Lobbying blitz begins on Internet poker measure

Dale Wetzel

Monday, March 7, 2005 | 9:15 a.m.

BISMARCK, N.D. -- Licensing Internet poker sites can help prevent gambling by youngsters, compulsive gambling and other consequences that concern state policymakers, an Internet gambling company executive believes.

Regulators in other countries demand safeguards to prevent underage gambling, overspending by players and collusion during poker games, said Nigel Payne, chief executive of Sportingbet of London.

"This is a huge industry that exists, and it's here to stay. You've got two simple choices, regulate it or don't regulate it," Payne said in a telephone interview. "If you don't regulate it, the probability of (gambling problems) actually happening has got to be materially higher than if you regulated it."

Payne is one of a group of gaming industry officials who are visiting the Capitol this week to lobby for legislation that would license and regulate Internet poker sites in North Dakota. No other state does so.

Others include Frank Catania, a former New Jersey gambling enforcement director and Republican state legislator, and Allyn Jaffrey Shulman, an attorney who is chief executive of CardPlayer.com, a poker Web site.

The North Dakota House has already approved the licensing bill, which is sponsored by Rep. Jim Kasper, R-Fargo. It gets its first Senate hearing in the Judiciary Committee on Tuesday.

The legislation includes taxes on poker revenue, and an annual $10 licensing fee for each player. For the bill to take effect, voters must approve an amendment to the North Dakota Constitution.

The proposed amendment is awaiting a House vote Tuesday. Should it also win Senate approval, it would go on the June 2006 primary election ballot for voters to render their verdict.

Attorney General Wayne Stenehjem is meeting with lobbyists for the measure this week. He said he wants industry representatives to address the U.S. Justice Department's belief that Internet gambling is illegal in the United States.

Stenehjem said Sunday he also has questions about the logistics of regulating Internet poker, including how to keep out computer hackers and prevent gambling by underage players.

Shulman disputes the Justice Department's contention that Internet gambling is illegal in this country. In any case, Shulman does not believe poker playing is gambling at all; it is a game of skill, she says.

"No one makes a living playing the lottery, bingo, slot machines, craps, baccarat, roulette or keno. The reason is that they all constitute games of chance," Shulman said. "In a poker game, a player has control of the outcome of the game in the long run, by making statistically correct decisions."

Senate Judiciary Committee members said last week they have had only a few messages about the poker measure.

"My dad taught me how to play poker, and we played it around the kitchen table, and that's the extent of my knowledge of the game," said Sen. Jack Traynor, R-Devils Lake, the committee's chairman.

A Judiciary member, Sen. Nick Hacker, R-Grand Forks, said he had reservations about the legislation.

"This industry is already competitive, and we're going to charge people more to locate here," Hacker said. "There is a security factor of saying, yeah, well, it's licensed, Well, who's liable (for problems) now? Because we licensed them."

Hacker said he has played poker and blackjack on a Web site called Sportsbook.com, and he has a number of friends who play poker on Web sites.

Many of them offer discounts to players, and Hacker wonders whether North Dakota's proposed $10 annual licensing fee for players will be a turnoff.

"If you looked at it ... from a financial standpoint, why would I put in $100 and only get to play with $90, when I can go to this other site and put in $100 and get to play with $110?" Hacker asked.

Stenehjem said he is neutral on the licensing bill. Gov. John Hoeven is also reserving judgment on it, said his spokesman, Don Canton.

"I told (Kasper), I didn't sign up for this when I ran for the office," Stenehjem said. "This is a new thing for me, and I certainly want to make sure that if the Legislature decides they want to pass it, and the governor signs it, and the constitutional amendment is approved, that it's done right."