GAMING:

Web betting is wedge for Big Gaming

Casino trade group hurrying to nail down its position

Tuesday, Nov. 25, 2008 | 2 a.m.

Web poker banned, they play politics (8-29-2008)
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Online gaming in the shadows (7-17-2007)

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Headlines from the Vegas gaming industry

Casino companies may be commiserating over their earnings troubles, but they are squabbling like extended family at Thanksgiving dinner over the prospect of legalized Internet gambling.

After more than a decade of hit-and-miss efforts by individual casino companies and interest groups to develop lobbying strategies, the American Gaming Association — the industry’s premier trade group — is rushing to clarify its position on Internet betting.

The new sense of urgency comes as a presidential administration that appears friendlier toward the prospect of legalized Internet gambling prepares to take office.

To present a unified front, members of the association have to work through at least three viewpoints. Some casino companies support federal regulation of Internet gambling. Other members want that authority to rest with the states, like the regulation of non-tribal casinos. Still others, fearing competition from land-based casinos with online outlets, oppose regulation that would open the door to new rivals.

The group’s largest members, MGM Mirage, Harrah’s Entertainment and International Game Technology — which have been or are involved in Internet gambling ventures in countries where it’s legal — support legalization.

The association has, of late, supported a more conservative approach, favoring a bill that would study whether to legalize Internet gambling, though some advocates say that might be a waste of time.

It isn’t the first time the association’s dozens of members have disagreed on policy. In the 1990s, members were divided on whether to support gaming efforts by Indian tribes — some of which were partners with Las Vegas casino giants. The Nevada Resort Association, and later the American Gaming Association, decided to remain neutral.

As a first step, the association has formed a working group to study bills that have cropped up in the past year.

Rep. Barney Frank, D-Mass., chairman of the House Committee on Financial Services, has introduced a bill to regulate online gambling sites by exempting licensed operators from the federal ban and creating protections against underage gambling, compulsive gambling, money laundering and fraud.

Other bills were introduced in Congress last year and this year to legalize online poker at the federal level.

In California, state Assemblyman Lloyd Levine has introduced a bill to legalize Internet poker for California residents.

At last week’s Global Gaming Expo, the gaming industry’s largest conference, Internet gambling experts concluded that legalizing online poker — as either a fallback position or an ultimate goal — would be more palatable to politicians and the public than legalizing other forms of Internet gambling.

Online sports betting appears to be off the table entirely because of a framework put in place to prosecute phone betting during the mob’s heyday, as well as a 1992 law giving Nevada a monopoly on legal sports betting, experts said.

Whether regulatory authority should reside with states or the federal government is also up for debate.

Federal regulation makes sense because it would establish a level playing field for operators while allowing individual states that oppose gambling to opt out, said John Pappas, executive director of the Poker Players Alliance.

A PricewaterhouseCoopers study conducted this year in support of federal regulation estimated that online gambling could generate at least $9 billion in fees and taxes for the federal government over the next decade.

The prospect of federal oversight worries some casino operators. Casinos formed the American Gaming Association in 1995 in part to keep would-be meddling federal regulators at bay.

The Poker Players Alliance, a grass-roots group that has ballooned to 1 million members in just a few years, is pressing to legalize online poker. It argues that poker is primarily a game of skill and should therefore be exempt from the Wire Act, the basis for the federal government’s ban on Internet gambling.

The Bush and Clinton administrations have maintained that the Wire Act prohibited all forms of online gambling, in spite of an oft-cited federal appeals court ruling in 2002 that the law primarily applies to sports wagering.

Congress further criminalized Internet gambling in 2006 through a much-criticized law that prohibits banks from processing online wagers. Meanwhile, states’ attorney generals have prosecuted online gambling sites and related advertisers.

Internet gambling declined as a result of the 2006 legislation, which prompted several offshore operators to stop accepting bets from Americans. But it’s once again on the upswing as bettors gravitate toward black market sites and use other payment mechanisms — such as wiring money to foreign bank accounts or using foreign credit cards — beyond the reach of the law.

In recent years, Internet gambling has been under siege by political and religious conservatives. But competing interest groups, such as sports leagues, also have played a role, as fantasy sports games — a big money maker for the leagues — were specifically exempted from the 2006 legislation.

During the presidential race, the candidates generally sidestepped gambling issues for more pressing concerns. And yet, Internet gambling supporters are cheering Barack Obama’s victory, noting that the Illinois senator, like many of his colleagues in the House and Senate, is an avid poker player.

“It has been a rough eight years,” said Sue Schneider, founder of Interactive Gaming News. “There’s a glimmer of hope.”

Discussion: 9 comments so far…

By CactusJack

11/25/08 at 5:43 a.m.

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A very well-written and comprehensive article. My highest compliments. All I can add for a comment is I am a poker player in the Valley. I play nearly every day, and poker is all I play. Poker players aren't really gamblers in the traditional sense. We are playing a game which requires a very high degree of skill, knowledge and practice to become a very good player. I played online poker for several years, and was the primary reason for my move to Las Vegas. I also work in a part of the poker industry and have seen the industry as a whole greatly diminished by the UIGEA.

No one should have the ability to make decisions for adults. What I do in my own home on my own computer with my own money is my business and no one else's. That is the crux of our argument for online poker. It is our hope that the new Congress and Administration will take a new look at our game.

CJ
By azsk8fan

11/25/08 at 6:25 a.m.

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I don't understand why the government persists in sticking there nose into peoples business when it comes to how they want to spend their money. If I want to go online to gamble that is my right as long as I'm stealing money from someone to do it (thus breaking the law) and as long as I understand I can't expect the government to support me if I go broke. This, to me, is just another smoke screen, much like the abortion issue that was resolved years ago - the government needs to concern itself with the serious matters going on right now - unemployment, home foreclosures, the ECONOMY, and quit using smoke-screen issues to cover up their ineptness.
By pmmart

11/25/08 at 6:47 a.m.

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Hey Cactus I got an idea that nobody else will ever think of.

IF.. They legalize internet poker let's form a group that uses laptop computers or camera phones, slo-play until we can get 3 to 6 of the group on the same table and share the wealth.

SHHHHHH..I am quit sure that we will be the only ones that think of this.
By dave202

11/25/08 at 9:22 a.m.

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Well written? There's all speculation, no attribution here.

The one quote is from the internet gambling industry's biggest cheerleader. Hardly a balanced approach....
By gold1020

11/25/08 at 9:54 a.m.

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I'd like to see online sports betting legalized. I still fail to understand why Nevada should have a monopoly on legalized spots betting. It would be great if river boat casinos & Indian Casinos also had sportsbooks.
By davidwayneosedach

11/25/08 at 10:21 a.m.

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It is a certainty that online gambling will be eventually legalized. Which sites will attract the most customers is highly speculative.
By scouser

11/25/08 at 10:40 a.m.

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Leave it to State regulation and it will never happen in Texas. Make it Federaly regulated so everyone is equal.
By azsk8fan

11/25/08 at 2:25 p.m.

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I meant to say as long as I'm NOT stealing money from someone else. oops.
By lctom

12/6/08 at 1:18 p.m.

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i agree with all about the ban its a bad law but let our casinos and gaming commissions already in place run WITH THEIR OWN online gaming sites where it will be regulated and taxed as i say let the people play and let the money stay!!!! i feel safer with my money and if i have a beef with such site it would be handled in a fair and proper way do you what the Kahnwake gaming commission AKA Fulltilt +Absolute and Ultimate bet poker reviewing your your case IF THEIR WAS ANY PROBLEM AT ALL YEAH RIGHT you have seen way they can protect you cheating is allowed and not punished they have no power at all