Internet gambling law may crimp lawmaker's plans

New federal legislation may derail Fargo state Rep. Jim Kasper's plans to revive a proposal to make North Dakota the first state to license Internet poker sites.

The measure, which the U.S. House overwhelmingly approved last week, would ban Internet gambling sites, including online poker rooms, from taking money from customers in the United States.

It changes a 1961 antigambling law, called the Wire Act, to explicitly apply its terms to Internet gambling. It requires the Federal Reserve and the U.S. Treasury Department to write regulations to block gambling money transfers by American banks.

Kasper said he has not reviewed the legislation, which is a meshing of separate bills introduced by Reps. Bob Goodlatte, R-Va., and Jim Leach, R-Iowa. The House endorsed it 317-93. One of its supporters was Rep. Earl Pomeroy, D-N.D.

Approval from the Senate and President Bush is still needed for the bill to become law. The Senate has not taken up the measure, and may not do so before the current session of Congress concludes at year's end.

Kasper said he was unsure of the legislation's implications for his North Dakota poker licensing bill, but that he is reluctant to abandon the concept.

"I don't want to give it up, because there's too much money for the people of North Dakota, and there's too many good things that can happen if we become the first state that regulates the Internet poker business," Kasper said. "But I've got to interpret what this bill does ... Maybe there are too many restrictions in it. I don't know."

During the 2005 Legislature, Kasper sponsored a bill and a North Dakota constitutional amendment to allow North Dakota to license and regulate Internet poker sites. They are now based in several countries, including Costa Rica and Antigua, an island nation in the eastern Caribbean.

Both proposals squeezed through the North Dakota House, but were walloped in the Senate. Both measures got only three Senate votes in favor, and one of the "yes" votes, Sen. Jack Traynor, R-Devils Lake, is not seeking re-election.

Kasper believes North Dakota could reap considerable revenues from poker site licensing, and from using the state-owned Bank of North Dakota to process the sites' financial transactions. Under the Fargo Republican's proposed legislation, most of the poker licensing revenue would be set aside to finance local property tax cuts.

The federal legislation exempts horse racing and state-run lotteries from Internet gambling restrictions, and would allow Internet gambling operations that are contained only within a single state. The intrastate exemption would be meaningless in North Dakota, which is not a large enough market to sustain a lucrative Internet poker business.

Kasper toyed with the idea of circulating initiative petitions to put the Internet poker measures directly to a vote this year, but the effort never got started.

He said any new poker legislation he offers in the 2007 Legislature will have stronger provisions to ensure that underage gamblers would not be allowed to play, and safeguards would be included to stop players from gambling away too much money.

In an interview with CardPlayer.com, a poker Web site, Kasper said he had consulted Frank Fahrenkopf Jr., president of the American Gaming Association, about the effects of the federal measure, and that he would be soliciting gaming industry assistance in drafting his own legislation.

Kasper has been a featured speaker at several industry conferences about his North Dakota Internet poker measures, and is scheduled to speak at a "poker summit" in Montreal in early October.

"A lot of people want to know what I did, why I did it, how I did it and what happened, and what does this hold for the future of the Internet poker industry," Kasper said.

courtesy of Dale Wetzel

News Added: 17 July, 2006

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