House subcommittee hearing asks who should operate regulated Internet poker sites

A House subcommittee hearing on the possibility of licensing and regulating Internet poker rehashed a familiar debate on Friday, with many lawmakers expressing reserved support for the idea while others were concerned about the impact it would have on problem gamblers and minors.

Members of the Subcommittee on Commerce, Manufacturing and Trade heard testimony from members of Congress who supported and opposed regulation, gaming industry leaders and an expert on problem gambling. The hearing came less than a month after the same subcommittee held an initial hearing on the same topic, where many of the same issues and concerns had been addressed. The hearing ended with no word on whether legislation to license and regulate the industry would be marked up at a later date.

Rep. Joe Barton (R-Texas), the sponsor of a bill that would regulate the industry, repeatedly pointed out that his bill would only regulate the Internet poker industry and not full-scale online casinos.

"Poker is a game of skill," said Barton. "I point to myself as an example; I've lost plenty of money to more skillful players."

Rep. Frank Wolf (R-Va.) testified that regulating the industry would lead to a huge increase in problem gambling.

"The important distinction between destination gambling and convenience gambling is entertainment," said Wolf. "Online gambling is the ultimate in convenience gambling. Internet gambling is the crack cocaine of gambling. People can gamble in their bathrobes."

When Barton pressed Wolf, asking whether he believed that poker was a game of skill, Wolf dodged the question, citing a study that said gambling among college-aged males dipped after the passage of the UIGEA. Barton again questioned Wolf, asking if he believed that poker was not a legitimate pastime.

"I'm not here to tell you that poker's wrong," said Wolf. "What I'm saying is that if you put this on the Internet, college kids will be broke in an instant."

Wolf's assertion, however, makes it seem as if poker is not already available on the Internet. As numerous panelists pointed out, millions of Americans are currently playing poker online on sites that the U.S. has no jurisdiction over, as they are licensed and regulated by offshore entities.

"Prohibition rarely works," said Rep. Barney Frank (D-Mass.), who along with Rep. John Campbell (R-Calif.) is cosponsoring a separate bill that would license and regulate online poker and casino gaming. "Legalization provides an opportunity to provide a safer environment."

Frank went on to say that he would like to see all gambling opportunities regulated and made available to American adults, but is willing to compromise to get whatever he can passed so Americans can be free to spend their money as they wish.

Several lawmakers expressed concern that regulating the industry may have an adverse effect on state lotteries and brick-and-mortar casinos, as people may choose to spend their gambling dollars on Internet poker.

"If a state is concerned about cannibalization, then they can opt out," said Frank Fahrenkopf, CEO of the American Gaming Association.

Fahrenkopf noted that the AGA has not taken a position on any legislation that is currently being considered, but said that his organization wants legislation that will creates a fair market for commercial casinos, Native American casinos and lotteries, does not legalize anything that is currently illegal and respects states rights.

Rep. Mary Bono Mack (R-Calif.), the subcommittee's chairman, asked Fahrenkopf if he believed that states should be able to opt out and license and regulate intrastate Internet poker, and Fahrenkopf said that states should have that option.

Rep. Charlie Bass (R-N.H.) asked if state lotteries should be allowed to offer Internet poker.

"If a state wants to have their lottery offer online poker, I have no objection to that," said Fahrenkopf. "The key to online poker is liquidity. I'm not sure smaller states will be able to provide the player pool necessary to make it worthwhile."