Big week for Internet gambling legislation

Rep. Barney Frank (D-Mass.), the chairman of the House Financial Services Committee, is holding a hearing on the feasibility of regulating the Internet gambling industry in the United States on Friday. And Rep. Robert Wexler (D-Fla.) is introducing a bill that would provide an exemption from the UIGEA for poker and other skill games today.

Add to the list of legislators lining up to amend the UIGEA Rep. Shelley Berkley (D-Nev.), whose approach would commission a study to determine the effects of regulating the Internet gambling market in the U.S.

While I applaud Wexler and Berkley’s bills, I believe that Frank’s is the most prudent, and I look forward to watching the hearing tomorrow morning.

I’ve been reading some industry news sites to gauge the reaction to the hearing, and one of the biggest complaints I’ve seen is that the list of witnesses is problematic. I couldn’t disagree more.

Howard Lederer, a professional poker player and a member of the Board of Directors of the Poker Players Alliance, is the only person set to testify that many in the industry can identify. Lederer, who has always been one of the most eloquent defenders of Internet gambling, will give some Congressmen reason to rethink the issue (if they take the time to listen).

Radley Balko, who may not be known to industry insiders, is actually one of the most active people in Washington in trying to overturn the UIGEA. Balko, the senior editor of Reason Magazine, is a staunch defender of libertarian ideals. Balko has been in this fight from the start, and his voice can be influential.

Gerald Kitchen, CEO of SecureTrading, and Jon Prideaux, chief executive of Asterion Payments, may not be well known in the gambling industry, but given the current stance on Internet gambling, that’s likely a good thing. The Department of Justice has always stated that any business that accepts or facilitates Internet wagers by people in the United States is breaking the law.

Surely NETeller founders Stephen Lawrence and John Lefebvre are better versed in the true nature of funding practices in the Internet gambling industry. But does it help or hurt the cause to have them testify, given their indictments and the pending legal action against them? Is it helpful to the Internet gambling industry to have Congressmen accuse people in the industry of breaking the law? At the very least Howard Lederer is sure to hear some questions about his business relationship with Full Tilt Poker, an Internet poker room that is still accepting U.S. players. Why bring more scrutiny on the current industry instead of exploring what it could become?

Gambling911.com’s Chris Costigan estimated that 70 percent of those who work in the Internet gambling industry have prior arrest records which would preclude them from gaining licenses under Frank’s plan. This doesn’t seem to be a badge of honor to me.

The Las Vegas casino boom was born thanks to organized crime, but today’s strip casinos are corporate owned facilities. A Nevada gaming license isn’t an easy thing to get, and a large part of the process involves a criminal background check. I think I’m OK with the same process being a part of regulating cyber casinos.

Last, but not least, Rev. Greg Hogan will testify. He will most likely tell the story of how his son, the sophomore class president at Lehigh University, robbed a bank to pay off debts he’d incurred after losing money at Internet poker sites.

Hogan’s story is sad, and I can’t imagine how awful it feels to watch your son spiral out of control. But perhaps, given the right controls and regulations, it could have been avoided. The UIGEA did nothing to stop the next Greg Hogan Jr. from logging on and playing in dozens of Internet poker rooms. I believe that Frank’s bill provides a solution for those that believe Internet gambling preys on minors and people with gambling problems. And it also gives those enjoy Internet gambling for entertainment some hope.