A lengthy hearing in the House Financial Services Committee on Wednesday featured discussion of HR 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act. After a fairly standard hearing by internet gambling standards, Congressman John Campbell (R-CA) dropped a bombshell, alluding to a markup hearing of the bill next week. As of the time of writing, no such hearing has been announced.
Rescheduled to 2:00pm ET, the proceedings in Room 2128 of the Rayburn House Office Building did not commence until 2:30pm ET. Then, Ranking Member Spencer Bachus (R-AL) gave his take on the hours to come: “The timing of today’s hearing strikes some of us as ironic, to say the least. After all of the talk about shutting down the casinos on Wall Street, it makes no sense why we would open casinos on every… computer in America.” Earlier in the day, President Barack Obama signed a major financial overhaul measure into law.
Campbell, despite being a Republican, seemed to be HR 2267 author and Committee Chairman Barney Frank’s (D-MA) right-hand man. Campbell told the assembled committee, “I don’t gamble. I don’t partake in it, but freedom is not about legislating what I like to do. Freedom is about allowing Americans to do what they want to do.” In her testimony, Poker News Daily Guest Columnist Annie Duke, who represented the Poker Players Alliance (PPA), noted that 70 million Americans play poker.
Michael Fagan, Law Enforcement and Anti-Terrorism Consultant, spoke out ardently against HR 2267 and called into question a stat that Duke contributed saying that 1% of gamblers could be classified as problem gamblers. Fagan noted that offshore sites are subject to U.S. excise taxes now, but don’t pay them. He summed up his testimony by concluding, “The costs of regulating and taxing don’t outweigh the negatives.”
Perhaps amenable to a bill like HR 2267 was soon-to-be-Chief Lynn Malerba of the Mohegan Tribe, who told the panel, “Our tribe has a philosophy known as the Mohegan Way, which stresses cooperation rather than conflict.” Malerba noted that Frank had worked hand-in-hand with Indian tribes to create the components of HR 2267. She added that hundreds of thousands of new jobs have been created from tribal gaming and that the Mohegan Tribe was still studying its optimal strategy.
Tom Malkasian, Vice Chairman and Director of Strategic Planning for the Commerce Casino, told the House Financial Services Committee, “We believe limited forms of online poker can provide safe play for our patrons, but only if the legislation is done the right way.” He called HR 2267 “fundamentally flawed” and “based on false revenue assumptions.” Malkasian claimed that HR 2267 rewards foreign operators purportedly operating illegally in the United States now. Once the market opens up, they would have a leg up on their competition in terms of a learning curve if they were granted a license.
The last witness was Ed Williams, President and Chief Executive Officer for the Discovery Federal Credit Union, who spoke on behalf of the Credit Union National Association. Williams told the Committee that the Unlawful Internet Gambling Enforcement Act (UIGEA) “represents an inappropriate and unreasonable compliance burden. It does not provide us with the definition of unlawful internet gambling.”
Congressman Joe Baca (D-CA) lashed out against his colleague’s bill, saying, “The only thing this bill will do is create problems for California and our economy. It threatens to close 22,000 jobs in California.” Baca also expressed concern that a direct federal tax on Indian tribes would threaten their sovereignty, at one point raising his voice and pointing at Malerba before reiterating his concerns about job losses.
One new point that surfaced during the hearing was whether sites like PokerStars, Bodog, and UB.com, which have continued to operate in the United States since the passage of the UIGEA in 2006, should be eligible to receive licenses under HR 2267. Malerba responded, “I think that all sites should be located in the USA. In terms of what has happened in the past with the internet gambling operators, I’m sure that there are internet gambling operators offshore that are legitimate and have been licensed by legitimate governments.
Then, it was Campbell’s turn to shine. At the tail end of a hearing that was delayed by 30 minutes to start and had a 45 minute respite in the middle, Campbell told the audience in a largely empty conference room that he’ll offer an amendment in a markup hearing next week that will add use of sophisticated technologies to HR 2267. He’ll also propose a loss limit: “Most brick and mortar casinos don’t have those things.”
The hearing came to a close around 5:00pm ET. PPA Executive Director John Pappas told Poker News Daily that the markup hearing directive would come from Frank’s office.