Gambling Congress Assaults UIGEA

Another congressional push to de-claw the Unlawful Internet Gambling Enforcement Act came Thursday when U.S. Senator Robert Menendez (D-N.J.) proposed the Internet Game Licensing and Control Act (S3616). The bill aims to define specific Internet wagers, such as poker, bridge and mahjong, as “skill games” and seeks to legalize and regulate them.

If passed, Menendez’s bill would require the Treasury Department to issue operating licenses to firms that meet certain criteria: Firms that apply for licenses would have to provide a full breakdown of their corporate structure, including proof of their experience in the gaming industry, adequate financial solvency and a record of UIGEA compliance. The Treasury Department would also conduct background checks on applicants’ owners and associates and would require they have effective methods in place to block addictive gamblers and children from accessing their sites.

The bill would limit operators to providing “skill games,” which are defined as any game “in which success is predominantly determined by the skill of the players.” It would also explicitly block online sports betting and would carry a stipulated fine and-or five-year prison sentence for the owners of any firm caught operating without a license. Similar measures would be implemented against licensed firms that engage in gambling fraud, tax avoidance or money laundering.

“One of the things that Senator Menendez gravitated to is the fact that, under the current environment, consumers aren’t getting the protection that they deserve,” said John Pappas, president of the Poker Players Alliance. “He wanted to introduce a bill that would provide a regulatory framework that protected U.S. consumers.”

The bill is similar to the Skill Game Protection Act, HR2610, which was proposed by Representative Robert Wexler (D-Fla.). And it comes on the heels of the House Financial Services Committee’s approval of the Payment System Protection Act, which Representative Barney Frank (D-Mass.) has been pushing for since 2007.

The SGPA would explicitly exempt “skill games” from language in existing federal laws like the Wire Act of 1961 and the UIGEA.

The PSPA (HR 6870) would force the Treasury Department to specify which games it considers illegal. Many financial institutions have demanded such specificity, claiming the swath of activities considered illegal under the UIGEA is far too broad for them to successfully monitor.

In any case, the past week’s $700 billion “bailout” bill forced lawmakers to put further progress on pro-gambling legislation on hold. Prospects for all three pieces of legislation look bright, however, insomuch as the PSPA is ready for a vote on the House floor and the SGPA has already garnered 22 co-sponsors.

The PPA is strongly backing the three bills and provides regular updates on all U.S. gambling legislatuon on their website.

“Movement of this bill this session is unlikely, but this is a great rallying point so that the poker community can know where their senators stand,” said Pappas. ”We encourage poker players to contact their senators and ask them to support the (Menendez) bill. We intend for this bill to be
reintroduced in the next congress.”