GPWA Times Magazine - Issue 14 - October 2010

By Vin Narayanan I n a 41-22-1 vote, the House Financial Services Committee approved a bill on July 28 that would license and regulate online gambling in the United States. The decisive vote is a sign of how far the Democratic Congress has come since Committee Chairman Barney Frank (D- Mass.) attempted to halt the implementa- tion of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2008. Frank’s first attempt to halt UIGEA im- plementation failed to get out of Commit- tee on a 32-32 vote. A second bill, which would have allowed UIGEA regulations for sports betting only, passed Commit- tee on a 30-19 to vote, but was never voted on by the full House of Representatives. This year, Frank’s Internet Gambling Regulation, Consumer Protection, and Enforcement Act (HR 2267) drew sub- stantial bipartisan support with seven Republicans voting for the bill and 18 voting against it. Thirty-four Democrats voted for the bill and four voted against it. Republican Ron Paul voted present, and seven members of the committee failed to vote. Two Californians – Republican John Campbell and Democrat Brad Sherman – played a significant role in amending the bill and ensuring its passage. Campbell authored a substantial amend- ment which called for changes on both the administrative and consumer protection sides of the proposed legislation. On the administrative side, Campbell’s amend- ment gives “states and tribal authorities parallel authority to administer licenses and enforce these regulations.” “There’s no reason to reinvent the wheel when many states have these structures already in place,” Campbell added during the markup session. Campbell’s amendment also requires li- censees to maintain all online gambling facilities targeting U.S. residents within the United States. Campbell added additional protec- tions for consumers by requiring that the odds of winning be posted for each game. His amendment also requires loss limits for players in addition to age and location verification. Sherman’s amendments added language that prevents “bad actors” from obtain- ing licenses, gives states a full legislative session to opt out of the federal plan and specified that in order to get a license, the majority of that company’s jobs had to be in the U.S. Rep. Spencer Bachus (R-Ala.), who was the chief opponent to Frank’s bill in the committee, successfully strengthened Sherman’s “bad actors” language by spec- ifying that companies – and managers from companies – that had deliberately evaded or violated U.S. law regarding on- line gambling could not obtain licenses. The funniest moment in the hearing came when Rep. Peter King (R-N.Y.) introduced an amendment that reiterated that sports betting on the Internet would be illegal. “This is a full employment act for book- ies,” joked Campbell, before voting for the amendment. The amendment did pass. Other amendments that passed include bans on inappropriate advertising, bans on ads targeting minors and the frequent testing of minor protection systems. The Poker Players Alliance was quick to praise the passage of the amended bill. “The fact is, online poker is not going away,” said former Sen. Alfonse D’Amato, chairman of the PPA, in a statement. “Congress has a choice; it can license and regulate it to provide government over- sight and consumer protections, or our lawmakers can stick their heads in the sand, ignore it, and leave consumers to play on non-U.S. regulated Web sites in all 50 states. I’m glad the Financial Ser- vices Committee today overwhelmingly chose to act and protect Americans as well as preserve the fundamental free- doms of adults and the Internet.” Frank’s bill still had several hurdles it needed to clear before it could become law. First the full House needed to vote on it. That vote didn’t happen before the House’s August break and isn’t likely to happen during the lame-duck session of Congress after the November elections. That meant it had to pass a full floor vote between Sept. 7 and Oct. 8. In or- der for a full vote to happen, the Demo- cratic leadership in the House, led by Speaker Nancy Pelosi (D-Calif.), needed to schedule it. As of press time, this had not occurred. If the House passes the bill, then it needs to be taken up by the Senate. If it is passed by both the House and the Sen- ate, then it will need to be signed by Pres- ident Obama. All of this needs to happen this year, before the end of the legislative session. If it doesn’t happen before the end of this year’s legislative session, the process will have to start over next year – when the makeup of both the House and the Senate will be different. WEBMASTER NEWS Legalized online gambling moves one step closer to reality in U.S. Barney Frank Webmaster News