Internet Gambling Bill Advances Out of Financial Services Committee

 

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In case you haven’t heard, online poker players from around the United States have been jumping for joy. Why? HR 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act, has advanced out of the House Financial Services Committee. At a markup hearing on July 28th, the powerful committee approved the bill by a wide 41-22 margin, meaning that the legalization and regulation of online poker in the United States is one step closer to becoming reality.

A bevy of amendments were added to the bill, including one by Brad Sherman (D-CA) that the Congressman explained as follows: “Those who have a history of violating gaming laws are not allowed to solicit licenses… If you have intentionally violated federal or state gaming laws or operate an internet gaming site and have not used due diligence, then you’re not going to be a licensee.”

What Sherman’s amendment means for the future operations of sites like PokerStars and Full Tilt Poker in the United States should the bill become law is unclear. If these sites truly believe that they are not breaking U.S. law by continuing to serve the market after the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006, then an argument could be made that the online poker giants have exhibited due diligence.

Sherman later added another amendment that gave states one full legislative session to opt out of what would be a federal gaming framework. HR 2267 prescribed 90 days to opt out, which Sherman claimed was not enough time for states and Indian tribes to act. Also weighing in was John Campbell (R-CA), who called for the odds of winning to be posted, the legal age of online gaming to be 21, and other consumer protections to be implemented.

An amendment proposed by Peter King (R-NY) and Gregory Meeks (D-NY) explicitly stated that HR 2267 does not permit sports betting of any kind over the internet. King noted that, while he did not believe that HR 2267 would allow sports betting anyway, organizations like the National Football League wanted the situation clarified.

Mary Jo Kilroy (D-OH) proposed an amendment that received no debate and was nearly instantly approved. Kilroy’s inclusion prohibited advertising by internet gambling sites geared towards children, problem gamblers, and other “vulnerable” segments of the population.

Barney Frank (D-MA), the Chairman of the House Financial Services Committee and primary sponsor of HR 2267, proposed a Manager’s Amendment that outlaws online gaming sites from accepting credit cards. Instead, debit and prepaid cards would become the currency of the land. Frank explained, “I think that’s a way to deal with the possibility that people might get carried away.” Frank’s amendment also made it clear that HR 2267 does not infringe on Indian tribe contracts and created a self-exclusion list.

Gary Peters (D-MI) was a co-sponsor of an amendment that clarified HR 2267 to say that state and tribal lotteries would not be affected in any way. Ranking Member Spencer Bachus (R-AL), however, came out against the proposal, arguing, “Every online gaming site should be licensed. We’d create a loophole for some of the largest internet gambling operations. By exempting lotteries, I’m afraid that Mr. Peters weakens the bill.” Nevertheless, the amendment passed with flying colors.

What the next step will be for HR 2267 remains to be seen. The Committee approved the measure by a 2:1 margin. However, with time quickly running out on the 2010 legislative session, the bill’s prospects for debate on the House floor appear to be limited.

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