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Bill would make online gaming up to states

Governments would regulate gambling, collect taxes

WASHINGTON — A bill to legalize Internet gambling might take little, if any, of the nearly $2 billion Arizona’s tribal casinos gross annually, experts say – but that does not mean that tribes don’t have concerns.

The bill, introduced by Rep. Joe Barton, R–Texas, would let states license online poker and collect taxes from the games instead of letting that revenue flow, illegally, to gambling websites based overseas.

“People are playing poker – on the internet – for money. Today,” Barton said during a House Energy and Commerce subcommittee hearing Tuesday.

But because the bill does not explicitly give tribes’ rights to license online gambling, it could violate the United States’ recognition of tribes as sovereign nations, said National Indian Gaming Association Chairman Ernest Stevens Jr. in testimony to the subcommittee.

Tribes’ ability to operate casinos and other games has improved the economy and the quality of life on reservations, while letting tribes be self–reliant, he said.

“Tribes are concerned that legalizing Internet gaming will threaten these gains,” Stevens said.

He recommended that regulations should be included in any federal legislation to protect current casinos from a competitive disadvantage, and to protect customers from scams.

“This (current) system is costly, is comprehensive, and our record shows that it is working,” he said of regulations governing bricks–and–mortar gaming operations.

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An officer for the 19–tribe Arizona Indian Gaming Association said it shares the concerns of the national association.

“We want to ensure that tribes have a parity position,” said AIGA Executive Director Valerie Spicer from Arizona Tuesday.

The Navajo Nation Washington office said in a statement that it is “wary of any federal legislation concerning Internet gaming, which will prohibit a tribal licensee (or) operator from exercising its regulatory authority.”

The Department of Justice has said that Internet gambling is illegal, citing the 1961 Wire Act that prohibits the use of wire communications to place bets across state lines. That position was strengthened in 2006 when Congress passed the Unlawful Internet Gambling Enforcement Act, which prohibited businesses from taking payments connected to illegal online bets.

Under Barton’s bill, states could allow Internet poker games and they would have the authority to license operators of those games. Licensed game operators could accept wagers across state lines, but only if the wager comes from a state that also allows Internet gaming.

Barton’s bill is one of three web gaming bills that have been introduced in the House in this Congress. None of the bills have yet made it out of committee.

If any of the bills passes and intrastate online gaming is legalized, it won’t necessarily take much revenue away from established casinos, said David Schwartz of the Center for Gaming Research.

“It’s the same market, but they’re for different tastes,” said Schwartz, a professor at the University of Nevada–Las Vegas.

Jerry Lane, general manager of the Cocopah Casino, said in August that if online gambling were allowed, his casino would look into it like any other opportunity.

“The major ones, like Caesar’s (Palace) and MGM, they’re probably ready to go and have 100 people who could handle it right now,” said Lane, whose family has been in the gaming industry for three generations.

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If the bill does become law, Lane just hopes it is carefully crafted.

“I hope it’s not a knee–jerk reaction,” he said.

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Nathan O'Neal/Cronkite News Service

Witnesses testifying on an Internet gambling bill included, from left, Parry Aftab of FairPlayUSA, National Indian Gaming Association Chairman Ernest Stevens, Keith Whyte of the National Council on Problem Gambling, former New York Sen. Alfonse D’Amato, Chapman University law Professor Kurt Eggert and Dan Romer of the Annenberg Public Policy Center.

Online gaming

The House is currently considering three bills that would legalize online gambling:


The Internet Gambling Prohibition, Poker Consumer Protection, and Strengthening UIGEA Act of 2011

  • Sponsor: Rep. Joe Barton, R-Texas
  • What it does: Lets states license and regulate online poker within the state. Creates an oversight agency in the Department of Commerce.
  • Makes it illegal for a company to accept a bet from states where online gaming is not permitted.


The Internet Gambling Regulation, Consumer Protection, and Enforcement Act

  • Sponsor: Rep. John Campbell, R-Calif.
  • What it does: Creates an Internet gambling licensing program under the Treasury Department.
  • Among the requirements, Treasury would have to keep “datasets on player behavior” available to the public on the department website.


The Wire Clarification Act of 2011

  • Sponsor: Rep. Christopher P. Gibson, R-N.Y.
  • What it does: Exempts any interstate gambling that is legal under the Interstate Horseracing Act of 1978, namely off-track wagers.