Federal Legislation Wants To Formalize Online Gaming in the US

The US politicians are ramping up again and are taking another stab at getting some consistency on a national level for the emerging online gaming industry as it continues to expand. Representative Peter King (R-N.Y.) introduced a bill this year that is set to legalize online gambling at the federal level that would seek to minimize the state level regulators and provide some formalities and make sense for everyone claims King, “With states approaching this issue piecemeal, it can lead to conflicting or inconsistent laws from state-to-state, varying levels of consumer protection, and a perverse incentive for a race-to-the-bottom on standards to attract gaming operators and revenues.” Mr. King isn’t the only one that wants to see something done sooner than later as the federal government continues to move at a snail’s pace to establish some sort of regulatory body or a bill that would define how online gaming will be legal on a national level.

The federal government should have a good reason to figure out something so they can capitalize on the tax revenue. Morgan Stanley estimated that online gaming would be worth $9.5 billion by 2020, so that means lots of tax dollars that will be generated over the years. One of the nice features of the recent King bill would be to grandfather in the existing states regulatory requirements and then create a federal Office of Internet Gambling Oversight inside the Treasury Department to oversee licensing across the country. This would enable the current licensees that are operating legally to benefit from the federal bill and step right from the state level to a nationally accepted jurisdiction.

At this point in time it’s only Nevada, New Jersey and Delaware that have legalized online gaming, but other states such as California, Massachusetts and Illinois are getting closer to submitting bills. The current situation with California is that they have classified the online poker bill that has been amended as an “urgency” measure. This means that if the bill is passed in both the house and the senate, then signed by the governor, it could take effective immediately and online poker would become a reality in one of the most populated states in the union.

Another good point is the bill is “severable” which means that sections of the bill could be removed or adjusted and it would not totally kill it, giving it more chances at seeing the light of day. Once a major issue with a state and federal bill, is that the tribal casinos that cannot seem to come to any sort of consensus on how to license and regulate online gaming. If nothing happens by the September deadline, then that means it would be pushed until 2014.

Even though similar bills have been submitted in the past and they haven’t gone far, this is due to the unwillingness from Capital Hill to even look at something, this one seems to have some legs on it. One of the main reasons is that is seems to address all the interested parties and issues involved. Safe and Secure Internet Gambling Initiative spokesman Michael Waxman claims in a statement: “If in Utah they don’t want any type of gambling to occur, which is currently the case, they want to respect that right, and the same goes for tribes; the tribes should be able to decide what sort of gambling occurs within its borders.”

What the politicians also like about this bill is that it has lots of consumer protection and initiatives to keep everything clean and neat for everyone: “It requires that consumer protections be in place and looks to create a level playing filed, giving state lotteries and tribes and anyone else a chance to become an operator nationwide in states that allow the activity to occur,” Waxman further added. If the feds decide this is getting closer to what they are looking for, then this would be a good chance for them to stop the procrastination and get on with signing it into law.

They obviously know they cannot ignore the online gaming issue any longer, as each state will one by one, just keep legalizing it and moving forward, leaving them to catch up and making it more complicated to address all the differences in each states regulatory requirements. Then they would potentially end up like Europe, where all the countries are operating on their own system and now the operators are filing complaints with the European Gaming Commission, because each country seems to think they can do whatever they want even if a company has a license.

The US Federal government needs to develop a consistent framework for the entire country to follow and then have a regulatory body in place to police it all. Online gaming is not going away in the US, so it’s better for them to get on with a bill that makes everyone want to be a part of and make plans for the future.

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