“Internet Poker Freedom Act” Introduced in U.S. Congress

Joe Barton

Rep. Joe Barton want to legalize online poker on a federal level.

Rep. Joe Barton (R-TX) introduced a bill to legalize and regulate online poker in the U.S. House of Representatives today. The bill, HR 2666 – the Internet Poker Freedom Act of 2013 – fulfills a Barton promise from earlier in the year to try to advance the cause of online poker in the United States.

Barton’s bill would set up a licensing and regulatory scheme for online poker, on a nationwide basis, that would fall under the rubric of a new Office of Internet Poker Oversight. Individual states would have the option to opt-out of the regulation – and thereby bar internet poker within that state – by letter to the OIPO from the state’s governor.

For the first two years, the IPFA would restrict licenses to operators that have owned, for the last five years, a U.S.-licensed casino with at least 500 gaming machines or a card room with at least 175 tables. That requirement would shut the door on Rational Group’s PokerStars and Full Tilt brands, even if Rational Group somehow prevails in its troubled acquisition of the Atlantic Club casino in New Jersey.

The bill also contains a five-year licensing prohibition for any operator convicted of accepting online bets in felony violation of U.S. law. If Barton’s bill makes any headway in the House, the wording of that provision is likely to become a battleground between operators like PokerStars and its brick-and-mortar counterparts. Although PokerStars accepted bets in the U.S. after the passage of the UIGEA – which would potentially be a felony – it has never been “convicted” of such action, choosing instead to settle with the U.S. Department of Justice with no admission of wrongdoing.

Under Barton’s proposal, unlicensed operators that continue to serve the U.S. market could face criminal penalties of 5 years in prison and fines of up to $1 million a day. Other features of the bill include cheating prohibitions, compulsive gaming and self-exclusion protections, and a ban on credit-card deposits. Tax rates and licensing fees have not yet been determined.

The IPFA is not Barton’s first bite at the apple. He introduced similar legislation (the awkwardly named Internet Gambling Prohibition, Poker Consumer Protection, and Strengthening UIGEA Act) in 2011. Although that bill garnered 30 co-sponsors, including Barney Frank (D-MA), Peter King (R-NY), Shelley Berkely (D-NV) and Ron Paul (R-TX), it never made it out of committee.

The introduction of Barton’s bill coincides with a Senate hearing on “The Expansion of Internet Gambling: Assessing Consumer Protection Concerns” that is scheduled for Wednesday July 17. No action is expected on Barton’s bill prior to that date.

The brick-and-mortar gaming industry and poker players nationwide favor federal regulation of online poker. A spokesperson for Caesars Interactive Entertainment, the online gaming arm of Caesars Entertainment Corp., said the company hadn’t yet reviewed the bill but appreciates supporters of a federal solution like Rep. Barton.

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Kevin McGrady

Legislative and Politics Beat Writer: Kevin McGrady practiced corporate law in New York City for eight years before moving to Las Vegas in 2008 to join the gaming industry. Kevin is a graduate of New York University and Columbia University School of Law.
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