Online poker bill might get a shot in Congress
By Mark Gruetze
Published: Friday, Dec. 7, 2012, 8:56 p.m.
The “fiscal cliff” debate in Congress could open an opportunity for federal legalization of Internet poker in the United States, supporters say.
The American Gaming Association, a casino industry group, this week renewed its campaign for a bill that would legalize online poker, but restrict other forms of Internet gambling.
“A lot of people are pushing all they can to try to get it done this year,” says John Pappas, executive director of Poker Players Alliance. “For a federal bill, I don't think this is a last chance, but it's the best chance we've had so far.” The alliance prefers federal regulation but does not oppose a state-by-state approach.
The North American Association of State and Provincial Lotteries, which represents legal lotteries in the United States and Canada, opposes the restriction on games other than poker. Officials of several state lotteries will go to Washington next week to lobby against the bill. Although no one from the Pennsylvania Lottery will be involved, the delegation will represent the state's interests, lottery spokesman Gary Miller says.
The action comes almost a year after the federal Justice Department opened the door to legal online gaming in the United States with an opinion that Internet sales of lottery tickets — and other forms of legal gambling within a state, except for sports betting — are permissible under the federal Wire Act. That reversed the department's previous stance.
A bill sponsored by Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Whip John Kyl, R-Ariz., would allow online sales of lottery tickets but prohibit lotteries from expanding into Internet slot machines and table games.
“If Congress doesn't act in the lame duck session, we will face the largest expansion of gambling in this country in our nation's history,” American Gaming Association president and CEO Frank J. Fahrenkopf Jr. tells Player's Advantage. “You're going to see state after state, all hungry for revenue, going ahead and trying to license and get involved in online gaming.”
Under the Reid-Kyl bill, the federal Commerce Department would regulate games offered by Native American tribes, and states with long experience in gaming oversight — for example, Nevada, New Jersey, Mississippi or Illinois — would regulate offerings by commercial casinos for at least two years. The bill would set minimum standards for consumer protection, prevention of gambling by minors and help for compulsive gamblers.
“The legal gaming industry depends on integrity,” Fahrenkopf says. “The integrity has to be provided by tough regulation with law- enforcement oversight.”
Even if federal regulation of online gambling is passed this session, legal Internet play in the United States still might be a year or two away, he predicts. If not, the online rush could start as soon as January.
Pappas says the 15-month wait proposed in Reid-Kyl is too long. The alliance wants the system up and running sooner and provisions that allow play across jurisdictions, including internationally. The group also wants licensing opened to a variety of operators, including tribes, lotteries and private Internet companies such as Google and Yahoo.
Our feeling is that the more competitors, the better,” Pappas says.
Pappas says the potential expansion of online gaming through lotteries and the states has many in Washington concerned.
Nevada has approved an online-gaming structure, and a Delaware law allows that state lottery to offer online slot machines plus poker, roulette, blackjack and other games.
An October report by GamblingCompliance, a research firm with offices in Washington, D.C., and London, says online-gaming proposals have failed this year in six states, including Pennsylvania and the District of Columbia. The Pennsylvania proposal was withdrawn shortly after introduction, the report says.
Fahrenkopf says a state-by-state approach would lead to “a patchwork quilt” of regulations.
“We're not talking about regulating picking up the ping-pong balls that come out twice a week,” he says. “We're talking about very sophisticated operations.”
The lottery association says states are “uniquely qualified” to regulate gambling within their borders, and federal regulation would mean a costly and duplicative licensing bureaucracy.
“Each state should continue to determine the games offered as well as the manner in which they are delivered to their players, even if that is on the Internet,” Executive Director David Gale says in an email.
Online scratch-off tickets are a natural evolution, but states would decide whether they could be sold, he says.
“Lotteries have for years offered games that are secure, so there is no reason to think that we couldn't continue,” he says. “The integrity of lottery games is of the utmost importance and will continue to be. Players must feel that the games bring offered by each state are secure.”
Mark Gruetze is administrative editor for Trib Total Media. He can be reached at 412-320-7838 or firstname.lastname@example.org.
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