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Poker News | Gambling and the Law

Annie Duke Highlights Online Gaming Committee Hearing

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The hearing was held on Wednesday, July 21, to discuss Rep. Barney Frank’s Internet Gambling Regulation, Consumer Protection and Enforcement Act, otherwise known as H.R. 2267. And the results of the hearing, which was held in Chairman Frank’s Financial Services Committee, seemed positive, as mark-up for the bill has finally been scheduled for the following week.

It was a long-awaited hearing, as Frank’s bill had been introduced back in the early months of 2009. A year later, a hearing was announced for July of 2010, and that took place on July 21. The committee hearing began with a few introductory words from Frank and opposition leader Rep. Spencer Bacchus.

Testimony began soon after, with Annie Duke as the initial speaker. As a representative of the Poker Players Alliance and a professional poker player, Duke spoke eloquently about the right to privacy in the home, as personal freedom is an essential part of the argument for the bill. She also discussed the protections that could be put into place should the bill become a law, especially as a mother of four children who are getting acquainted with the internet, and made a special point to give statistics regarding the number of poker players competing online and the growth the industry has seen in past years, despite the passage of the UIGEA.

Duke said, in part: “This committee and this Congress should not tolerate laws that seek to prevent responsible adults from playing a game we find stimulating, challenging, and entertaining. H.R. 2267 provides this freedom in a safe and regulated environment and I urge everyone on this committee to support this common sense policy. However you might feel about gambling on the internet, I would suggest that gambling with freedom is far more risky.”

Lynn Malerba, Chairwoman of the Mohegan Tribe of Indians who run a casino operation in Connecticut, spoke with some trepidation about the legislation, but did describe some concerns that existing and allegedly law-breaking companies who currently operate offshore and accept U.S. customers would grab the lion’s share of the business should it become legal, and she expressed some worry about H.R. 2267 interfering with individual and federal tribal compacts. However, her overall sentiment was positive, acknowledging that Frank has been open to discussions with Indian tribes.

Ed Williams spoke on behalf of the Credit Union National Association and reiterated Frank’s earlier concerns that banks have found it difficult to enforce the UIGEA regulations because of their ambiguity and the inability to monitor every customer’s transaction based on stipulations that require intimate policing of money as well as pinpointing which transactions are legal and illegal.

Tom Malkasian represented Commerce Casino in the Los Angeles area as a reluctant opponent of the bill, stating that overseas online poker sites would be allowed to continue business in the United States while others who currently abide by the laws and would like to participate in the online business may be shut out of the industry.

Michael Fagan also provided testimony as an independent law enforcement and anti-terrorism consultant, noting that there are not enough ways to protect society from the harms of online gaming. He agreed with others that overseas operators would be rewarded instead of punished for ignoring the UIGEA and other current laws, while noting that money laundering would be a very real possibility under the new law.

The question and answer period got fairly intense at points, especially when Bacchus challenged Duke with the UltimateBet scandal from years past, though Duke answered succinctly and reiterated that Frank’s bill was the answer to such issues with its monitoring and security provisions that would be industry-wide. She also noted that the perpetrator(s) of the scandal could have been dealt with quickly and justly should legislation like Frank’s have been in operation at the time.

The Poker Players Alliance released a statement about the hearing. After stating that the United States Chamber of Commerce recently announced its support for Frank’s bill, words from PPA Executive Director John Pappas. “The testimony we heard today underscores the challenges face by the federal government due to the unclear definition of what now constitutes unlawful internet gambling and the glaring lack of protections for consumers. Frankly, our opponents can’t offer a consistent argument on this issue… In interest in and awareness of licensing and regulating online poker grows among members of Congress and the Administration - and with it the consumer protection and tax revenue benefits that accompany licensing and regulation - the PPA is ready and eager to work with policymakers to continue moving this legislation through the process.”

The Safe and Secure Internet Gambling Initiative also released a statement, first with some words from spokesperson Michael Waxman: “With the recent passage of financial reform legislation, it’s great to see the Financial Services Committee now with the opportunity to focus its attention on other issues such as internet gambling regulation. Today’s hearing demonstrates that regulating internet gambling remains a top priority for Chairman Frank. We’re optimistic that this hearing will give the committee the final push it needs to schedule a vote on the bill.”

SSIGI also noted that along with the Chamber of Commerce, two other organizations - the National Association of Federal Credit Unions and the Financial Services Roundtable - expressed their support for the bill as well. As R. Bruce Josten of the Chamber of Commerce wrote in his statement of support, “The United States should seek to bring that commerce on-shore and regulate it to provide appropriate protections to consumers. The Chamber believes that H.R. 2267 would create jobs and revenue for federal and state governments.”

But one of the most important points to be made at the committee meeting was a statement by Rep. Campbell, who said that H.R. 2267 will go to the committee for mark-up in the coming week, and it would then be sent to the House of Representatives for vote consideration. The SSIGI confirmed this, saying that the mark-up is a “critical next step for the bill to become law” and that it demonstrates Congress’ intention of moving the bill forward.

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