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Changing Partners

A bill to legalize online poker doesn't get everyone's support

Changing Partners

Although a bill introduced in June by Rep. Joe Barton (R-Texas) is seen as the first step toward the legalization of online poker, there still is a long road to travel. Barton says he’s been given the “yellow light” by House leadership to move the bill, but other legislators realize things must change in the bill to get it passed.

Rep. Shelley Berkley (D-Nevada) is the bill’s main Democratic sponsor.

“The bill is not perfect, and we will, in order to get it passed, have to make some changes, particularly when we talk about the wait period for those companies that have been doing business online against the spirit of the current legislation,” she told the Las Vegas Sun. “I suspect to reach a compromise and get this bill passed, we’re going to have to work on that.”

One of the issues that was included in a bill that was considered last year by Senator Harry Reid (D-Nevada) was a “time-out” period or “penalty box” for offshore online gaming companies. Reid’s bill stipulated a delay of 15 months for all offshore companies, plus a penalty of indeterminate length for companies that have continued to accept bets from U.S. customers. Barton’s bill has no such provision. Berkley says that will change.

“I support Senator Reid’s position,” she said. “I don’t think they should be prohibited for life. But there should be a price to pay. We’ll craft a piece of legislation to reflect that price.”

The “Black Friday” indictments of three of the most popular online poker sites are also having an uncertain effect on the legislation. Rep. Barney Frank  (D-Massachusetts), who has submitted his own bill legalizing a wide range of online gaming, believes it actually helps.

“People will sometimes defend laws like this by pointing out that it’s not enforced,” he says. “This is no longer an abstract philosophical question; it’s now an interference. The fact that people were actually getting arrested, that businesses were being interrupted, that has given some people a reason to say, ‘Yeah, you’re right, we ought to get rid of it.’”

The bill will also need to have some provision for online horse race betting, which will be required to gain the support of Senate Republican Leader Mitch McConnell of Kentucky.

While the American Gaming Association expressed admiration for Barton’s approach, it stopped short of supporting the bill itself. AGA President and CEO Frank Fahrenkopf said that a “framework” of a bill has been circulated and could be introduced in the fall.

“The American Gaming Association supports the licensing and regulation of online poker in the U.S.,” the statement read. “Although the AGA has not endorsed any specific legislation on this issue, we are pleased that Rep. Barton wants to protect American consumers and understands the need for regulating online poker in our country.”

Meanwhile, top-ranking Democratic Senator Jay Rockefeller from West Virginia has proposed an 18-point plan to trim the federal deficit by $1.29 trillion over the next 10 years by regulating and taxing internet gaming. Rockefeller, who is second in command on the powerful Senate Finance Committee, sees the measure as a way to end some corporate tax breaks and generate income.

“There’s a lot of talk about reducing the deficit and cutting spending, but we have seen very few specific ideas, especially when it comes to revenues,” Rockefeller said in a statement.

“Establishing online gambling regulations will protect consumers, states’ rights and state sovereignty, and eliminate a huge, illegal market that today benefits only countries and companies overseas.”

Rockefeller, citing the U.S. Congress’ Joint Committee on Taxation, estimated a tax on internet gambling could produce $41.8 billion in tax revenue for the federal government and an additional $30 billion for states in 10 years.

Rockefeller is not the first legislator to advocate for the legalization of internet gambling. Democrats Bob Menendez of New Jersey and Ron Wyden of Oregon, who both sit on the Senate Finance Committee, introduced legislation in previous sessions of Congress to regulate and tax online gaming, but their bills went nowhere. Senate Majority Leader Harry Reid, Democrat Rob Andrews and Republican John Campbell all have introduced legislation taking up the question of internet gambling, but so far efforts to achieve any significant regulation have stalled.