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MasterCard Spends $84,000 Lobbying for Online Gaming Regulation

10 January 2011 by admin

Online poker players, other patrons of online casinos and a good many state level lawmakers are not the only ones who want to see the United States set up regulations for online gambling. MasterCard is also pushing for the repeal of the Unlawful Internet Gambling Enforcement Act (UIGEA) and for the regulation of online gambling. Or at least for the regulation of online poker, the biggest casino game of the Internet.

To back this up I would like to point out the fact that MasterCard spent $84,000 in the third quarter of 2010 on lobbying the federal government. Granted that $84,000 was spent towards a few issues that, if changed, would benefit MasterCard. And really, what other reason is there for lobbying. But the biggest issue was changing the regulations on the limitations put on credit card companies to function as the payment processor between US citizens and online casinos.

The reason for MasterCard’s fuss is that they are definitely losing millions of dollars, potentially billions of dollars, to online payment processing services outside of the US as such online payment processing services are being used by online casino patrons so that they can gamble online. So it is not just the potential tax dollars that are being lost to due to UIGEA; UIGEA is also depriving US companies of revenue. All because the conservatives wish to save us all from ourselves.

So how big of a deal is $84,000 of MasterCard’s money? That $84,000 is twenty four percent more than what they spent on online gambling lobbying in the third quarter of 2009. So it is a pretty significant increase in money spent on lobbying.

And really I cannot blame MasterCard for being a tad upset about the money they are losing to overseas online payment processing companies. It is not like they have any choice in the matter; UIGEA has their hands tied after all. UIGEA does not outright ban US citizens from gambling online—which is a bit odd considering that is the wish of the conservatives—to save the poor US citizens of small minds from the bright shiny lure of online casino games. The purpose of UIGEA was to tie the hands of US payment processing companies, such as MasterCard and banks and other financial institutions based in the US, from processing transactions between US citizens and online casinos. But there are two problems with this: 1. There are overseas online payment processing companies that will gladly handle transactions for US citizens, and 2. Based on history—check out Prohibition—US citizens will find a way to keep doing something they want to do.

So with citizens finding ways around UIGEA with the overseas payment processing companies, the conservatives obviously did not pay attention in history class and, yes, they are costing this country more money than just the lost tax revenue. It is this hand tying that UIGEA has done that has MasterCard lobbying for a change in online gambling regulations. This means that they could be standing behind Nevada Senator Harry Reid’s bill for legalizing online poker. It also means that they could be standing behind the states that are looking to regulate online gambling within their own states: New Jersey, California and Florida. Granted, it would have to be approved for companies such as MasterCard to process transaction to online casinos for citizens in those states so that they do not aggravate the mighty conservative shield UIGEA.

Reid has made it known that he is going to continue to push for his online poker bill to be approved. And I have no doubt that Representative Barney Frank will continue with his efforts. It is likely that MasterCard’s future lobbying investments will go to such efforts in hopes of getting at least an online poker bill passed in 2011, if not a stronger effort towards UIGEA being over turned.

2 Responses to “MasterCard Spends $84,000 Lobbying for Online Gaming Regulation”

  1. Devon says:

    Great article. It’s actually $840,000 though. I know, it seems hard to believe that much money went to lobbying?! Granted, it wasn’t all for online gambling. Gaming lobbying took place in Q1 & Q2, and the exact amount wasn’t disclosed that I know of.

    Go New Jersey, California and Florida!!!!

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