Under Reid’s proposal as reported, popular existing offshore sites such as PokerStars and Full Tilt could be blocked from U.S. customers for two years or longer. That would not sit well with long-time customers of those sites.
Frank’s legislation, meanwhile, effectively would take the same line by initially excluding sites that continued to operate in the U.S. after enactment of the UIGEA.
Under Frank’s proposal, Party Poker (formerly the world’s largest) and other sites that cut off U.S. customers because of UIGEA would receive more favorable consideration for licensing.
Whether, or how quickly, either of these online poker regulatory efforts advances is anybody’s guess.
E-mail your poker questions and comments to firstname.lastname@example.org for use in future columns. To find out more about Russ Scott and read previous LuckyDog Poker columns, visit www.creators.com or www.luckydogpoker.com
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