The Mouthpiece

By Martin Owens
Contributing Editor

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    Martin Owens

    Capitol Ideas

    Another Round of I-gaming bills in Congress

    Tis the silly season. With no elections in sight, and nothing to do except maybe what they were hired for, like pass a budget or something, our national lawmakers are just plain stuck for a gambit to attract attention.

    Democrats in particular have a hard time pushing the envelope, having rubber-stamped every extreme cause that presents itself. (But why take pictures of your underwear, when the government is already doing it for you?) Republicans have it easier - the bar is much lower. In particular, a Republican can raise a perfectly adequate fuss by even suggesting that the government moderate its rigid, unreasoning opposition to Internet gambling. House Republicans Peter King (NY) and Joe Barton (TX) are each feeling different versions of a scheme to licensed Internet gambling on a national basis. But outside the Republican perimeter, such attempts at reform are about as bold as tapioca pudding.

    First, licensed Internet gambling is already a fact of life in the USA, has been for almost 20 years now No fewer than 32 states now license Internet sites to help them with horse race betting- everything from merely posting the odds in the video feeds, right through to fully interactive account wagering. Unlicensed Internet gambling is here, too. The US online poker market alone is worth about $6 billion. And the vast majority of that is a legal gray area at best. Ultimate Poker, so far the only licensed online poker operation in the country, has only been open for a couple months and its customer pool is restricted to people physically located within Nevada. Even so, they've already dealt more than 2 million hands. Which give you an idea of the potential.

    Second, both bills are probably nonstarters, and it is very likely that the respective authors know that. It would be difficult to find space on the legislative calendar to begin with- Congress has many more important things on its plate than online poker. State governments won't like it either. Up to now they have not had to share either their power or their revenue with Uncle Sam, and most see no reason to change.

    The bill by Rep. King, HR 2282,is a perfect example of why. It establishes a national Office of Internet Gambling Oversight, under the Treasury Department. This will be for every sort of Internet gambling except sports betting. It will require both state and tribal authorities to affirmatively opt in, in order to participate. Those who do not opt in will not be at liberty to open their own Internet gambling, except if it's confined within the state borders as per the UIGEA.

    Of course, this raises the question of why should the states or tribes bother? They would still remain at liberty to enter into compacts allowing bets between them. The bill is also not to be construed as an okay to license sports betting, which is what many states really want.

    And like all the Congressional bills on Internet gambling, it begs the question of jurisdiction. Supposedly it will be illegal for anyone to offer betting services to residents of the USA unless one has a license. Just how Uncle Sam proposes to enforce that outside the borders of the nation is once more simply not addressed.

    Rep. Barton's bill deals with online poker only. It graciously acknowledges that the US government will not prosecute Internet poker sites located outside the United States and which do not take US customers. Of course, the US government has no right or excuse to do so in the first place.

    In the Barton version, Internet poker will be supervised by the Department of Commerce. Unlike the King bill, this measure will allow states and tribes to issue their own Internet poker licenses, once the Office certifies they are fit to do so. Since they already possess this power, it's likely that this bill, too, will meet with concerted opposition. The Barton bill also takes away state and tribal discretion- once a site is certified, it will be able to take poker customers from across the country, except in those places which have affirmatively opted out. This seems to conflict directly with the UIGEA. Most curious of all, the Barton bill will not allow the use of credit cards for online poker.

    Both bills contain the obligatory language about protecting problem gamblers, self exclusion, and a rather shortsighted requirement that the licensee's facilities be located within the United States itself. Cheating an attempt at cheating will be elevated into federal offenses. And both measures outlaw "Internet parlors" whose machines offer access to online gambling/poker. Besides being unnecessary, this add-on represents another unwarranted intrusion into areas that have been, and should be, controlled by state law.

    In any case, unless there is a major shift in the political currents of Washington, the most likely result is that neither bill will make it out of committee.

    Copyright 2013

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