House committee takes 'first step' on legalized online gambling

The House Energy and Commerce Manufacturing subpanel will hold a hearing Tuesday on Internet gambling, a victory for supporters of legalizing the online gaming industry.

“I am pleased that Chairman Bono-Mack is holding a hearing on the important issue of Internet gaming," said Rep. Joe Barton (R-Texas), who introduced a bill that would legalize and regulate online poker in June after the Obama administration shut down much of the industry in April.

"It’s a first step to showing why the current law is a lose, lose for everyone — the public, the taxpayer, the banking industry, and the people who want to play poker openly and honestly on the Internet. I look forward to an open exchange of ideas.”

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Rep. Barney Frank (D-Mass.), an outspoken advocate for legalizing online gambling, has criticized the Obama administration for its zeal in targeting the poker sites. The Justice Department has accused one of the seized sites, Full Tilt Poker, of being a "massive Ponzi scheme."

Frank shepherded a bill to legalize online gaming through the House Financial Services Committee as chairman in the last Congress and reintroduced the same bill with Rep. John Campbell (R-Calif.) earlier this year.

But Financial Services chairman Spencer Bachus (R-Ala.) is a staunch opponent of online gambling and helped ban the practice in 2006. His office indicated earlier this year they have no plans to revisit the issue, making the Energy and Commerce Committee a better option for supporters of legalization.

Proponents of legalizing online poker such as Barton argue it is a game of skill, unlike traditional table games like roulette or blackjack. His legislation would only legalize online poker and expressly prohibit accepting any form of betting over the Internet without a license.

Barton's bill would allow only currently licensed race tracks, card rooms and casinos to obtain licenses to set up online poker sites, meaning the corporations that currently control the U.S. gambling industry would likely extend that dominance online.

Barton's bill has drawn bipartisan support from lawmakers and the Poker Players Alliance, which represents over 1.2 million poker players. Four percent of the group's members identify as professionals. But House Majority Leader Eric Cantor (R-Va.) has voiced opposition to legalizing online gaming in the past.

In addition, the two largest gaming industry firms, Caesar's and MGM, came together to fund the launch of the FairPlayUSA Coalition in July that will advocate for the legalization of online poker alone. The group will not directly lobby lawmakers.

Separately, a trade group that represents the Fantasy Sports industry hired its first lobbyist in May in hopes of getting the game legalized in the nine to 12 states where running or participating in a league could be considered illegal. The group doesn't plan to get involved in the debate over online poker.

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