Lobbyists Clash Over Net Gaming Bill

Dante · Jun 8, 2003

For the second time in a week, US House leaders have postponed voting on the Internet gambling bill that has become controversial after being attacked by Indian tribal gaming interests. Though the vote is being rescheduled for Tuesday, Capitol Hill lobbyists report being no closer to a solution satisfactory for all parties.
The bill would outlaw the use of credit cards, checks, wire transfers and other bank instruments to pay for Internet bets

Rep. Richard Pombo, R-Calif., of the Resources Committee, intends to offer an amendment that would allow American Indian tribes to operate Internet gambling sites on their reservations. 'The amendment would treat tribes on a par with state governments, which would be authorized to regulate Internet gambling under the bill,' said John Harte, general counsel of the National Indian Gaming Association. Frank Fahrenkopf, president of the American Gaming Association said “We believe that would give tribes an unfair advantage.

Rep. James Sensenbrenner, R-Wis., the chairman of the House Judiciary Committee, plans to offer an amendment that would strike all exemptions from the bill, including those for the horse and dog racing industry and state lotteries. Harte said the tribes could accept the Sensenbrenner amendment, while Fahrenkopf opposed it, claiming it “would interfere with states’ rights”.777

IntuitionBET · Jun 8, 2003

We ALL need to keep the PRESSURE on these politicians ALL YEAR LONG that YOU oppose any ban on Online Gambling!

***If you state in your letter you DO NOT AGREE and OPPOSE the views of Judiciary Committee Chairman James Sensenbrenner and House Democrats who oppose an outright ban on online gambling.*** it might be the right kind of PRESSURE

Here is the site you need to go to to Tell your Representative and Senators to oppose H.R. 21 and S. 627, the so-called Unlawful Internet Gambling Funding Prohibition Acts! Or any NEW bill that tries to ban Online Gambling. Fill out the form on this page to take action on this important issue (your privacy will be protected) http://www.profreedom.com/

bhbookie · Jun 8, 2003

Thanks guys.

WildBill · Jun 8, 2003

Its important to note that if any amendments are offered that there isn't enough support to get them to pass. The funny thing is, despite what people seem to think, is that Oxley's bill, as is, might be the best thing for everyone. It has no enforcement power, it basically tells the operators of these businesses that they should behave and don't take these instruments. Banks already generally comply with this, but they could just as easily say its none of our business and we leave it to the books to not accept these. After all the banks aren't doing this so much because of legality issues, they are doing it because the threat still exists that someone could charge up a lot of deposits and then make the claim that gambling debts are uneforceable in many states. The whole threatened by Spitzer claim is overblown, the banks don't care so much about something that hasn't been declared legal or not, they are just worried about losses like these.

So if Oxley passed it would be just like I said. There would be something on the books that says you can't do it and there would be the foolish expectation it does something, but it might actually get some banks into the business of allowing transfers. Further it would give these morons a feeling that they did something. They often do care about what they did, just that they made their statement. If nothing passes this year, the charade will go on next year and the year after. Congress never lets something go, that is almost their unofficial motto. If anything they think of it as a good thing, ie "I fought 7 years to protect my constituents and I have finally succeeded." Not the obvious point of maybe you were fighting a stupid battle and that is why it took so long.

In any case Oxley as is won't get voted on, it will either get pulled or one of these amendments will get attached and then they thing gets pulled or voted down. The sense is that by the end of the week the issue will just be taken off the table this year. The hopes of many in the camp pushing these bills is that technology gives them a better way to track this or that there is some big blow up where a scandal of some sort hits and they have more ammo to use next year. So offshores keep your noses clean...

Dante · Jun 8, 2003

good info BHB..thanks

THE SHRINK · Jun 8, 2003

Wild Bill,

Your information and insight into these bills has been second to no one. Thanks for keeping us informed...

Ken

WildBill · Jun 9, 2003

Thanks Ken, now tell me how to get a job that makes decent money using all this otherwise worthless information

I spent a lot of hours helping out with the effort, talking with the lobbyists and even a few lawmakers explaining some of the fine points with these issues and I did it gratis (well got some nice free food out of it!). It was a lot of fun and convinced me that offshore is the more interesting way to go now. I just need to figure out a business angle, my side of the business where I work is boring and stodgy and who likes dealing with Wall Street analysts anyways???

In any event it was sort of disappointing that the people there were mostly those that had no clue about the industry, beyond the simple talking points they were given. I know some people have asked for us to send letters to our representatives, but the fact is without the input and hard work of people that really know the business and really are affected by these potential policies then the process just doesn't go that well. Members of Congress aren't dumb, when you talk to them they fire back with a question that some of these guys really couldn't answer well and that just looked real bad to me. Someone asked "well I hear you are for regulating the business, so how much you propose we tax?" This highly paid lobbyist just kind of babbled his way through a terse answer. Then he was asked, "well would that be a rate for gaming revenues or just the amount dropped?". I knew this guy was in trouble here, he didn't have a clue. I was told not to talk so I didn't bail him out, but that was something that just blew me away that he could have someone run circles around him like that. It was very inexcusable, but I am told very common when there aren't a lot of good volunteers involved.

oldmantime · Jun 9, 2003

Much Thanks, Wild Bill for your work on this topic.
I know you seem to prefer the offshores to The USA, but what do you think the chances are of Vegas books getting to offer all US resident internet wagering say in the next 10 years?
It seems to me that IF (Congress) No. 1 argument against it is terrorism (ie money laundering) having it here would solve that issue. It's hard to understand what they really think for the average "joe".

WildBill · Jun 9, 2003

I would guess about 1% for simple reasons, first of all the leagues will fight it til the death. The casinos will quickly, faster than you can blink, give up the right to book sports just for the chance to offer casino games online. Its not even a consideration. If regulation ever becomes a possibility that probably will be the first deal struck, casino games but no sports. Lets face it, the big companies have no interest in sports book, its merely a marketing tool to get players out to Nevada during football season and for big events. I don't even think they are really that convinced they need college sports betting except for March Madness. Not having that would kill their chance to get a ton of people in March and April, but otherwise they don't care about anything that isn't related to the NFL. They would be happy if they outlawed NHL and MLB betting and would be neutral on NBA. So to expect them to fight for the right to book sports is crazy, if they offer casino games online they will assume that having a sports betting option will just steal away time and business from their moneymaker.

Just remember that the sports leagues are amazingly powerful right now. They lean on cities and states saying they won't keep their teams or get an expansion team if there is a betting connection and then they lean on the networks and their billion dollar contracts to side with them. The leagues are crazy though, they damn well know that money is left on the table by not being part of the gambling culture, but they also realize they could never get involved without losing credibility.

oldmantime · Jun 9, 2003

I see what you are saying and well stated.

Personally--I'm rooting for Delaware to bring in Sports wagering soon. Yes it won't be very good to start--but it will be a start and a CASH Cow!

WildBill · Jun 9, 2003

Delaware is in a good spot since they never have to worry about TV market or getting a team like Las Vegas is starting to have to deal with. Still mark my words if it ever got out of the gate, and I give it maybe 10-20% chance, it would crash and burn real quick. They are talking about having the lottery run it and you know that means horse race like takeouts, if you are lucky. Outside of getting some play on weekends in the fall and during the big events, its not going to draw much action. Offshore is out of the bag and back east in those areas bookies are everywhere. No reason for almost anyone to deal with the traffic and tolls of driving down to Wilmington or Dover just to get some action on a game at extortionary rates when the neighborhood out or the offshore book can take care of you.

oldmantime · Jun 10, 2003

I would say that Delaware is a small part of both the Philadelphia and Baltimore TV markets. Yes I saw something about the lottery handling it. But there were several proposals and a study which showed a big demand. (Of course studys can show anything, depending on how asked etc.) With slots already well estasbished they might not have as much trouble getting this through. The NFL, NBA and MLB are really living in a dream world, if they believe gambling is NOT going on! The problem with illegal bookies is one of confidence. Not only of will you get paid -but will they be in"business" tomorrow. Also, their thinking of playing all the time. Basically they want constant play. I agree offshore is the best now and may remain that way for the immediate future, but "Rome wasn't built in a day" and this would be a start. Sadly like you I don't give it a high probility this year, but soon. It beats tax increases and thats the bottom line.

Dante · Jun 10, 2003

Oldman...if Delware gets this leagalized do you think other states would follow possibly??

oldmantime · Jun 10, 2003

Yes Dante; Would take awhile and probably NOT those states in the Bible Belt of the South. (NC still does not have a lottery---A fortune leaves there to Virginia!)

It will have growing pains-but no doubt it is the long range wave of the future. Especially as a state revenue source.

Dante · Jun 10, 2003

thank you Sir for your reply

drunkguy · Jun 10, 2003

Looks like one of the proposed amendments is to allow credit cards to be used for gambling transactions, since they can't be obtained by minors (Amendment 2 below).

SUMMARY OF AMENDMENT MADE IN ORDER
1. Kelly #5
Adds a new section 5 to the end of the bill consisting of a rule of construction clarifying that the bill should be read as leaving intact the substantive law with respect to gambling in the United States. It confirms that the bill does not change Federal, State or Tribal law in this regard. (10 minutes)

2. Jackson-Lee #4
Removes credit cards from the list of bank instruments banned under the bill. The reasoning for removing credit cards is that the age requirements necessary for obtaining a credit card provide a means of preventing minor's use of Internet gambling websites. (10 minutes)

3. Sensenbrenner/Cannon/Conyers #2
Strikes language in the bill which states that a bet or wager does not include "any lawful transaction with a business licensed or authorized by a State." (20 minutes)

http://www.house.gov/rules/108rule2143.htm

FunkSoulBrother · Jun 10, 2003

<BLOCKQUOTE class="ip-ubbcode-quote">quote:<HR>Oldman...if Delware gets this leagalized do you think other states would follow possibly??<HR></BLOCKQUOTE>

I could be wrong, but I thought there was a Federal ban on sports wagering, and the only reason Delaware can consider it is because they are one of 4(?) states that were grandfathered in, with Oregon, Nevada and Montana being the others.

So I'm not sure that any state that sees this as a good thing can act on it if the want to.

-Oregon is pretty much out with the Trailblazers.

-Montana could do it, but they don't have the economic advantage of people driving from New York, Boston, Philly, DC to place a wager. I mean, it would be nice for me in North Dakota (and maybe Jake Thompson in Idaho) but its pretty sparsely populated out here. I think they'd have to try and build it as a tourist trap... some sort of insanse "Ski-Vegas".

But to their credit they do have the right mindset.. they tend to be libertarian conservatives rather than bible-thumping neo-cons.

Besides, does anyone really think that Delaware will be able to take this beyond a state-controlled parlay card with terrible odds that you can buy at a convenience store? Something tells me thats what they would sell-- a 6 team parlay at 25-1 odds.

FunkSoulBrother · Jun 10, 2003

<BLOCKQUOTE class="ip-ubbcode-quote">quote:<HR>Looks like one of the proposed amendments is to allow credit cards to be used for gambling transactions, since they can't be obtained by minors (Amendment 2 below).<HR></BLOCKQUOTE>

That is indeed interesting news, But I wonder if its any better for us as gamblers. Would this exemption make credit card providers any more likely to remove gaming codes? I thought they didn't like our business anyhow because of a high fraud rate, etc, etc. But it would be nice to use my debit card to wager again, rather than waiting for EFTs to hit neteller.

WildBill · Jun 10, 2003

About CCs, yes you are right. First off that amendment is highly unlikely to last. Its almost like passing a law and taking its purpose out of it. Most in the know can't see the bill surviving with that taken out. If it were to be taken out, its hard to say what the issuers would do. The problem for them isn't legality, its the unenforceability of gambling debts that are on the books in many states. What baffles me is if this is the case, why not allow debit cards to be used since there is no debt in that transaction. So many things are going on and almost all are behind closed doors. Sensenbrenner is running around like a madman some say, changing his mind about what to do every hour. The guy would like to get rid of any and all gambling, but is basically trying to choose his spot where he can get the most activity banned while still having a passable bill. Once again Oxley's original bill is about all that stands a good chance of getting support, but its such an affront to so many people that its not going to get voted on as it right now. The expectation from the lobbying experts is that this thing will get tabled by Friday and go away for the year unless the Senate for some reason really gets excited about Kyl's bill and passes it forcing the House to at least consider something. That is very unlikely as well, the issue is looking just too convoluted and ultimately, too unimportant, to get any consensus.

As for Delaware, its true the feds have a law on the books saying only the 4 listed states can take sports bets, but most legal experts have said this is a joke and that any state that wanted to could take this to court and have a 90% chance of getting it overturned. Its a clear violation of states rights which have a long precedence of gaming regulation being purely a state decision, not something the federal government can rule over.

drunkguy · Jun 10, 2003

<BLOCKQUOTE class="ip-ubbcode-quote">quote:<HR>Originally posted by WildBill:
What baffles me is if this is the case, why not allow debit cards to be used since there is no debt in that transaction.<HR></BLOCKQUOTE>

My debit card usually goes through at some sportsbooks. Maybe because it is through a local bank. Also, there must be SOME credit card providers that would be willing to process these transactions just to grab the extra business. I think the quesionable legality of these transactions has held most of them off.

I do, however, agree that it is unlikely to pass with this amendment.