Online gambling bill is big news

Yesterday's press release (see previous InfoPowa report) that US House Financial Services chairman Barney Frank is to host a press release this (Wednesday) morning on his imminent attack on the UIGEA generated massive mainstream media coverage internationally, showing that the battle for the liberation of online gambling in the United States continues to draw considerable interest.

Support for Congressman Frank's proposal to overturn the UIGEA came immediately from the pressure group Safe and Secure Internet Gambling Initiative, which issued a statement updating the financial benefits of regulating and taxing US Internet gambling. A SSIGI spokesman said that a recent analysis had shown that collecting taxes on regulated Internet gambling would allow the U.S. to capture between $48.6 billion to $62.7 billion in new revenue over the next decade, a 21 percent increase from previous estimates.

SSIGI spokesman Jeffrey Sandman said that Congressman Frank's proposal would establish an enforcement framework for licensed gambling operators to accept online wagers from individuals in the U.S.

"The legislation is expected to include a number of significant consumer protections, including safeguards against compulsive and underage gambling, money laundering, fraud and identity theft," said Sandman. "Millions of Americans are wagering more than $100 billion annually with offshore Internet gambling operators despite the current prohibition imposed under the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA)," he added.

Sandman said the SSIGI applauded Frank's strong leadership to advance a common sense approach to regulate Internet gambling and reverse the intrusive, ineffective and burdensome prohibition.

"Rather than tell Americans what they can and cannot do online in the privacy of their homes, Chairman Frank's approach to regulate Internet gambling would protect consumers and allow the U.S. to generate billions in new revenue to fund critical government programs. We hope all interested parties will unite to support Congressman Frank to help advance this important legislation. Americans continue to gamble online. It is time for Congress to regulate and tax Internet gambling," he concluded.

During the 110th Congress, Chairman Frank introduced the Internet Gambling Regulation and Enforcement Act of 2007. A companion piece of legislation introduced by Rep. Jim McDermott (D-WA), the Internet Gambling Regulation and Tax Enforcement Act of 2008, would help capture revenues that are currently lost to offshore gambling operators.

Representatives of the financial services industry, including the Chamber of Commerce and Financial Services Roundtable, have expressed concerns about the burden and ambiguity in the rules to implement UIGEA which require the financial services sector to identify and block unlawful Internet gambling transactions (see previous InfoPowa reportage).

Bloomberg, along with other major news sources, reported on the new Frank initiative, noting that it has support from influential companies such as Inc. and Harrah’s Entertainment Inc., in addition to the Poker Players Alliance, a million member organisation formed to overturn the UIGEA.

The service recalled that online gambling operations, banks, state lotteries and poker aficionados have previously opposed the UIGEA without success. Some critics had criticised the law for making no clear distinction between legal and illegal online wagering, creating problems from the financial services industry burdened with its enforcement. For example, some states such as California allow lottery tickets to be purchased online, and the ban doesn’t affect online betting on horse racing.

Harrah’s registered to lobby for the first time and spent $405 087 from January to March '09, the Bloomberg report revealed. To supplement its in-house lobbyists, the gambling giant hired veteran Democratic fundraiser Tony Podesta.

Harrah Vice President Jan Jones said regulating and taxing online gambling might swell government coffers by $2 billion to $6 billion annually. “At a time where there is no money, that can be going to health care or S-CHIP,” the children’s insurance program, Jones said.

California-based Youbet hired its own lobbyist to push for legalised online gambling, according to CEO Michael Brodsky. He said the company would expand into online poker and other Internet gambling if Congress permitted it.

“Our customers would love to do more and we would love to offer our customers more,” said Brodsky. “There’s a big opportunity to do something that makes sense for everyone. It’s a very nice revenue-raiser at a time when everyone is looking to plug the holes.”

The Poker Players Alliance has engaged with another specialist outside firm and boosted its lobbying budget.

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