The Mouthpiece


By Martin Owens
Contributing Editor


  • Recent Articles

    Martin Owens

    Lame Duck Maneuvers?

    Possibilities of last minute legislation for Internet Gambling in 2010

    There's never time to do it right, but always time to do it over.--- Old Navy Proverb

    Philadelphia, PA (Sports Network) - Now that the dust is settling from the 2010 election, it's looking like two sets of legislators ( at least) must turn to unfinished business. That is, having failed to clear the decks before the elections, they would have to return and clean their plates. The parties we're interested in are the U.S. Congress and the California State Legislature. Because either one of them, or even both, just might affect Internet gambling in a sudden, bold stroke. Maybe.

    Competing Agendas - the State Angle

    There is no longer much doubt that the United States will soon have legalized Internet gaming: poker at least, and quite possibly other, casino style games. But there are two very different approaches to how this should be done.

    The first approach happens to be the current status quo. Right now, the individual states of the Union have the power to legalize Internet gambling within their own respective borders, for their own residents, provided certain supervisory precautions are put in place. In what is surely one of the great ironies of the last 50 years, that power was conferred by the Unlawful Internet Gambling Enforcement Act ( UIGEA), a badly written, badly presented bill that was voted into law in bad faith: literally snuck onto the statute books at 2:45 AM, the last day of the U.S. Senate session of 2006 as a stealth trailer to a totally unrelated seaport-security measure. But whatever its inconsistencies, faults and shortcomings (and Allah witness that they are many!), the UIGEA makes it perfectly clear that such Internet gambling, properly legalized and licensed by State authorities, shall not be considered as "unlawful Internet gambling". English translation: state authorities can do it if they want to. The results of the November 2nd election have not changed this.

    But the only state which still has a chance of passing such legislation before the end of the legislative year is California. That is because the Golden State is chronically in debt and because its legislative session is open until December. In what has become an annual ritual, the California Legislature ignored its constitutional duty to pass a balanced budget by the end of June, and delayed a full hundred days (a record, even for here) before passing something that can only be referred to as a "budget" by using quotation marks. To cut a long and sad story short, the income projections were understood to be fictional on the day they were made, whereas the liabilities were all too real. After the election, the financial heavy lifting still remains to be done.

    And so, to surprise of absolutely no one, we see three things converging. A California lame-duck session is needed to adjust to financial reality; a vote on the California Senate Bill to authorize an Internet poker system is still hanging fire; and there just might be a possibility that California's assembled public servants will finally realize that Internet poker offers about $300 million in revenue that requires neither spending cuts nor new taxes.

    Competing Agendas - the Federal Angle

    The second approach has yet to become reality. This would involve Congress passing a law to legalize and license Internet gambling on a national basis. The prime mover of this proposed law,, up to now, has been Congressman Barney Frank of Massachusetts. Frank has not met with much success in moving this idea forward, and this was when he was chairman of the powerful Finance Committee. Now that the House of Representatives is slated to pass to Republican hands, getting that bill signed into law will be even tougher after January. This is because the Republican base is fundamentalist and conservative. Their champions, such as Rep. Goodlatte of Virginia, Bacchus of Alabama, or Sen. Kyle of Arizona, can always raise a cheer by condemning gambling as wicked and sinful, and standing foursquare against its expansion. But there is no corresponding pro-gambling lobby, outside of Nevada and maybe New Jersey.

    And so, anyone interested in a nationwide regime of licensed Internet gambling is watching the window of opportunity slam shut- unless they can make a move before the new Congress convenes. When Senator Harry Reid of Nevada was in danger of losing his job, speculation arose that he might, in the lame-duck session of Congress, run through an Internet gambling bill ( specifically poker) in the same way that the Unlawful Internet Gambling Enforcement Act became law- a "Saturday Night Special". Unlike most other countries, US legislative procedure would permit the Senate to tack the Internet gambling language onto a must-pass law such as budgets, defense or homeland security - usually at the last minute. Just as the UIGEA climbed through an unlocked window at zero-dark-thirty one fine morning, so would Internet poker come to America at large.

    Reading the Omens

    Put them together and what have you got? Essentially, a race between two snails. Whatever its merits, there simply isn't a lot of interest in legalizing Internet gambling on any level right now. But, for those involved in the industry, the consequences of this slow-motion competition could be quite significant. If California is first to install an Internet gambling regime, any later national scheme would have to take it into account as a political reality. If, on the other hand, the national scheme is voted into law before any of the state legislatures take action, then they will all have to dance to Washington's tune.

    Just now, events still favor the state-by-state approach. Senator Reid has managed to keep his job, and even his position as Senate Majority Leader. And that means there is much less pressure for a no-holds-barred bid to ram through I-gaming on a national level in what is still left of this year. The odds are slightly better in Sacramento, where both departing Governor Schwarzenegger and incoming Governor Brown have indicated that they would sign an Internet poker bill if it were passed. The question here is whether the legislators would find time to tackle it this year, or let it slide to the 2011 session.

    Summary

    There is still a small window of opportunity remaining for somebody to pass an Internet gambling expansion law in what's left of this year. The only two realistic candidates seem to be California and the Federal government. The opportunity, as so often before, remains. The other necessary ingredient, the political will to stand up and take the matter in hand, seems to be much scarcer on the ground just now. I recently made a dinner bet with a European gaming consultant, that there would be a new Internet gambling law someplace in the USA by New Year's Eve. But it's looking more and more like I better start saving my buffet coupons.

    Mr. Owens is a California attorney specializing in the law of Internet and interactive gaming since 1998. Co-author of INTERNET GAMING LAW with Professor I. Nelson Rose,( Mary Ann Liebert Publishers , 2nd ed 2009) ; Associate Editor , Gaming Law Review & Economics; Contributing Editor, TSN. Com Comments and inquiries welcome at to mowens@trade-attorney.com.

    Copyright 2010


  • HURLEY: College Bowl Report
  • STURGEON: College Hoops takes center stage