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Report: Reid, Kyl Make Internet Poker Deal; But What About Tribes?

Several sources have told Global Gaming Business that secret negotiations between Nevada Senator and U.S. Senate Majority Leader Harry Reid and Republican Arizona Senator Jon Kyl have resulted in a deal that will legalize online poker in the United States. That news was revealed to top executives of Nevada gaming companies by Governor Brian Sandoval via private phone calls in February.

The sources say the bill will be an amendment to a bill that will extend the payroll tax cuts that almost crippled budget negotiations at the end of last year. Since such a bill would be supported by both parties, it’s unlikely any member would object. The story follows persistent reports that Reid and Kyl have been inching closer to a deal, despite Kyl’s longstanding opposition to gaming. The December opinion issued by the Department of Justice that only sports betting is specifically forbidden by the federal Wire Act, which has long been cited as the reason internet gambling is illegal, reportedly has been the catalyst that is forcing Congress to act before multiple states muddy the legal water by legalizing online wagering themselves.

In response to a Global Gaming Business post on Twitter, Sandoval’s office responded: “This report is false. Governor Sandoval has made no such statements.”

A possible roadblock to any federal legislation was examined last month when the Senate Indian Affairs Committee heard testimony that outlined how legal online wagering would hurt existing land-based tribal gaming. Chairman Daniel Akaka (D-Hawaii) heard from witnesses who contended that online gaming would be harmful and could impact social welfare programs in Indian Country.

Launching the attack on commercial casino participation in online gaming, Robert Odawi Porter, president of New York’s Seneca Nation of Indians, called any federal bill permitting online gaming a “brazen power grab for monopolistic control” of any online gaming industry. Porter admitted, however, that online poker would not have as much of a detrimental impact on tribal gaming as full online gaming would have.

Kevin Washburn, a professor at the University of New Mexico, said Congress has no choice now but to act as a result of the DOJ ruling. He said state-by-state legalization of online gaming would be “schizophrenic,” and that federal oversight of the industry would be far more efficient.

California gaming law professor I. Nelson Rose agreed, but said tribes are at risk. He contended the larger tribal casinos could take care of themselves, but “it’s up to Congress to protect the rest.”

Tribal gaming attorney Glenn Feldman warned Congress not to rush into online gaming legalization, however, saying that there are many unknowns, including the legality of online gaming under statutes separate from the Wire Act. If it is legalized, however, and has a serious impact on tribal gaming, Feldman suggested that tribes be compensated for their losses.

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