On Thursday, Senator Robert Menendez (D-NJ) officially unveiled S 1597, the Internet Poker and Games of Skill Regulation, Consumer Protection, and Enforcement Act. Congress remains on recess until after Labor Day in the United States.
As its name implies, Menendez’s legislation explicitly legalizes and regulates games of skill like online poker, which should come as a welcome sign to players in the United States who question the legality of the game. The bill notes that poker, bridge, mahjong, backgammon, and chess are examples of games in which a player’s skill dominates the outcome: “While each of these games contains an element of chance, over any substantial interval, a player’s ultimate success is determined by that player’s relative level of skill.” Menendez’s measure weighs in at a hefty 89 pages.
The bill focuses heavily on online poker, noting, “Poker is part of the cultural and recreational fabric of the United States and has been since the founding days of the United States. United States poker aficionados have included presidents, judges, and statesmen.” S 1597 calls for the continuance of laws against sports betting online in a similar fashion to Congressman Barney Frank’s (D-MA) HR 2267, which establishes a complete licensing and regulatory framework for the internet gambling industry in the United States. HR 2267 was introduced exactly three months ago and is up to 54 co-sponsors.
The Secretary of the Treasury is responsible for overseeing the licensing process for skill game operators and prescribing regulations. Each applicant for a license must submit a comprehensive financial background, an outline of the company’s structure and that of its affiliates, criminal and credit histories of executives, and how each licensee plans to combat underage gambling and compulsive gambling. In addition, they must convey how the games offered will be fair. All gamblers must be at least 21 years-old.
Licenses run for five years and can be renewed at the end of each term. Like other recent internet gambling legislation, Menendez’s S 1597 calls for a list of “persons self-excluded from gaming activities at all licensee sites.” States have a period of 90 days to opt out of the legislation after it becomes law; Indian tribes can also exempt themselves from the bill. S 1597 addresses problem gambling, allocating $14.2 million per year between 2010 and 2014 for awareness, treatment, and research.
S 1597 clearly states, “Nothing… shall be construed to repeal or amend any provision of State or Federal law prohibiting, restricting, or otherwise addressing bets or wagers on sporting events.” Professional sports leagues like the NFL have expressed a desire for Frank’s HR 2267 to contain clearer language outlawing sports betting. During a working dinner as part of National Poker Week, the Poker Players Alliance (PPA) claimed it was part of a “broad coalition” that included the NFL.
The Federal Government and State Governments will each reap 5% of a licensee’s deposits during each calendar month in taxes. Unauthorized gambling is subject to a 50% fee. Menendez’s S 1597 is similar in scope to last session’s S 3616, the Internet Skill Game Licensing and Control Act. However, Thursday’s version focuses on consumer protections. The PPA reviewed a draft of the bill in mid-July with what the organization called a “commitment” from Menendez to introduce it. The online poker measure was scheduled to be released before August 1st. However, it was ultimately revealed to the world on Thursday.
The 1.2 million member strong PPA will likely push its members to call their Senators and urge support of Menendez’s S 1597. As of the time of writing, no companion bill exists in the House of Representatives. Frank’s HR 2267 encompasses all forms of internet gambling except sports betting, whereas Menendez’s only legalizes games of skill. Congressman Robert Wexler (D-FL) introduced the Skill Game Protection Act (HR 2610) during the last Congressional session. It exempted player versus player games from internet gambling law, including the Wire Act of 1961 and Unlawful Internet Gambling Enforcement Act (UIGEA).
The PPA had not released an official statement on S 1597 as of press time. We’ll have full industry reaction to Menendez’s online poker legislation on Poker News Daily.
