G-Day Approaches In The USA
Published: Tuesday, July 11, 2006 Online-Casinos.com
G-DAY APPROACHES IN THE USA
Today's debate on the "American Values Agenda" will be closely followed
Today's US House of Representatives debate on the online gambling element in the "American Values Agenda" is sure to attract close attention from the industry as yet another attempt, this time in the form of the merged Goodlatte and Leach Bills, seeks to decapitate Internet gambling in the USA through financial blocks and possible ISP actions.
The positioning of the Goodlatte and Leach Bill as one of the 10 items listed (alongside tax cuts and a flag burning amendment) on the "American Values Agenda" was a shrewd political move by the Republicans and it brought the issue to the floor faster than would otherwise have been possible.
The inclusion has achieved remarkable world wide mainstream media coverage this week, with the online gaming content of the "American Values Agenda" almost totally eclipsing the other 9 items the Republicans' Agenda contains. And opinions of the many experts quoted differ widely.
Reuters reported that regulating Internet poker [instead of banning it] could bring the U.S. government some $3.3 billion in taxes annually, according to a study by the Poker Players Alliance due to be released today (Tuesday), ahead of the debate.
Quoting excerpts from the report, which has presumably been leaked to promote it, Reuters revealed that income taxes on winnings from Internet poker alone - which is estimated to have attracted $60 billion in wagers worldwide in 2005 - could amount to $2.5 billion each year.
"The majority of the revenue that's generated would be from reporting of poker winnings," said Michael Bolcerek, president of the group.
The study also said that a 1 percent user fee on online poker transactions would generate another $800 million to $1 billion in revenue per year for the U.S. government.
The Internet poker market is projected to grow 15 percent to 20 percent a year, according to the study.
"The reason why poker hasn't exploded as rapidly as it probably could have is because there is this overhanging legal question," Bolcerek said. "Once you remove that barrier ... that's going to more than compensate for any potential negative effect of people not playing the game because they are being taxed."
Associated Press put out an article on the upcoming House debate that received exceptionally wide coverage in mainstream newspapers and journals.
In explaining the background to the legislative confusion in the USA, an informative and balanced article reported that "...critics complain that the bill doesn't cover all forms of gambling. They point to exemptions they say would allow online lotteries and Internet betting on horse racing to flourish."
Quoting Andrea Lafferty of the Traditional Values Coalition which supports banning, the article reports: "If you're going to support legislation that is supposed to 'prohibit gambling,' you should not have carve-outs." This seems to be a reference to the use of the Internet to place bets on horseraces and buy lottery tickets that are in many cases owned by state governments.
The judicious use of "sound bytes" was evident in a quote from John Kindt, a business professor at the University of Illinois at Urbana-Champaign who has studied the issue, and calls the Internet "the crack cocaine" of gambling.
"There are no needle marks. There's no alcohol on the breath. You just click the mouse and lose your house," he said.
Pro-sports leagues understandably like the bill, arguing that Web wagering could hurt the integrity of their sports.
The horse racing industry also supports the bill because of the exemption it would get. Horse racing states would not be prohibited from any activity allowed under the Internet Horseracing Act. That law written in the 1970s set up rules for interstate betting on racing. It was updated a few years ago to clarify that betting on horse racing over the Internet is allowed.
Greg Avioli, chief executive officer of the National Thoroughbred Racing Association, said the mention of horse racing in the bill is "a recognition of existing federal law," not a new carve-out. A neat sidestep that is unlikely to fool anyone.
He said the racing industry has a strong future in the digital age and acknowledged the bill would send Internet gamblers to racing sites. "They'd return to the one place they can bet legally," Avioli said.
That's what some critics say is unfair.
"Somehow we find ourselves in a situation where Congress has gotten in the business of cherry-picking types of gambling," complained Rep. Robert Wexler, who had earlier tried unsuccessfully to include exemptions for dog racing and jai alai, both popular in Florida.
The Justice Department has taken a different view on the legality of Internet betting on horse races. In a World Trade Organisation case involving Antigua, the department said online betting on horse racing remains illegal under the 1961 Wire Act despite the existence of the more recently passed Interstate Horseracing Act.
The department hasn't actively enforced its stance, but observers say it is possible the agency and the racing industry could face off in court in the future.
One of the most pungent observations on the selective nature of the banning attempts came from a Sacramento online gaming lawyer and specialist who described the legislative position as "basically, a mess." Quoted in the Seattle press, Martin D. Owens said:
"Here's the country that has Las Vegas, Atlantic City, riverboats up to Iowa and Indian gambling under every tree. Not to mention state lotteries. Now you're going to turn around and say Internet casinos are undermining the moral tone of the United States? It's just plain silly."
