Frank Introduces Internet Gambling Regulation Legislation

The long-awaited bill that poker players have been clamoring for was introduced Wednesday morning at 10:00am ET in a small press conference on Capitol Hill. Financial Services Committee Chairman Barney Frank (D-MA) revealed the details and full text of the Internet Gambling Regulation Consumer Protection and Enforcement Act of 2009, which in essence, calls for a federal system to license, regulate, and tax internet gambling operators. In addition, he introduced a companion bill to delay Unlawful Internet Gambling Enforcement Act compliance until December of 2010.

Freshly introduced, the Internet Gambling Regulation Consumer Protection and Enforcement Act of 2009 has yet to be assigned a House of Representatives bill number, but the 48-page text of the legislation has been released in its entirety.

Frank’s legislation provides for the Department of the Treasury to have exclusive authority to establish regulations and license internet gambling operators. Said operators would be subject to review of their entire corporate structure and financial history, employee background checks, and willingness to comply with U.S. jurisdiction. There is also a carve-out that prohibits any wager initiated or terminated in a state or tribal land that prohibits internet gambling, as well as any sports gambling or wager prohibited under the Professional and Amateur Sports Protection Act. The Department of the Treasury will also be charged with enforcement of the licensing, and imposing fines, imprisonment, or license revocation for violators of the bill’s provisions.

The consumer protection aspect of the bill calls for specific safeguards and the monitoring of the internet gambling operators and their customers, including enforcing age limits and confirming that bettors are conducting gambling activities from a legal location. Provisions will be in place to protect patrons’ privacy and security, find and prosecute fraud and money laundering attempts, and guard against compulsive gambling.

The second bill introduced by Frank was a separate piece of legislation to specifically delay compliance with the UIGEA from the date it is set to be effective – December 1, 2009 – until December 1, 2010. Such a delay would allow for action on the Internet Gambling Regulation Consumer Protection and Enforcement Act of 2009, with the consideration that its passage would render the UIGEA unenforceable.

In addition to Frank’s bills, Rep. Jim McDermott (D-WA) introduced a bill to compliment that of Frank, which will ensure the collection of individual and corporate taxes resulting from internet gambling. The companion bill will work hand-in-hand to ensure that licensing and enforcement are partnered with taxation to complete the process and bring the potential tens of billions of dollars to the U.S. government.

In response to the introduction of the two pieces of legislation, Poker Players Alliance Chairman and former Senator Alfonse D’Amato said, “Online poker is a legal, thriving industry and poker players deserve the consumer protections and the freedom to play that are provided for in this legislation. We are grateful for Chairman Frank’s leadership and will be activating our grassroots army made up of over one million members to help him drive legislation.”

The Poker Players Alliance is prepared to spend upwards of $3 million on its lobbying efforts, backed in part by the group’s membership and associations like the Interactive Gaming Council in Canada.

It was also reported by Bloomberg in advance of Frank’s press conference that the legislation has the support of numerous companies, such as Harrah’s Entertainment, Inc. and Youbet.com. In fact, Harrah’s registered to lobby for the first time in the company’s history and hired veteran Democratic fundraiser Tony Podesta to highlight its team of lobbyists.

Youbet.com released a post-conference statement, and CEO Michael Brodsky noted, “Chairman’s Frank’s bill is a welcome and realistic approach to U.S. internet gambling… Youbet.com looks forward to sharing our experiences in providing a safe, reliable and legal internet platform for adults who enjoy the horse racing experience with Congress and other policymakers as they begin consideration of this important legislation.”

Spokesman for the Safe and Secure Internet Gambling Initiative (SSIGI) Jeffrey Sandman also spoke out in support of Frank’s legislation. “As Americans continue to wager online more than $100 billion annually in a thriving underground marketplace, it is time for Congress to acknowledge that prohibition has been a failure and a new approach is needed. We support the legislation introduced by Representatives Frank and McDermott that provides a sensible solution to regulate Internet gambling in a way that protects consumers and collects billions of dollars in otherwise lost revenue.”

The Poker Players Alliance and Safe and Secure Internet Gambling Initiative provide access to members of Congress and encourage poker enthusiasts to express their support of the legislation.

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