A New York congressman introduced legislation last week to legalize all forms of Internet wagering by establishing a federal licensing and regulatory system.

Internet gaming supporters quickly applauded the measure, authored by Rep. Peter King, R-N.Y., which goes beyond previous attempts to legalize just online poker.

Others expressed caution and wanted to take a closer look at the 134-page bill.

“Our team and the board will need some time to fully review this legislation before taking an official position,” American Gaming Association President Frank Fahrenkopf Jr. said in a statement.

Last year an online poker bill backed by U.S. Senate Majority Leader Harry Reid and now-retired U.S. Sen. John Kyl, R-Ariz., was leaked in Washington, D.C., but never introduced.

Partisan politics and opposition from Indian gaming tribes and state lotteries sank the legislation. Several online gaming and online poker-only bills have surfaced in Congress over the past few sessions.

Rep. Joe Barton, R-Texas, told Internet gaming proponents he will introduce online poker legislation later this year. Reid spokeswoman Kristen Orthman said the Democratic leader and Sen. Dean Heller, R-Nev., “continue to work together in this issue.”

Former Rep. Jon Porter, R-Nev., now a lobbyist in Washington, D.C., said the King bill most likely will take on a different form as it comes up for debate and additional online gaming bills surface.

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Two of Nevada’s longtime political power players — gaming lobbyist Frank Fahrenkopf Jr. and Senate Majority Leader Harry Reid — took turns blaming each other for the failure for Congress to legalize Internet poker last year.

The dust-up surprised many because the longtime Nevadans had always been complimentary to each other.

Fahrenkopf, chief executive of the Washington, D.C.-based American Gaming Association, is retiring at the end of the month.

In an interview with online publication Gambling Compliance that was published Thursday, he said the failure of Reid and now-retired Arizona Sen. John Kyl to introduce an online poker bill last year “was my biggest disappointment” in his 18 years with the American Gaming Association.

Asked if he blames Reid and Kyl for not introducing legislation, Fahrenkopf said, “If I had to blame anybody — I mean I’m sure they did their best — but that’s where the failure is. Blame is not probably the right way to put it, but there was a failure because nothing was introduced.”

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Online gaming giant PokerStars folded its hand last summer after a 15-month legal battle with the U.S. Department of Justice.

Since that time the company has been on a heater.

It was the right call for PokerStars to accept a $731 million forfeiture to the federal government and shed a nine-count indictment. The settlement also absolved PokerStars of any wrongdoing in accepting Internet wagers from American customers.

PokerStars, through its Isle of Man-based parent The Rational Group, said in January it was buying a casino in Atlantic City. On Feb. 21, it announced plans to open a live-play poker room at the City of Dreams in Macau, while its online business grew to more than 50 million registered customers through legal Internet gaming markets.

The only place PokerStars can’t earn a seat at the table is Nevada.

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Nevada’s budding Internet poker market could eventually accept wagers from players in other states under a proposed legislative change in the Silver State’s interactive gambling regulations.

In a bill draft submitted to the Legislature, the Gaming Control Board wants to amend interactive gaming regulatory language that would allow Nevada’s governor to enter agreements with other states that legalize Internet poker.

Conceivably, the interstate gaming compacts would allow Nevada-based Internet poker websites to accept bets from gamblers from states with similar interactive gaming laws, considerably growing the size of the potential player pool.

Under Nevada’s interactive gaming regulations, websites in the state can accept wagers only from players gambling on computers or mobile devices within the state’s borders.

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WASHINGTON – Its dim prospects finally fading to black, Sen. Harry Reid pulled the plug [last] Friday on the effort in Congress to legalize Internet poker this year.

With only days remaining in the session, and with consensus far from reached on a bill that sought to reshape the landscape of online gaming, “we have simply run out of time in this legislative calendar,” he said.

“I am disappointed,” Reid said, adding he and Sen. Dean Heller, R-Nev., “remain committed to this issue and it will be a priority for us in the new Congress.”

Reid’s comment in a statement came shortly after his chief of staff, David Krone, said in an interview that “this bill for this year is dead.”

The poker bill was a priority for several Nevada casino companies seeking a lucrative new and national market for their brands and for poker players seeking legal and federally regulated online games accompanied by consumer protections.

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WASHINGTON – A bill to legalize online poker that is being written in Congress and that Nevada senators are trying to pass by the end of the year could be challenged in court and found unconstitutional, according to a legal analysis by a former top government attorney.

The bill would set up a framework to license and regulate Internet poker companies, and to nourish a U.S.-based online poker industry. But former U.S. solicitor general Paul Clement said he found flaws in segments of the bill that seek to punish overseas providers that ran games in the United States and continued to take bets from U.S. players even after Congress enacted online restrictions in 2006.

The so-called “penalty box” provisions would prohibit those companies from applying for an online poker license for five years, and from selling their trademarks or software to others seeking a license.

Clement said the bill being formed by Sens. Harry Reid, D-Nev., and Jon Kyl, R-Ariz., “raises serious due process concerns.”

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WASHINGTON DC – Gov. Brian Sandoval went to bat Thursday for a federal online poker bill, breaking away from fellow governors ramping up to fight it.

Sandoval split with the National Governors Association, which told congressional leaders the proposed bill would restrict states from pursuing their own forms of legalized gaming, and the revenue gained would help fund schools and social programs.

A draft bill reviewed by the governors was unacceptable, according to Govs. Tom Corbett of Pennsylvania and Steve Beshear of Kentucky.

“We oppose the draft Senate legislation in its current form as an unnecessary pre-emption of state authority,” said the governors, who head the association’s economic development committee.

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The big news this week is the release of the draft of the legislation that, if passed into law, will license and regulate online poker in the U.S. This bill, officially titled the “Internet Gambling Prohibition, Poker Consumer Protection, and Strengthening UIGEA Act of 2012” but more often referred to as the “Reid/Kyl bill” after backers Sen. Harry Reid (D-NV) and Sen. Jon Kyl (R-AZ), will potentially see introduction during the lame duck session of Congress (the session immediately following the November elections). I encourage everyone to read the draft here, and Chris Grove’s summary of the bill on QuadJacks Poker News here.

In addition to giving us licensed and regulated poker in the U.S., this bill provides for consumer protections, including mandated segregation of player funds, background checks of providers, and criminal penalties for cheaters. It also provides a real framework for the game. With a solid foundation upon which to build the game, rather than watching online poker degrade each year, we would once again watch our game grow and thrive year after year.

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Passage of federal Internet poker legislation during Congress’ upcoming lame duck session will “take a little bit of gamblers luck,” the casino industry’s chief Washington, D.C., lobbyist said Tuesday in Las Vegas.

American Gaming Association President Frank Fahrenkopf Jr. said legalizing Internet poker in the U.S. continues to be an overriding issue for the casino industry, which officially kicked off the Global Gaming Expo at the Sands Expo and Convention Center. The four-day conference and trade show is the industry’s largest annual meeting.

Fahrenkopf, whose organization co-produces G2E with Reed Exhibitions, said Internet poker legalization is the most talked about subject among the gaming community. Most of the major casino companies and gaming equipment manufacturers have taken initial steps to jump into a legalized American Internet poker market.

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What seemed like a tremendous decision for the gaming industry nine months ago – the re-evaluation of the Federal Wire Act of 1961 – may not be so advantageous for Nevada unless Congress takes steps to enact Internet poker legislation.

A window of opportunity that could place Nevada at the center of the potential U.S. Internet gaming market is closing quickly, and some in the gaming industry worry that lack of federal action could cost the state tax revenues and casino customers, while making Nevada subservient to less-regulated states.

“There are different standards for gaming regulation in one state versus another,” Station Casinos Vice Chairman Lorenzo Fertitta said. “We know some companies will shop for the lowest common denominator. We could start seeing bets being taken away from Nevada.”

The U.S. Department of Justice on Dec. 23 reversed a 50-year-old interpretation of the Wire Act, saying the law covers only sports wagering. Legal experts said the decision frees individual states to let online operators offer poker and traditional casino games such as slot machines and blackjack if the play doesn’t cross state lines.

It’s been estimated that U.S. gamblers spent as much as $26 billion annually gambling online before federal prosecutors indicted the operators of three of the largest Internet poker websites in April 2011. Closing those sites, which had violated federal law by accepting wagers from the U.S., effectively walled Americans off from the online gaming universe.

Now, states dealing with tight budgets are looking at that huge, untapped Internet market and are increasingly open to allowing – and taxing – it. Lawmakers in several states are in various stages of adopting regulations to allow full-scale online gaming.

Several Nevada gaming companies are on the verge of offering in-state online poker, but they foresee trouble ahead if their market is limited only to players in the sparsely populated Silver State.

And not only are they concerned about missing out on poker profits, they fear gamblers who can play online at home won’t bother traveling to Las Vegas’s tourist-dependent resorts.

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WASHINGTON DC- With a nearly finished bill in hand, Sen. Harry Reid is hunting for a path to move Internet gambling legislation through the Senate. But on Thursday, Indian tribes dealt in for a piece of the action.

The chairman of the Senate Indian Affairs Committee unveiled a draft bill that would allow Native American tribes to operate online poker games alone or with non-Indian partners.

Online gaming licenses would be issued by the Department of Commerce and not subject to taxation or to state compacts for brick and mortar casinos. Once licensed, tribes would be able to accept wagers from players anywhere in the United States. When it comes to online gambling, Congress “must enable tribes to participate fully should any legislation be considered so tribes are on equal footing with their counterparts in the commercial gaming industry,” Sen. Daniel Akaka, D-Hawaii, said.

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Poker players will receive an update from their top lobbying organization on legislative efforts to license and regulate online poker in the United States during a special town hall-style meeting Saturday at the Rio.

When it comes to federal efforts, however, it might be a short conversation.

The Poker Players Alliance is using the World Series of Poker, which has attracted thousands of players to Las Vegas, to update the poker community on what’s taking place in various states.

John Pappas, the alliance’s executive director, said he expects to hear from players who have been sidelined from Internet play since the April 15, 2011, crackdown on Internet poker by the U.S. Department of Justice.

Pappas will be joined by Rep. Joe Barton, R-Texas, the sponsor of House Resolution 2366, which calls for legalization of Internet poker, and professional poker players Greg Raymer – the 2004 World Series of Poker Main Event champion – and Linda Johnson, who have lobbied on behalf of the Poker Players Alliance in Washington, D.C.

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Poker continues to gain ground on Capitol Hill! On Monday, Gambling Compliance reported some excellent news (click here, subscription required) in an article entitled Reid Says DoJ Opinion Gives Congress Incentive for Internet Poker Bill.

The article quotes Senate Majority Leader Harry Reid (D-NV) as follows: “It [the Department of Justice’s clarification of its interpretation of the scope of the Wire Act as not including online poker] (will) give us an incentive to get something done. We cannot have a series of laws around the country related to [Internet] gaming, I know a lot about gaming. I’m a former chairman of the Nevada [Gaming] Commission, and I think it’s very important that we have a national law.” The article further states that Sen. Reid has confirmed that he is negotiating with Sen. Jon Kyl (R-AZ) on a federal online poker bill bill!

When articles like this goes public, lawmakers always look at public reaction. So, let’s all do our part and tell both that we wish for them to push forward with appropriate online poker legislation! Fortunately, we can do this quickly and easily.

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It really would be kinda selfish to hoard all the knowledge in poker, let alone any insight gleaned from all the uninformed and/or misinformed Twitter-fueled forum banter. Things are moving so fast these days in poker it’s hard to keep up, let alone have time to post after filtering through the muck. Actually, that probably explains the continued love/hate in poker for QuadJacks … accuracy shmacuracy, if there’s new hubbub in poker, Zac and Marco and crew are on top of it, and occasionally the middle of it — with informed insiders and ignorant blowhards alike contributing — while SrslySirius makes a rap video.

But a few recent stories of particular significance that might otherwise get buried amid PokerStars/WSOP/WPT press releases, 2+2 NVG threads, and the mashup of Jungleman cheating buzz:

Ring-fenced funds: Full Tilt debaucle explained
ALDERNEY
Check out this story in Poker Player Newspaper about a regulatory matter of new relevance called “ring-fenced funds”. It helps one understand a little better why Full Tilt found themselves in tighter straits than PokerStars post-Black Friday (even though PokerStars is the big boy the DOJ most wants) … and leaves one to wonder why senior executives and on-duty attorneys representing both Party Gaming and PokerStars flew in from Gibraltar, Israel, and the United States to observe the proceedings firsthand. Perhaps they thought they were coming in to witness an execution?

Online gambling goes national
WASHINGTON DC
Big talk all over the internet about a piece in the New York Post that points out how stars seem to be aligning for online gambling legalzation in the US — from the Kyl/Reid letter requesting DOJ assistance in squelching offshore operatives and state initiatives alike, to a Boehner aide taking on a VP role with the American Gaming Association, to a warming friendship between House Majority Leader Eric Cantor and Venetian pooh-bah Shelly Adelson.

It all supports my belief that online gambling will indeed be a national issue in coming months (assuming people behind a rumored Senate bill want it to be). There’s no mention, however, of the player-friendly Barton Bill, nor much anything about poker specifically — the writer talks of “gambling” — which suggests this story could be a plant by media operatives for the AGA, who we know, of course, represent Big Casinos and likely have Harry Reid’s office on speed dial. It also supports contentions that the effort to bring back online poker (thanks PPA and Joe Barton!) will likely become a push for full-on legal online casinos as bills move forward.

Nevada regulators prepping for Poker+ …
LAS VEGAS/CARSON CITY
Meanwhile, unbeknownst to many, Nevada Gaming authorities are in the midst of sweeping changes to state regulations — with very specific language updates on matters of foreign partners, “suitability”, server location, mobile gaming platforms, slot machine networks, money transfers, tax collection, you name it … The new rules currently taking shape in Nevada touch on just about every issue brought up in the online gaming political sphere over the past five years. Whether revolutionary or standard as far as procedure goes, if you really wanna know what the future of online gambling (and therefore poker) will look like — and/or place your bets on who the corporate winners will be* — follow the public work of the Nevada Gaming Commission and State Gaming Control Board here in coming weeks.

* for entertainment purposes only: smart bet is Caesars, William Hill, and Cantor-Fitzgerald.

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This week’s online gambling news includes an unusual bipartisan letter to the US Department of Justice. Plus, industry news from the United Kingdom, and a potential setback for regulated gaming in Washington DC.