Bill unveiled to reverse U.S. online gambling ban
Wed May 6, 2009 12:26pm EDT
WASHINGTON (Reuters) - Legislation aimed at reversing a three-year-old ban on Americans placing online bets was introduced on Wednesday by U.S. House Financial Services Committee Chairman Barney Frank.
The Internet Gambling Regulation Consumer Protection & Enforcement Act would establish a federal regulatory and enforcement framework for online gaming.
Frank said the bill would give the U.S. Treasury Department the authority to establish regulations and license Internet gambling operators.
The Treasury would also have the authority to revoke or terminate the license of any operator that violates the law. Enforcement actions could also include fines, according to the bill.
"The government should not interfere with people's liberties," said Frank.
The Massachusetts Democrat also told reporters he is introducing separate legislation to freeze the implementation of online gambling regulations under a Bush administration-era law.
European online gambling firms lost billions of euros in value after Congress made it illegal for banks and credit card companies to make payments to online gambling sites.
Republicans controlled the White House and Congress when the Bush-era law was approved. Now, Democrats are in control in both branches of the government, but it is unclear how the Obama administration will handle the issue.
Companies involved in the issue include PartyGaming Plc and 888.com.
Frank's bill quickly drew criticism from a senior Republican lawmaker opposed to gambling.
"Illegal off-shore Internet gambling sites are a criminal enterprise," said Representative Spencer Bachus, the top Republican on the financial services committee. "Allowing them to operate unfettered in the United States would present a clear danger to our youth, who are subject to becoming addicted to gambling at an early age," said Bachus from Alabama.
Re: Bill unveiled to reverse U.S. online gambling ban
Backed by a growing legion of supporters, Barney Frank wants online gambling fully legalized, regulated and taxed.
by Chad Millman
BEHIND THE BETS
ESPN
Everybody is showing their hands. And the World Series of Poker doesn't start for another three weeks.
Yesterday, Congressman Barney Frank (D. Mass.) unveiled a bill called the "Internet Gambling Regulation, Consumer Protection, and Enforcement Act." What's that mouthful of jargon mean? Simply, the congressman wants online gambling, not including sports, to be legal, regulated and taxed.
"I think this has a good chance to pass because there are a lot people playing these games. They're not always politically motivated, but they feel like something's been taken away from them," says Frank, who is chairman of the House's Financial Services Committee.
This has been a pet project of Frank's since 2006, when Congress passed the Unlawful Internet Gaming Enforcement Act, which banned websites offering games such as poker from making payouts to people playing in the United States. The bill was controversial from the start, and not because it dealt with a hot button topic like gambling. Republicans attached it to a port security bill Congress had no choice but to pass. That angered a lot of pols, who felt conservatives were wrongly asserting their moral authority.
"I believe in personal freedom," says Frank. "And my major issue with the bill was that it interfered with that. The federal government shouldn't be telling adults how to spend their money in the privacy of their homes."
Since then he's been fighting to take the teeth out of the UIGEA, with little success. Back in 2007 he proposed a similar pro-gambling bill that failed to go anywhere. This time, the path to passage won't be any easier. The day before Frank announced his legislation, I spoke with Ryan Patmintra, the mouthpiece for Arizona Senator John Kyl, who sponsored the UIGEA and is now the Republican whip in the Senate, responsible for getting his colleagues in line on big issues. Patmintra told me, "Senator Kyl will vigorously oppose any efforts to repeal or water down the provisions of UIGEA."
That doesn't mean Frank's bill is DOA. Unlike 2007, his agenda is being pushed by a million-man army in the Poker Players Alliance, a poker advocacy group whose membership has skyrocketed from 100,000 pre-UIGEA to 1.2 million today. The Democratic congressman's biggest backer is New York's former Republican Senator Alfonse D'Amato, who is now chairman of the PPA and itching to take on his former friends in Congress. "There's hypocrisy with this whole thing," says D'Amato. "On one hand they say they want less government, on the other they push a bill that goes into someone's house and says they can't do something. More presidents played poker than any other game; we're not talking about pornography."
The problem isn't that the UIGEA made playing poker online illegal. It didn't. It just made it much harder for online poker companies to do business. But it did change the public's perception of the game; from an American pastime taught by fathers or learned in suburban basements to something suddenly more illicit like, well, porn. "It's created this false impression that online poker is illegal," says Howard Lederer, one of the game's most decorated players. "But it's not a game of chance -- it's a contest of skill and wits and guile. And the game was booming. And then it just stopped."
While the pros care about the little people -- really they do -- they're just as concerned with how the UIGEA has impacted America's reign in a sport perfected by cowboys in Wild West Saloons. "I feel like we are losing our dominance," says Lederer. "It is exploding in Europe and ten years from now, who knows?"
I discussed the topic with 2004 WSOP champ Greg Raymer on Tuesday. "We haven't had much growth in the numbers of new American players since it passed," said Raymer. "The growth has come from other markets overseas."
Raymer and Lederer make interesting points. Last year the main event final left Denmark's Peter Eastgate and Russia's Ivan Demidov holding the final two chip stacks. It was the first finals between two foreign born players. Before last year, appearances by non-Americans were spotty: 2007's second place finisher, Tuan Lam, was born in Vietnam and raised in Canada. Does Canada even count as a foreign country? In 2001, Juan Carlos Mortensen of Spain took home the big money. "This is our game, this is like jazz," says Lederer. "And the rest of the world is figuring out how to beat us."
Other countries' attitudes towards online gaming -- and the money they make by regulating it -- are at the heart of the debate in the states. It's legal in Great Britain and Italy. And two months ago France proposed new laws that would, according to the country's Budget Minister, adapt to "Internet reality" and allow online gambling. That reality is worth about $7 billion a year in illegal wagers in France. In the United States, according to a recent study by the accounting firm PricewaterhouseCoopers, $5 billion a year is left on the table by policing, rather than taxing, Internet Gaming.
Not exactly chump change. Although Frank isn't thinking about the windfall.
"I think this is something people want," says Frank. "And house members tend to listen to public opinion."
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