Online gambling finds support in House

A House subcommittee signaled Tuesday that it will move forward with legislation to legalize some forms of online gambling.

Rep. Mary Bono Mack (R-Calif.), chairwoman of the House Energy and Commerce Committee's Manufacturing subpanel, said the committee would deliberate before acting on any legislation. 

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But lawmakers and industry players at a Tuesday hearing on Internet gambling seemed to be in broad agreement that the time has come to let the nation’s casinos, cardrooms and racetracks operate online as a regulated industry.

Bono Mack noted that some form of gambling is already legal in every state except Hawaii and Utah. 

“I learned to play poker, believe it or not, in the Boy Scouts,” said Rep. Joe Barton (R-Texas), who introduced legislation this summer that would legalize and regulate online poker. “If you learned something in the Boy Scouts, it has to be a good thing,”

Lawmakers at the hearing pointed to statistics that show millions of Americans gamble online, sending as much as $6 billion to illegal offshore gambling sites each year.

Several members said regulating and taxing the industry could provide a steady stream of revenue to help close the federal deficit. 

Ranking committee member G.K. Butterfield (D-N.C.) said games like poker and bingo “are as ubiquitous in the U.S. as baseball and football” and said Congress’s inaction on the issue has driven millions of Americans to offshore sites where they can easily be scammed. 

Several lawmakers and witnesses argued the 2006 law that banned U.S. financial institutions from processing payments for online gambling sites has failed. Barton called it “unenforceable.”  

Barton reiterated his longstanding argument that poker is a game of skill, adding that President Nixon financed his first congressional campaign partially through his poker winnings. He also noted that President Obama is known to be an excellent card player. 

Barton said the broad support in the House for his poker bill — libertarian Ron Paul (R-Texas) and liberal Barney Frank (D-Mass.) are co-sponsors — shows the idea has merit. 

“If you’ve got a bill they are all for, who can be against it?” Barton asked.

Poker Players Alliance chairman and former Sen. Alfonso D’Amato (R-N.Y.) said the Obama administration’s crackdown on the industry earlier this year has only served to drive the game underground, where players have no assurances that games are fair or that they will be paid if they win.

“The status quo is badly broken and benefits no one,” D’Amato said. “Internet poker has not gone away and it’s hard to envision a scenario where it will.”

D’Amato also noted that the Wire Act, which banned interstate financial transactions related to gambling, was intended to prevent sports betting, and it remains unclear whether online poker is illegal.

Opposition to online gambling has emerged from the organizers of state lotteries, which argue that legalization would drain dollars from state coffers that are often earmarked for education.

D’Amato argued that online poker sites serve a different customer and would have minimal impact on lotteries if the game were legalized.

“We believe that people who buy lottery tickets are generally not the same people and we don’t believe they really compete,” D’Amato said. 

Several witnesses at the hearing pushed for enhanced age verification to prevent children from gambling online. Others called for funding to help address the social costs of gambling addiction. 

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National Council on Problem Gambling executive director Keith Whyte said at least $50 million should be set aside to deal with gambling addiction. He noted that minorities, young men and veterans are particularly prone to addiction, which can lead to bankruptcy and criminal acts.

Whyte said his organization is neutral on legalizing gambling but noted that the online form may exacerbate addiction problems due to the speed of the games, the relative anonymity and the reliance on credit instead of cash. 

D’Amato argued it would be possible to include safeguards that would prevent problem gamblers from being able to log onto the websites.

—This story has been updated.