In Afterglow of Obama Inauguration, Caution Is the Word, Lobbyists Say

Two United States I-gaming lobbyists say the jury remains out on how and whether the new Obama administration will engage with the historically thorny issue of Internet gambling.

It is with guarded optimism that the industry looks toward the next four years in the United States. But the last decade has seen efforts to regulate Internet gambling largely stymied by the powerful professional sports lobbies in tandem with perhaps the best-known and most respected I-gaming opponent in America, Senator Jon Kyl of Arizona.

At the recent Senate confirmation hearing for Eric H. Holder Jr., President Barack Obama's pick for attorney general, Mr. Kyl asked Mr. Holder directly whether the Department of Justice will continue to "aggressively enforce" the law against all forms of Internet gambling considered illegal.

"That's correct, Senator," Mr. Holder said, according to a transcript of the hearing published by The New York Times this week.

When asked whether Mr. Holder's reply was more a matter of ceremonial acquiescence -- less a resolute indication of mission -- one lobbyist in Washington, D.C., who wished not to be named, quipped to IGamingNews Wednesday: "What's he going to say? No?"

"There is some perception that the Obama administration will be less harsh than the Bush administration toward Internet gambling," the lobbyist said. "With that said, we don't know what the posture of the Obama administration is going to be."

Joseph Brennan Jr., chairman of the Interactive Media & Entertainment Gaming Association in Washington, meanwhile, cautioned against expecting any direct moves on behalf of the Obama administration.

"Don't expect the Obama administration to take the lead in any kind of legalization-slash-taxation move for Internet gaming," he told IGamingNews Wednesday. "That is going to have to come from Congress, but obviously, there are a lot of people being very aggressive right now about moving things into Congress, even though Congress has a pretty full plate with the economy and other things."

Mr. Brennan reminded that in 2009, some of the United States' largest casino companies -- like Harrah's Entertainment Inc. and MGM Mirage -- will be jumping into the ring independent of the American Gaming Association.

In an interview with IGamingNews earlier this month, Frank J. Fahrenkopf Jr., the association's chief executive, revealed association members were not able to reach a clear consensus during a December meeting on how to treat Internet gambling. For its part, Harrah's, the association's largest member by revenue, was rumored to have been involved in pushing for Senator Robert Menendez's Skill Games License and Control Act last fall and is expected to be one of the more aggressive forces for regulation this year.

Both the Washington lobbyist and Mr. Brennan agreed that the will exists for both a poker-only bill and a bill that would incorporate poker and traditional casino games like blackjack and roulette, but that the way forward among the respective lobbies has still to be hashed out.

"No one believes traditional casino games will go ahead of poker," the lobbyist said.

With data consultancies like H2 Gambling Capital more bullish now on America than at any time since the Unlawful Internet Gambling Enforcement Act passed through Congress in September 2006, Mr. Brennan, likewise, said the chances are better now for some form of regulation than at any time in the last decade.

The Washington lobbyist said that in the next four years, the odds are 50-50 -- or better -- that the industry will see some form of licensed Internet gambling.