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Lobbyists push for legalization of internet gambling
07 February 2010

From the Washington Post on Sunday, February 7, 2010:
WASHINGTON -- Poker lobbyists are ramping up an aggressive push backed by millions of dollars to legalize internet gambling in the United States this year, hoping to overcome passionate objections from social conservatives, sports leagues and other longtime opponents.
Partly bankrolled by offshore gaming companies, the campaign already has persuaded the Obama administration to delay enforcement of a 2006 law cracking down on internet wagers.

Rep. Barney Frank of Massachusetts and other Democrats are using the six-month reprieve to push ahead with legislation that would legalize and regulate poker, mahjong and other online betting games - pastimes that have exploded in popularity in a country that accounts for more than half of the $16 billion global internet gambling market. The federal government, which rarely prosecutes online gambling, would net billions of dollars in tax and licensing revenue if it were legalized, proponents say.

The legalization push has alarmed the National Football League, Focus on the Family and other internet gambling opponents, who say that online betting would encourage criminal activity, threaten children and dramatically increase gambling addiction. Sen. Jon Kyl, a Republican from Arizona, has placed a hold on six Treasury Department nominees to retaliate for the delay in the anti-gambling law, legislative aides said.

But those in favor are hoping that with Congress in the hands of Democrats, who have historically been less opposed to gambling than Republicans, along with the growing popularity of recreational poker, will work to their advantage.

The list of backers includes Frank, a New England liberal who says the government should not bother gamblers, and former GOP senator Alfonse D'Amato of New York, chairman of the Poker Players Alliance, which is leading the Capitol Hill push.

With 1.2 million members, the alliance is funded largely by the Interactive Gaming Council, a Canada-based trade group for offshore gambling firms. Together, the groups have spent more than $4 million on Washington lobbying over the past year, and the alliance says its members recently have sent more than 300,000 mailings and e-mails to members of Congress.

"I think there's a growing realization in Washington that prohibition probably isn't going to work, just like prohibitions throughout history have not worked," said John Pappas, the poker group's executive director. "There needs to be a more commonsense approach, because it's not going away."

Those opposed to legalized gaming include all four major sports leagues and numerous religious groups. Major casinos are divided on whether online gaming is a threat or an opportunity.

Chad Hills, a gambling research analyst for Focus on the Family Action, said opponents "are just trying to fortify the vaults" against the legislation, which they think would dramatically expand gambling in the United States. "This would go outside the walls of a brick-and-mortar casino, outside the walls of a convenience store lottery, and into the living rooms and homes of all Americans," he said.

The outlook on Capitol Hill, however, is uncertain given a slate of unfinished business on health-care reform, cap-and-trade legislation, and financial market regulations, not to mention nervousness among Democrats about November midterm challenges. Gambling opponents say Democrats are unlikely to muster support during such a contentious year, but proponents say that changing mores and the prospect of new tax revenue give the effort a better chance than at any other time in recent memory.

The Justice Department views all online gambling as illegal under a 1961 law aimed at mob bookies using telephone lines, but it has prosecuted only a handful of internet betting operations. The market is run by firms operating from Antigua, Malta and other foreign sanctuaries.
By Dan Eggen


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