MOTLEY FOOL SLAMS UIGEA

8 June 2007

Respected investment publication suggests Frank bill is a good chance for politicians to right a wrong

The widely read US publication The Motley Fool again criticised the Unlawful Internet Gambling Enforcement Act this week, pointing out it's inequities, and suggesting that Congressman Barney Frank's legislative proposal to regulate and license Internet gambling is an opportunity for US politicians to right a wrong law.

"The House Financial Services Committee and Chairman Barney Frank said it will hold hearings on Friday to determine whether Internet gambling can be regulated in a way that balances individual freedom with consumer protection," reports an MF columnist.

"Seems sensible enough to me. I only wish legislators had been thinking this clearly eight months ago, when the president signed the Unlawful Internet Gambling Enforcement Act. The law makes transactions between banks (or credit card companies) and online gambling establishments illegal.

"Well, most gambling establishments. YouBet.com (Nasdaq: UBET), which uses the Web to facilitate wagering on horse races, went unaffected. So did state-run lotteries. Poker rooms like those operated by PartyGaming and 888 Holdings, however, were forced to walk away from millions in revenue.

"So was Neteller, a U.K.-based electronic-payments processor in which I own shares. Neteller derived 83% of its first-half, 2006, non-interest revenue from North America, and its shares are down 50% since the bill became law.

"Surely risk is a part of investing. And I understand that the you-scratch-my-back-and-I'll-scratch-yours nature of lawmaking in this country can be like a protection racket. Here, it seems to have aided big operators like Wynn Resorts (Nasdaq: WYNN), Las Vegas Sands (NYSE: LVS), and MGM Mirage (NYSE: MGM), while completely disregarding the (mostly) law-abiding online poker players.

"Bad move. Read this commentary by our Foolish gaming expert, Jeff Hwang, for all the reasons why. He makes the argument far more eloquently than I can. All I'll add is this: Rarely is anyone, let alone our elected representatives, given a clear-cut chance to right a wrong. But that's what you now have, Chairman Frank. Please take it."

Read the full articles here:

http://www.fool.com/investing/general/2007/06/05/quick-take-bring-back-digital-poker.aspx

http://www.fool.com/investing/small-cap/2006/10/03/did-congress-kill-online-poker.aspx

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