Poker News

After teasing their proposal for several months, the draft of a bill regarding online gaming and poker by Senators Harry Reid of Nevada and Jon Kyl of Arizona has been circulated, although whether it will garner support from not only members of the Senate but also the gaming public remains to be seen. received a copy of the proposed bill, given the same title as Representative Joe Barton’s bill in the House (“Gambling Prohibition, Poker Consumer Protection and Strengthening UIGEA Act of 2012”), and the summary of what Senators Reid and Kyl have proposed offers several bright spots for the regulation of an online poker market. Where people may have trouble is that is where the bill stops and how it strengthens current laws on the books.

The bill would look to enhance the power of several current laws on the books regarding online gaming as a whole. The Reid/Kyl effort would look to rescind the December 2011 decision by the U. S. Department of Justice that the Wire Act of 1961 applied only to sports betting. In addition to changing this legal decision, the Reid/Kyl bill would amend the Wire Act, the Illegal Gambling Business Act (IGBA) of 1970 and the Unlawful Internet Gaming Enforcement Act (UIGEA) of 2006 so that they cover internet activities (especially the older laws).

Under the Reid/Kyl proposal, the Commerce Department would create a new government program, the Office of Online Poker Oversight (OOPO). This body would monitor state and Indian gaming and their regulatory bodies and issue the licenses to potential operators. The OOPO would administer a list of standards for online poker operators and violations of those standards would incur civil penalties of up to $750,000 per violation and loss of an operator’s license.

It is arguable that, instead of opening up the United States to a federally regulated online gaming world, the Reid/Kyl bill would instead clamp down on it. In the proposed bill, internet gambling – whether intrastate or interstate – would be prohibited except for horse racing wagering and online poker. For those that would offer such activities outside of the two exceptions, a penalty of ten years in prison and fines would be assessed.

Another segment of the proposed Reid/Kyl bill would prevent any licensing of companies or people involved in post-2006 online gaming activities. In this provision, those companies that either offered gaming services post-enactment of the UIGEA (and the persons involved) would be prohibited from obtaining a license to participate in a regulated U. S. market. This would mean that PokerStars (even though they negotiated a deal with the Department of Justice that would allow them access) would not be allowed into the U. S. market until they “sat out” for five years following the law’s enactment.

One of the main bones of contention was in the “waiting period” that was proposed in previous legislation, and that provision makes an appearance in the Reid/Kyl bill as well. If enacted, there would be a minimum of 15 months before a potential U. S. online poker market would begin. This is done, according to the bill summary, to allow for a “level playing field” among potential operators.

The Reid/Kyl proposal would further look to lock down any further online gaming, including one that opened up as a result of the Department of Justice decision in December 2011. Online lottery sales would be severely limited to sales of tickets that aren’t determined in daily drawings, such as the Powerball or the MegaMillions games. The lottery games could also not be played only online or “mimic online games.”

The proposed Reid/Kyl bill has caused some dispute between one of the author’s and his fellow state Senator. According to the Las Vegas Review-Journal’s Steve Tetreault, Reid and junior Nevada Senator Dean Heller have been at odds over Reid’s insistence that Heller lead the charge for getting the necessary votes in the Senate from other Republicans. In a letter to Reid on the online poker issue sent Monday, Heller stated that it “would be best for the Senate to step back and let the House of Representatives act first on Web poker,” according to Tetreault.

The continued “dragging of feet” by legislators on any online poker legislation is threatening to see those proposals die in the current Congress. Rep. Barton’s online poker bill still hasn’t emerged from committee as of yet and, at this point, the proposed Reid/Kyl bill is still that…a proposal that hasn’t actually been introduced to committee. With the Congress recessing in days for the November elections (the entirety of the House and a third of the Senate are facing reelection) – and the “lame duck” session that will follow – time is running out for passage of federal online poker legislation in 2012.

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