Washington D.C. Gaming Lobby Refuses to Endorse Any Current Internet Gaming Legislation
The American Gaming Association, a Washington, DC-based lobbying group for the American casino industry, has just released a policy statement in which it claims it is amenable to legalizing internet gaming in America. Their support is dependent on a strong regulatory structure being put in place to protect consumers and maintain the integrity of online gambling sites. The statement stopped short of sanctioning any of the bills recently introduced by legislators of both parties. The CEO of the AGA, Frank Fahrenkopf Jr., explained that making this determination allows the AGA to have a seat at the table as the online gambling and betting policy is hammered out.
There are at least two bills working their way through Congress that could legalize all or a portion of internet gaming. One bill, introduced by Rep. Barney Frank, D-Mass., would establish a framework to allow operators of online gambling sites to accept wagers from U.S. residents. Sen. Robert Menendez, D-N.J., introduced a bill in 2009 that would legalize online poker only.
The AGA’s policy on online gambling has evolved over the years. In 2006, the group supported the Unlawful Gambling Enforcement Act, which made it a misdemeanor for U.S. financial organizations to knowingly process transactions between American consumers and internet gaming operations. Even with those restrictions, the AGA estimated that American’s wagered just short of $6 billion with offshore gambling establishments, a significant portion of the $21 billion wagered worldwide.
According to Fahrenkopf, the AGA has been reformulating its policy regarding online gaming for the past two years. It formed committees to explore three critical issues facing the legalization of internet gambling: the availability of technology capable of preventing the laundering of money as well as gambling by under aged individuals, the possibility that internet gaming could cannibalize the brick-and-mortar casino industry and the pros and cons of federal versus state regulation.
They discovered that the required technology was available and capable of meeting the challenge of protecting both consumers and gaming websites. Noting that the 2006 act designed to prevent and dissuade Americans from illegally gambling online was a failure, the AGA decided that much of the possible cannibalization has already occurred. Instead of trying to roll things back, the AGA believes that American casinos would be better off doing what they can to profit off the situation. Regarding the applicability of state or federal regulation, the group was divided right down the middle.
At least one major casino supports legalizing online gaming. Harrah’s Entertainment, the company behind the World Series of Poker, has backed Barney Frank’s legalization bill, which Fahrenkopf expects to come up for a hearing this spring. However, no other casino companies with major clout have followed suit, including MGM Mirage, which at one time hosted an online casino on the Isle of Man, where U.S. residents were not allowed to play. The site lasted under two years.
The debate regarding internet gaming has been going on in Washington for the past ten years, but with the new policy position of the most powerful gambling lobby, progress may be just around the corner.
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