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Emily D. Swoboda
 

Mixed Signals Accompany New U.S. Bill

7 August 2008

A new bill in Congress meant to narrow the scope of the Unlawful Internet Gambling Enforcement Act raises more questions than answers, but one lawyer says if interpreted correctly, the bill could mean good news for most of the industry.

For all intents and purposes, HR 6663, introduced on July 30 by Representative Pete Sessions, the Texas Republican, looks to be the answer to the what-defines-illegal-Internet-gambling debate.

According to the language of the legislation, it appears the bill, called the Unlawful Internet Gambling Enforcement Clarification and Implementation Act, would grant amnesty to online gambling companies who stopped offering bets -- other than sports bets, that is -- to United States customers after Oct. 13, 2006.

So far, Mr. Sessions has declined to comment on the bill and IGamingNews has yet to reach its four cosponsors -- all Democrats: Marion Berry of Arkansas, William Delahunt of Massachusetts, Gene Greene of Texas and Jesse L. Jackson Jr. of Illinois.

However, HR 6633 is not without its share of friends and foes, all of whom, it seems, are willing to be heard.

Joseph M. Kelly, a professor of business law at Buffalo State University in New York, told IGN he feels that Internet sports betting was made illegal by the Wire Wager Act and that Mr. Sessions' bill -- and the Unlawful Internet Gambling Enforcement Act, for that matter -- reiterates that statute.

"There's plenty of case law that says the Wire Act only applies to illegal sports betting," Mr. Kelly said. "And when judges go through the Congressional history of the Wire Act, most of the decisions say that the Wire Act is only applicable to sports betting. Other decisions conclude the opposite."

By all accounts, Mr. Kelly feels that the bill is a very positive piece of legislation for the industry.

"Suppose that I was somebody engaging in operating gambling other than sports betting," Mr. Kelly proposed, "I would look at two parts of this bill and I would smile."

According to Section 2, paragraph a, subsection 7, under Congressional Findings and Purpose, Mr. Sessions finds that in order to properly implement the Unlawful Internet Gambling Enforcement Act, the attorney general should focus any prosecutorial efforts on individuals who offer Internet sports betting or engage in payment processing for Internet sports betting.

In addition, Section 4, Rule of Construction, the bill states: "No provision of this Act, or any amendment made by this Act, shall be construed as clarifying or implying that Internet bets or wagers, other than sports bets or wagers, which were accepted subsequent to October 13, 2006, are in violation of Federal law."

"This particular language would be useful to offshore gambling operators if it ever passed," Mr. Kelly said.

Despite the fact that the bill literally instructs the attorney general not to prosecute operators other than those in sports betting, poker lobbyists like the Poker Players Alliance oppose the effort because of its implications for the game of poker.

"(It's) the inference that Internet poker could be construed as an activity that is in need of special protection from prosecution," John Pappas, executive director of the P.P.A., told IGN. "And by shepherding out those who remained in the market after the UIGEA came into existence on Oct. 13, 2006 it does not serve the poker community well and adds to the confusion of the UIGEA and what is lawful and what is not lawful."

The P.P.A. takes issue with Section 2, paragraph a, subsection 2, the only sentence in the bill that addresses online poker and casino gambling.

"To date, all Federal Internet gambling prosecutions have involved sports betting, creating a lack of authoritative court decisions on the applicability of other federal criminal statutes to Internet poker and casino-style gambling," the section states.

Mr. Pappas said the P.P.A. is confused by the bill, but is not likely to expend much energy lobbying against it as they are doubtful of its success.

Not all members of the poker community oppose the Sessions bill.

Jay Lakin, co-owner and vice president of PokerSourceOnline.com, disagrees with the P.P.A.'s point of view.

"While I still feel that the UIGEA hypocritically carved out some forms of online gambling and left other forms of online gambling out of the U.S, I think that because the U.S. government has been opposed to sports betting for close to 50 years now, the acceptance of all online gambling except for sports betting makes the most sense," Mr. Lakin said. "It would also be the easiest to police and regulate: Any online gambling site that wants to do business within the United States can simply remove sports betting from their site and gain access to United States gamblers."

HR 6663 was introduced just before Congress broke for summer recess, which will be followed by the presidential elections in November. The chances of this, or any Internet gambling-related legislation, passing in the 2008 calendar year are slim.

Click here to view a copy of HR 6663.

IGN's Take

Several questions remain that perhaps only the authors of the bill can answer -- then again, it is possible that the authors themselves have not even reached the stage of actually thinking it all the way through.

For instance, if this bill passed would it allow non-sports betting operators to operate in the United States market? And what about companies that offer sports betting in addition to casino games and poker? Would they be able to offer only their non-sports betting products? Mr. Lakin seems to think so.

But is that really what the bill is offering?

Everyone seems a little too confused about exactly what this bill says to be able to interpret it.

It's unfortunate that that the five members of Congress involved with this bill, and their staff for that matter, were not more communicative. Surely, we could have gotten some answers from them.

Mixed Signals Accompany New U.S. Bill is republished from iGamingNews.com.
Emily D. Swoboda
Emily D. Swoboda