A spark of hope for online gambling in US

After weeks of negative reports that US online gambling is being dismantled by the outgoing Bush administration, a spark of hope was ignited over the weekend by the chief of the powerful American Gaming Association, Frank Fahrenkopf, who says that the new Congress may have more appetite for a legalised industry....and the taxes it can deliver.

According to a report in the Reno Gazette-Journal, Fahrenkopf opines that the legalisation of Internet gambling will be the hottest federal issue facing Nevada's gaming industry in the next few years. Speaking on the run-up to the Global Gaming Expo in Las Vegas, the influential executive said that the need for new tax money could drive legalisation initiatives in both houses of Congress next year.

"There have been projections circulated on the Hill that it can raise billions of dollars in new federal revenue," said Fahrenkopf. "So we can expect that the whole issue of Internet gambling will be front and center in the next Congress."

Federal lawmakers see that potential tax revenue from Internet gaming could fuel their legislative agenda, Fahrenkopf added. "Congress has adopted a pay-as-you-go system," he said. "So any Congressman or Senator who introduces a piece of legislation that is going to cost something will also have to show how they are going to pay for it, either by cutting spending in one place or raising taxes in another. So we know under those circumstances, they will be looking around at a place to get additional revenue."

But Fahrenkopf cautioned that any push to legalise and tax Internet gaming will first have to redress anti-Internet gaming work done by the Bush administration over the past few years. He noted the "midnight drop" submission of the regulations for the Unlawful Internet Gambling Enforcement Act 2006 in the waning weeks of the Bush presidency, and the efforts of the Democrat chairman of the House Financial Services Committee, Barney Frank, to counter the Act and the regulations.

Nevada gaming companies have mixed opinions on the issue, Fahrenkopf said. "If it were legalized, I know that Harrah's, which now owns the World Series of Poker, would be extremely interested in getting into that market. We know that MGM has been bullish on Internet gaming for a long time. Steve (Wynn)... I don't know what he would do and I don't know what some of the other operators would do."

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