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Online bet battle will continue

14 July 2008

By Tony Batt

WASHINGTON, DC -- Despite a stunning setback in his effort to roll back a ban on Internet gambling, Rep. Barney Frank, D-Mass., says the issue is not going away.

"At this point, I'm waiting to see what the Republicans, who voted against this, plan to do after getting the heat for killing it," Frank said this week.

Opponents of the ban were oozing confidence on June 25 as the House Financial Services Committee prepared to vote on an amendment to stop federal agencies from drafting regulations to enforce the online gambling ban that Congress passed two years ago.

The question was not whether the amendment by Rep. Peter King, R-N.Y., would pass, but how large the margin would be. If it proved large enough, the King amendment could have come up for a vote on the House floor before Congress adjourned this year.

But the amendment died when the committee split along party lines and delivered a 32-32 tie.

Then by voice vote, the committee defeated a bill by Frank to legalize Internet gambling and require the Department of Treasury to regulate online wagering.

Frank said the surprising turnaround occurred because Internet gambling supporters underestimated pressure coming from "the right wing of the Republican Party."

"There is a great deal of discomfort between those on the business end of the Republican Party and those on the social conservative end of the party about this bill," Frank said. "A lot of Republicans wanted to vote for this, but they were pressured by their leadership to vote against it."

A lobbyist, who requested anonymity, said the committee's ranking Republican, Rep. Spencer Bachus of Alabama, took the vote "extremely personally."

Bachus exerted enormous pressure on other Republicans, including those who already had indicated support for the King amendment, to vote against it, the lobbyist said.

Marisol Garibay, a committee spokeswoman for Bachus, denied he twisted arms to pick up votes.

"Absolutely not. He has never done anything like that," Garibay said.

Nevertheless, Frank remains confident that time is on his side.

"The problem the other side has is that nothing is going to be done on the regulations because it's impossible to get them done," Frank said.

In April, regulators from the Federal Reserve and the Department of Treasury told the committee they are struggling to draft the regulations because the 2006 law mandating the ban does not define "unlawful Internet gambling."

"Something must have gotten lost in translation between the hearings and the vote," said Michael Waxman, a spokesman for the Safe and Secure Internet Gambling Initiative.

Even if the King amendment and his bill had passed the House this year, Frank acknowledged they would not have made it through the Senate.

As daunting as the challenge is to gain House approval to repeal an Internet gambling ban, the task in the Senate promises to be much more difficult.

Sen. Jon Kyl, R-Ariz. who authored the first bill to ban Internet gambling in 1996, is already pressuring the Treasury Department to finish regulations to enforce the ban.

And Senate Majority Leader Harry Reid, D-Nev, a former chairman of the Nevada Gaming Commission, has said he does not believe Internet gambling can be effectively regulated.

When asked if he would revive efforts against the ban in 2009, Frank said, "Of course."

But Frank added it's "way too speculative" to assume his bill will pass next year even though Democrats are expected to gain seats in the House and on his committee after the November elections.

Former Sen. Alfonse D'Amato, R-N.Y., chairman of the Poker Players Alliance, took a glass-half-full perspective on the 32-32 vote that stopped the King amendment.

"That's the best vote we've had so far on this issue, and I think it's a harbinger of good things to come," D'Amato said.

D'Amato described the ban as "ridiculous legislation" and he said Bachus "is full of zeal."

"Unfortunately, some members felt pressured by him, but I do think that the responsibility ultimately rests with individual members for their votes," D'Amato said.

The American Gaming Association, which represents Nevada casinos, remains neutral on Internet gaming because of a split among its members.

The association continues to push a bill by Rep. Shelley Berkley, D-Nev., calling for a one-year study of Internet gambling by the National Research Council of the National Academy of Sciences.

Berkley's bill has 73 co-sponsors.

Holly Thomsen, an association spokeswoman, said a study "can help determine what future legislative or regulatory action is appropriate."

Online bet battle will continue is republished from Online.CasinoCity.com.