US Congress Sees New Federal Online Poker Bill

Times are changing and the US federal government is finally taking notice since some of the states have been moving ahead with their own regulations in online gaming. Even after the UIGEA became a law, the online gaming industry continued on and people in the US kept on betting. Now a New York Congressman by the name of Peter King is making another attempt at introducing a federal bill that will not only include poker but other forms of online gaming like casino products. A draft of the legislation was officially published in the US Congress on June 6th 2013. The bill will be called: The Internet Gambling, Regulation, Consumer Protection and Enforcement Act of 2013 and just like the states are currently doing this, will create a system of regulation and licensing for companies that want to offer their products and services on a country-wide basis.

This potentially means that this long time in coming bill will be making it’s first attempts at delivering some efforts in maintaining consistency on a national level as opposed to a state-by-state process. It would also ensure and protect consumers as well. The only exception to the legislation will be online sports betting, but other forms of gambling will be allowed such as poker and casino. Not everyone has to play either. This means that Indian Tribes and States will be allowed to “Opt Out”. One of the major departments to manage this legislation to be created will be the “Office of Internet Gambling Oversight” that will be run by the federal government and will be responsible for regulating the industry. States that have already legalized and are currently regulating online gaming like Nevada and New Jersey will be “grandfathered” into the new federal system. This is not entirely new to the federal government as it wasn’t too long ago that Congressmen Barney Frank and John Campbell introduced legislation way back in early 2011 that would allow online gaming. This piece of legislation never saw daylight and Barney Frank has since retired from politics. What makes the King Bill different is the timing. Back in 2011, there were no states already in business legalizing and they Department of Justice hadn’t officially clarified their stand on online gaming and whether it was legal for state lotteries to offer products on their web sites for purchase. Some of the major points that will have an impact on this legislation will essentially two issues: (1) the desirability of creating uniform national standards, and (2) the potential revenue that would be generated by federal taxes on online gaming.

King made it clear in a statement about what his major concerns were and why he is so interesting in spearheading this federal online gaming bill; “A common federal standard will ensure strong protections for consumers, protect against problem and underage gambling, and make it easier for businesses, players, lawmakers and regulators to navigate and freely participate”. The bill’s main intention is to create a level playing field for all the parties that will be affected by this legislation including land based casinos, Indian tribes, state lotteries and horseracing outfits.

The proposed legislation also states that operators who have a licenses will only be allowed to accept wagers from people located in the US or be legal where the transaction is made, to be considered: “Is not lawful in the jurisdiction in which the individual is located.” There are some stiff fines for those companies that don’t play by the rules. For example, if a company does not have a license and is accepting bets from players in the US, they could face a hefty fine of $1m for each day in operation and up to 5 years in jail.

One thing this bill does not include is a “bad actor” clause, so that means all the big operators that were in the market pre UIGEA won’t have to worry about whether their past history will have a negative impact on them getting a license. So, that means the big companies like PokerStars and Party Poker will be able to come back in if they so desire. Much like getting a license in Nevada, the federal license will surely be just as or even more stringent and a license could be revoked at anytime if they feel there is something wrong with the operator or provider.

This bill will still have some major hurdles to climb over, as not everyone will be pleased to see if this comes to life. First of all, there is no indication that a key committee chairman will even be prepared to take it up and consider it for legislation. Then there are all the religious conservatives in the parties that wouldn’t even consider it and have a history of actually opposing it. Not only that, there the complications of a companion tax legislations and this would have to be approved by the House Ways and Means committee. They have never shown any interest on moving or even looking at this type of legislation.