HR 2267, Congressman Barney Frank’s (D-MA) Internet Gambling Regulation, Consumer Protection, and Enforcement Act, made it out of the House Financial Services Committee in late July. Across the United States, online poker players have been wading through the bill’s language and dozen-plus amendments to comprehend what the lay of the land will be should it become law.
In Washington State, playing online poker is a Class C felony. HR 2267, contrastingly, creates a Federally approved licensing and regulatory regime and would give each state one full legislative session to opt out. Accordingly, if Washington State elected not to opt out of the bill, online poker players could be returning to the felts in droves.
Poker Players Alliance (PPA) Washington State Director Lee Rousso told PocketFives.com in a post last week, “Washington could opt out of HR 2267. It is a flaw in the bill that the opt-out can be communicated by the governor. It would have been a better bill if legislative action were required to opt-out. It is not even clear that a legislative act could force the governor to opt-in.” Therefore, opting out of HR 2267 appears to be a simple task. However, whether government officials in Washington State would do so remains to be seen.
Rousso, who has been fighting a legal battle to overturn the statute that makes playing online poker a felony, added, “In spite of these concerns, I think it is more likely that Washington would not opt-out. Although Governor Gregoire claims to be opposed to gambling, it is also true that she has never met a tax that she did not like. Once internet poker has the Federal seal of approval, it is far more likely that Washington would tax it rather than ban it.”
HR 2267’s tax companion bill, Congressman Jim McDermott’s (D-WA) HR 4976, prescribes that states and tribal governments can extract 6% of deposits made onto licensed internet gambling sites. McDermott, whose home state imposes the harshest penalty in the country for playing internet poker, also proposed a 2% Federal tax in his bill. Both revenue measures would help to eradicate massive budget shortfalls that have plagued states and the U.S. Government.
During the July 28th markup hearing of HR 2267, Congressman Joe Baca (D-CA) proposed an amendment that would have required states and tribes to opt into the internet gambling scheme rather than opt out. Supporting the amendment was Ranking Member Spencer Bachus (R-AL), who told his fellow lawmakers, “An opt-in is stronger than an opt-out. If we’re going to legalize gambling on every iPod in America… it sweeps away all state laws.”
Frank responded by asserting, “You’re setting a dangerous precedent that your use of the internet is subject to state law.” Frank added that he believed Baca supported gambling, but wanted to protect those who engage in it in California from competition. Congressman Dan Maffei (D-NY) supported the idea that Baca’s amendment was simply a way to kill the bill: “You would have just a crazy quilt system if you had states decide whether to opt in or out. If we were to approve [Baca’s amendment], it would be a stealth way of gutting the bill.”
In May, the PPA staged a rally on the steps of the Washington State Supreme Court in Olympia following Rousso’s testimony there. Rousso primarily argued that the bill making online poker a Class C felony violates the Commerce Clause of the United States Constitution because it protects in-state interests from out-of-state competition. Rousso told Poker News Daily that month, “The Commerce Clause of the U.S. Constitution doesn’t allow that. I think it’s clear that online poker is international commerce, which means the states can’t regulate it.”
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