Undoing UIGEA damage could take years

The Unlawful Internet Gambling Enforcement Act might have been under the radar before it passed beneath U.S. President George Bush's pen last October, but subsequent rumblings of discontent from the poker industry have been loud enough to set members of the political area into damage control mode.

The first to step into the fray: Barney Frank (D-Mass.), a seasoned congressman who chairs the Financial Services Committee. Calling the UIGEA "preposterous" and one of the "stupidest laws" he'd ever seen passed, Frank became online poker's would-be savior when he announced plans to repeal the sweeping ban in March.

On Friday, Frank's bill - the Internet Gambling Regulation and Enforcement Act of 2007 - went before the House Financial Services Committee in a hearing that saw expert testimony from the Internet gambling industry, financial institutions and payment processors as well as problem gambling organizations.

The 70-member panel will decide the fate of the bill, which calls for online gambling to be licensed and regulated in the U.S. If the bill is passed by an as-yet unscheduled vote by the committee, the legislation could go before the House of Representatives as soon as this summer.

But the day before legislators turned their ears to Frank's proposal, a Florida congressman got the community buzzing with renewed hope when he introduced legislation calling for the UIGEA to exempt skill games. Rep. Robert Wexler, a Democrat, introduced the Skill Game Protection Act, calling on the U.S. to allow Internet gambling for games such as poker, bridge, mah-jong and backgammon.

"While each of these games contains an element of chance, over any substantial interval, a player's success at these games is determined by that player's relative level of skill and is widely recognized as such," Wexler's bill reads.

"Games where success is predominantly determined by the skill of the players involved, as a matter of law and of policy, are distinct from the games of chance traditionally described and addressed in Federal and State gambling statutes."

The seemingly out-of-the-blue bill also takes care to call for safeguards to protect underage players, ensure privacy, prevent fraud and compulsive gambling and regulate taxation of individual players profiting from games of skill.

The ink wasn't dry on Wexler's bill before Washington State Rep. Jim McDermott fielded his own accompanying proposal Friday, the Safe and Secure Internet Gambling Initiative.

The Democrat's legislation calls for a 2% tax of a player's online poker or gambling deposits, matched by 2% taxation on gaming operators for each real-money deposit. The bill is cosponsored by Shelley Berkley (D-Nev.) who is also calling for an online gambling study for the purposes of taxing, regulating and providing protection for minors.

What chance any of these bills have of going to a vote before the House of Representatives is purely speculation at this stage in the game. While Frank's bill was brief fodder for national media, Wexler and McDermott's proposals failed to cause the faintest hiccup on the news front.

Notwithstanding the media attention, Frank is still unsure of whether he'll be able to squeak his Internet Gambling Regulation and Enforcement Act through the House. Congress passed the bill last July with a 317-93 vote and, as Frank told CNET News.com's tech politics podcast Tuesday, he's not confident he's picked up enough votes since then.

"I haven't yet seen enough change for me to have a majority to pass the bill," he said. "I can tell you if we voted on it today, there'd be 30 or 40 less votes on it - maybe more."

Even if the votes are there, Frank speculates that the process to repeal the UIGEA is a multi-year affair. This is likely no surprise to online poker rooms, whose executives are busy plotting expansion into Asia and Europe while biding their time in the hopes that lobbying efforts will hurry the process along.

In the meantime, leading online gambling lobbyist group Poker Players Alliance has thrown its enthusiastic support behind both the Frank and Wexler legislation and is encouraging its 500,000-plus members to tell their representatives they share the sentiment.

"Poker and other games of skill have fallen victim to bad public policy," said PPA president Michael Bolcerek in a press release shortly after Wexler's bill was announced.

Indeed it has, so much so that the poker community is falling all over itself with gratitude for any politician willing take on its cause.

Legalizing Internet wagering is hardly akin to, say, drafting bills to protect gay and lesbian rights or prevent anti-Semitism or help Hurricane Katrina victims - all causes these men sponsored. Even so, these representatives are willing to attach their names to these proposals because it is the right thing to do.

The UIGEA unfairly targets the Internet gambling industry and the rights of individual citizens who make their living, or simply enjoy, playing poker online. It's been eight months since the act became law. At this point it's not a matter of picking and choosing which bill gets through the House; it's about crossing our fingers and hoping any of one gets passed at all.

courtesy of Erin Warner

News Added: 13 June, 2007

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