Internet Gambling Regulation Discussed in Financial Services Committee


If you’re an online poker player and you live in the United States, then Wednesday was a monumental day for you and the game you love. Internet gambling took center stage in the House Financial Services Committee. In the spotlight was HR 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act, proposed by House Financial Services Committee Chairman Barney Frank (D-MA) in May 2009, but not yet acted upon.

Ranking Member Spencer Bachus (R-AL) kicked the festivities off by laying the wood to the internet gambling industry: “If this Congress continues to hope our youth won’t be addicted to gambling, there’s no reason for us to oppose the efforts this bill does to allow internet gambling in every… bedroom of our youth. It simply makes no sense.”

Bachus also pointed out the “irony” in the timing of Wednesday’s hearing, which occurred just hours after President Barack Obama signed a Wall Street overhaul bill into law: “After all of the talk about shutting down the casinos on Wall Street, it makes no sense why we would open casinos on every computer in America.”

Perhaps making the largest waves during the proceedings was Congressman John Campbell (R-CA), who, perhaps inadvertently, clued the industry in to a markup hearing of HR 2267 next week. The markup, which is one of the first steps of a bill becoming law, has not yet been formally scheduled. Campbell explained, “Maybe we will attract foreigners to American sites to bring something back to this country. We can also raise tax revenue without raising taxes.”

Bachs produced four letters from the Obama administration and Attorney Generals across the United States in support of the Unlawful Internet Gambling Enforcement Act (UIGEA) and its regulations. Frank, meanwhile, noted that the Financial Services Roundtable, United States Chamber of Commerce, Americans for Tax Reform, and the National Association of Federal Credit Unions support his bill.

Witnesses included pro Annie Duke, who imparted testimony on behalf of the Poker Players Alliance (PPA). Her pre-written statement read in part, “To be sure, there are many who believe that gaming is immoral or unproductive. I don’t share these beliefs, but I do respect their right to hold those beliefs. What is harder to respect is the idea that, because someone disapproves of a particular activity, they would seek to have the government prevent others from engaging in it.”

Duke reminded the panel several times that the UIGEA was merely a “banking bill” and 70 million Americans play poker. Perhaps speaking in part to her experience with, she noted, “It’s much easier to spot collusion online because you can mine the data. Then, they can look and see how much money each person on the site lost to that individual or consortium.”

Talked about heavily on Wednesday was whether internet gambling sites – specifically PokerStars and Bodog – that have “defied” U.S. law since the enactment of the UIGEA should be eligible to receive licenses if HR 2267 were passed. Other points discussed included whether licenses should only be awarded to those companies who provide jobs in the United States and whether tribal sovereignty could potentially be threatened.

Then, Campbell dropped the most significant news nugget of the hearing, announcing that he would add an amendment to HR 2267 during a markup hearing next week. The amendment in question would add more technological safeguards to the bill as well as a loss limit: “Most brick and mortar casinos don’t have those things.”

The entire hearing lasted about two-and-a-half hours, which included a 45-minute break for floor votes. When the session resumed, Congressman Dennis Moore (D-KS) pitched questions to the panel and acted as Chair in place of Frank. Particularly pessimistic during the hearing was witness Michael Fagan, a law enforcement and anti-terrorism consultant. When asked if online technologies exist to curb underage gambling, Fagan responded, “Anybody who grew up in America knows someone [underage] who went out and bought liquor and the same thing will happen on the internet.”

Stay tuned to for the latest on the yet-to-be-announced markup hearing. Read the text of HR 2267 and check out an archived webcast of Wednesday’s hearing.


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