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Online Betting Gains Backer

5/7/09 - Las Vegas Review-Journal - View Source

By Arnold M. Knightly

Casino giant Harrah's Entertainment has thrown its support behind legislation introduced Wednesday that would allow Internet gambling by individuals in the United States, something that could open a whole new market for the owner of the World Series of Poker brand.

The proposed Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2009, which was introduced Wednesday by Rep. Barney Frank, D-Mass., would establish a framework to permit licensed gambling operators to accept wagers from inside the United States.

The legislation provides safeguards against compulsive and underage gambling, money laundering, fraud and identity theft.

"We really believe this industry already exists," said Jan Jones, Harrah's Entertainment's senior vice president of communications and government relations. "It just exists in a Wild West setting. If you say you care about protecting children and fraud and money laundering, then the only way you can put those protections in place is to put in a strong regulatory frame."

The casino company spent $405,087 in the first quarter and registered as a lobbyist to try to build support for the new proposal.

Harrah's Entertainment has also hired Tony Podesta, a longtime Democratic fundraiser who has lobbied for Wal-Mart and Sallie Mae, and his brother John Podesta, an adviser to President Barack Obama.

Jones said Americans are already spending $6 billion annually gambling in an unregulated online environment.

The bill would establish regulations that would be enforced by the U.S. Treasury Department. The federal department would also issue licenses to Internet gambling operators.

Frank's bill was co-sponsored by Rep. Shelley Berkley, D.-Nev., whose district includes Clark County.

It would repeal the Unlawful Internet Gambling Enforcement Act of 2006, which made it a crime for banks or other institutions to process financial transactions used to place illegal bets online.

The Bush administration implemented regulations, which are set to take effect Dec. 1, to enforce the banking ban.

Separate legislation introduced by Frank on Wednesday would delay those regulations from taking effect.

"What we have now is an unworkable law passed by those opposed to all gaming, whether it's done by adults in Las Vegas or on the Internet," Berkley said in a statement. "So there is no question we must act to correct the problems caused by this failed crusade to ban Internet gaming."

Similar legislation failed in the last Congress.

MGM Mirage expressed support for the idea of legalizing, regulating and taxing Internet gambling, but cautioned that company executives have not read Frank's new bill to know whether it is the right one to support.

Alan Feldman, MGM Mirage's senior vice president of public affairs, called the 2006 law bad legislation that was passed without any hearings.

"The original ban was absolutely ridiculous, just absurd," Feldman said. and the Poker Players Alliance, which is headed by former Sen. Alfonse D'Amato, R-N.Y., are also lobbying for the legalization of online gambling.

Not every supporter of online gaming expressed blanket support for the new bill.

David G. Schwartz, director of the University of Nevada, Las Vegas' Gaming Research Center, expressed concern about having the federal government oversee the industry. He said the new proposal would basically set up what he described as a federal Gaming Control Board.

"It would have the federal government regulating gambling, which goes against 220 years of how we've interpreted the Constitution, which is that states have the right to regulate gaming," Schwartz said. "This seems to foist an overly complicated bureaucracy on the gaming industry."

Jones said Harrah's supports a federal oversight role because regulating online gambling at the state level would be nearly impossible.

"The whole nature of Internet gaming is that people can be on all over the world," Jones said. "It makes much more sense to have a federal regulatory oversight, with an opt-out by the states, which this bill provides."

Protecting Children
Compulsive Gambling Safeguards
Secure Financial Transactions
New Government Revenues
Regulated and Licensed Environment
International Ramifications
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