Inside Asian Gaming

21 38 Stanley, Victor Chandler, Virgin Games, Play- tech, CryptoLogic and Microgaming — has issued no official statement on the bill. Chief Executive Clive Hawkswood has sought to downplay the industry’s disenchantment. In an interview with eGaming Review, he said: “Do we think our involvement could tip the scales? No.Look at it from the opposite angle. Did US involvement in the lobbying effort for the UK super-casino help at all? Or was it rather a hindrance?” Study time Big-time sports in the United States have made no secret of their views on Frank’s bill. They don’t like it. The day before it was introduced they sent to the 68 members of the Financial Services Committee a strongly worded letter to this effect. It was signed by representatives of the National Football League, Major League Baseball, the National Basketball Association, the National Hockey League and the National Collegiate Athletic Association. There is in addition to several laws on the federal books governing illegal gambling and related crimes a federal stat- ute, the Professional and Amateur Sports Protection Act of 1992, which specifically bans sports wagering except in three states with grandfather rights: Nevada, Oregon and Delaware. State opposition is another formidable obstacle, as witnessed last year by the arrest in New York of former Sportingbet Chairman Peter Dicks, a British national, on a warrant out of Louisiana — and more recently by Connecticut’s threat to sue unless the New York Racing Association blocked Connecticut residents from the association’s new betting portal. (NYRA quickly complied.) It’s important in this regard to note that what really lies at the heart of the dispute be- tween the United States and Antigua in the World Trade Organisation over offshore ac- cess to US players is the well-settled Ameri- can principle of state primacy over gambling policy.According to research of the American Gaming Association, seven states have laws on their books specifically banning Internet gambling within their borders. Five more have issued opinions opposing its legality. Their ranks are certain to swell if Washington were to attempt to force them to abide by it. The opt-out provision in Frank’s legislation acknowledges as much. The AGA, in the meantime, finds itself in a bit of a spot over all this. The organization was formed in 1995 specifically to counter an attempt by members of Congress at the time to impose a federal tax on land-based casinos. The organization and its well-connected CEO Frank Fahrenkopf, a former chairman of the Republican National Committee, have been states’ rights advocates ever since and con- sistent opponents of any federal interference in the industry.On the other hand, the associ- ation’s operating members — especially the Las Vegas Big Five of Harrah’s Entertainment, MGM Mirage, Boyd Gaming, Station Casinos and Wynn Resorts — don’t like the fact that they’ve had to spend the last decade on the sidelines of Internet gambling’s growth into a US$12 billion- plus industry, especially since it’s been American trade that grew it. The problem is, they can’t get in the game without federal approbation. Not that they haven’t tried. Nevada’s congressional delega- tion — Shelley Berkley, Jon Porter and James Gibbons (who is now the state’s governor) — voted against the prohibition bill intro- duced last year by former Rep. James Leach — the bill that became UIGEA.(Berkley also is a co-sponsor of Frank’s bill.) Back in 2001 the casinos prevailed on the Nevada Legislature to direct the Nevada Gaming Control Board to write regulations for an intrastate Inter- net market. But this collapsed in the face of a warning from the Justice Department.They then went offshore — MGM Mirage and Sta- tion to the Isle of Man, Harrah’s to London with a free-play site — but with no legal au- thorization to market real-money gambling to US gamblers their efforts proved unten- able economically. Given all this,the Remote Gambling Asso- ciation’s members have cause to be skeptical. Thanks toWashington they’ve had to endure the fear and indignity occasioned by the jailing of several of their own, all prominent industry executives and stakeholders. Then UIGEA nearly wiped them out financially. Frank’s committee oversees the US banking industry, and the banks are not happy about the expense and exposure UIGEA imposes on them as unwilling Internet policemen.The RGA knows this. Most important, they know that if this ever changes it will be in favor of established US corporate taxpayers and em- ployers — that is, the members of the Ameri- can Gaming Association — not some murky Bahamian-registered entities ensconced in sub-tropical tax havens, booking bets from file servers in places like Costa Rica, whose government shielded Gary Kaplan, a US citizen and the prime suspect in the BetonS- ports case, from extradition. “It’s a question of priorities and resourc- es,” a spokesperson for UK bookmaking gi- ant Ladbrokes told the trade press.“There is movement in Europe at the moment, with the EU behind us, so that is what we are con- centrating on.” Another operator, speaking anonymous- ly, said, “There may come a time to step on the gas once again in the US, but that time is not now.” The AGA, likewise, is treading carefully, declining to comment specifically on Frank’s bill.Instead the group has turned to the strat- egy on which it made its bones 12 years ago when it helped beat back the federal-taxa- tion threat — a study. Within days of the introduction of H.R. 2046, his Democratic colleague Shelley Berk- ley, co-chair of the Congressional Gaming Caucus and Las Vegas’woman inWashington going on nine years, introduced H.R. 2140 — “To provide for a study by the National Academy of Sciences to identify the proper response of the United States to the growth of Internet gambling.” Needless to say, the AGA “strongly sup- ports” H.R. 2140, as do the other two Nevada congressmen, both of whom happen to be Republicans. Porter and Gibbons’ successor, freshman Dean Heller, are among the bill’s 62 co-sponsors. “A thorough study, conducted by a re- spected government entity would provide much-needed guidance on the issue,” the AGA says.“Such an endeavor could evaluate whether legalization, regulation and taxation — on a state-option basis — may be a more viable option than a complete ban.” Frank has said he won’t release his bill unless it has the votes to pass. And he has admitted that he doesn’t yet have them — a reminder perhaps that Leach’s prohibition bill sailed through the House of Representa- tives last July by a handy 317-93,and that 115 Democrats voted for it, 39 more than voted against it. For what it’s worth the ranking Republican on the Financial Services Com- mittee, Spencer Bachus of Alabama, opposes H.R. 2046. Frank has scheduled hearings on the bill this month. Berkley’s bill, on the other hand, has a shot. Frank is a co-sponsor, and as a cour- tesy it has been referred to his committee. It also has been referred to the powerful Judiciary and Ways and Means committees, whose powerful chairmen, John Conyers and Charles Rangel, also are co-sponsors. Reprinted with permission from International Gaming and Wagering Business (IGWB) mag- azine