Where is the Barney Frank Bill? APCW Perspectives Weekly: 19 June 2009

[RobWin]

BAD NEWS FROM BARNEY

Anti-UIGEA bill delayed till September

The economic crisis throughout the world and in the United States in particular has created a heavy workload for Congressman Barney Frank's House Financial Services Committee, and that unfortunately means that his latest attempt to regulate and licence online gambling in the United States will have to be put on hold until September, the politician's staff advised this week.

The industry has high hopes for HR2267, the Internet Gambling Regulation Consumer Protection & Enforcement Act, which was launched last (May) month and has already attracted political support.

However, it now appears unlikely that the bill will be voted on before the next session of Congress following a decision to delay hearings in the Committee until September 2009.

Confirming the re-scheduling, a spokesman in Congressman Frank's office said that the hearing for the proposal had been postponed until the autumn due to an excessive workload on legislation urgently needed to address the economic crisis and the administration's measures to correct it.

I believe "Political maneuvering" is the key word here for the delay in the hearings which will give Barney more time to garner extra support for this bill that should eventually get passed. With the likes of Harrah's and other big players in this game it will be hard for this one to fail IMO.

[MJackson]

So if I were a politician I would vote against it. The arguments by Frank I have read are far from convincing. And online gambling regulation would never work anyway due to black markets.

What seems far from convincing to me is that prohibition would ever work - due to black markets. This is the current situation we have now. As has been stated by other posters in this thread the main goal of regulation is to allow reputable operators into the market place where they will largely replace the rogues.

An analogy might shed some light on the falsehood of your premise. Is cocaine commerce superior to that of Ritalin? I think the policy on cocaine use is the one that doesn't work due to black markets whereas that of it's very close cousin Ritalin (at least in terms of effects), while not perfect, is relatively effective. That's a pretty clean example of two like products with similar demand, one regulated, the other not. I think the results speak for themselves.

[jetset]

I think US players would probably prefer to gamble at top and trusted brand names that go online in a legalised US market, rather than some of the fly-by-night and questionable outfits that I'm sure will still try to make a buck at the players' expense.

I think the following factors will have to be considered:

1) How efficiently the new online operations are marketed (visibility, promos, customer support etc) The major companies will be bringing a lot of expertise both in-house and via Internet marketing specialists to the table to achieve high standards....that could make for some great player deals.

2) Whether the enforcement authorities will continue to so enthusiastically blitz unlicensed gambling operators who continue to try to operate in the States, and measures against US companies servicing their needs - processors for example. Imagine a US market where, as a player, you didn't have to duck and and dive to arrange deposits and payments and worry about checks and c/card transactions and questions.

3) How much the player is likely to be impacted by taxation aspects, given that a high standard of financial reportage will be expected from the regulated companies by state and /or federal government.

4) How much tax the operators will be expected to pay, and how onerous and labour intensive reporting requirements by the regulator are likely to be. The tax issue is obviously of particular importance in any US operator's business plan.

5) Whether the regulatory requirements are realistic - given the nature of the targets of political and other opponents of the industry to date, we can be sure there will a heavy emphasis on preventing underage and problem gambling, responsible gaming provisions, ensuring the probity of operators, enforcing international financial precautions and software fairness. Most of these work to the protection and advantage of the genuine online player.

HR2267 is treading cautiously to reassure the various vested interests like the national sports leagues and the rights of individual states, so this legislation is likely to be tough even without the Congress deal-making that is probably yet to come.

[Auditor]

Another good video my friend.

Better be careful though, your starting to sound like me...

That's not a bad thing...

The legitimate online casinos will be jumping at the chance to re-enter the USA market, and the gov't will make a small fortune on licensing fees alone. The UK made it work, so there's no reason it wouldn't for the USA, as well.

I also agree, it's all about the money and when they look at estimated revenues, there will be even more momentum to get it passed. U.S. needs all the income they can get right now.

[jetset]

POSITIVE SIGNS ON U.S. LEGALISATION FOR ONLINE GAMBLING

These are the folks in the know....

Two positive but unrelated opinions on the legalisation of online gambling in the United States were given this week, adding credibility to a growing optimism that this year will see the United States joining other progressive Western nations in permitting controlled and regulated betting over the Internet.

The first opinion comes from the highly respected business analysts at investment bankers Goldman Sachs, who have issued a note to investors predicting that the Americans will legalise and regulate the online gambling industry, woth up to $12 billion a year according to a report from The Examiner.com.

The note covers the latest attempt by Barney Frank, chairman of the House Financial Services Committee, to introduce legislation that recognises the rights of individual states in legalising and regulating carefully vetted online gambling providers. If passed (see previous InfoPowa reports) this bill would largely negate the controversial Unlawful Internet Gambling Enforcement Act which has cost the industry billions.

Goldman Sachs advises investors "We believe it is logical to assume that the US market will eventually regulate, given the potential implications for US tax take, if nothing else."

“Based on a simple ‘grossing up’ of PartyGaming’s rake relative to its 9 percent market share, the US poker market alone was worth $1.5 billion in 2008,” the report noted.

“Were the market to be legalised, we believe that the size of the revenue opportunity could increase materially,” it continued. “Based on an assumption of 30 percent penetration of offline poker players and $300 gross gaming revenue (GGR) per player, we estimate that a legal poker market could be worth $3 billion a year.”

“Were GGR to increase to 45 percent and GGR per player rise to $400, the size of the poker market alone could be worth $6 billion. We also estimate that the casino market could expand to a similar scale, based on various offline penetration assumptions.”

But US players will have to be patient, it appears. There is a strong likelihood that online poker may be legalised in a number of states before the federal government makes any changes to the current laws, the analysts opined, noting that Florida and California in particular could be possible early adapters. And the Franks legislative proposals to liberate the US online gambling market have been delayed until September due to pressure of other work in Congress, and may not be politically debated until the new Congress.

“The momentum at state level, where widening state budget deficits are ratcheting up financial pressures, is clearly building,” the report pointed out. “Indeed, if California and Florida move forward with legislation to legalise online poker, this could prove the catalyst for other states to follow suit”.

The second perspective came from the highly experienced Canadian online gambling executive Mitch Garber, who until recently headed up Party Gaming and is now managing the new online gambling division of Harrah's Entertainment.

In an interview with EGR Garber was bullish about the future of the online gambling industry in Northern America, opining that the egaming scene would be dominated by “a few strong, global operators” where Americans would be free to gamble online legally.

“The future of online gaming is going to be not dissimilar from the current situation with land-based gambling," Garber predicted. "There will be a few, very strong global operators that dominate, and obviously it is Harrah’s strategy to be one of those leading global operators, and to leverage our brands and the expertise of the people that I’m bringing on board to see that that happens.

“Caesar’s, Harrah’s and the World Series of Poker are all strong brands and part of our strategy is to leverage those. Caesar’s, Harrah’s and the WSOP are the most powerful brands globally, and even if you don’t see them in Europe they are still strong and we will use them online.”

Garber emphasised that Harrah’s is not yet a global business. “The idea is that ultimately Harrah’s will be a global business,” the executive explained. “Today it is not yet a really global business because online gaming is an activity not yet legal in the US, which is the biggest internet market in the world, but the UK and the rest of the EU and the positions they have taken are creating a positive market for opportunity, and we are exploring those opportunities.”

Commenting on US regulation, Garber said: “I’m very confident that legislators will see that this is an industry that can be properly regulated, and that the technology exists to alleviate concerns about money laundering or age verification.

"It boils down to the activity being properly regulated and properly taxed. Gaming is an important revenue source in the USA and interactive gaming could be an important extension of that.”


P.P.A. PETITION GATHERS MOMENTUM

Almost 200 000 signatures in the first week

Just a week after launch at the World Series of Poker, a petition organised by the Poker Players Alliance to legalise online poker in the United States has almost reached a total of 200 000 signatures - 6 000 over the weekend alone.

The petition is part of the PPA's National Poker Week awareness initiative, and several major online poker networks such as PokerStars and Cake Poker are supporting the project, offering free roll tourneys and making facilities available to players to indicate their support for the legalisation of online poker. The Poker Players Alliance boasts a membership in excess of a million poker players, and the petition can be expected to grow substantially in the days and weeks ahead.

The petition requests state and national politicians to:

1) Exempt poker from the Unlawful Internet Gambling Enforcement Act (UIGEA)

2) License and regulate internet poker in the US.

3) Respect the rights of law-abiding Americans who love to play this great game of skill.

The document reminds politicians that the public response to President Obama's pre-election Citizens’ Briefing Book (see previous InfoPowa report), which was hosted by Change.gov, overwhelmingly prioritised the need for legalised online poker.

My midday Monday this week 194 795 poker players and other concerned citizens had virtually signed the petition. A person’s first name, last name, e-mail address, mailing address, city, state, and zip code are required to add weight to the petition.

Former World Champion poker player Greg Raymer urged players to support the petition in an email to PokerStars members he authored last week. In it, he addressed the US president, saying: “President Obama – Poker is Not a Crime. I am a voter and a fellow poker player asking for your support of my right to play games of skill like poker on the Internet.”

As previously reported, the PPA's National Poker Week runs from July 19th to 25th and is to include discussions with Washington DC politicians by the PPA's 30 state directors, along with high profile figures in the player community.

Full details are available on the PPA website.

[lots0]

...Mitch Garber, who until recently headed up Party Gaming and is now managing the new online gambling division of Harrah's Entertainment.

In an interview with EGR Garber was bullish about the future of the online gambling industry in Northern America, opining that the egaming scene would be dominated by “a few strong, global operators” where Americans would be free to gamble online legally.

Ahhh the future for American online gambling... A few big operators and everybody else cut out... The American Way.

[RobWin]

I don't know about you guys but when I see the words "highly respected business analysts" and "investment bankers" in the same sentence...it really makes me cringe!

[jetset]

MORE SUPPORT FOR BARNEY'S BILL (Update)

Five more Congressman sign up to HR 2267

HR2267, the Internet Gambling Regulation Consumer Protection & Enforcement Act launched in May this year by Massachusetts Democrat Barney Franks, may have been delayed until September by the work overload in Congress (see previous InfoPowa report), but that hasn't stopped another five Congressmen signing up as co-sponsors this week, bringing the total number so far to 40.

The latest politicians to give their bipartisan support to the bill, which seeks to regulate and license online gambling in the United States, are Rep. Neil Abercrombie of Hawaii, Rep. Earl Blumenauer of Oregon, Rep. Bill Foster of Illinois, Rep. Tim Ryan of Ohio and Rep. Jerrold Nadler of New York.

[jetset]

TWO MORE SPONSORS SIGN UP TO LEGALISE U.S. ONLINE GAMBLING (Update)

New England Congressmen join the fight

Congressman Barney Frank's bill HR 2267 aiming to regulate and license online gambling in the United States has acquired two more sponsors, bringing to 42 the number of politicians now on board.

The latest supporters to sign up for the bill are Representative Paul Hodes from New Hampshire and Representative Edolphus Towns from New York.

The bill is currently on hold in the House Financial Services Committee until September this year due to pressure of more urgent work connected with the global economic crisis, but as recently as last weekend Congressman Frank, addressing players at the World Series of Poker, urged all interested parties to maintain pressure on their representatives by writing to them in support of the bill.

[spiderlegz]

To those that think gambling may be good for the economy:
http://www.texaspolicy.com/pdf/2005-...mary-11-04.pdf

Collect x in tax when the costs are higher isnt actually a good deal.

And most people are indifferent if they can gamble online or not. Ask people if they are ready to pay higher taxes or get less services because that a minority would be able to gamble online and the answer is obvious.

If they would regulate online gambling it hopefully only covers internet poker. At least you play against other players and not the house.

So regulate online poker yes, online casino gambling no.

And blackmarkets would still exist.