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Proposed Bill Could Lead to Legalized Internet Poker in North Dakota

5 February 2005

A group of state legislators in North Dakota has proposed a plan that would allow the state's citizens to vote in 2006 on whether the definition of gambling should be revised to exclude Internet poker, which would be reclassified as a game of skill. If the plan is approved, the state will license Internet poker companies to operate in the state and use the millions of dollars in tax revenue for education, property tax relief and other public funding.

House Bill 1509 was introduced on Jan. 17 by Reps. Jim Kasper (R), Mark Dosch (R), Ronald Iverson (R), Blair Thoreson (R) and Dave Weiler (R) and Sen. Randy Schobinger (R). It would amend section 12.1-28-01 of the North Dakota Century Code by revising the definition of gambling. A subsection that exempts "lawful contests of skill" from a list of prohibited activities would be supplemented with the phrase "including Internet live poker."

According to Kasper, "Poker is much different than gambling. The skill is what you do with what you are given."

The bill would also provide for the authorization of live Internet poker games and empower the attorney general to license and regulate Internet poker operations. To develop and implement a sufficient licensing and regulatory program, the attorney general would be asked to contract a knowledgeable private entity for assistance.

At the moment, the bill's tax structure would impose an 8 percent tax on the first $1 million in adjusted gross proceeds earned by a licensed operator. A 6 percent tax would then be levied on the second $1 million, followed by 4 percent on the third, 2 percent on the next five, 0.5 percent on the next fifty million dollars and 0.25 percent on any amount in excess of $58 million.

A quirky proposal would create "an annual licensing fee of $10 for each player who plays Internet live poker at a site." Paying the fee would permit the player to play at any state-licensed site.

Kasper believes the bill could create up to $500 million in new revenue.

"This could potentially match the whole revenue stream that the state has now," Kasper said. He would like to allocate 60 percent toward property tax relief, 20 percent toward public education and another 20 percent to the state's general fund.

The bill was debated Tuesday before a House committee, where it received a mix of support and opposition. Some committee members are concerned that the state could get wrapped up in a very long and expensive legal battle if the federal government challenges the law.

But Mark Dosch and Lawrence Klemin, co-sponsors of the bill, believe that North Dakota could defeat the federal government.

"I believe that for the people of North Dakota and for the state, we need to be strong and take on this challenge and not be afraid to step outside of the box," Dosch said.

Klemin suggested that the state could use the revenues gained from licensing Internet poker operations to pay for the legal dispute if necessary.

Other committee members, such as Rep. Lois Delmore, are hesitant to approve the bill because they still see poker as gambling.

"It's hard for me to look at this bill and say this isn't really gambling," Delmore said.

Another member, former governor Art Link, who has opposed gambling for much of his career, demonstrated how other forms of gambling have grown since the state began permitting charitable gambling years ago.

"I made the statement then that gambling has an insatiable appetite that can never be satisfied," Link said.

No action was taken during Tuesday's hearing.

Click here to view H.B. 1509.

Proposed Bill Could Lead to Legalized Internet Poker in North Dakota is republished from iGamingNews.com.
Bradley Vallerius

Bradley P. Vallerius, JD manages For the Bettor Good, a comprehensive resource for information related to Internet gaming policy in the U.S. federal and state governments. For the Bettor Good provides official government documents, jurisdiction updates, policy analysis, and many other helpful research materials.

Bradley has been researching and writing about the business and law of internet gaming since 2003. His work has covered all aspects of the industry, including technology, finance, advertising, taxation, poker, betting exchanges, and laws and regulations around the world.

Bradley Vallerius Websites:

www.FortheBettorGood.com
Bradley Vallerius
Bradley P. Vallerius, JD manages For the Bettor Good, a comprehensive resource for information related to Internet gaming policy in the U.S. federal and state governments. For the Bettor Good provides official government documents, jurisdiction updates, policy analysis, and many other helpful research materials.

Bradley has been researching and writing about the business and law of internet gaming since 2003. His work has covered all aspects of the industry, including technology, finance, advertising, taxation, poker, betting exchanges, and laws and regulations around the world.

Bradley Vallerius Websites:

www.FortheBettorGood.com