Bipartisan Coalition Unites to Legalize Online Gambling -- And Tax It

7/25/09 - Fort Worth Star-Telegram - View Source

By Anna Tinsley

Bipartisanship is in short supply in Washington these days, but a diverse coalition ranging from liberal Democrat Barney Frank of Massachusetts to conservative Republican Joe Barton of Arlington is uniting in a high-stakes push to legalize Internet poker gambling.

The goal is to overturn a 2006 law that bans financial institutions from transferring money to gaming sites, which prevents Americans from gambling online using their credit cards.
Internet poker remained legal, but gambling was outlawed in what Frank derides as one of the most ridiculous acts ever by Congress.

It didn’t take long for enterprising businesses to find ways around the ban, including operating overseas, allowing players to use offshore accounts or foreign credit cards, or even sending money to a third-party site that transfers funds to gambling sites.

A separate bill would tax revenue from Internet poker, which is likely to get less support from Republicans fighting to hold the line on taxes. According to estimates, legalized Internet poker could be a $12-billion-a-year industry.

A big fan of Frank’s repeal effort is David "The Maven" Chicotsky, 29, a Fort Worth native who makes a living playing poker online.

The 1998 graduate of Southwest High School, who now lives in Las Vegas and earned Bluff Magazine’s 2008 Online Player of the Year title, says that "there’s a cloud over the whole game right now" because of the ban.

In the Texas delegation, Reps. Ron Paul, R-Surfside, and Ciro Rodriguez, D-San Antonio, also back Frank’s bill. (Former House Majority Leader Dick Armey has also voiced support.)
Frank gained momentum for more co-sponsors after poker players such as Dallas’ Dan Michalski, who runs a poker Web site, flooded Washington, D.C., last week to talk to lawmakers. They even presented President Barack Obama with a "Poker is Not a Crime" petition signed by more than 375,000 players who want online gambling legalized.

Opponents say legalizing this industry could hurt families and their finances. Supporters say it’s time to legalize, and tax, the industry once and for all. "This is not about a moral issue," Michalski said. "This is a matter of sensible government. What we are trying to accomplish here is to give people the freedom to . and create protections. This can do that. play games in their home, and generate revenue for the nation."

'A winning hand’

Chicotsky, whose family runs a Fort Worth shopping center and liquor store, said that he enjoys playing poker in person but that online gaming lets him play in multiple tournaments at once. He teaches poker lessons in his Las Vegas training facility, often letting students watch his online moves on their computers.

"I’m just trying to make a living," Chicotsky said. "On the Internet, there are games 24/7. You can do it from the comfort of your own home, and when you make a mistake at home, people don’t see you.

"If they do make this openly legal, it will be unbelievable for poker players — they can get sponsors like race car . and bring a lot more people into the game."

Frank has filed a similar bill before, but it didn’t get far. But this time, his party is in power, and he heads the House Financial Services Committee. He plans to bring his bill — which would also add protections against underage gambling, compulsive gambling, identity theft and fraud — before a committee in coming months.

A separate measure would delay implementation of the 2006 law, the Unlawful Internet Gambling Enforcement Act, for another year.

"Online gambling is illegal because those in D.C. can’t figure out a foolproof way to tax the bejesus out of it — yet," Frank told a group of poker players in Las Vegas this month.
On that front, Rep. Jim McDermott, D-Wash., has filed a separate measure to create a structure for gambling sites to collect taxes.

Proponents of the bills hope they will ultimately have the support of Obama, himself a casual poker player.

Opposing viewpoint

Opponents say they’re alarmed about gambling addiction and how that can hurt families.
"For online poker and gambling, the addiction rates — especially for young males 18-23 — is extremely high," said Suzii Paynter, director of the Texas Baptist Christian Life Commission. "Gambling is addictive; no one disputes that. The thing that makes it worse is that it’s too much, too fast. When it’s available to you 24 hours a day, and in your home, there’s complete access and speed for the addiction."

Bill Kearney, a former gambler turned activist, said he learned the hard way how addicting it can be.

"Gambling machines addict victims much faster than other forms of wagering, earning electronic gambling machines the title of the 'crack cocaine’ of gambling," according to his letter on the Stop Predatory Gambling Web site. "Internet games have the ability to provide all the sights, sounds and scenarios of traditional slot and video poker devices, and do so at the stroke of a key."

Building in protections

Barton said that he plays poker online — for free — and that he occasionally plays for money at casinos in Oklahoma and Las Vegas. He said his dad was a great player and could have made a living playing the game.

Barton said he’s not opposed to making online poker gambling legal as long as there are valid protections and oversight.

"But this is like anything else," he said. "Don’t go to a poker room or casino with money you need for the rent. I consider this discretionary entertainment."

As for taxing the industry, "I’m a little ambivalent about that," Barton said. "Republicans aren’t really for tax increases. But if that was a way to let people play legally for money, I’d have an open mind."

John Blevins, an online poker player and assistant professor of law at the South Texas College of Law in Houston, said the upside of legalization is clear. "This is the only industry in Washington right now asking to be taxed," he said.

To learn more To read the legislation, go to www.govtrack.us and search for HR2266 and HR2267 (bills by Rep. Barney Frank, D-Mass.) or HR2268 (the bill by Rep. Jim McDermott, D-Wash.).

For more information on those who support legal online poker gambling, visit theppa.org.
For more information on efforts to oppose online gambling, go to www.stoppredatorygambling.org or www.texansagainstgambling.org.