Posts Tagged ‘uigea’

American Banking Association Openly Criticizes U.S. Online Gambling Ban

Friday, April 23rd, 2010

As the day looms closer in which the Unlawful Internet Gambling Enforcement Act (UIGEA), aka, the U.S. online gambling ban, is mandated for enforcement, U.S. financial institutions are expressing – once again – their displeasure with the highly flawed and otherwise unenforceable law.

Why all the groaning from private banks and not the Federal Treasury? You would think it’s because of a loss in revenue, would you not? However, while billions of dollars do indeed stand to be lost (for both private companies and the federal government), the resistance being expressed by the financial industry has more to do with the actual nature of the UIGEA itself.

Placing all of the enforcement responsibility, i.e., blocking online gambling transactions, on the financial industry, the UIGEA is essentially imposing an impossible task, while creating new costs that are only going to spill over onto tax payers. In other words, not only will the UIGEA be impossible to enforce – meaning online gambling will continue in the US – the federal government will lose badly needed tax revenue that would have come from regulation, while imposing more costs on tax payers and financial institutions, that will consequently roll over on U.S. consumers.

Sure, it sounds like a good argument, but where’s the proof? Well, according to none other than Steve Kenneally – the VP of the American Bankers Association – which represents over 90% of the financial institutions doing business in America, the UIGEA is simply the wrong answer.

Keneally opines that not only is it nigh impossible to identify which online gambling transactions are legal or illegal (the UIGEA is full of carve-outs for fantasy sports and horse racing), let alone that a transaction can be detected as an online wager period, there will indeed be a considerable amount of new costs that will inevitably carry over on consumers.

GOP Circulates Memo Tying Jack Abramoff with Online Gambling Interests

Saturday, April 17th, 2010

As time draws near in which either the Unlawful Internet Gambling Enforcement Act (UIGEA) begins to be enforced (as much as is possible, of course) or proposed legislation to overturn the UIGEA and regulate online casinos is passed, the Republican party is gearing up for a fight. As reported by the Washington Post, the latest “card” being played by the GOP is none other than Jack Abramoff.Recently circulated on Capitol Hill is a GOP-backed memo arguing that while Jack Abramoff’s shameful lobbying tactics and ties to Indian casinos certainly warrants the jail sentence he is currently serving, the lobbying firm that employed Abramoff, Greenberg Traurig, has itself, been employed by online gambling interests, including the Interactive Gaming Council (IGC) – a leading trade body formed of the biggest names in the online gambling industry and working to get online gambling legalized in North America.

In effect, the memo seeks to assert that it was Abramoff’s employer, Greenberg Traurig, that was in on the “criminal activities” carried out by Abramoff. But even if that was the case (however unlikely), the IGC never worked with Jack Abramoff in any capacity whatsoever. Furthermore, Abramoff was fired by the firm, apparently for doing things “his way”.

What may seem an ironic strategy, considering Jack Abramoff’s association with the Republican Party, could end up being a solid argument in the GOP’s fight against online gambling, or rather, fight to protect land-based gambling interests. The only flaw to their argument, is the fact that Abramoff was acting on his own and that his activities regarding Indian casinos had nothing at all to do with the work Greenberg Traurig was doing on behalf of online gambling interests. In other words, there is no solid base for argument to claim that Abramoff was connected with all of Greenberg Traurig’s clients.

In many ways, the attempts made by the GOP to squash the legalization of online gambling are paramount the same tactics used to get the UIGEA passed. Added as a last-minute attachment to a must-pass Port Security bill with provisions to block terrorist funding, the UIGEA was passed into law unawares to many of the politicians who voted for the port security bill.

USA Online Gambling Regulatory Update: Frank’s Bills Delayed; Amendments in Mass

Tuesday, April 13th, 2010

Currently, there are several areas in the U.S. online gambling legislative landscape that are experiencing a major upheaval. One, of course, is the overall federal stance toward online gambling as a whole in the States. The other resides on a State level, which at this time, is primarily being soaked up by Kentucky and Massachusetts. In other words, no other two States are making as many headlines in regards to online gambling legislation.

Not that I’m sick of talking about Kentucky (okay, maybe I am), it’s just that what is happening in Massachusetts is more about legislation than the legal battle currently taking place in Kentucky. As reported earlier last week here at OCS, Massachusetts is currently seeking to expand gambling. However, certain provisions slipped into the legislation would call for an outright ban of online gambling – going so far to impose a prison sentence on those who participate in online gambling.

The latest word on the street in Massachusetts is that several alternative proposals have been given to amend the legislation, including several dealing specifically with online poker. These include a provision introduced by House Representative, Robert Nyman, to provide an exception within the online gambling ban to games of skill, including online poker. Other proposals seek to ban all forms of online gambling other than online poker.

So yes, the online poker industry definitely has their fingers in this one, folks. This is no surprise considering how big online poker has become in the US over the last ten years, not to mention the lobbying power of groups like the Poker Players Alliance (PPA). Just how the final bill turns out in Massachusetts is anybody’s guess, although proponents of the original bill are already claiming victory. Their belief is that the bill will easily pass the House, and will, perhaps, see some amendments in the Senate.

As for the federal debate on online gambling, it looks like Barney Frank’s bills to overturn the UIGEA and provide regulatory guidelines is being postponed for a hearing to take place in the House Financial Services Committee. By no means up for a markup (just yet), the two bills will be scheduled for a hearing in due time as the Committee tends to previously scheduled matters.

Washington Post Reports Frank’s Online Gambling Bill is Making Serious Headway

Saturday, February 6th, 2010

Spencer Bachus & Barney Frank

Barney, I'm gonna scratch your bill like I scratch a phat mix on the turntables... (Image: Pablo Martinez Monsivais/AP)

When the Washington Post publishes an article titled, “Internet Gambling Again in Play”, then that pretty much means internet gambling is again in play. In fact, up until now, online gambling in the U.S. has never been so close to being regulated.You’ll notice I didn’t use the word liberated, although regulation is something of a liberation in this case. The fact is that strong opposition toward online gambling in the past, not to mention it being a relatively young industry, has helped paint a picture that online gambling does not even stand the slightest chance at being regulated in good ‘ol USA.

Typically, the only media outlets even reporting on regulatory updates, were oftentimes the same forces behind lobbying U.S. politicians, or rather, educating lawmakers on why regulation makes more sense than prohibition, or more importantly, how it can be effectively enforced, much unlike the inherently flawed UIGEA which passed as an attachment to a Port Security bill in 2005, and is still waiting to be enforced (the UIGEA that is – not the Port Security bill).

In fact, the UIGEA was supposed to be implement already this year, but due to heavy resistance by the American Banking Association and several politicians urging the U.S. Treasury to do the same, implementation and enforcement was postponed for another six months, thereby giving Massachusetts Representative and House Financial Services Committee Chairman, Congressman Barney Frank, more time to get his bill – the Internet Gambling Regulation and Enforcement Act (IGREA) up for a vote.

With major support from former Republican Senator, Alfonse D’Amato (New York), who is head of the massive poker player’s lobby group, Poker Players Alliance (backed by Canada-based Interactive Gaming Council), Frank’s bill is already up for committee markup in a couple of weeks, and is showing promise for the first time since the passing of the UIGEA. Like I said, it’s even got the attention of the Washington Post.

If Frank’s bill does indeed pass, it would, in effect, overturn the UIGEA, establish federal oversight of online betting companies in exchange for five-year operating licenses, implement protection for minors and compulsory addicts, enforce anti-criminal activity measures, while a companion bill introduced by Washington Democrat, Jim McDermott, would impose a 2% tax on deposits, netting an estimated $42 billion in tax revenue over the next decade. Under the bill, online sports betting would remain illegal (which would appease the NFL and Las Vegas casino sportsbooks), while online poker, skill games such as Mahjong, and online casino games would be legal.