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Frank Introduces Internet Gambling Bill

Get Used to Saying “Internet Gambling Regulation Consumer Protection & Enforcement Act of 2009”

by , May 6, 2009 | 9:38 am

Comments (19)

Kudos to Rep. Barney Frank for introducing the much-anticipated legislation this morning. The Internet Gambling Regulation Consumer Protection & Enforcement Act of 2009 has no H.R. number attached yet, but the process has begun. The name of the bill doesn’t exactly roll off the tongue or make for a nice abbreviation – IGRCPEA? – but might just be referred to as “The Bill” going forward. (Catchy?)

The 48-page bill provides for licensing, enforcement, and consumer protections regarding legal internet gambling, as detailed on the House Financial Services Committee website.

SUMMARY
The Internet Gambling Regulation Consumer Protection & Enforcement Act would establish a federal regulatory and enforcement framework under which Internet gambling operators could obtain licenses authorizing them to accept bets and wagers from individuals in the U.S., on the condition that they maintain effective protections against underage gambling, compulsive gambling, money laundering and fraud, and enforce prohibitions or restrictions on types of gambling prohibited by states, and Indian Tribes.

At the same time, Frank introduced a piece of companion legislation calling for the postponement of UIGEA regulations from this year’s compliance date of December 1, 2009 to one year later. Pushing it to 2010 gives “The Bill” time to progress as it may.

So, it’s on! According to Bloomberg, Harrah’s Entertainment and Youbet.com are already on board and ready to lobby on behalf of this bill. More to come in the weeks ahead, no doubt.

(Note: KevMath beat me to it again! Duplicate posts on this can be forgiven, eh?)


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19 Comments to “Frank Introduces Internet Gambling Bill”


  1. Kevin Mathers     says:
    May 6th, 2009 at 10:21am

    From what I’ve been reading over at 2+2, the state opt-outs in the bill are not really going over well.


  2. California Jen     says:
    May 6th, 2009 at 10:39am

    Not going over well with whom? Legislators have barely had time to look at the thing, if at all.


  3. Kevin Mathers     says:
    May 6th, 2009 at 10:42am

    Legislation forum readers on 2+2, who have been looking at the bill as its currently written. They’ll all for the delay UIGEA by a year thing, but say the other bill needs some work.


  4. California Jen     says:
    May 6th, 2009 at 10:53am

    In my opinion, if this bill tried to step all over states’ decisions, there would be no way to pass it. But let them have their say. I just feel like some forum posters want everything their way all the time, with no consideration for anything or anyone else involved. Not sure they’re looking at the big picture here. If we pass this federal legislation, more states might consider giving online gaming a chance.

    I’m just waiting to see what legislators say about the whole thing.


  5. Kevin Mathers     says:
    May 6th, 2009 at 11:06am

    Well we have Spencer Bacchus’ opinion (Frank’s counterpart on the Financial Services Committee:

    WASHINGTON – Congressman Spencer Bachus (AL), the top Financial Services Committee Republican, issued the following statement on legislation introduced today that would allow illegal on-line gambling criminals to prey upon America’s youth:
    “Illegal off-shore Internet gambling sites are a criminal enterprise and allowing them to operate unfettered in the United States would present a clear danger to our youth, who are subject to becoming addicted to gambling at an early age. If you put a computer in a teenager’s bedroom, or in a student’s dorm room at college, it’s a temptation that many fall prey to. In fact, studies have shown that the earlier one begins gambling, the more likely it is he or she will become a compulsive problem gambler.

    “In the 109th Congress, Democrats and Republicans worked together to pass commonsense, bipartisan legislation aimed at combating criminals from preying upon American’s youth. That legislation was supported by a broad coalition that included college presidents, the American Bankers Association, the American Psychiatric Association, and major sports organizations.”


  6. Kevin Mathers     says:
    May 6th, 2009 at 11:17am

    Also, it’ll be H.R. 2267, which rolls off the tongue easier than the IGRCEPA


  7. DanM     says:
    May 6th, 2009 at 12:41pm

    I’m not so sure Spencer Bacchus saying the things he says hurts us. These are the types of people (and arguments) that have lost relevance with 2/3 of the American people.

    I like his word “unfettered” too … because we’re basically saying the same thing. Let’s fetter this industry … just a little bit!


  8. DanM     says:
    May 6th, 2009 at 12:56pm

    Kevin, can we get a source on where you got that bacchus quote from?


  9. BJ Nemeth     says:
    May 6th, 2009 at 1:42pm

    The language coming from those like Spencer Bacchus does hurt our cause, because on an issue like this, most people will decide for themselves rather than blindly follow their party of choice (Republican/Democrat). Online gaming is a simple enough issue that most people will listen to a few minutes about it on the news and come up with their own decisions. (Unlike a bank bailout or foreign aid, which people readily admit they don’t understand.)

    Framing the issue is one of the most important things in passing legislation — that’s why nobody is anti-choice or anti-life when it comes to abortion. In some cases, whoever successfully frames the argument at the beginning ultimately wins on that fact alone.

    Example: Obama set himself from the beginning of his campaign as the candidate of change, and Hillary Clinton — who could have justifiably claimed the same thing — willingly conceded it to him, preferring to pitch herself more as the inevitable incumbent. It was a horrible decision going against the obvious direction of the voters, and that simple decision in 2007 may have cost her the Presidency.

    We don’t want out opponents to frame the arguments around online gaming before we do. It’s the difference between playing offense and defense. It’s very hard to win on defense.


  10. Kevin Mathers     says:
    May 6th, 2009 at 3:07pm

    Dan,

    Link added to the press release that Bachus issued.


  11. California Jen     says:
    May 6th, 2009 at 3:12pm

    I agree that Bacchus has an argument that will resonate with some people, so it is powerful in that way and could hurt. However, I also think Frank’s statements (along with Pappas on Bloomberg today and Sandman on Fox) counter Bacchus quite eloquently.

    BJ, you’re right that many people will formulate their opinions on this issue based on a simple argument, but I don’t think it’s going to be Bacchus – or Frank, for that matter – who contributes to those opinions. Most people in this country know someone who plays poker, enjoys poker, has fun at the blackjack tables, or plays the ponies now and then. The millions upon millions of people who know us will likely support Frank’s legislation. On the other side, some people will likely take an anti-gaming stance because their cousin’s kid lost $500 on the internet or their friend’s husband gambled away a slice of the family savings in Las Vegas. I think this is how the opinions are formed, for the most part, not by a Bacchus press release.

    Just my opinion. Fire away.


  12. DanM     says:
    May 7th, 2009 at 1:10am

    I think you all over-estimate the Bacchanalian opposition. This guy is literally a dying breed, and even conservative Republicans know this. When Rush Limbaugh starts taking the “Go UIGEA!” side, then we are in trouble.

    The enemy here is process. The Banks are gonna want certain things, and they’ll have to sort those measures out with the Treasury. Mix in some WTO issues (not sure if that’s the Dept. of State or Commerce handling these matters) and of course the Department of Justice.

    To many people will need to have their say in these regulations before they get close to becoming law. But it’s a good start … we’re at the table with something resembling a framework for online gambling/banking regulation.


  13. Losty     says:
    May 6th, 2009 at 3:15pm

    Well, Spencer’s quotes stink..

    But the State opt-outs stink too.. To Me, IT seems in one way worse than the status-quo (If you’re not in an opt-out state.

    One other troubling characteristic, for small-timers.. Withholding on every cash out.

    If you are a loser from Site A, and A Winner From Site B, they withhold from both ends. If it’s a 1099 from cashouts only it would be better, but there is a problem even with that..

    Isn’t a transfer from player to player a cashout from your account? Staking players online would drop way down. Also, if one had dual citizenship (or could get it), would it be based on where you are, or where yo register your info from?


  14. BJ Nemeth     says:
    May 6th, 2009 at 3:24pm

    There’s no need for return fire; I simply disagree. 🙂

    If this gets no media coverage one way or the other, most people won’t have an opinion other than a gut reaction that will probably be affected more by the phrasing of the question than anything else. Compare these two questions:

    “Do you think adult Americans should be free to play poker in legally licensed and taxed online poker rooms?”

    “Do you think gambling companies should be allowed to let anyone with a credit card gamble online at any time of day or night?” (This is a very generous phrasing by the way, without direct mention of kids or addiction.”

    If this bill *does* get a lot of media coverage, then that’s what most people will base their opinions on — that’s why it’s called mass media. The news reports and the talking heads/talk radio. They’ll hear about the bill, hear someone’s analysis, and make their own opinion. Whoever they hear first/most will have a *lot* of influence over that opinion.

    And don’t assume that friends & relatives of poker players will automatically support this. A lot of people (moms of college students are a prime example) would love to see online poker disappear entirely.


  15. Losty     says:
    May 6th, 2009 at 3:40pm

    What do you all think of McDermott’s companion bill.. Licencee tax of 2%/month on all net deposits? Withholding of individual’s Net Gaming winnings? No carveout for person-to-person transfers from what I’ve read..

    Meaning: Online staking becomes problematic at best.. Staking, Who knows what percentages they use to figure out withholding, and net gaming winnings is only Gross winnings from wagers less the amount wagered. It appears after thought that this would include the rake as it’s an amount wagered, but who knows. Would rakeback be included, or a business expense from licencee to person, and if it’s included in the accounts..


  16. California Jen     says:
    May 6th, 2009 at 3:45pm

    Okay, Losty, you lost me. I confess I haven’t read the 48-page document word for word yet. Can anyone else address Losty’s questions?


  17. scott diamond     says:
    May 6th, 2009 at 4:09pm

    Politics works in strange ways and we all know this.I think I read somewhere the passage of this Bill could bring in 56 Billion dollars to our economy.

    Those we have elected would be hard pressed not to take a serious look at this for their own States.

    There will be a lot of work once interest is shown because States may want to add a different taxation on our money. Some States do not even have a State income tax. Federal regulations will have to supersede States attempts to raise more money.

    How many people travel to Vegas and Atlantic City a year and gamble?

    How many College campuses and kids bedrooms have computers in them right now and are playing On Line Poker?

    I think most of them do not want to make a big deal out of this right now and are hoping it can pass without to much fanfare.

    I wonder how many of these politicians go to Vegas and play?


  18. DanM     says:
    May 7th, 2009 at 1:15am

    ***But the State opt-outs stink too.. To Me, IT seems in one way worse than the status-quo (If you’re not in an opt-out state.***

    I’d presume the state opt-outs are in there to keep it alive in the early stages … so should anyone start strongly objecting, Frank & Co, can say, “hey, fine, your state can opt out!”

    But these seem impractical in the world of internet commerce and finance transfer. (And may or may not violate the Commerce Clause?)


  19. Losty     says:
    May 7th, 2009 at 5:48am

    What about withholding from winnings? 2%/year licencing? Player-to-player transvers being apparently taxable events both ways? Withholding from A and not having B losses considered? you could have enough withheld to make you a net loser if you’re close (and not one already) Staking taxable makes a LOT of buyers a net loser at the mini level.

    For smaller players PTP transfers are staking.