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Jeanette Kozlowski

Insights | Election Day v. 2

10 September 2008

With each presidential ticket cemented -- Obama-Biden versus McCain-Palin -- IGamingNews wondered what United States I-gaming policy would look like if either administration were to set up shop in Washington, D.C., after the November 2008 election. The following is the second installment of industry-expert responses to that rather taxing question.

Conway Downing Jr.: I don't expect much traction for the I-gaming industry in the U.S. under a McCain administration.

The reinsertion of support for an I-gaming ban in the Republican platform, of course, signals that an expansive ban is still something that is favored by rank-and-file Republicans. However, I think there are two other compelling factors that militate against gaining traction in a MCain administration: 1.) the conservative bent of his running mate, Palin; and 2.) the fact that his fellow Arizona Senator is a staunch I-gaming detractor.

Democratic control of the White House, Senate and House under an Obama administration means that there is a much diminished prospect of blowback from a House-originated effort to liberalize I-gaming, which would not be the case with a McCain White House. And, as most know, Barack was or continues to be a poker player. Although he may not take the lead on this issue, he certainly would not do anything to derail I-gaming liberalization efforts. Moreover, inasmuch as both he and Biden will have come from the Senate, I see Biden as his surrogate in twisting arms in this chamber where even support from the Democrats has been tepid at best.

With Barack in the White House, perhaps the I-gaming industry will cease its misguided legislative approach by trying to establish the status quo ante UIGEA, i.e., nationwide access to the U.S. market. The authorization, regulation and taxation of gambling in the U.S. is the prerogative of the respective states. The industry needs to do two things in my opinion: 1.) focus its efforts on state legislatures; and 2) focus its federal efforts on the Judiciary Subcommittee on Crime, Terrorism and Homeland Security in carving out safe-harbor applications and expanding and clarifying the intrastate exemption under UIGEA.

Mr. Downing is a gaming lobbyist and senior advisor for the Washington Gaming Group.

Clive Hawkswood: The RGA has been involved with politicians in lots of different countries, and one easy lesson to learn from that experience is that while gambling can be a very political issue it is rarely a party political issue. The U.S. is no different and within their ranks both the Republicans and the Democrats have those who support and those who vehemently oppose gambling. This, together with the complicating moral, economic, and legal factors, mean that it’s an issue that any sensible Presidential candidate is going to steer clear of in the run-up to an election.

Against this background it is almost impossible to say with any sense of certainty whether an Obama or McCain administration would be better for the online gambling industry.

There seems to be a general feeling that Obama and the Democrats could be more open to reform because more Democratic Congressmen seem willing to support the introduction of a regulatory system. Beyond that we are left picking over the bones of odd comments made in the past about gambling by each of the Presidential hopefuls, but I suspect that whether they have played the odd game of poker or juggled a few chips in a casino is not really going to tell us too much.

At least now we know who their running mates will be and the political profile of Sara Palin is not encouraging. This could be another indicator that, in practice, the Democrats will offer us greater hope, especially if an Obama presidency was augmented by the Democrats increasing their presence in Congress. Would that lead to early change in 2009? Unfortunately for us it probably won’t. Irrespective of who wins the election, gambling legislation and regulation is not going to be a priority, and if it’s going to be done properly, it will take a while to get right. And getting it right for the long term must be the industry’s objective.

Mr. Hawkswood is chief executive of the United Kingdom's Remote Gambling Association, which represents the interests of some of the industry's most well-known companies.

Simon J. Holliday: Obviously a president sets a theme. Obama is particularly looking for ways to generate funds. I guess a president has more pressing things to look at than online gaming in the first hundred days or one year as well. There is a chance that on the Obama-side things might be speeded up that much more because he perhaps has the most ambitious spending plans, perhaps -- given that I read he plays online poker -- he has that much more affinity with the industry and perhaps being a democrat who doesn’t have as much of the UIGEA baggage as well.

I just still think it’s a time issue, and I don’t think Obama is going to go in there and open the floodgates, or McCain, likewise, is going to go in there and stamp out online gaming. I think the incumbent land-based industry in the U.S. always really saw it panning out this way in terms of a closing down of the existing market and perhaps didn’t see what people call "the black market" continuing to thrive.

We’ve been asked by people to project what would happen if in the next year online gaming was legalized in the U.S., but we firmly believe that it will be on the scope of our current forecasts, which go to 2012, before there’s actual activity on the ground.

Mr. Holliday is a partner with Global Betting and Gaming Consultants, a United Kingdom-based consultancy to the gambling industry, which he co-founded in 1998.

I. Nelson Rose: The federal agencies charged with making regulations to enforce the Unlawful Internet Gambling Enforcement Act know how to count votes. They know that there will soon be a new President and Congress. They don’t want to make regulations only to find that the UIGEA itself has been undone.

Whether that will happen depends on which party wins in November.

If the Republicans win, the regulations will be promulgated just about as they were first proposed. Note that the Republican platform has language condemning Internet gambling.

But if the Democrats win the White House, they will keep control of the House, so Barney Frank will remain chair of his committee and will again try to kill the proposed regulations. More importantly, Harry Reid (D.-NV) will remain Majority Leader and push for what the Nevada casinos want: The UIGEA to be amended to make it clear that Internet gambling is a state’s-rights issue, and that licensed casinos can take bets online from any state that does not object.

Mr. Rose is a professor at Whittier Law School in Costa Mesa, Calif., who specializes in gambling law. He also serves as a consultant and expert witness for governments and industry.

Insights | Election Day v. 2 is republished from
Articles in this Series
Jeanette Kozlowski
Jeanette Kozlowski