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

Auditor

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Is the American Mass Media hurting our helping the online gambling industry? Plus, what is the status of the Barney Frank Bill and its attempt to overturn the UIGEA?

 
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4 of a kind

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The numbers (billions & billions) might be catching the eye's of the real money people. If they decide they want to chop it up, online gaming for U.S. could be on the doorstep... and nothing else would matter.
 

jetset

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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.
 

winbig

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A spokeswoman for the Financial Services Committee, which Frank chairs, confirmed the hearing for Franks Internet Gambling Regulation Consumer Protection & Enforcement Act would likely not take place until after the summer due to the urgent need for the committee to deal with legislation aimed at bolstering the US economy against the global slowdown.




WTF????????


Regulating, licensing, and taxing online casinos WON'T BOOST THE ECONOMY?

These people are )*&#$@(@*&$(@*# IDIOTS.
 

jetset

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Ironically, this week saw the 35th sponsor to Barney's bill sign up - Alaska Republican Representative Don Young.
 

Tengil

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WTF????????


Regulating, licensing, and taxing online casinos WON'T BOOST THE ECONOMY?

These people are )*&#$@(@*&$(@*# IDIOTS.


Actually it wont, the opposite actually. Huge negative externalities, failing cost-benefit etc.

Google "casino economics" without quotes, and thats for B&M casinos.

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.
 

winbig

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Actually it wont, the opposite actually. Huge negative externalities, failing cost-benefit etc.

Google "casino economics" without quotes, and thats for B&M casinos.

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.

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.
 

jetset

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I'm with Winbig's more positive view on this - if Barney Frank is successful it could have very beneficial results for player safety and a better choice, licensing and tax revenues (and we've already seen professionally and independently assessed tax projections over the next decade from PWC and other leading business analysts), better youth and problem gambling control and good business for industry-related service sectors.

Harrah's are already champing at the bit to get in on it, and if HR2267 is passed it would be hard for other major terrestrial gaming companies to stay out of a legal business, especially if the competition is already climbing in.

The US has always been the dominant market, and is likely to grow even further if the shackles are removed, imo.

There are a number of potentially watershed events shaping up within the next few months, including several legal issues both in the States and in the WTO, and political manoeuvreing in cash-strapped states that could all bring about significant changes.

It won't be a smooth ride - there are still plenty of adversaries out there - but it's going to be a very interesting year.
 

lots0

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Harrah's is not the only company that is impatiently waiting for Regulation in the US market.

Most of the already regulated companies in the UK are eying the US legal situation very closely. Some of the smarter companies are already beefing up their online presence for the US market.

IMO, the US the unregulated casinos will start to fade away after Regulation. There will always be a few of the Rogues around... along a few people that think they can beat them... Some people never learn.
 

RobWin

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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

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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

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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

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Another good video my friend.

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

That's not a bad thing... :thumbsup:


Winbig said:
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

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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 PartyGamings 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 Harrahs strategy to be one of those leading global operators, and to leverage our brands and the expertise of the people that Im bringing on board to see that that happens.

Caesars, Harrahs and the World Series of Poker are all strong brands and part of our strategy is to leverage those. Caesars, Harrahs and the WSOP are the most powerful brands globally, and even if you dont see them in Europe they are still strong and we will use them online.

Garber emphasised that Harrahs is not yet a global business. The idea is that ultimately Harrahs 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: Im 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 persons 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

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...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

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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! :eek2:
 

jetset

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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

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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.
 

Tengil

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To those that think gambling may be good for the economy:
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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.
 

jetset

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I can't agree with your premise here.

It's costing a ton of money - for very little return - to impose the UIGEA (not to mention the balls-ups, financial institutional bottlenecks and inconvenience it is causing) in the present prohibition style regime.

And it is not as effective as the authorities would hope as we see on a daily basis right here.

On the other hand, a regulatory approach can generate substantial tax revenues (as has been independently assessed by professional business bodies), in addition releasing marketing funds into the economy from major licensed operators and improving the security of American players, who would be offered well known, professional and trusted brands strictly regulated and competing with whichever offshore companies still want to risk operating in such a market.

Those are persuasive benefits imo.

I think we may see individual state decisions on the legalisation of online poker happen sooner rather than later, anyway.

But an overall liberation that gives US players the freedom of choice all round in a legitimate environment is prefereable
 

Tengil

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Dont know what the costs of the UIGEA are, if anyone can provide any info I would be thankful. But it has decreased online gambling, by how much I dont know, so I still think it has been cost effective.

And whatever tax revenue regulation could generate is actually irrelevant as the costs to the economy would be higher.

And blackmarkets would still exist. Unregulated sites would be able to offfer better promotions and higher returns.

And US players still can go to B&M casinos. It wouldnt be fair for the majority (non gamblers and non onlinegamblers) to pay for the minoritys hobby.

Some more interesting links:

Do casinos cause economic growth?
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Business profitability vs social profitability
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These studies are about B&M casinos, for online most of the positive externalities doesnt exist so they have an even worse cost-benefit ratio.

I have more links but they they require at least intermediate skills in microeconomics.
 

winbig

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And US players still can go to B&M casinos. It wouldnt be fair for the majority (non gamblers and non onlinegamblers) to pay for the minoritys hobby.

:confused: :what:

How are the taxpayers (gamblers or not) paying for this? It's not like it's costing them anything.

You're not even in America, at least you have the choice to gamble where and when you want.

The banks have already said time and time again that they simply CANNOT implement what the DoJ is asking of them in trying to enforce the UIGEA. They're in bad enough shape already, and have more important things to worry about, plain and simple.
 

jetset

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Ask the American Banker's Association and the North Dakota and New Hampshire state lotteries what they think of the UIGEA and the mounting costs of trying to sort out mis-classified blocks and other upfucks (which just about everyone warned the Bush administration was going to happen with this imprecise piece of legislation.)

And I believe a conservative estimate of the associated costs presented to one of the hearings on the UIGEA ran into the tens of millions - I'll have to look that one up when I have a moment.

Certainly the tax revenues will be tempting, even at the relatively low levels suggested by Rep. McDermott in his companion tax proposal bill.

I am firmly of the view that in a legalised market that will contain a number of very large American companies anxious to grab a slice of the US multi-billion online gambling action, the independently predicted revenues will be realised.

Just last week Ryan of Party Gaming warned the exec summit in Madrid that it would not just be established gambling companies that would present formidable competition in the US sector, but large media companies with an eye on a tempting new revenue source too.

And the market will grow because present impediments (at least for US licensed companies) will fall away, and there will be more marketing activity.

That is going to create a very competitive market which the offshore tiddlers may find difficult to match in terms of promos, and certainly in terms of professional management and customer care.
 

lots0

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you can find articles that will support just about any point of view on the web.

But where do they get their information from?
I do not see any documentation or any sources for what they claim to be 'facts'.
 
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