Poker News

Poker Players Alliance Pushing for February Markup of HR 2267

The Poker Players Alliance (PPA), the industry’s one-million member strong lobbying organization, is ramping up for what could be a monumental 2010 legislative year. At stake is the future of online poker in the United States.

As the industry treks into the new decade, Congressman Barney Frank’s (D-MA) HR 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act, is up to 65 co-sponsors. In the first two weeks of January, the measure saw two new lawmakers lend their names in support, Congressmen Eliot Engel (D-NY) and Charlie Melancon (D-LA). HR 2267 was introduced in May and, in the beginning of December, was discussed in the House Financial Services Committee.

No markup of HR 2267 occurred during the December 3rd hearing, which took place one week following officials from the U.S. Treasury and Federal Reserve delaying mandatory compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) by six months to June 1st, 2010. However, according to PPA Executive Director John Pappas, a markup may be in the offing: “The big next step for us is the markup. We’ve built out who our targets are for that committee and are pursuing them. We think it might happen in February, but there are no guarantees.”

According to Pappas, Frank expressed his desire to hold a markup hearing next month, which could lead to discussion of HR 2267 on the floor of the House of Representatives later this year. From there, Frank and the PPA could elect to attach the measure to another piece of legislation, similar to how the UIGEA became a part of an unrelated port security bill in 2006. Pappas noted, “One of our biggest challenges will be to make the vote in the committee bipartisan. That’s going to be our challenge and I think we can do it. Winning big in the Financial Services Committee will help us advance the bill in any other capacity.”

In the next month, the PPA also expects information to be released concerning the amount of money that could be raised should Senator Robert Menendez’s (D-NJ) S 1597 be approved. The bill, dubbed the Internet Poker and Game of Skill Regulation, Consumer Protection, and Enforcement Act, regulates online skill games. S 1597 was introduced in August, but has yet to garner any co-sponsors.

On the difficult road that lies ahead in the U.S. Senate, Pappas commented, “The Senate has been a tougher ground for us to plow so far, so we’re trying to do what we can there. It’s not because the topic isn’t of interest or important, but rather because they operate differently. The House operates quickly, whereas the Senate is more deliberate.”

The UIGEA was not discussed in the Senate four years ago; instead, it was approved by unanimous consent. Then, the PPA was in its infancy, boasting around 50,000 members during the 2006 World Series of Poker (WSOP). Now, it has grown into the seven-figures and seen players like UB.com pro Annie Duke and 2004 WSOP Main Event winner Greg Raymer champion its cause. In 2010, the PPA expects to work with a variety of organizations in the industry for membership drives, following the blueprint of its recent promotion with Card Player Cruises that awarded one player a trip for two to the Caribbean.

Finally, Pappas gave his take on the proposed intrastate internet gambling bill introduced in New Jersey by State Senator Raymond Lesniak. On the model for other states to follow to legalize online wagering, Pappas told Poker News Daily, “For poker players in New Jersey, it presents an interesting opportunity to play on a licensed site. The issue is what sites they’ll be able to play on. Will it be on the brands they know? Having Atlantic City casinos undertake building their own software and player bases will take quite a long time.” According to PokerScout.com, PokerStars, the largest online poker site in the industry, boasts a seven-day running average of 33,200 real money ring game players.

Stay tuned for the latest news from the PPA right here on Poker News Daily.

House Financial Services Committee: Key Issues

FBI Issues Online Poker Findings; PPA Responds

Online poker players tuned into last week’s House Financial Services Committee on internet gambling can recall a letter cited by Congressman Spencer Bachus (R-AL) that claimed online poker games could be compromised.

The memo, dated November 13th and written by FBI Cyber Division Assistant Director Shawn Henry, addresses six questions put forth by Bachus regarding the current state of affairs in the online poker world. The report states, “The technology exists to manipulate online poker games in that it would only take two or three players working in unison to defeat the other players who are not part of the team.” Henry’s analysis speculates as to whether online poker sites would spend the time and money needed to combat these tag team maneuvers: “It really comes down to a cost analysis for the vendor. How much money will I make or lose by detecting cheating and implementing safeguards?”

The letter from Henry then addresses money laundering possibilities in private online poker tournaments before Bachus asked if “qualified personnel” existed to regulate the game should it be legalized. Henry responded, “FBI investigative resources are focused on our highest priorities, that being counterterrirosm, counterintelligence, and cyber threats to critical infrastructure.” No mention of online poker or internet gambling is given in Henry’s response to this question.

Henry questions the age and location verification mechanisms that online poker sites currently have in place. Henry responds, “For age verification, the possession of a credit card is usually the only validation these sites require. Credit card numbers are easily compromised and can be bought by the hundreds on several ‘underground’ websites.” On the question of location verification, Henry asserts, “While geolocation can be accurate when used to determine the physical country of residence, it becomes exponentially less accurate when determining the city or zip code.”

Also discussed in the letter from the FBI Cyber Division official are bots, programs against the Terms of Service of most major sites. In addition, Bachus asks whether U.S. law enforcement officials have had any conversations with their counterparts overseas where internet gambling is regulated about “potential vulnerabilities.” Henry emphatically claims, “The FBI has not engaged in this discussion with our foreign partners.” On casino bot programs manipulating online games, Henry admits, “While casino software could very easily be employed to manipulate games, the FBI has no data in this area.”

The Poker Players Alliance (PPA) was quick to point out the pitfalls of Henry’s letter. Its Executive Director, John Pappas, charged, “Every concern the letter raises is better addressed by licensing and regulation than by prohibition. The letter misconstrues much about the current state of online poker, but it does so in a way that clearly makes the case for why federal oversight is necessary. Licensing and regulation is the most protective measure we can take to ensure the online community can be properly monitored while maintaining our internet freedom.”

The PPA added that Congressman Peter King (R-NY), the current Ranking Member and former Chairman of the Committee on Homeland Security, conveyed that money laundering and terrorism financing were not taking place through internet gambling. The PPA explains that online poker sites use credit databases to address age and location and that the Department of Justice has never found evidence that organized crime benefited from internet gambling. In total, the lobbying group notes, “In defense of Mr. Henry’s letter, it is intended to address the status quo, not the internet poker landscape under HR 2267.”

Age verification was one of the many issues discussed at last week’s hearing, which focused on HR 2267. The bill, proposed by Congressman Barney Frank (D-MA) crafts a complete licensing and regulatory framework for the internet gambling industry in the United States.

Poker Industry Reacts to House Financial Services Committee Hearing

On Thursday, the House Financial Services Committee, Chaired by Congressman Barney Frank (D-MA), hosted a hearing on two internet gambling bills. Twenty-four hours later, the online poker industry has had a chance to respond.

In one portion of Thursday’s hearing, Congressman Spencer Bachus (R-AL) referenced a letter he received from the FBI noting that the integrity of online poker games could be compromised. On the letter sent by Shawn Henry, the Poker Players Alliance (PPA) retorted, “The PPA takes issue with certain representations made by Mr. Henry, but believes that the larger point is the more important one: Mr. Henry’s letter makes a compelling case for licensing and regulation of internet poker as proposed in HR 2267.” Bachus is the Ranking Member of the House Financial Services Committee and a staunch opponent of internet gambling interests.

Safe and Secure Internet Gambling Initiative (SSIGI) spokesperson Michael Waxman gave Poker News Daily his two cents on the 90-minute long hearing that took place on Thursday morning in one of Congress’ most powerful committees: “The hearing and witness testimony clearly portrayed why Congress should scrap an unrealistic attempt to ban internet gambling and regulate the burgeoning underground marketplace since it is the only effective way to protect consumers.” Witnesses covered the gamut, ranging from the banking industry to problem gambling interests.

Early on in the proceedings, Bachus questioned Frank as to why no representatives from the U.S. Treasury or Federal Reserve were present at the hearing. Frank responded that he had not received any such request. However, the Committee’s Chairman later recanted his statement after producing an e-mail dated 40 hours before the hearing began from Bachus’ staff calling for the Treasury or Fed to be present. The awkward exchange ultimately led to agreement that an additional hearing should take place featuring members of the two government organizations, setting up more debate on the internet gambling issue in 2010. The Treasury and Fed granted a six-month delay in compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA).

On the proceedings, Interactive Media Entertainment and Gaming Association (iMEGA) Chairman Joe Brennan told Poker News Daily, “It’s good to see that the ball is rolling again. The trick is going to be if things are sustained beyond the hearing. The industry has this pace of getting a public hearing every six months, but there seems to be little follow-up. Seeing that the minority wanted to hear from the Treasury and Fed, it may be the opposition who keeps the ball rolling.” No hearing has been scheduled, although PPA Executive Director John Pappas expected swift movement to mark up HR 2267.

Bachus’ generalizations about millions of young Americans becoming addicted to online gaming if legalization were to occur rubbed many in the industry the wrong way. On some of the claims made by the high-ranking Alabama Congressman, PocketFives.com poster “RI Tony” commented, “This Bachus guy is a classic example of why I hate politicians. There would be no way to change this guy’s mind. He’s simple minded and arrogant, thinking he can legislate morality. Oh yeah, and like I’m going to play poker on my Blackberry as I’m driving or waiting in line at the supermarket as he suggested people would. Idiot.” Online sites like Cake Poker already offer a mobile client.

Bachus asserted, “If Congress repeals the law, online casinos will proliferate. In the next five years, I feel that if [we] are successful in creating a federal right to gamble on the internet, we will create a generation of millions of Americans who from their youth will be addicted to internet gambling and, therefore, life-long problem gamblers.” Frank labeled Bachus’ comments “hyperbole” and “based on no factual basis whatsoever.”

In June of 2008 during a separate committee hearing, Bachus relayed a study from McGill University claiming that one-third of college students who gambled on the internet attempted suicide. In fact, no such study had ever taken place. A representative for the university quipped, “I am confident the Congressman doesn’t read research – he could not misinterpret this.”

Stay tuned to Poker News Daily for the latest from Capitol Hill.

House Financial Services Committee Holds First Hearing

Internet Gambling Discussed in House Financial Services Committee

On Thursday morning, the subject of internet gambling took center stage in an informative hearing in the House Financial Services Committee, Chaired by Congressman Barney Frank (D-MA). Seven witnesses participated.

The hearing began with Frank candidly stating, “It is nice to be able to think legislatively about other things besides the financial crisis, which has consumed this Committee since September of 2008.” It was over one year ago, just before the world’s economy crumbled, that internet gambling was last discussed in the Committee. Frank added, “There are a whole range of things on the internet that we would not like underage people to use. The notion that because some people abuse something, you prevent everyone from doing it is as great of a threat to the individual as any cause I have ever seen.” He went on to cite smoking, video games, and dieting as activities that people abuse.

The Committee’s Ranking Member, Congressman Spencer Bachus (R-AL), summed up many of the opposing arguments for legislation like HR 2266 and HR 2267. The former delays compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) by one year, while the latter establishes a comprehensive framework for licensing and regulating the industry in the United States. Bachus asserted, “I believe that internet gambling is, has been, and will continue to be a substantial threat to our youth. Any economic benefits from taxing internet gambling would be more than offset by the harm it causes young people.” He then sourced a New York Times Letter to the Editor from a mother lamenting her son’s turn to internet gambling.

Bachus expressed remorse that the regulations of the UIGEA had not been fully implemented, citing last week’s six-month delay of their compliance: “These regulations should have been finalized and implemented more than two years ago. The House voted by an overwhelming number to stop illegal internet gambling. Chairman [Frank], it’s time for you, the Treasury, and the Fed to stop delaying the will of the great majority of this Congress and the American people.

Bachus noted that the Treasury and Federal Reserve, who granted the six-month compliance reprieve, should have been a part of Thursday’s witness panel. The Alabama Congressman quoted a letter from the FBI he received in November stating, “The FBI warns that technology exists to manipulate online poker games. The FBI rejects claims from vendors that they can validate age and location.” Frank retorted that he had not received a request from Bachus for the Treasury or Federal Reserve to be present, but later recanted his statement, referencing an e-mail from the Ranking Member’s staff late Tuesday afternoon. Both agreed that the Federal Reserve and Treasury should testify at a future hearing.

Seven witnesses each spoke for about five minutes, offering different viewpoints on the issue. Robert Martin, Tribal Chairman of the Morongo Band of Mission Indians, noted that tribes were not consulted in the extension of the UIGEA deadline and “By following the law, we are now facing unfair competition because of these bills. Allow the regulatory scheme [currently in place] to protect what we have built.”

Parry Aftab, Executive Director of Wired Safety, candidly explained, “It’s ironic that I am sitting here today saying that the only way to protect consumers is by legalizing it. If we don’t legalize it, we can’t regulate it.” She referenced a study by Professor Malcolm Sparrow from the John F. Kennedy School of Government at Harvard University, who explained, “Legalization with regulation would provide U.S. authorities the power to grant or deny licenses.” He added that HR 2267 is an “adequate framework” in which to operate.

Keith Whyte, Executive Director for the National Council on Problem Gambling, remarked, “While participation in internet gambling by U.S. residents appeared to decline after the passage of the UIEGA, we did not see a decrease in indicators of gambling problems, such as help line calls.” A chart submitted by Whyte showed that help line calls instead gradually increased every year since 2006, when the UIGEA was approved.

Jim Dowling from the Dowling Advisory Group lent his insight into fraud, money laundering, and terrorism, while Mike Brodsky, Executive Chairman of YouBet.com, discussed the presumably legal online horse racing market. The legality of online horse racing was discussed at length, with Frank noting that the Department of Justice said it was against the law in 2006. Brodsky added that 88% of online horse racing wagers are transmitted across state lines electronically, which Frank also questioned the legality of.

Also speaking was Samuel Vallandingham, Chief Information Officer and Vice President for The First State Bank in West Virginia. Interestingly, Vallandingham was the only financial services industry representative present and explained, “The added burden [of enforcing the UIGEA] would drain our resources… The law doesn’t define unlawful internet gambling. As a result, the burden rests solely on financial institutions.”

After 90 minutes, the hearing adjourned, with Frank noting that the Committee would take up the issue again in 2010. No markup vote on HR 2266 or HR 2267 was scheduled.

Preview of Dec. 3 Committee Hearing

Internet Gambling to be Discussed in House Financial Services Committee

On Thursday, internet gambling will take center stage in the House Financial Services Committee. A hearing to be held at 10:00am ET in Room 2128 of the Rayburn House Office Building will discuss two bills that could change the landscape of the industry in the United States.

Although an official list of witnesses has not yet been announced at press time, Poker News Daily can confirm that National Council on Problem Gambling Executive Director Keith Whyte will speak during the proceedings. Whyte told us that he received his formal invitation Wednesday morning and is looking forward to discussing the issue in front of the Committee tomorrow. A press release distributed by the Safe and Secure Internet Gambling Initiative (SSIGI) on Wednesday added, “Top experts are expected to describe how existing systems and technologies have proven successful in blocking minors from gambling online, combating compulsive gambling, and protecting consumers against money laundering, fraud, and identity theft.”

SSIGI spokesperson Michael Waxman commented that his organization is looking forward to a well-rounded discussion that could lead to one of two internet gambling bills being marked up and passed: “This hearing will provide further evidence on the ability to effectively regulate internet gambling and require licensed operators to utilize already-proven technologies to protect consumers. It’s expected this hearing will answer any outstanding questions and pave the way for a vote in the committee on Chairman Frank’s legislation.” Thursday’s hearing marks the first major discussion of internet gambling in the House Financial Services Committee in over a year and is expected to last around two hours.

At issue will be HR 2266 and HR 2267, both introduced by Congressman Barney Frank (D-MA). The former, dubbed the Reasonable Prudence in Regulation Act, delays mandatory compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) by one year. Despite compliance being delayed by six months last week, a Committee spokesperson told Poker News Daily that HR 2266 would still be discussed on Thursday. The bill claims 53 co-sponsors.

Also to be discussed is HR 2267, Frank’s Internet Gambling Regulation, Consumer Protection, and Enforcement Act. The measure, which was introduced on the same day in May as HR 2266, establishes a full licensing and regulatory framework for internet gambling companies to accept real money wagers from U.S. customers. It boasts 63 co-sponsors on both sides of the aisle and is Frank’s latest attempt to undo the effects of the UIGEA, which was passed into law in 2006.

Poker Players Alliance (PPA) Executive Director John Pappas told Poker News Daily that markup of HR 2266 or HR 2267 could be scheduled within one week of the hearing, although it would be contingent on the Committee’s calendar. Lawmakers on Capitol Hill have been focusing their efforts on a faltering economy and major health care reform, the latter of which could come with a $1 trillion price tag. A study by the Joint Committee on Taxation revealed that up to $42 billion over a 10-year period could be reaped by taxing the internet gambling industry at a rate of 2% of deposits pursuant to Congressman Jim McDermott’s (D-WA) HR 2268.

Waxman put the hearing in perspective: “Coupled with last week’s decision by the Treasury Department and Federal Reserve to delay UIGEA implementation, this hearing further builds the case for Congress to rewrite U.S. gambling laws. It’s simply common sense to override the UIGEA, a poorly conceived law that is doomed to fail, and replace it with a framework that regulates a thriving underground marketplace to protect consumers and collect billions in otherwise lost revenue.” Despite the UIGEA, traffic on the USA-facing site Full Tilt Poker, according to a recent report released by PokerScout.com, is up 127% year over year.

We’ll have a complete recap of the hearing right here on Poker News Daily.

Inside the Treasury and Federal Reserve UIGEA Regulations Delay

Last week, the U.S. Treasury and Federal Reserve announced that mandatory compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) had been delayed until June 1st, 2010. Let’s take a look at the agencies’ reasoning.

The seven-page document issued by the Treasury and Federal Reserve on Wednesday begins with an overview of the UIGEA and states that the two government agencies consulted with the U.S. Department of Justice prior to delaying the compliance date. The final regulations of the UIGEA were published on January 19th as so-called “midnight rules” by the outgoing Bush administration. One day later, sitting President Barack Obama assumed office.

The document gives a brief timeline of events since then, noting that on September 18th, the Poker Players Alliance (PPA), National Thoroughbred Racing Association, and American Greyhound Track Owners Association submitted a joint letter calling for compliance with the UIGEA regulations to be delayed by one year to December 1st, 2010. The two agencies explained, “Petitioners assert that many small regulated entities do not have the resources necessary to develop and implement appropriate policies and procedures by the December 1, 2009 compliance date and cite the possibility of confusion regarding the term unlawful internet gambling.” The latter three-word phrase was not defined in the UIGEA, which instead deferred to a muddled slate of state, federal, and tribal laws.

In October and November, members of Congress led by Barney Frank (D-MA) also asked for a delay, as did several organizations, including the American Bankers Association, Wells Fargo, the Credit Union National Association, and the National Association of Federal Credit Unions. On November 9th, other lawmakers including Senate Majority Leader Harry Reid (D-NV), whose home state serves as the epicenter for brick-and-mortar gambling in the United States, authored a letter purportedly expressing “an intent to consider legislation that would allow problematic aspects of the Act to be addressed.”

Meanwhile, Senator Jon Kyl (R-AZ) and Congressman Spencer Bachus (R-AL) weighed in, calling the reasons for a delay “speculative” in a November 3rd plea to the Treasury and Federal Reserve. Many of the groups clamoring for an extension feared overblocking, which could result in the denial of legal online wagering. In New Hampshire and North Dakota, credit card companies like Visa and MasterCard disallowed online lottery transactions, which received a carve out from the UIGEA. In Kentucky, horse racing outfits feared that internet bets on the sport would come to a screeching halt. Several weeks ago, Churchill Downs Incorporated purchased YouBet, further complicating the matter.

In the end, the two government entities asserted, “Neither petitioners nor commenters supporting the petition have provided the Agencies with sufficient data or documentation to justify a twelve-month extension of the compliance date. The Agencies believe that a six-month extension is sufficient for regulated entities to address issues related to the definition of unlawful internet gambling.” The agencies added that documentation provided by merchants to banks and other financial institutions should be sufficient to comply with the UIGEA.

The Treasury and Federal Reserve ultimately settled on using the Administrative Procedure Act to serve the delay on the grounds that the existing UIGEA rules are “impracticable, unnecessary, or contrary to the public interest.” Other pieces of law addressed were Executive Order 12866, the Regulatory Flexibility Act, and the Unfunded Mandates Reform Act. The document added, “The Agencies also believe that regulated entities need to be informed as soon as possible of the extension and its length in order to plan and adjust their implementation process accordingly.”

On Thursday, the House Financial Services Committee will discuss HR 2266 and HR 2267. No markup will occur during the informational hearing, which will be held in Room 2128 of the Rayburn House Office Building at 10:00am ET. HR 2267 establishes a comprehensive framework for regulating the internet gambling industry in the United States and, if passed, may mark the beginning of explicitly legal online poker in the North American country.

Poker Industry Reacts to UIGEA Regulations Delay

Twenty-four hours after it was revealed that mandatory financial services industry compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) would be delayed by six months, the poker industry has had a chance to react.

The Poker Players Alliance (PPA) was one of several organizations that successfully petitioned U.S. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke to push back conformity with the UIGEA rules until June 1st, 2010. The 1.2 million member strong lobbying organization’s Chairman, Alfonse D’Amato, commented in a press release distributed on Friday, “We are thankful to our co-petitioners, the National Thoroughbred Racing Association and the American Greyhound Track Operators Association, and for the dozens of members of Congress who voiced their support for this petition through letters to Secretary Geithner and Chairman Bernanke. The PPA looks forward to working with regulators and legislators to pass legislation that protects consumers and the great game of poker.” News of the extension originally broke on Wednesday.

The two horse racing outfits co-authored a letter with the PPA to Geithner and Bernanke outlining the potential for overblocking by financial institutions, which could have led to legal online wagers being denied by companies like Visa and MasterCard. According to the PPA, the possibility of an extension beyond the current six-month time frame exists. Ideally, Congress would formulate proper internet gambling legislation before June 1st.

To that end, Safe and Secure Internet Gambling Initiative (SSIGI) spokesperson Michael Waxman commented, “This decision is the latest evidence that momentum is building for a shift in policy and a rewrite of U.S. internet gambling laws to provide for regulation and taxation instead of prohibition. Over the next six months, Congress should act to create a framework that regulates internet gambling to protect consumers and collect billions in much-needed revenue for critical federal and state government programs.”

Congressman Barney Frank (D-MA), whose House Financial Services Committee will host a hearing on two internet gambling bills next Thursday, gave his two cents on the UIGEA compliance date being postponed: “The Department of the Treasury and the Federal Reserve Board of Governors deserve a great deal of credit for suspending these midnight regulations promulgated by the Bush administration which would curtail the freedom of Americans to use the internet as they choose and which would pose unrealistic burdens on the entire financial community. This will give us a chance to act in an unhurried manner on my legislation to undo this regulatory excess by the Bush administration and to undo this ill-advised law.”

On the PocketFives.com online poker forum, Rich “TheEngineer” Muny, who serves as the Kentucky State Director for the PPA, broke the news early on Black Friday. While many online poker players were out hunting for deep holiday discounts, PocketFives.com member “mordan” was on the message boards candidly responding, “Everyone in the poker community just won a 30/70 with this development. Although this doesn’t guarantee regulation in the future, our odds have significantly increased with the U.S. Treasury recognizing problems with this bill.”

The future of the legality of games like online poker remains up in the air. In the PPA forum on TwoPlusTwo, poster “Distajo” questioned, “Was the delay granted more for the clarity of the UIGEA rules? Thus, being more beneficial for banks? Like don’t fund poker accounts, but allow horseracing wagers?” Past attempts to clarify the UIGEA have mandated that “laundry lists” of legal activities be created. If a bill like Frank’s HR 2267 is passed, much of the industry seems likely to be legalized and regulated in the United States.

Stay tuned to Poker News Daily for the latest UIGEA headlines.

UIGEA delayed six months

A joint press release from the U.S. Department of the Treasury and the Federal Reserve Board announced Friday that the date for implementing regulations in the Unlawful Internet Gambling Enforcement Act (UIGEA) has been delayed by six months, from Dec. 1 to June 1, 2010.

The regulations were to force financial institutions in the U.S. to stop processing any transactions related to Internet gambling.

However, the delay will now give the U.S. House Financial Services Committee the chance to hold hearings on two bills designed to regulate and tax online gambling and futher delay UIGEA enforcement.

Those hearings are schedule for Dec. 3.

Committee Chairman Barney Frank applauded Friday's announcement.

"This will give us a chance to act in an unhurried manner on my legislation to undo this regulatory excess by the Bush administration and to undo this ill-advised law," he said.

A poker advocacy group lobbying to legalize online poker in the United States, the Poker Players Alliance believes the delay is also the first step towards legal and regulated online poker in America.

"This is a great victory for poker, but an even greater victory for advocates of good and fair public policy," said PPA Chairman Alfonse D'Amato.

"These additional months are critical to provide legislators time to clarify UIGEA and pass legislation to licence and regulate poker early next year."

UIGEA Regulations Officially Delayed Six Months

Online poker players in the United States have a lot to be thankful for this holiday season. On Friday, CNBC and the Associated Press confirmed that U.S. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke had granted requests to delay the mandatory compliance date of the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) by six months to June 1st, 2010.

Word of a potential delay first broke on Wednesday from Interactive Media Entertainment and Gaming Association (iMEGA) Executive Director Joe Brennan. However, no official comment had been handed down from Geithner, Bernanke, the Poker Players Alliance (PPA), or the office of Congressman Barney Frank (D-MA). Around 12:15pm ET on Friday, cable station CNBC ran a segment touting the successful six-month delay and an Associated Press article had hit cyberspace 15 minutes earlier.

The six-month delay will take the internet gambling industry to June 1st, 2010. In the interim, the theory goes that sensible legislation governing the industry in the United States will be passed. Frank introduced HR 2267 back in May. The bill, which has attracted 63 co-sponsors, establishes a full licensing and regulatory framework for online gaming outfits to solicit U.S. customers.

An Associated Press article sourced both the Treasury and Federal Reserve as saying that the UIGEA’s regulations would indeed be pushed off until mid-2010. The news service explained, “The delayed rules would curb online gambling by prohibiting financial institutions from accepting payments from credit cards, checks or electronic fund transfers to settle online wagers. The financial industry complained that the new rules would be difficult to enforce because they did not offer a clear definition of what constitutes internet gambling.” Since the UIGEA was approved in 2006, a Third Circuit Court of Appeals ruling stated that the legality of internet gambling may depend on state law, similar to the way that the brick-and-mortar version is governed.

Next Thursday, December 3rd, the House Financial Services Committee will hold a hearing discussing the merits of HR 2266 and HR 2267. The former bill delays mandatory industry compliance with the UIGEA regulations by one year to December 1st, 2010. Its relevance given Friday’s confirmation that the regulations would be pushed back six months is up in the air. The hearing kicks off at 10:00am ET in Room 2128 of the Rayburn House Office Building. Witnesses for the informational hearing have not yet been announced and the proceedings can be followed via a live webcast accessible from the Committee’s website.

Potential overblocking by credit card companies like Visa and MasterCard led the PPA, two horse racing organizations, and members of Kentucky’s Congressional delegation to petition Geithner and Bernanke, urging that the regulations of the UIGEA be shuttled back to December 1st of next year. PPA Executive Director John Pappas told Poker News Daily, “Many believe what you’ll see is overblocking of legitimate transactions. It’s not a good thing for players. It won’t just affect poker; it’ll affect horse racing, lotteries, and other online entities.”

Around 1:00pm ET, the PPA confirmed the news. The organization’s Chairman, Alfonse D’Amato, commented in a press release, “The PPA is extremely pleased with the decision by the Federal Reserve and Treasury to grant the six month extension. This is a great victory for poker, but an even greater victory for advocates of good and fair public policy.”

Stay tuned to Poker News Daily for the latest news and events from Capitol Hill.

UIGEA hearing scheduled Dec. 3

According to the House Financial Services Committee website, a full committee hearing on two bills designed to regulate and tax online gambling in the US and delay UIGEA enforcement will be held Dec. 3.

House Financial Services Committee chairman Barney Frank, a longtime proponent of legalized online poker, unveiled both bills this past May.

HR 2266 is designed to delay UIGEA compliance until December 2010 while HR 2267 seeks to render the act moot by establishing a federal regulatory and enforcement framework to license Internet gambling operators, including online poker sites, in the United States.

The hearing will be held Dec. 3 at 10 a.m. ET in the Committee's Rayburn House Office Building and interested members of the public can watch a live webcast through the Committee's website.

In the meantime, UIGEA regulations come into effect next Tuesday Dec. 1 forcing financial institutions in the U.S. to stop processing any transactions related to online gambling.

Report: UIGEA Regulations Postponed Six Months

The regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) have been delayed six months from December 1st, according to Interactive Media Entertainment and Gaming Association (iMEGA) Chairman Joe Brennan.

Neither U.S. Treasury Secretary Timothy Geithner nor Federal Reserve Chairman Ben Bernanke had made any official comment regarding a six-month delay at press time. The two government officials received petitions to stay the UIGEA’s regulations by one year in letters filed by the Poker Players Alliance (PPA), National Thoroughbred Racing Association, the American Greyhound Track Operators Association, and members of Kentucky’s Congressional delegation. Congressman Spencer Bachus (R-AL) and Senator Jon Kyl (R-AZ) asked the two officials to uphold the original December 1st industry compliance deadline in a dissenting opinion.

The news comes one week ahead of a hearing in the House Financial Services Committee regarding two internet gambling bills introduced by Congressman Barney Frank (D-MA) in May that would alter the landscape of the industry in the United States. The first, HR 2266, would have postponed the regulations of the UIGEA by one year to December 1st, 2010. Its viability given today’s news of a likely six-month postponement is up in the air. The measure had attracted 53 co-sponsors on both sides of the aisle.

HR 2267, claiming 63 co-sponsors, creates a full licensing and regulatory framework for the internet gambling industry in the United States. It marks Frank’s latest attempt to undo the UIGEA, which was passed in 2006 after being attached to an unrelated port security measure at the prompting of then-Senate Majority Leader Bill Frist (R-TN). In the Senate, the SAFE Port Act was passed by unanimous consent.

On the hearing next week, which will be held at 10:00am ET in Room 2128 of the Rayburn House Office Building on Thursday, Safe and Secure Internet Gambling Initiative spokesperson Michael Waxman told Poker News Daily, “Chairman Frank is clearly indicating his commitment to switch the government’s position on Internet gambling, replacing attempts to prohibit the activity with a regulatory framework where consumers are protected. Chairman Frank’s commitment is further reinforced by scheduling this hearing and taking up this issue on the heals of the push for financial industry reform, which has been the committee’s exclusive focus the last six months.”

The six-month window will take the internet gambling industry to June 1st, right before election season in the United States in 2010. While issues like health care and a sagging economy have taken center stage since late 2008, internet gambling may finally see its day in the sun. Brennan explained his thoughts on the breaking news: “It’s encouraging that you’ve had this stay on the compliance, but it’s unfortunate that it took this long. We should all hope that in the next six months, a bill that already has 63 co-sponsors can be heard.”

To be clear, no official comment from the Treasury or Federal Reserve was available at the time of writing. With December 1st occurring next Tuesday, a stay likely had to be granted today or Monday, November 30th given the Thanksgiving holiday in the United States. Word breaking on Black Friday was also a possibility.

Stay tuned to Poker News Daily for the latest on this developing story.

No Markup Planned for December 3rd Internet Gambling Hearing

On Tuesday night, it was revealed that a hearing will occur next Thursday, December 3rd in the House Financial Services Committee. Taking center stage are two bills related to the Unlawful Internet Gambling Enforcement Act (UIGEA).

Poker Players Alliance (PPA) Executive Director John Pappas told Poker News Daily that no markup will occur at the hearing, which will be purely informational in nature: “It’s just an informational hearing. I don’t think the witnesses have been set yet and we’ve been in touch with the Committee about that. The PPA has been building the groundwork for this hearing for some time now. We look forward to it.” A representative from the House Financial Services Committee confirmed that no markup will occur. The hearing will take place in Room 2128 of the Rayburn House Office Building at 10:00am ET.

Depending upon the outcome of the internet gambling hearing next Thursday, either HR 2266 or HR 2267 could be scheduled for markup, potentially within a week. Congressman Barney Frank (D-MA) introduced both bills back in May. HR 2266 delays mandatory financial services industry compliance with the regulations of the UIGEA by one year to December 1st, 2010. It has attracted 53 co-sponsors on both sides of the aisle and is dubbed the Reasonable Prudence in Regulation Act. As it stands now, the financial services industry must fall into line with the UIGEA by Tuesday, December 1st.

When asked if the December 1st compliance date passing makes HR 2266 moot, Safe and Secure Internet Gambling Initiative (SSIGI) spokesperson Michael Waxman told Poker News Daily, “It could be unless Frank decides that the financial services sector needs a reprieve. Many companies have already expressed concern that the implementation of the law will be burdensome. I believe we’ll hear back from them again as they are forced to abide by the rules.”

HR 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act, establishes a full licensing and regulatory framework for the internet gambling industry in the United States. It boasts 63 co-sponsors and, when coupled with a tax bill introduced by Congressman Jim McDermott (D-WA), could bring in as much as $42 billion over a 10-year period, according to a study by the Joint Committee on Taxation.

Many in the industry have pondered the status of the internet gambling and online poker industries in the United States after December 1st. Interactive Media Entertainment and Gaming Association (iMEGA) Chairman Joe Brennan told Poker News Daily, “Poker players are going to have to get used to the kind of speed of deposit and withdrawal that online sports betters have had to get used to. To my knowledge, all of the top sports books have moved their processing offshore. I don’t expect there to be the wealth of electronic transfer methods and you’re probably going to see an increased use of checks drawn on international banks.”

One possible outcome in the post-December 1st internet gambling industry is overblocking by credit card companies like Visa and MasterCard. The 12-letter term began popping up earlier this year, when legal online lottery purchases in North Dakota and New Hampshire were denied. In essence, credit card companies could disallow any transaction that appears to look remotely like internet gambling in an effort to comply with the 2006 law. Overblocking also led several members of the Kentucky Congressional delegation to petition U.S. Treasury Secretary Timothy Geithner seeking the delay of UIGEA regulation enforcement. The group fears that legal online wagering on horseracing could come to a screeching halt as a result.

The PPA, National Thoroughbred Racing Association, and the American Greyhound Track Operators Association issued a letter to Geithner and Federal Reserve Chairman Ben Bernanke seeking delay of the UIGEA’s regulations. As of the time of writing, the request had not yet been acted on.

Stay tuned for the latest from Capitol Hill right here on Poker News Daily.

UIGEA Hearing Scheduled for December 3rd in Financial Services Committee

In breaking news from the House Financial Services Committee, a hearing to discuss two pieces of legislation related to the Unlawful Internet Gambling Enforcement Act (UIGEA) will be held on Thursday, December 3rd at 10:00am ET.

Interested online poker players can check out the hearing via a webcast found on the official website of the Committee. The hearing, which will be held in Room 2128 of the Rayburn House Office Building, will cover two pieces of legislation introduced by Committee Chairman Barney Frank (D-MA), HR 2266 (Reasonable Prudence in Regulation Act) and HR 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act. The longtime Massachusetts Congressman introduced the measures on the same day in May.

On December 1st, two days prior to the hearing, the financial services industry in the United States must come into full compliance with the regulations of the UIGEA, which were officially approved as midnight rules by the outgoing Bush administration back in January. Several days ago, Poker Players Alliance (PPA) Executive Director John Pappas told Poker News Daily that he expected a hearing to come soon: “Chairman Frank has told us that he intends to have a hearing and mark up HR 2267 as soon as he’s done with financial regulation reform bills. We think it might be in January, but there’s a good chance we could have a hearing in December. It depends on the Congressional schedule.”

Christmas has come early for the PPA, which has lobbied on several fronts for HR 2266 and HR 2267 to be marked up. It is unclear at the time of writing as to whether any markup will occur, as the proceedings next Thursday appear to be purely informational in nature. HR 2266 delays the regulations of the UIGEA by one year to December 1st, 2010. As it stands now, the industry has merely a week to brace for their effects on payment processors. HR 2266 has 53 co-sponsors on both sides of the aisle, including Steve Cohen (D-TN), Jim McDermott (D-WA), Ron Paul (R-TX), and Robert Wexler (D-FL).

Frank’s other bill, HR 2267, has 63 co-sponsors and creates a full licensing and regulatory framework for internet gambling and online poker outfits to solicit real money customers from the United States. A companion bill introduced by McDermott in May, HR 2268, taxes online gaming operators 2% of deposits. Although several estimates have been made as to how much revenue internet gambling could bring to the United States Government, the most recent study, which came from the Joint Committee on Taxation, pinned the figure at $42 billion over a ten-year period.

Witnesses for the December 3rd hearing and their prepared testimony were not given on the House Financial Services Committee website at the time of writing. Next Thursday will mark the first major movement on the internet gambling front in the Financial Services Committee since September of 2008, when Frank’s HR 6870 was approved by a 30-19 margin. The bill sought to clarify what activities were permissible under the UIGEA. It was not acted on during the 110th Congress and therefore was declared dead entering 2009.

A total of 41 Democrats and 29 Republicans make up the Financial Services Committee. The latter are headed by Spencer Bachus (R-AL), who, along with Senator Jon Kyl (R-AZ) recently authored a letter to U.S. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke urging that the regulations of the UIGEA be enforced on December 1st as scheduled. Recently, members of the Kentucky House delegation implored Geithner and company to delay UIGEA regulation enforcement due to overblocking by credit card companies, potentially stunting legal online horseracing wagers.

We’ll have more information on the December 3rd hearing as it unfolds right here on Poker News Daily.

Spencer Bachus, Jon Kyl Issue Letter to Timothy Geithner, Ben Bernanke

Recently, two high-powered, longtime opponents of internet gambling issued a letter to Federal Reserve Chairman Ben Bernanke and U.S. Treasury Secretary Timothy Geithner calling for the compliance date of the Unlawful Internet Gambling Enforcement Act (UIGEA) regulations (December 1st) to be enforced.

The date is now 10 days away and approaching rapidly. Last month, the Poker Players Alliance (PPA) teamed up with the National Thoroughbred Racing Association and American Greyhound Track Operators Association to issue a letter to the same two government officials. Following the letter by the PPA was one authored by 19 Congressmen belonging to the House Financial Services Committee, of which Barney Frank (D-MA) is the Chair.

Congressman Spencer Bachus (R-AL) and Senator Jon Kyl (R-AZ) explained in their own letter, “We strongly oppose this request and believe there is no justification for delaying the compliance deadline of the UIGEA regulations.”

The letter, dated earlier this month, outlines the passage of the UIGEA and the approval of its regulations, which went into effect on January 19th as so-called “midnight rules” by the outgoing Bush administration. The Republican duo notes, “If the Final Rule represented an ‘unreasonable burden on regulators and the financial services industry,’ as certain other Members have claimed, then the Treasury Department and the Federal Reserve could have reconsidered the regulations.” The letter adds that the Truth in Lending Act, whose regulations were issued in August, accommodated the UIGEA.

All told, Kyl and Bachus, staunch opponents of internet gambling, give their stance on the letter writing campaign by the PPA and Financial Services Committee members: “This is a blatant attempt to circumvent the democratic process by influencing the Treasury Department and the Federal Reserve to take action that cannot possibly be enacted by Congress.” On Capitol Hill, the United States legislative body is in the midst of a debate about massive health care expansion.

Two bills, both introduced by Frank, have the potential to change the landscape of the internet gambling industry in the United States as December approaches. The first, HR 2267, establishes a full licensing and regulatory framework for the online gaming outfits in the United States. The measure received its 63rd co-sponsor last week after its introduction in May. The second piece of legislation, HR 2266, delays mandatory compliance with UIGEA regulations by one year to December 1st, 2010. HR 2266 is up to 53 co-sponsors on both sides of the aisle. The House Financial Services Committee has scheduled neither HR 2266 nor HR 2267 for markup.

The letter from the two lawmakers concludes, “Simply delaying the compliance date serves no interest except that of the internet gambling enterprises that have long evaded American gambling laws and will continue to do so until effective enforcement is in place.” Kyl is a third term Senator from Arizona and the current Senate Minority Whip. His counterpart in the Western state is also a Republican, former Presidential candidate John McCain. Bachus was elected to the House of Representatives in 1992 and is the Ranking Member of the Financial Services Committee, which includes 30 Republicans and 42 Democrats.

Neither Geithner nor Bernanke has responded to any of the three letters as of the time of writing. John Pappas, Executive Director of the PPA, told Poker News Daily that a January markup of HR 2267 is a possibility, although no timetable has been set in stone. Blocking of legal online gambling transactions led the two horse racing organizations to become involved. Similarly, in North Dakota and New Hampshire, major credit card companies denied legal online lottery purchases due to “overblocking.”

The effect that the December 1st deadline will have on the industry is not yet known. Stay tuned to Poker News Daily for the latest poker legislation headlines.

Online Poker May Be Coming to Quebec, British Columbia

Quebec, British Columbia, and the four Atlantic provinces of Canada may soon see legalized and regulated online poker headed their way, according to an article that appeared in the Montreal Gazette newspaper.

Loto-Québec has submitted a proposal to the province’s government “for an internet wagering initiative in partnership with British Columbia and the four Atlantic provinces, which already have limited online gaming,” according to the Canadian news outlet. Loto-Québec claims that Canadians are currently placating more than 2,000 offshore internet gambling outfits, sending nearly $700 million in wagers away from the country each year, a number that will likely top $1 billion in three years.

Quebec plays home to the Kahnawake Gaming Commission (KGC), which is located on the Indian reservation of the same name outside of the city. Although the KGC is not currently linked to Loto-Québec’s endeavors, the organization’s Chairman, Dean Montour, told the Montreal Gazette, “The fact that Quebec is now entering the online gaming business in partnership with the Atlantic provinces and British Columbia is an indication that the industry is thriving and is gaining wider acceptance. For over 10 years, the Kahnawake Gaming Commission has had a positive working relationship with online gaming regulators throughout the world and looks forward to sharing its knowledge and experience with the Régie des alcools des courses et des jeux.”

The KGC is fresh off completing the investigating surrounding Ultimate Bet, an online poker site that recently changed its name to UB.com. In a September report, the KGC continued to finger former World Series of Poker (WSOP) Main Event champion Russ Hamilton as the mastermind behind the scandal and noted that 31 other individuals were involved, but would not identify who they were. The KGC also issued over 100 screen names associated with the misgivings, a list that included “nvtease,” “Sleeplesss,” and the infamous “NioNio.”

Given the seemingly “Wild West” atmosphere of the internet, Canadian control of the online poker industry will likely bring a considerable amount of validity: “The integrity of the online games often is dubious, as it was for some lotteries and VLTs before Loto-Québec was mandated by the government to funnel them into controlled circuits and oversee them,” noted Loto-Québec President and CEO Alain Cousineau. Loto-Québec added $1.4 billion to the bottom line of the province during the last fiscal year.

Potentially adding to the pressure of Loto-Québec to legalize and regulate the internet version of the age-old card game is a move towards licensing in the United States, spearheaded by Congressman Barney Frank (D-MA). Back in May, the lawmaker introduced HR 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act, which establishes a full framework for legalized internet gambling in the USA. The measure is up to 63 co-sponsors, including Anthony Weiner (D-NY), who signed on four days ago. The Poker Players Alliance (PPA) expects HR 2267 to be marked up in the House Financial Services Committee, of which Frank is the Chair, in January. Other reports signal that markup is coming in December.

On December 1st, the financial services industry in the United States must fall into full compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA), which was passed three years ago. The PPA and other organizations have been feverishly working to delay the compliance date by one year, but so far, pleas to Federal Reserve Chairman Ben Bernanke, Treasury Secretary Timothy Geithner, and the U.S. Congress have not been heeded.

Earlier this year, it was revealed that the newly-created Harrah’s Interactive Entertainment (HIE), headed by former Party Gaming CEO Mitch Garber, would be based in Montreal. Former WSOP Commissioner Jeffrey Pollack was originally slated to be HIE’s President, but recently parted ways with the Las Vegas-based gambling giant.

Internet Gambling Revenue Analysis Released by Joint Committee on Taxation

Today, Congressman Jim McDermott (D-WA) released a study by the Joint Committee on Taxation (JCT) revealing that up to $41 billion could be generated by regulating and taxing the internet gambling industry over a 10-year period.

This is one of several studies to be released by various outfits, but is the first to be handed down by an agency of the United States Government. On the importance of the JCT’s findings, McDermott commented in a press release distributed on Thursday, “I suspect that many of my colleagues… will take more interest in this issue once they see $41 billion available that they can match up with any number of worthy programs.” Being debated on Capitol Hill is major health care reform, one social program that could conceivably be funded through internet gambling.

McDermott continued, “I would suspect it’s only a matter of time before Congress appropriately moves to regulate the industry in order to protect consumers and reverse the flow of billions of dollars currently lost offshore as Americans gamble billions online despite attempts to prohibit the activity.” In May, the Washington Congressman unveiled HR 2268, the Internet Gambling Regulation and Tax Enforcement Act. The measure imposes a fee of 2% of deposits on licensed internet gambling operators.

HR 2268 is a companion bill to Congressman Barney Frank’s HR 2267, which establishes a comprehensive framework for companies to solicit U.S. customers. The two bills were introduced on the same day and HR 2267 is up to 62 cosponsors on both sides of the political spectrum. Safe and Secure Internet Gambling Initiative (SSIGI) spokesperson Michael Waxman told Poker News Daily, “This is a very significant development in support of the push to regulate the industry. We would expect that there will be more conversation and more interest in internet gambling regulations as Congress is attempting to figure out funding for health care and other various programs.”

Today, Democrats in Congress unleashed health care reform that comes with a price tag of nearly $900 billion. While not able to cover the full amount, legalizing internet gambling could, in theory, put a dent in the price tag. The JCT’s analysis does not include online sports betting, which is barred in Frank’s legislation. Moreover, the findings assume that states will not opt out of HR 2267. A February study by the U.S.-based firm PricewaterhouseCoopers revealed that up to $52 billion could be raised by taxing internet gambling companies over a 10-year period.

On the significance of a $4 billion per year revenue stream when programs like health care run over 200 times that total, Interactive Media Entertainment and Gaming Association (iMEGA) Chairman Joe Brennan explained, “It’s realistic to see it packaged with a number of revenue enhancers. As a standalone, in my opinion, it’s not enough money to be able to get people off the mark who have been against this in the near-term.”

Information released today by the SSIGI noted that Frank planned to hold a markup hearing on HR 2267, but the House Financial Services Committee has released no official information. For the balance of the week, Frank’s committee will be bogged down in discussion of systematic regulation, overdraft protection, and investor protection. The grizzly state of the U.S. economy has been the committee’s main focus since September of 2008.

Frank has also introduced HR 2266, the Reasonable Prudence in Regulation Act. The measure delays industry compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) by one year. As it stands, the financial services industry in the United States must come into full compliance with the 2006 law by December 1st, which is just five weeks away. The Poker Players Alliance (PPA), the industry’s main lobbying force, has been working feverishly to delay the deadline through other means, including appealing directly to U.S. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke.

The JCT study assumes that wagering taxes will be levied and that HR 2267 will be amended so that internet gambling companies doing business in the United States must also be incorporated in the United States. Read the full internet gambling study.

Stay tuned to Poker News Daily for the latest news from Capitol Hill.

Anurag Dikshit’s Sale of Party Gaming Stock Receives Mixed Reaction

One of the major poker headlines this week was the news that Party Gaming Cofounder Anurag Dikshit would divest himself of nearly 114 million shares of the company’s stock, which is traded in London under the symbol “PRTY.” Now, the industry has had a chance to react.

The internet gambling think tank sported mixed reactions to the news, as Dikshit’s departure meant that a man who admitted to violating U.S. law in a New York courtroom one year ago would no longer hold any interest in the company. Interactive Media Entertainment and Gaming Association (iMEGA) Chairman Joe Brennan told Poker News Daily, “The thing to take away is that this is probably good overall for Party Gaming. When you have one of their founders pleading guilty, if and when things start to get normalized in the U.S. and Party Gaming comes into the market, they need to clear it off the books. The fact that he’s exiting the company is good for its future.”

When internet gambling will be legalized and regulated in the United States is anyone’s guess. Congressman Barney Frank (D-MA) introduced HR 2267 in May as one solution. The bill outlines a framework for the explicit legalization of the industry and, although the measure is up to 62 cosponsors, it has not yet been scheduled for markup in the House Financial Services Committee.

On how members of Congress and others outside of the industry would react to Dikshit’s exit, Brennan explained, “If Dikshit leaving Party Gaming can be a benefit to that company, I would say that it does the same broadly for the industry.” Financial analyst Nick Batram told Bloomberg that Dikshit’s departure meant that Party Gaming “may also find it easier to raise funds from institutional investors rather than the founders for large sports gambling acquisitions.” The Wire Act of 1961 has historically been interpreted to mean that online wagering on sports is not permitted in the U.S.

Dikshit will purportedly turn over the proceeds of his sale, which will likely total more than ?188 million, to his charitable foundation. On the TwoPlusTwo online poker forums, posters questioned Dikshit’s charitable motives: “If he donated to an established charity that could not be mistaken for a front, then that would be impressive,” one skeptic noted. Some have speculated that tax benefits are the real reason behind his actions. Brennan told Poker News Daily, “He wants to get out of the business and focus on his charitable endeavors.”

The sale of two-thirds of Dikshit’s stake sent shares of Party Gaming plummeting. Trading above 284 pence on October 19th, the stock dove to 240 pence in 24 hours, a dip of 15%. PRTY closed trading on Friday on the London Stock Exchange fetching 243 pence, 135 pence above its asking price one year ago.

An article in the Financial Times summed up the reaction from most of the industry: “The truth, however, is that while the distancing of Mr Dikshit can’t be bad for Party Gaming, it is still frustratingly unclear what the odds are on a successful return to the U.S. market.” In five weeks, the financial services industry in the United States must fall into full compliance with the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA). The impact of the December 1st deadline remains to be seen, but the Poker Players Alliance (PPA) recently authored a letter to U.S. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke asking for the UIGEA’s regulations to be delayed by one year.

Party Gaming Cofounders Ruth Parasol and Russ DeLeon, a husband and wife team, have not yet announced their intentions to sell stock or formulate a plea agreement with the U.S. Government.

UIGEA Regulations Won’t Change Online Poker Industry

Coming out of National Poker Week, an effort orchestrated by the Poker Players Alliance (PPA) to legalize and regulate the online game in the United States, many wondered what the future of the industry would be once the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) are fully enforced in December.

As it currently stands, the financial services industry has until December 1st to comply with the 2006 law. Despite the presence of 32 co-sponsors of HR 2266, which delays mandatory compliance with the UIGEA by one year, the bill has yet to see time in the House Financial Services Committee. In addition, Congress will be on recess during the month of August and return after the Labor Day holiday in the United States.

In an exclusive interview with Poker News Daily during the recent PPA Fly-In, poker lobbyist Mickey Leibner noted, “We hope that HR 2266, which is the bill to delay the implementation of the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) by one year – We’re hopeful that we can get something done on that as soon as we get back from the August recess. That’s the plan.” In the interim, concerned poker players are encouraged to call, e-mail, and write their Congressmen urging support of HR 2266 and HR 2267, the latter of which establishes a full licensing and regulatory framework for the internet gambling industry in the United States. Congressman Barney Frank (D-MA) introduced both measures in early May.

In order to gauge the potential effectiveness of the regulations once they are in full effect, Poker News Daily sat down with noted gambling and the law expert Nelson Rose.

Poker News Daily: What do you foresee as the status of the online poker industry in the United States come December?

Rose: I think there’s a good chance that HR 2266 will pass. Nobody likes the regulations of the UIGEA, but it’s of such little interest to members of Congress right now.

PND: You had mentioned to us in a previous interview that you doubted how effective the regulations of the UIGEA would ultimately be. Can you comment on that?

Rose: I don’t think they’re going to have any effect at all. The whole focus has changed. Instead of looking at individual transactions, financial institutions are now told not to. Basically, the whole program focuses on due diligence on new accounts. If you’re crazy enough to set up a bank account with an American bank, they’ll ask if you’re involved in illegal internet gambling. Banks are specifically told not to look at individual transactions, so it doesn’t really do much except impose an extra level of regulation and cost onto the banks. The payment processors have already figured out ways around it.

PND: Is over-blocking by companies like Visa and MasterCard a function of compliance with the UIGEA? For example, legal online lottery transactions in North Dakota and New Hampshire have been blocked.

Rose: The credit card companies stopped letting their cards be used a few years ago. It was partly because of a fear of charge backs and partly because they were afraid they were doing something illegal. The U.S. Department of Justice ran a very successful campaign of intimidation and it worked. In fact, I work with racetracks and state lotteries and they’re having a horrible time doing transactions that everyone agrees are legal.

The UIGEA is a piece of garbage, but the regulators did the best they could do with it. It’s an un-funded mandate. It’s a requirement that banks spend money for nothing and that’s not what the government should be doing right now, partly because we’re in a financial crisis. It’s also personal intrusion. The regulations would have been killed last summer, but the Republicans decided to make it into a political issue.

Visit GamblingAndTheLaw.com for more information.

PPA Lobbyist Mickey Leibner on Legalizing Online Poker

Amid the sea of individuals actively involved in National Poker Week was Mickey Leibner, a lobbyist for the Poker Players Alliance (PPA). Leibner sat down with Poker News Daily to discuss lobbying for the legalization and regulation of online poker in the United States.

Poker News Daily: How did you become involved with lobbying on behalf of the PPA?

Leibner: I work with former Congressman Toby Moffett and have been lobbying on behalf of the PPA since the fall of 2007. Our policy is that we won’t lobby for any causes we don’t believe in. We want to go to Capitol Hill with clients who have a good story to tell. The PPA and the poker world have a great story to tell. It’s a message of personal freedoms.

PND: You mentioned personal freedoms. Does that resonate with Congressmen when you lobby about the issue?

Leibner: It does resonate. One of the interesting things about this issue is that it truly resonates across the aisle – Democrats and Republicans. I personally am a big-time Democrat, but there are people we meet with on both sides of the aisle that like this issue for different reasons.

PND: What’s an average day for a lobbyist?

Leibner: We do a lot of preparation, like crafting memos for staff and gathering the most relevant information on an issue. What we do is based on our knowledge of a particular Congressman, district, office, or staff member – We tend to tailor what we say so it will have the greatest effect. You want to make sure that you’re using the right arguments with a rural Republican Representative and those are probably different arguments than you’d use with an urban Democrat, for example.

PND: You told us earlier that your firm also lobbies on behalf of environmental issues and other efforts. Is it difficult juggling several different commitments?

Leibner: It’s not necessarily hard and it keeps it interesting. I actually like it because every day is a little bit different. I can wake up every morning knowing that everything I’m doing is something I can get behind and feel good about. That makes a big difference.

PND: How did you begin your lobbying career?

Leibner: I’ve been politically involved for a while. I graduated from college and really didn’t know what I was going to do. I wanted to be in politics. I focused a lot in college on the intersection of technology and politics, so I wrote a thesis on the world of blogs. I was looking at a number of non-profits and organizations outside of the government and I happened to get in with Toby Moffett. It’s neat because the poker issue allows me to work on the intersection of technology and politics.

PND: What is your forecast for the future of internet gambling legislation in the United States in 2009 and 2010?

Leibner: We’re very hopeful and we’re very confident that we can get these laws passed. We have a lot of powerful people on our side, including Barney Frank, who is the Chairman of the House Financial Services Committee. It just so happens that we’re in the midst of the biggest financial crisis in the past few decades. We’re confident that our message is getting through.

We hope that HR 2266, which is the bill to delay the implementation of the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) by one year – We’re hopeful that we can get something done on that as soon as we get back from the August recess. That’s the plan. Tell your readers that we’re out there every day and trying to bust our butts to get this done. We’re pretty confident and feel better than we did a year ago at this time.

Poker Petition Breaks 300,000 Signatures

The petition put forth by the Poker Players Alliance (PPA) as part of National Poker Week currently stands at 300,428 signatures. The measure broke through the 300,000 threshold overnight.

Players have turned out in droves to sign the poker petition. The process takes less than 30 seconds and involves a person entering in their first name, last name, e-mail address, street address, city, state, zip code, and a special authentication code. Its text begins, “I am a voter and a fellow poker player asking for your support of my right to play games of skill like poker on the internet.” On July 22nd, the petition will be presented to President Barack Obama, who is in St. Louis this evening to throw out the first pitch of the Major League Baseball All-Star Game at Busch Stadium.

The language of the petition notes that regulation of online poker was the top technology topic in the Citizens’ Briefing Book, which asked Americans what issues they wanted to see addressed by the new Obama Administration. The entry, which appeared on Change.gov, was entitled “Boost America’s Economy with Legal Online Poker” and received support from around the industry. Specifically, the petition asks President Obama to “1) exempt poker from the Unlawful Internet Gambling Enforcement Act (UIGEA) and 2) license and regulate internet poker in the U.S. 3) Respect the rights of law-abiding Americans who love to play this great game of skill.”

The petition is one of several components of National Poker Week, which takes place from July 19th through 25th. Thirty of the PPA’s State Directors and a handful of poker pros will travel to Washington, DC to meet with Congressmen and push for the legalization of online poker. Congressman Barney Frank (D-MA), Chairman of the House Financial Services Committee, has introduced two measures that State Directors and poker pros will push. HR 2267 establishes a full framework for the licensing and regulation of internet gambling in the United States. HR 2266 delays industry compliance with the UIGEA by one year until December 1st, 2010. The measures sit at 42 and 25 co-sponsors, respectively, after being introduced on May 6th.

Congresswoman Shelley Berkley (D-NV), PPA Chairman Alfonse D’Amato, and PPA Executive Director John Pappas unveiled National Poker Week at a press conference on June 22nd during the 2009 World Series of Poker (WSOP). The PPA will welcome poker pros Howard Lederer, Andy Bloch, “Celebrity Apprentice” runner-up Annie Duke, Jan Fisher, Linda Johnson, and 2008 WSOP November Nine member Dennis Phillips to the Capitol Hill next week for the festivities.

On Tuesday night, the PPA will host a charity poker tournament. The event will be held at the Hyatt Regency Capitol Hill and begins with a reception at 6:00pm. The tournament kicks off at 7:00pm, with funds raised being donated to the USO of Metropolitan Washington. According to an invitation sent out by the PPA, which is fronting the costs of the event, players can win “travel packages, poker tutorials by pros, and other great prizes.” Members of the U.S. Armed Services will play alongside some of the industry’s top poker players.

The PPA has also set up MyPokerStory.com, a site that allows players to submit videos outlining why poker is critical to their lives. Professional poker players including World Poker Tour (WPT) Host Mike Sexton, “Cowboy” Kenna James, and Lederer have all submitted videos to the cause. Sexton’s submission reveals, “I have been playing poker since I was 13 years-old… I’m a die-hard poker guy and I hope you like to play as well.”

Poker News Daily will be camped out in Washington, DC during National Poker Week, so stay tuned for a full recap of events.

Third Circuit Court of Appeals Hears iMEGA UIGEA Case

On Tuesday, lawyers from the Interactive Media Entertainment and Gaming Association (iMEGA) argued in front of the Third Circuit Court of Appeals in Philadelphia. The objective: prove that the Unlawful Internet Gambling Enforcement Act (UIGEA) is unconstitutional.

iMEGA’s case was the second on the docket on Tuesday in the Third Circuit behind a legal battle over whether a Yeshiva school could be constructed on the grounds of a synagogue based on zoning rights. One of the central issues discussed by the trade organization and counsel  for the United States Attorney General’s Office was where a bet placed online actually occurs. iMEGA Executive Director Joe Brennan explained, “We argued that the bet took place in another country like Costa Rica. When a person enters into a bet, it comes from an account already placed on the site.” However, it could be argued that bets originate on a person’s computer, on a server, or somewhere along the way in cyberspace.

Also at the forefront of the debate on Tuesday was whether iMEGA had standing to sue, something Brennan noted was preserved at the District Court level. iMEGA has online poker sites and individual players as members. Brennan recalled, “There was a ruling from the Third Circuit that concluded whether or not third parties could come forward if members were harmed, but [U.S. Attorney General counsel] Nicholas Bagley wasn’t familiar with it.” On his overall impressions, Brennan admitted, “It’s tough to tell. The three judge panel spent a lot of time with us. They didn’t spend as much time with the Government’s attorneys.”

Also questioned was whether it would have been advantageous for iMEGA to find an internet gambler who was harmed to appear in court. It’s a similar quandary that the Poker Players Alliance (PPA) has found itself in with regards to the online poker funds seizure in New York. In essence, anyone who stepped forward would be required to testify under oath that they played online poker. Brennan noted, “We said that, per the language of the statute, a person would essentially incriminate themselves in order to challenge the UIGEA. While there are no criminal sanctions, there are civil penalties for players.”

Judges Dolores Sloviter, Thomas Ambro, and Kent Jordan listened to attorneys for iMEGA and the Federal Government on Tuesday. The panel will now deliberate and return one of a wide variety of verdicts. One of the questions posed concerned the status of bills to license the industry in the United States and delay the implementation of the UIGEA’s regulations. Both were introduced on May 6th and referred to the House Financial Services Committee. HR 2266, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act, is up to 40 co-sponsors. HR 2267, the Reasonable Prudence in Regulation Act, has attracted 23 co-sponsors. Neither has been scheduled for mark-up or discussion on the floor of the House of Representatives. One possible outcome is the Third Circuit deferring a resolution until Frank’s bills are acted on.

Many in the industry are now scrambling to ascertain when the Third Circuit will hand down a decision. Brennan revealed that the court’s average turnaround time is three months and iMEGA does not expect to hear back in the next 30 days. At the District Court level, the organization was left in the dark for nearly six months.

In the meantime, iMEGA will turn its attention to the Commonwealth of Kentucky, where briefs were filed to the state’s Supreme Court in May. To open the year, the Kentucky Court of Appeals in Louisville overturned a lower court ruling by a two to one margin and asserted that the Commonwealth did not have jurisdiction to seize 141 internet gambling domain names. The State quickly appealed. There has been no word on whether the Kentucky Supreme Court will take the case.

Visit the official website of iMEGA.

Barney Frank, Emperor Phil Hellmuth to Highlight WSOP Main Event Day 1C

On Sunday, the third of four starting days in the 2009 World Series of Poker (WSOP) Main Event will kick off with Congressman Barney Frank (D-MA) issuing the traditional “Shuffle up and deal” command. In addition, “Emperor” Phil Hellmuth will make his entrance.

With Sunday majors expected to keep many of the world’s top online poker players away from Day 1C, Frank and Hellmuth will instead take center stage. Frank, whose Internet Gambling Regulation, Consumer Protection, and Enforcement Act (HR 2267) is up to 40 co-sponsors, will also be available to media inside the Pro’s Choice Suite adjacent to the Amazon Room at 1:00pm Pacific Time. All WSOP credentialed media are invited to attend the function, which will take place one hour after Frank authorizes Rio dealers to begin Day 1C. A press release issued by the Poker Players Alliance (PPA) on Sunday morning noted, “Chairman Frank has been online poker’s greatest advocate in Congress, sponsoring legislation to license and regulate the game (HR 2267) as well as delay implementation of Unlawful Internet Gambling Enforcement Act (UIGEA).”

HR 2266, which delays industry compliance with the regulations of the UIGEA by one year, is up to 23 co-sponsors after being introduced on May 6th, nearly two months ago to the day. Both HR 2266 and HR 2267 have been referred to the House Financial Services Committee, of which Frank is the Chair, although neither has been scheduled for markup in Committee. Last September, Frank’s HR 6870, the second installment of the Payments System Protection Act, was approved by the House Financial Services Committee in a 30-19 vote, but failed to reach the House floor due to the then-emerging financial crisis in the United States and around the world.

Those registered for Day 1C will also witness Hellmuth, an Ultimate Bet pro, enter the Rio in grand fashion. This year, the 11-time WSOP bracelet winner will arrive as “Emperor Hellmuth,” according to a press release distributed by the Tokwiro-owned online poker room: “Hellmuth will enter the Rio Convention Center appropriately attired, in keeping with Ultimate Bet’s Romanesque 10th Anniversary theme. Come see Emperor Phil as he leads his legions into the Amazon Room to take his seat at the table and thus begin the ultimate challenge of conquering the 2009 WSOP Main Event.” Play will begin on Sunday at Noon Pacific Time. When Hellmuth will arrive is anyone’s guess.

Twenty years ago, Hellmuth became the youngest WSOP Main Event winner ever at age 24. His record stood for 19 years until 2008, when Danish poker pro Peter Eastgate took down the industry’s most prestigious tournament at age 22. Hellmuth has recorded five in the money finishes during the 2009 WSOP leading up to the Main Event, a tournament he grabbed 45th in last year for $154,000. Ultimate Bet notes that Hellmuth’s entrance will provide for “magnificent photographic and video opportunities.”

Last year, Hellmuth donned UB Army attire when entering the Main Event. In 2007, he famously collided with a light pole in the Rio parking lot while at the wheel of a racecar. Hellmuth leads all players with 11 WSOP bracelets. Hot on his heels are poker legends Doyle Brunson and Johnny Chan, who own 10 bracelets apiece. Johnny Moss holds nine bracelets, just ahead of Full Tilt Poker pro Erik Seidel, who owns eight. Phil Ivey’s dual bracelet wins this year propelled the top all-around player to seven overall, tied with Billy Baxter. A total of 57 pieces of hardware were handed out during the 2009 WSOP festivities in Las Vegas. Four more will be awarded as part of WSOP Europe in London.

Monday marks the final starting day of the 2009 WSOP Main Event. The field will play down to the final table on July 15th, when the action will be paused for four months until November 7th. The feature table will be played on the morning of November 10th and air on cable station ESPN that night.

Poker Players Alliance Giving Away a 2009 WSOP Main Event Seat

An e-mail sent to members of the Poker Players Alliance (PPA) late Friday night offered the prospects of playing in the 2009 World Series of Poker (WSOP) Main Event for renewing or upgrading to a premium membership. The seat is worth $10,000.

The offer is available until Midnight ET on June 15th and doles out one seat into the world’s most prestigious poker tournament. Last year, a total of 6,844 players entered the Main Event, which saw its final table delayed until November for the very first time in order to coincide with its airing on ESPN. In the end, it came down to a battle of Europe, as Danish poker pro Peter Eastgate bested Russian sensation Ivan Demidov, becoming the youngest WSOP Main Event Champion ever at age 22 and banking $9.1 million.

The offer is good for existing premium members who renew as well as members paying for the first time. The cost of the upgrade is $20, which can be done in a few quick steps online. First, existing members are asked to log in and new members are taken to the organization’s sign-up screen. Once logged in, players should select the “Membership” option, which whisks them to the subscription page. PPA members that do not have an automatically renewing membership will then see the date that their current one expires and a large orange button to “Purchase One Year of PPA Online Premium.” This will extend their renewal date by 365 days and does not eat into current time remaining.

Entrants must be over the age of 21 and a mail-in option to qualify is also available. The lucky winner will be selected at High Noon ET on June 16th. Travel expenses to and from Las Vegas and hotel accommodations are not included. However, the Rio and participating Harrah’s hotels offer discount rates for WSOP players throughout the seven week tournament series. The Main Event kicks off from the massive Amazon Room on July 3rd with the first of four starting days. The tournament plays down to its final table on July 15th, at which point it will be paused for over 100 days and resume in November.

Premium PPA members can take advantage of a variety of discounts on movies, restaurants, hotels, electronics, and travel as part of PPA Advantages. The discount shopping program touts potential savings of over $2,000 every year at over 600 merchants. The program includes instantaneous discounts; no point accumulation is required. Premium members also have access to the PPA’s Litigation Network, which has helped orchestrate successful court cases around the United States. The PPA is in the midst of fighting for the rights of one of its own members, Kevin Raley, who was charged with illegal gambling in Colorado. Finally, Premium PPA members score a card protector and window decal.

The organization is fresh off playing a part in Congressman Barney Frank’s (D-MA) introduction of HR 2266 and HR 2267. The former delays the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) from going into effect until December 1st, 2010. The latter bill establishes a complete licensing and regulatory framework for the internet gambling industry in the United States. Both were introduced on May 6th and referred to the House Financial Services Committee, of which Frank is the Chair. No timeline has yet been announced for their possible discussion in Committee. Besides the PPA, other organizations supporting the bill include Harrah’s and YouBet.com.

Last April, the PPA eclipsed the one million member mark. It has constituents in all 50 states and Washington, D.C. In 2006, it stood at just 50,000 members and has experienced phenomenal growth in terms of numbers and status on Capitol Hill. Much of its growth came with the announcement that former three-term Republican Senator from New York, Alfonse D’Amato, would serve as its Chairman.

Stay tuned to Poker News Daily for the latest news from the PPA.

PPA Director John Pappas Appears on Bloomberg

This week, Poker Players Alliance (PPA) Executive Director John Pappas appeared on Bloomberg television to break down Congressman Barney Frank’s (D-MA) Internet Gambling Regulation Consumer Protection and Enforcement Act.

The bill, numbered HR 2267, was introduced on Wednesday and calls for a complete licensing and regulatory framework for the internet gambling industry in the United States. Although similar to a bill that Frank introduced during the last Congressional session, HR 2267 focuses on how proper regulation can mitigate the perceived social ills of gambling. Pappas told Bloomberg’s television outlet, “We want to make sure that the Federal Government puts the standards in place so that there is safety for minors, that there are services for problem gamblers, and that adult consumers can enjoy the game without fear of fraud or abuse. A prohibition never stopped a child from getting online. A prohibition never stopped a problem gambler. Regulation is the only way to do it.”

Congressman Spencer Bachus (R-AL) and others have argued that a computer with the ability to gamble online may provide the outlet for children in the United States to begin playing at a young age. Bachus even quoted a non-existent McGill University study during a House Financial Services Committee meeting last July, claiming that one-third of college students who gambled online attempted suicide. Pappas explained that online poker sites currently employ safeguards to combat underage gambling: “Most of the online sites today already are using very high-tech, sophisticated age verification technologies. They have no interest in having children on their websites playing against adults. They want adult consumers playing on their sites. The only way to ensure that all sites have that is to pass a bill like Barney Frank’s.”

Pappas’ appearance on Bloomberg also included a discussion of whether playing online poker is illegal in the United States. Poker players can vividly recall the CBS News program “60 Minutes” stating that the game was against the law on multiple occasions after show producers allegedly contacted the Justice Department. However, Pappas revealed what the legal status of the game in the United States is: “For the U.S. player, it’s not illegal for them to go online and play internet poker. What the law in 2006 attempted to do was to make illegal the transactions. It puts the burden on the financial institutions, not the actual player.” The law in question is the Unlawful Internet Gambling Enforcement Act (UIGEA), which was ushered through Congress in the waning moments of the 2006 Congressional session by then-Senate Majority Leader Bill Frist (R-TN). The UIGEA’s text gave no indication of what was legal or illegal under it. Instead, it deferred to existing State and Federal laws.

Some would cite the Wire Act of 1961 as grounds that playing online poker is not allowed in the United States. However, the 48 year-old measure traditionally applies to online sports wagering. Pappas told Bloomberg, “The Wire Act states that illegal gambling is being in the business of betting or wagering. An internet poker site isn’t in the business of betting or wagering. They’re simply allowing a venue in which people can compete in games of skill like poker against each other.”

In recent months, the PPA has seen judges in Pennsylvania, Colorado, and South Carolina conclude that poker is a game of skill and therefore should be treated separately from online casinos, Bingo parlors, and sports betting outfits. During the last Congressional session, Congressman Robert Wexler (D-FL) introduced HR 2610, the Skill Game Protection Act, which would have exempted poker, bridge, chess, mahjong, and other player versus player games from the UIGEA and Wire Act.

At the time of writing, HR 2267 has 16 co-sponsors, including Wexler, Shelley Berkley (D-NV), Steve Cohen (D-TN), Peter King (R-NY), Jim McDermott (D-WA), Ron Paul (R-TX), and Melvin Watt (D-NC).

Spencer Bachus Responds To Frank Bill

After the announcement on Wednesday of Massachusetts’ Democratic Representative Barney Frank’s bill to curb the Unlawful Internet Gaming Enforcement Act (UIGEA) of 2006, reaction has been quick. The ranking member of the House Financial Services Committee - of which Frank is the Chairman – has issued a negative response that should come as no surprise as he was one of the key players in the creation of the UIGEA.

Republican Representative Spencer Bachus of Alabama issued a statement after Rep. Frank’s announcement yesterday that insinuates that he will fight any legislation that Frank attempts to put into law. Rep. Bachus’ website trumpets proudly that he, “…is an author of the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006, which banned the use of credit cards and other financial instruments from being used for illegal on-line gambling.”

Rep. Bachus’ statement touches on many of the reasons that the Republican-led Congress used in 2006 for pushing the UIGEA through. “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”, he states. He also offers that the passage of the UIGEA in 2006 was, “…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.”

Rep. Bachus does not comment, however, on how the UIGEA was tacked on to a piece of legislation that was viewed as a “must pass” portion of national security, the Port Act. He also fails to address that there was no debate over the UIGEA, either in committee or on either floor of Congress; in an important difference, Rep. Frank’s bill is being put to committee for discussion on its own merits and freely debated in the halls of Congress.

The bill that Rep. Frank is proposing is the H.R. 2267 - the Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2009 - and it would be a significant change to current views of Washington regarding the regulation of online gaming and poker. Language of the bill states, “Internet gambling in the United States should be controlled by a strict Federal licensing and regulatory framework to protect underage and otherwise vulnerable individuals, to ensure the games are fair, to address the concerns of law enforcement, and to enforce any limitations on the activity established by the States and Indian tribes.”

The federal government – and in particular the Secretary of the Treasury – would be in charge of licensing and regulating the online gaming industry under the Frank proposal. Companies that pursue licensing would have to provide in-depth detail as to their personal backgrounds and the solidity of their companies. It also includes a proviso that ensures the potential licensee would vigorously work against, “fraud, money laundering, and terrorist finance.” The licenses would last for a five year period and would not allow the holder of the license to partake of any actions that are covered by the Professional and Amateur Sports Protection Act, which explicitly prohibits sports betting.

With Rep. Frank finally proposing his bill to curb the UIGEA, the debate can now begin. It is thought, with a Democratic-controlled Congress as well as the current Obama Administration in the White House, that the possibilities for change regarding the online gaming and poker industry can be achieved. Poker News Daily will continue to monitor the situation in Washington and report on any new developments.

Rep. Frank Introduces Internet Gambling Regulation, Consumer Protection, and Enforcement Act

Barney Frank Introduces Comprehensive Internet Gambling Legislation

On Wednesday morning, Congressman Barney Frank (D-MA) unveiled the Internet Gambling Regulation Consumer Protection and Enforcement Act, which establishes a comprehensive licensing and regulatory framework for the industry in the United States. Legislation to delay the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) by one year was also introduced.

Although the bill has not yet been formally assigned a number, Frank’s licensing measure focuses squarely on protecting consumers when they gamble online. The bill states, “Internet gambling in the United States should be controlled by a strict Federal licensing and regulatory framework to protect underage and otherwise vulnerable individuals, to ensure the games are fair, to address the concerns of law enforcement, and to enforce any limitations on the activity established by the States and Indian tribes.” Operators must be in good legal and financial standing, utilize proper safeguards to thwart underage and problem gambling, and have systems in place to prevent money laundering. These concerns have been brought up repeatedly in markup hearings of past internet gambling bills introduced by Frank.

The Secretary of the United States Treasury is charged with overseeing the industry and licensing the companies that would be allowed to accept U.S. customers. Applicants may be asked to provide criminal records, credit histories, comprehensive financial statements, an outline of the corporation’s structure, and their methodologies to combat underage, compulsive, and problem gambling. Licensees must also protect against “fraud, money laundering, and terrorist finance.” Licenses last for five years each and may be renewed at the end of that time period. The bill also calls for the establishment of a “program to alert the public to the existence, consequences, and availability of the self-exclusion list, and shall prepare and promulgate written materials to be used in such a program.”

Sports betting or any wager that would be considered a violation of the Professional and Amateur Sports Protection Act (PASPA) is not allowed under Frank’s legislation. However, fantasy sports and other “simulation games” are exempted. The bill does not overturn the UIGEA, which was passed in 2006. Instead, it exempts licensees from the three year-old law.

The bill appears to require a companion measure to provide for taxation of the industry. During the last Congress, that piece of the puzzle came in the form of HR 2607, which prescribed that 2% of the funds deposited online be taxed. PricewaterhouseCoopers released a study utilizing a similar bill along with Frank’s HR 2046, the Internet Gambling Regulation and Enforcement Act, to reveal that up to $52 billion could be raised over a 10 year period by taxing and regulating the industry. However, that figure relied heavily on the involvement of professional sports leagues.

A separate bill introduced by Frank on Wednesday, dubbed the Reasonable Prudence in Regulation Act, called for the regulations of the UIGEA to be enacted on December 1st, 2010, one year after the scheduled date. The House Financial Services Committee website explains, “The legislation will stop Federal regulators from enforcing the UIGEA until Congress has had a chance to decide national policy.” In essence, lawmakers on Capitol Hill will have an extra year under Frank’s second bill in order to pass legislation concerning internet gambling. The regulations of the UIGEA were approved in November as midnight rules and implemented on January 19th, one day prior to U.S. President Barack Obama taking office. As it currently stands, the financial services industry must come into full compliance by December 1st, 2009.

Poker Players Alliance (PPA) Chairman and former three-term Senator from New York Alfonse D’Amato commented in a press release, “Online poker is a legal, thriving industry and poker players deserve the consumer protections and the freedom to play that are provided for in this legislation. We are grateful for Chairman Frank’s leadership and will be activating our grassroots army made up of over one million members to help him drive legislation.” In an article published by the Associated Press last month, it was revealed that the PPA is planning to sink $3 million into lobbying efforts during the current Congressional session.