Barton US Online Poker Bill Faces AGA Rival

Barton US Online Poker Bill Faces AGA Rival
by Bradley P. Vallerius, JD

U.S. Internet poker legislation protects states’ rights and excludes foreign operators
Yet another bill that would bless internet poker but not casino games has appeared in the U.S. The latest is a federal bill that would create an interstate licensing system in which states and Indian tribes continue to exercise power over gambling within their territories.

Introduced on 24 June 2011, H.R. 2366 marks the third time legislation to legalize internet poker has been introduced into a U.S. Congress. The bill is a considerable improvement upon its predecessors, due largely to efforts of the Poker Players Alliance (PPA), a grassroots political organization that has been working “to protect the right to play poker” since 2005. Last year the PPA spent US$1.8 million lobbying Congress.
This time around, the PPA’ chief sponsor is Rep. Joe Barton, an experienced and influential Republican from the State of Texas. His emergence as a leader on the issue comes as a surprise, considering he has served as a Representative since 1984 but until now has contributed little to the discussion.

> Energy, particularly oil, is his sphere of expertise, and his most notable accomplishment is leading efforts to enact the Energy Policy Act of 2005. Rep. Barton last made major media headlines when he referred to a White House investigation of the BP oil spill as a “shakedown” and apologized to the company’ CEO during a Congressional hearing. Rep. Barton also meets with the new Tea Party caucus. 
The full title of Rep. Barton’ bill is the “Internet Gambling Prohibition, Poker Consumer Protection, and Strengthening UIGEA Act of 2011”. It proposes to give the U.S. Department of Commerce authority to create an “Office of Internet Poker Oversight” which would certify state regulatory agencies before they can award licences to operate Internet poker within their territories.
H.R. 2366 enumerates several requirements that state agencies would have to meet in order to obtain federal certification: 
– Agencies would be expected to investigate license applicants to ensure they can verify the age and physical location of customers and that they can keep customers’ information private and secure.
– Agencies would also have to require licensees to maintain gaming servers within the territorial borders of their state. 
– A number of measures designed to minimize the risks of problem gambling would also be required, including the creation of a self-exclusion list. 
Additionally, H.R. 2366 proposes to strengthen the federal prohibition on other types of Internet gambling. The framework codified by UIGEA and its banking regulations would remain in effect, and the Office of Internet Poker Oversight would maintain an official list of unlicensed operators in order to assist American banks with their duties.
States would be free to decline participating in the program if they prefer that Internet poker remain prohibited in their territories, and the same rules would apply to the sovereign Indian tribes located in America.
But at any rate, foreign operators should not be amused. For the first two years after enactment of H.R. 2366, licences to operate Internet poker would be restricted to companies of a certain size that have been operating regulated gambling services in the U.S. for at least five years already. Then at the end of two years, all other operators would become able to apply for a licence – but only if the Office of Internet Poker Oversight first makes a finding that there would be no risk to the public in opening the market to more providers. 
But of course it’ still very early in the legislative process for H.R. 2366. Many opportunities for mark-ups, amendments and delays remain.
Furthermore, the American Gaming Association (AGA) now says it will introduce an Internet poker bill of its own after Congress’ summer break. GBGC has heard AGA CEO Frank Fahrenkopf outline some of the draft details at both the IGaming Super Show in May and the Gaming Executive Summit in July:
– The AGA bill would again be for online poker only. 
– Overall regulation would sit with the Department of Commerce but with licensing would be delegated to state-level bodies, particularly those with a record of regulating gaming. 
– Individual states would have to opt in to the regulation to allow their resident to play poker online. 
– Indian tribes, as sovereign nations, would deal directly with the Department of Commerce. 
– Taxes would be split between state and federal bodies
And so lawmakers will face the challenge of having to grasp the implication of two competing proposals to correct a situation which they have utterly failed to understand over the last 16 years. An optimist would hope they will take time to consider both proposals and enact a solution that combines the best elements from each. But it’ more likely that the one with heavier political clout will gain favor, and probably even more likely that neither one makes it out of its committees and onto the floor of the House or Senate.
Because after all, even with Rep. Barton leading the way, any federal legislation is going to have a tough time today. A battle over the national debt ceiling consumes much of the calendars in both houses at the moment, and numerous other matters weigh heavier on the minds of most lawmakers than Internet gambling. 

Bradley P. Vallerius, JD has eight years of experience specializing in research and information for the global online gaming industry and is currently pursuing a career in regulatory compliance and government affairs in the U.S.

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