After stalling for a number of months and coming dangerously close to collapsing, the legislative poker ball is now firmly up and rolling. The Unlawful Internet Gambling Enforcement Act, a law which would prevent banks from processing online gambling deposits, was due to come into effect on December 1st. An impassioned plea from, among others, the Poker Players Alliance, resulted in the deadline being moved back by 6 months.
Now, with a bit of leeway to act, Rep. Barney Frank can spring into action. Frank has long been poker’s most powerful ally in Washington, objecting to the UIGEA on financial and moral grounds. As head of the House Financial Services Committee he has an important voice on all monetary issues. Unfortunately, the dire economic situation has meant that most of his attention has been focused away from online gambling.
With a UIGEA delay in place, Frank quickly scheduled a preliminary hearing for his pro-poker bills. It occurred this past Thursday and resulted in a generally positive outcome for online poker. The focus was almost entirely on H.R. 2267, the Internet Gambling Regulation, Consumer Protection and Enforcement Act. This seeks to introduce a framework where online poker sites can be regulated, licensed, and taxed. Twenty-two members of the committee turned out to hear seven expert witnesses talk on the subject of online gambling.
Barney Frank began by announcing that, “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 was fervently rebutted by Spencer Bachus, the Alabama Representative well known for his belligerent opposition to all forms of online gambling. “I believe that internet gambling is, has been, and will continue to be a substantial threat to our youth,” he told the committee. “Any economic benefits from taxing internet gambling would be more than offset by the harm it causes young people.”
An early expert speaker was Parry Aftab, the Executive Director of Wired Safety. She acknowledged what most industry experts and knowledgeable players already know. “The only way to protect consumers is by legalizing it. If we don’t legalize it, we can’t regulate it.” To ensure that players do not fall foul of cheating scandals, laws like the ones Frank proposes are vital. “There are a number of technologies routinely used in other industries that are easily adaptable to online gambling sites,” Parry added. “They are real, proven and in use today.”
Kerry Whyte, from the National Council on Problem Gambling, also fell, just about, into the pro-gambling camp. She noted that, despite the fact that online gambling had decreased post-UIGEA, calls to their problem gambling lines had not decreased at all. One of the few decidedly oppositional experts was Robert Martin, Tribal Chairman of the Morongo Band of Mission Indians. He claimed that allowing online poker sites to operate constituted unfair competition. However, Frank noted that his particular group of Indians attempted to start their own online poker site in the recent past.
Undoubtedly the most anti-UIGEA witness came in the form of Samuel Wallandingham, the Chief Information Officer and Vice President of the First State Bank in West Virginia. He was speaking on behalf of the Independent Community Bankers of America. He reiterated a common complaint about the poorly constructed nature of the UIGEA. “The law doesn’t define unlawful internet gambling. As a result, the burden rests solely on financial institutions.” He concluded with the statement that the, “ICBA strongly endorses H.R. 2267.”
One witness sited a study by Professor Sparrow from the Harvard John F. Kennedy School of Government. Sparrow is a former Detective Chief Inspector of the British Police Force and undertook a study into the viability of H.R. 2267. The paper is broadly in favor of Frank’s plan and states that, “at a minimum, even an imperfect legalization and regulatory regime for online gambling would give Americans much more protection than they have now.”
The 90 minute hearing concluded with no firm decision. A date was not scheduled for a vote, but Frank did promise that they would return to the issue in 2010. A firm decision has to be reached within the next six months, or the UIGEA will come into effect.