A High-Stakes Poker Game: Fighting Over Online Gambling
5/6/09 - Roll Call - View Source
By Anna Palmer
Online gambling advocates are upping their ante inside the Beltway, adding new hired guns and rethinking their Capitol Hill strategy as Congress gets ready to take up legislation that would reverse the ban on online gaming.
House Financial Services Chairman Barney Frank (D-Mass.) is expected to introduce legislation as early as today aimed at legalizing online gambling.
“We’ll file it as soon as it is drafted,” said Frank last week.
Online gambling operatives have been working to help give Frank’s bill a soft landing in the committee. One of their key arguments, especially given the country’s economic recession, is that legalized online gambling would result in billions of dollars in tax revenues.
“The more people need revenue, the better chance it has,” Frank said.
Gambling advocates have been working to reverse the ban since it took effect in 2006.
Frank tried to pass similar online gaming legislation in the 110th Congress. In 2007, he introduced a bill that would have blocked the Unlawful Internet Gambling Enforcement Act from going into effect.
Frank’s efforts were stopped short in the Financial Services Committee, where the National Football League lobbied against removing the ban largely for largely business reasons and the Christian Coalition lobbied against the Frank bill on mostly ethical grounds.
Rep. Spencer Bachus (R-Ala.), the ranking member on the Financial Services Committee, also actively pressured lawmakers to oppose the bill. He continues to oppose legalizing online gambling.
“My concern is for our youth who are subject to becoming addicted to gambling at an early age,” Bachus said in an e-mail statement. “If you put a computer in a teenager’s bedroom, or in a student’s dorm room at college, it’s a temptation that many fall prey to.”
While opponents of the bill have pledged to fight any efforts to repeal the ban, that hasn’t dimmed its prospects for passage, according to Frank.
“I don’t think their positions have changed, but I think their hold on Congress has lessened,” Frank said.
Positive movement has happened in recent weeks with people on both sides of the debate sitting down to find consensus about how the UIGEA could be amended, according to a lobbyist who works the issue for a pro-online-gambling client.
The Poker Players Alliance, a behemoth pro-online gaming entity, is working the issue on both tracks. In addition to pushing for Frank’s bill, the group has also been a part of the effort to find agreement on how the UIGEA can be reworked.
“We believe there is a growing sense among those in Congress that prohibition is not going to work,” PPA Executive Director John Pappas said.
The poker players, who spent $430,000 during the first quarter on lobbying, aren’t alone in their quest.
The Interactive Gaming Council also continued to spend heftily, doling out $668,000 in the first quarter of 2009 to outside lobbyists, according to Senate lobbying disclosure records.
And it’s not just the old guard going all in to get legislation passed.
California-based Youbet.com is also getting in on the game.
Youbet.com is the largest legally operating online gaming operation inside the United States, offering customers the ability to place online bets using the interstate horse racing exemption.
The company, which expects to make close to half a billion dollars in wagers this year, recently hired Prism Public Affairs and Democratic lobbyist Paul Equale of Equale & Associates. The company is trying to make the case to lawmakers that online gaming can be done with safeguards to help prevent abusive and underage gambling from occurring.
“We’ve always operated our business under a legal regime,” company CEO Michael Brodsky said. “We think that we do things pretty well in terms of managing customers and making sure that the conduct is appropriate, follows state laws and addresses problem gambling and underage gambling.”
Longtime brick-and-mortar casino operator Harrah’s Entertainment also registered to lobby for the first time this year. The company spent about $405,000 during the first quarter of 2009, according to Senate lobbying disclosure records.
The decision for Harrah’s to get involved in Washington comes as the American Gaming Association, the casinos’ trade association, is staying neutral in the debate.
The AGA’s members are divided over the issue with some, including Steve Wynn, founder of Wynn Resorts, opposing the regulation of online gaming.
AGA President Frank Fahrenkopf said the group will examine Frank’s bill once it’s introduced and will use three criteria to decide whether it will support the legislation: whether the bill gives equal parity to all gaming activities, if the legislation makes any currently legal gaming operations illegal, and whether it upholds states’ rights.
Harrah’s Jan Jones said the company, which owns the World Series of Poker, decided to get in on the lobbying game because online gaming is happening regardless of whether the U.S. legalizes and regulates it.
“Poker play alone for U.S. customers is more than $6 billion and it’s totally unregulated,” said Jones, senior vice president for communications and government relations for the company.
Jones added: “That’s money that could go to health care reform.”