Online Gambling Faces Another Challenge

The federal government’s recent seizure of millions of dollars from bank accounts used to process online poker transactions is sending shock waves through the Internet gambling community.

But insiders, including gaming giants poised to capitalize on the potential legalization of Internet wagering, disagree on how the action this month by the Justice Department will affect a controversial activity with millions of American participants.

The seizures, which follow other federal efforts to crack down on Internet gambling sites accepting bets from Americans, are among the most aggressive government actions to date involving poker sites.

Critics of the seizure say it won’t stop people from playing poker on the Internet and will fuel state and federal legalization efforts.

“I have not heard one person saying, ‘I am through with online poker,' ” said one industry official in Las Vegas, who declined to be named. “It’s just making people more militant and bitter against the government.”

But others think it will make players think twice about gambling online.

For the complete story, please see Liz Benston, Will Web poker bust spark fight or flight?, Las Vegas Sun, June 15, 2009.

Fight Continues to End Online Gambling Ban

After coming up short in a first effort, a Democratic lawmaker has again introduced legislation that would roll back a ban on Internet gambling enacted when Republicans led Congress.

The legislation, introduced this month by Representative Barney Frank of Massachusetts, would allow the Treasury Department to license and regulate online gambling companies that serve American customers. Under the current law, approved by Congress in September 2006, financial institutions are banned from handling transactions made to and from Internet gambling sites.

At a news conference announcing the legislation, Mr. Frank, who is chairman of the House Financial Services Committee, pointed out that the federal government could collect increased tax revenues if Internet gambling was regulated. But he said online gambling should be legal as a matter of personal liberty, calling it an activity the government should neither encourage nor prohibit.

“Most actions the government should stay out of,” Mr. Frank said.

Mr. Frank’s bill has roughly two dozen co-sponsors, most of them Democrats. He did not seek the backing of the Obama administration or the leadership in either the House or the Senate.

The legislation does have the backing of those who enjoy poker. The Poker Players Alliance, one of the groups lobbying for the bill’s passage, says it has more than a million members and, in former Senator Alfonse M. D’Amato, Republican of New York, a well-known chairman to press its case on Capitol Hill.

For the complete story, please see Bernie Becker, Aided by Poker Devotees, Lawmaker Pushes to End the Ban on Online Gambling, The New York Times, May 25, 2009.

Odds Increase for Online Bingo and Other Internet Gambling in US

Is online gambling coming in from the cold?

When the U.S. Congress cracked down on Internet betting in 2006, the big, publicly traded European companies that had dominated the business closed up shop in the United States. Growth in the booming industry shifted away from these companies, once the darlings of the stock market, to private operators in offshore locations like Antigua and the Isle of Man.

But now, executives of some of the European companies whisper excitedly that they may soon get a second chance in the United States. Meanwhile, a number of European countries that have long maintained barriers are moving, under pressure from regulators, to legalize, and tax, online gambling.

“There’s still a lot of gambling going on, where there’s no revenue coming in to the governments,” said Gavin Kelleher, an analyst at the research firm H2 Gambling Capital in Ireland. “They realize they could use the revenue.”

The biggest potential change would be in the United States, where, perhaps within days, Representative Barney Frank, Democrat of Massachusetts, is expected to introduce legislation aimed at overturning the Unlawful Internet Gambling Enforcement Act.

For the complete story, please see Eric Pfanner, A New Chance for Online Gambling in the U.S., The New York Times, April 26, 2009.

Legal Online Wagering May Have to Wait

At Wholesale Bingo Supplies, we've always paid close attention to the legal battle over online betting. It's impact on casinos, bingo, and the gaming industry in general is worth keeping an eye on.

From the Las Vegas Review-Journal:

Online gambling proponents may have to wait a little longer for the passage of federal legislation that would legalize betting on the Internet. Congress is tied up with other pressing issues.

Macquarie Securities gaming analyst Joel Simkins told investors not to bet the house on Internet gambling becoming legal anytime soon.

His prognosis comes despite a White House that is seemingly friendlier toward Internet gamblers and the support of Rep. Barney Frank, D-Mass., who plans to reintroduce a bill after the Easter holiday that would legalize and regulate Internet gaming.

After checking with Washington, D.C., lobbyist contacts and casino company operators dialed into Capitol Hill, Simkins put steep odds on the issue seeing any light.

"We see little reason for investors to try to play this near-term," Simkins said.

Online gambling has long interested the casino industry, mainly due to the reported revenues the activity has produced. Estimates by Internet gaming advocacy groups peg the amount of money annually wagered online at anywhere from $20 billion to $25 billion.

For the complete story, please see Howard Stutz, INSIDE GAMING: Legal Net betting may have to wait, Las Vegas Review-Journal, April 12, 2009.