AGA STATEMENTS ON INTERNET GAMBLING DRAW ATTENTION (Update)

28 November 2008

Las Vegas Sun comments on renewed US interest in regulated online gambling

 

American Gaming Association CEO Frank Fahrenkopf's recent comments on the possible regulation of online gambling (see previous InfoPowa reports) have ignited renewed and widespread US media interest in the idea of major land gambling groups supporting the legalisation of Internet gambling in the tough economic conditions currently presenting so many problems to the industry.

This week the Las Vegas Sun published an insightful article on the subject, commenting that the AGA is now "rushing to clarify its position on Internet betting" due to a potentially friendlier political dispensation taking power in the US soon.

The Las Vegas Sun explains that to present a unified front, members of the association have to work through at least three viewpoints. Some casino companies support federal regulation of Internet gambling. Other members want that authority to rest with individual states, like the regulation of non-tribal casinos. Still others, fearing competition from land-based casinos with online outlets, oppose regulation that would open the door to new rivals.

The group’s largest members, MGM Mirage, Harrah’s Entertainment and International Game Technology have been or are involved in Internet gambling ventures in countries where it’s legal and support legalisation.

The Sun recaps that the AGA is supportive of a bill that would study the implications of regulated US Internet gambling, though some advocates say that might be a waste of time. It reports that the AGA has formed a working group to study bills relevant to regulation that have been introduced this year. It goes on to describe the efforts of Congressman Barney Frank, and those of Assemblyman Lloyd Levine, who introduced a bill to legalise Internet poker in California (see previous InfoPowa reports)

The Las Vegas Sun reports that at last week's Global Gaming Expo, the gaming industry’s largest conference, Internet gambling experts concluded that legalising online poker - as either a fallback position or an ultimate goal - would be more palatable to politicians and the public than legalising other forms of Internet gambling.

Online sports betting appears to be off the table entirely because of a federal framework put in place to prosecute phone betting during the heyday of organised crime, as well as a 1992 law giving Nevada a monopoly on legal sports betting, experts said. The Bush and Clinton administrations have maintained that the Wire Act prohibited all forms of online gambling, in spite of an oft-cited federal appeals court ruling in 2002 that the law primarily applies to sports wagering.

Congress further criminalised Internet gambling in 2006 through the widely-criticised Unlawful Internet Gambling Enforcement Act that prohibits banks from processing online wagers.

The question of whether individual states or federal authorities should have the ultimate regulatory say is also up for discussion.

John Pappas, executive direction of the million-strong Poker Players Alliance, told the Sun that federal regulation makes sense because it establishes a level playing field for operators while allowing individual states that oppose gambling to opt out. A PricewaterhouseCoopers study conducted this year in support of federal regulation estimated that online gambling could generate at least $9 billion in fees and taxes for the federal government over the next decade.

But the prospect of federal oversight worries some casino operators, the Sun article notes. Land casino operators formed the American Gaming Association in 1995 in part to keep would-be meddling federal regulators at bay.