Online Gaming Debate Polarizes Lawmakers

In the United States, big issues sometimes polarize the people and their lawmakers. Slavery was perhaps the biggest debate with no center and caused a civil war. One of the most recent issues where there is no middle ground is abortion. But to see what transpired in the most recent House hearings on Internet gambling

In the United States, big issues sometimes polarize the people and their lawmakers. Slavery was perhaps the biggest debate with no center and caused a civil war. One of the most recent issues where there is no middle ground is abortion. But to see what transpired in the most recent House hearings on Internet gambling and several previous hearings, one would think that lawmakers are deciding another life and death issue. Apparently, when it comes to gambling on the Internet, there is no midpoint, some lawmakers are all in favor and other continue to think this form of gambling is like smoking crack.

Wednesday’s hearing on Barney Frank’s bill, H.R. 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act, started a little late and Chairman Frank rushed through opening statements to get to witnesses. However, there was enough time for Alabama Representative Spencer Bachus (R) to ask “why we would open gambling up to every Blackberry . . . and Ipad.” He added, “How does raking in cash from Internet gambling addicts differ from taking a cut from the heroin sold to drug addicts?”

Now that is some polarizing rhetoric.

Testimony included arguments from both sides of the table. microgaming casinos . Poker pro Annie Duke, propped up by the Poker Players Alliance, was excellent this time (she had testified in 2008). She must have read my previous BLOG entry because this time around she stressed consumer protection. Players “want to play on sites licensed in the United States, which will provide even greater consumer protections for the player,“ Duke testified. She added “The UIGEA does not keep a single child off an internet gaming site, nor does it provide any protections for problem gamblers or mechanisms to prevent fraud and abuse – it only regulates the banks, not those who operate the games. It is quite candidly a law that appears to be more about burying government’s head in the sand than it is about government providing its citizenry with sensible public policy. H.R. 2267 corrects this untenable posture and puts us in the greatest position to protect consumers and vulnerable populations.” Well said and about time!

Mr. Ed Williams spoke on behalf of the Credit Union National Association and was very eye-opening on what the banks are being forced to do to comply with the UIGEA. “We have handful of transactions that come through and we block all of them because we don’t know which are legal or illegal. He was simply stating that in order to comply that most financial institutions will choose to block all transactions that even appear to be Internet gambling related.

The Honorable Lynn Malerba, Tribal Chairwoman, Mohegan Tribe of Connecticut spoke in favor of H.R. 2267. She mentioned that the Mohegan Tribe had joined forces with other Indian tribes around the country to work with Barney Frank so that “all tribes” can get the benefits of Internet gambling. Unfortunately, she was also the target of Calfornia Rep. Joe Bacca (D). He lambasted her implying that currently the Tribal Nations in the U.S. pay no taxes on the money their casinos generate. She said that is not true and added that the Mohegan Sun pays 25% or its revenue to the state and if possible, she she would prefer the 2% tax in H.R.2267. Bacca claimed that eventually Indian tribes would lose their sovereignty! However, Malerba retorted that she is not fearful of either losing jobs or losing their sovereignty.

Michael K. Fagan, Law Enforcement/Anti-Terrorism Consultant, who was a former prosecutor in St. Louis, railed the entire concept of Internet gambling. He believes that Internet operators will engage in predatory behavior. He wanted to know how the online operator could tell if the player was high or drunk. He took a few softballs from Rep. Bachus and attempted to hit them out of the park citing child behavior that those playing MMOG games would now lose real money instead of virtual points, that identities would be stolen and that most likely it would be the end of civilization as we know it.

One of the big argument that opponents of Internet gambling use time and again in these hearings (Wednesday’s was no different) is that the current prohibition protects our children. I think that Rep. Frank said it best when he said that ‘ the poor children here are being used by people who don’t like gambling.”

Perhaps the best part of the hearing was when Rep. Bachus pulled out a giant picture, so big he had trouble holding it up, showing the headquarters for the Safe and Secure Internet Gambling Initiative. It was a picture of a UPS store in Washington, D.C. Rep Frank hit the gavel, making him put it away quickly. Hilarious.

But there is nothing funny about this debate. The sides are so diametrically opposed that there appears to be no middle ground; no compromise in sight. The bill is scheduled for markup (changes) on July 27. Unfortunately, it does not appear that Rep. Frank and others will ever be able to include enough alterations to H.R. 2267 to ever get the other side to see the light.

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