Move Afoot to Legalize Online Poker

It is estimated that anywhere from 10 to 15 million Americans play poker for money online in spite of the fact the activity falls under the Unlawful Internet Gambling Enforcement Act, which former President George W. Bush signed into law in October of 2006.

The legislation did not in fact kill the multi-billion dollar Web-based gambling industry. All it did was strictly regulate the process by which funds are transferred from users of the sites to the offshore companies that own and operate them.

It did in fact force publicly traded companies that had conducted business with citizens of the United States to cease operations, which opened the door for illegal offshore operators to circumvent the system and rake in millions of dollars from bettors in this country.

U.S. Senator Harry Reid wants to change all of that with a bill to legalize playing poker on the Internet in an effort to capture a fresh stream of tax revenues. The American Gaming Association (AGA) estimates more than $3-billion in new tax dollars would be generated if playing poker online was legalized.

"Ours is a unique industry in that it wants tough regulatory control and strict law enforcement oversight, which ensures the integrity of our business and protects consumers," said AGA president and CEO Frank Fahrenkopf. "Current online gambling laws do not provide these safeguards, leaving players and the system open to fraud, cheating and other illegal acts."

The proposed legislation ensures that Federal and state authorities will have the ability to control unfettered access to all forms of internet gambling. It will protect states' rights to choose whether or not to even legalize online poker. The states that do wish to legalize it will be provided with the authority, tools, and resources necessary for proper policing of the activity.

It would also require the Treasury Secretary to compile a list of unlicensed Internet gambling sites to ensure the unlawful operators can no longer conduct business.

"Without this legislation, players will remain unprotected, law enforcement oversight will remain murky, illegal offshore operators will continue to reap billions from U.S. bettors, and the U.S. will continue to lose out on significant tax revenues and thousands of jobs that could be generated by this already popular activity," Fahrenkopf said.

The major stumbling block to legalize playing poker online is that it continues to be discussed within the context of the 1961 Wire Act, which prohibits sports betting over telephone lines.

Nearly half a century ago, the Internet wasn't even a glint in technology's eye, and during the last 15 years regulators and legislators have looked the other way while online gambling was allowed to grow into a multi-billion dollar industry.

Whereas persuasive arguments can be made against betting on pure games of chance online, poker requires an element of skill.

There is a lot at stake for the big-name gambling companies, including Caesars Entertainment Corp., formerly known as Harrah's Entertainment. The Las Vegas-based casino giant owns the World Series of Poker, in which many participants have ties to Internet poker sites.