June 8, 2007
New Deal For Online Gambling?
By Roy Mark
Place your bets, please.
From the courtroom to Congress, opponents of the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) this week began playing their hands to undo the controversial legislation. UIGEA bars credit card companies and other online payment systems from processing transactions with Internet gambling sites.
UIGEA specifically exempts online horse racing and lotteries from the law.
The new law does not specifically ban Internet gambling, but combined with existing statutes and a major crackdown on online wagering by the Department of Justice, a number of gambling sites have withdrawn from the U.S. market. UIGEA has also drawn criticism for being attached to an unrelated port security bill on the last day of the 109th Congress with no floor debate.
On Tuesday, a new trade group called the Interactive Media Entertainment & Gaming Association (iMEGA) filed a lawsuit in New Jersey against U.S. Attorney General Alberto Gonzales, the Federal Trade Commission and the Federal Reserve. The lawsuit seeks to halt enforcement of UIGEA. The lawsuit also asks the court for a temporary restraining order.
"In general, the law infringes on the right of free speech, freedom of association and calls into question equal protection under the law," Edward Leyden, a Washington attorney who is serving as the director of iMEGA. "[UIGEA] will have a chilling effect on legitimate streams of e-commerce and the Internet as a whole."
On Capitol Hill, Rep. Robert Wexler (D-Fla.) filed legislation to exempt online poker, Mah-jong, chess and bridge from the provisions of UIGEA. Rep. Jim McDermott (D-Wash.) dropped a bill in the hopper to serve as companion legislation to Rep. Barney Frank's (D-Mass.) bill to legalize and license online gambling in the United States.
Frank's Internet Gambling Regulation and Enforcement Act of 2007 would establish a federal regulatory and law enforcement scheme to license companies to accept online wagers from individuals in the U.S. According to Frank (D-Mass.), the licenses would require protections against underage and compulsive gambling, money laundering and fraud.
McDermott's bill would establish the process to collect online gambling revenue online by state and federal authorities if Frank's legislation is successful. "If we decide as a nation to enable gambling online, the billions of dollars flowing out of this country should remain here to help us fund schools and bridges and a host of social programs that need more than luck to succeed," McDermott said Thursday in floor remarks.
Wexler's Skill Game Act would amend UIGEA to allow poker players and other game participants to legally compete against each other on the Internet. "If you want to bet online on horse racing today, it's perfectly legal," Wexler said at a Friday hearing on Frank's bill. "It's perfectly legal to bet through online state lotteries. We have an uneven state of the law here."
In a press statement, Wexler called poker a "great American pastime. Poker is a game, not a crime." According to Wexler, the difference between poker and sports wagering is that poker players are wagering against each other and not the "house."
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