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Congress Holds More Hearings on Internet Gaming -- Some Progress Made

By Shari Geller
Two separate congressional hearings were held last week to address the legalization and regulation of online poker in the U.S.  While the voices in opposition are few and far between, and the arguments in favor seemed compelling, there is still a lingering sense that Congress is in no hurry to pass legislation to bring legalized online gaming back to the States. Regardless, the fact that the issue has not be tabled but continues to have legs, gives us some hope that somewhere it the future there will be such legislation.
The first hearing was held by the U.S. Senate Committee on Indian Affair and was entitled an “Oversight Hearing on the Future of Internet Gaming: What's at Stake for Tribes?”  The hearing focused on tribal concerns and priorities related to internet gaming. The Committee Chairman said that even though there is no legislation pending before the committee now, the move to legalize online gaming is gaining interest as legislators look at it for its potential revenue and help in creating jobs.
What is of particular concern to this committee was the potential effect of online gaming to the Indian gaming industry which is currently a $26 billion industry.  Issues discussed included maintaining tribal sovereignty and ensuring that any legislation to legalize online gaming would provide all tribes with full participation on an equal footing to their counterparts in the general gaming industry.
During the hearing, Sen. Al Franken (D-MN) set the tone, which was to make sure that Indian tribes were included in any discussion concerning legislation to legalize online poker.  He discussed the positive impact of Indian gaming on revenue and jobs and, while voicing concerns about online gaming, said if Congress were to consider legislation legalizing online gaming, he argued that the tribes must be consulted in every step of the process.
Larry Roberts, general counsel of the National Indian Gaming commission, testified that there is no consensus among the tribes as to legalizing online gaming, some are in favor, some are opposed, and it was not his intention to ever take a position on the subject.  However, the people he represents are concerned about how internet gaming might cut into their revenue and make it difficult for them to compete. 
On Friday, there was a hearing in front of the Subcommittee on Commerce, Manufacturing, and Trade. That hearing, a follow up to a hearing last month, entitled “Internet Gaming: Regulating in an Online World” focused on how proposed online poker legislation should be regulated at the federal and state levels.
“Most people, including members of the subcommittee, seemed to be supportive of the concept of a poker-only bill,” said Rep. Joe Barton (R-TX), who proposed HR2366, one of the bills being debated by legislators that would legalize internet poker in the U.S. through various state agencies. The bill has 25 co-sponsors among House and Senate members.
But by definition “most” meant there were voices in opposition.  One such voice belonged to Frank Wolf (R-VA) who testified about the evils of gambling, calling it “a dangerous activity and study after study has shown that for many in our society, there is no question that it is strongly addictive.”
Barton countered Wolf’s concerns by citing statistics that show that less than two percent of gamblers can be categorized as having an addiction to gambling.  Rep. Barney Frank (D-MA) discussed his co-sponsorship of pending legislation, which Wolf had authored, to address the issue of problem gambling.  Frank supports taking a direct approach to the issue of gambling, from legalizing and regulating it, to providing programs to combat its potential harm, as the proper role of the government.
“Enacting legislation to license, regulate, and tax online gambling as well as implement problem gambling programs, would bring this industry out of the shadows, benefit consumers, create American jobs, capture revenue and allow adults to enjoy freedom from unnecessary government interference,” Frank said.
Overall, the hearing left those supporting Barton’s bill feeling hopeful.  “The hearings were great for us,” said Poker Players Alliance (PPA) Vice President of Player Relations Rich Muny. “They were also completely different. The October House subcommittee hearing didn’t mention anything about the morality of playing poker. Last week, Frank Wolf talked about morality, but his points didn’t connect with anyone. No one really referenced his comments throughout the rest of the hearing. Everyone else was talking about how we’re going to regulate it.”
As far as what is next for HR2366, Muny said “The next step for Barton’s bill would be a markup. We’ve had two hearings on internet gambling in the House subcommittee, so we’re hoping to be at the next step. It would be nice if we could get it in this year, but if that doesn’t happen, it could happen early next year. It has to be voted through somewhere.”
It seems unlikely that during an election cycle, Congress would be willing to stake a position on an issue as potentially incendiary as “gambling.” However, the tenor of the recent hearing gives some hope that moving the focus to the two prongs of revenue/jobs and protection of players might give the bill a chance.
With online poker being virtually absent from the U.S., there is greater urgency than ever to get a bill passed that would bring it back onshore.  There was hope that the supercommittee might take it up as a revenue generator, but that did not happen.  Barton’s bill, with its bipartisan support and focus on just poker, looks to be the best chance to get the issue resolved at last.
 “I think we moved the ball forward and are getting closer to making this bill a law,” Barton said. “I think the votes are there in the subcommittee, the whole committee and on the House floor.”

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