Wednesday's House Financial Services Committee hearing on Congressman Barney Frank's HR2267 Internet Gambling Regulation, Consumer Protection and Enforcement Act produced valid points in favour of legalising online gambling in the United States, but little in the way of new opinions not already aired in previous such gatherings.
Committee members heard testimony from representatives of the financial services, tribal and poker communities who spoke in support of regulating Internet gambling, and dyed-in-the-wool opponents like Republican Representative Spencer Bachus warned against addiction and the corruption of youth.
Ed Williams, a director of the Credit Union National Association (CUNA) spoke of the challenges faced by financial services companies who are forced to comply with burdensome and imprecise rules in an attempt to prevent unlawful Internet gambling transactions. Williams testified that H.R. 2267 would promote "…regulatory simplicity while assisting financial institutions compliance with UIGEA."
Lynn Malerba, tribal chairwoman of the Mohegan Tribe discussed the role tribes engaged in the gaming industry play in Internet gaming and praised chairman Frank for the great respect he has shown "…for tribal sovereignty by actively seeking the input of tribes" to ensure their fair treatment under the legislation.
Professional poker player Annie Duke testified about the consumer safeguards and revenue potential under H.R. 2267, maintaining that American poker players "…want to play on sites licensed in the United States, which will provide for even greater consumer protections for the player and yield badly-needed tax revenue for state and federal governments."
Duke represented the views of the million-plus membership of the Poker Players Alliance, and noted that 70 million Americans play poker, saying: "This Committee and this Congress should not tolerate laws that seek to prevent responsible adults from playing a game we find stimulating, challenging and entertaining.
"HR 2267 provides this freedom in a safe and regulated environment and I urge everyone on this Committee to support this common sense policy. However you might feel about gambling on the Internet, I would suggest that gambling with freedom is far more risky," she said.
PPA executive director John Pappas said: "The testimony we heard today underscores the challenges faced by the Federal government due to the unclear definition of what now constitutes unlawful Internet gambling, and the glaring lack of protections for consumers.
"Frankly, our opponents can't offer a consistent argument on this issue. Former U.S. Attorney Michael Fagan wants to go as far as banning Internet gambling outright, and Tom Malkasian of Commerce Casino supports licensing and regulation - just not in a competitive marketplace. It seems that our opponents don't even agree with each other here," he added.
Perhaps the main purpose for the hearing was to re-engage the interest of law makers prior to a move to vote (see following story on a possible mark-up of HR2267 in preparation for a vote).
Internet gambling regulation has been the subject of several previous congressional hearings. Most recently, in May 2010, the House Ways and Means Committee held a hearing to discuss the Internet Gambling Regulation and Tax Enforcement Act of 2010 (H.R. 4976), a companion piece of legislation to the Frank bill introduced by Rep. Jim McDermott that would ensure the collection of license fees and taxes on regulated Internet gambling activities.
According to a tax revenue analysis conducted by the Joint Committee on Taxation, regulated Internet gambling is expected to generate nearly $42 billion in revenue for the federal government over its first 10 years. Estimates suggest that it would also generate as much as $30 billion in new revenues to the states.
Chairman Frank's legislation reinforces the rights of each state to determine whether or not to allow Internet gambling activity for people accessing the Internet within the state and to apply other restrictions on the activity as determined necessary.
Since its introduction in May 2009, a bi-partisan group of 69 co-sponsors has signed onto the legislation. A recent analysis by H2 Gambling Capital predicts that Internet gambling regulation would create up to 32,000 jobs over its first five years.
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