Readers of three popular news periodicals will notice an ad this week dubbed “It’s time for some straight talk.” The campaign, which was sponsored by the Poker Players Alliance (PPA), the major lobbying group for the online poker industry, calls on Congressmen in Washington, D.C. to pass legislation regulating the online poker industry.
The online poker ad appeared in The Hill on Tuesday, can be seen today in The Politico, and is set to print on Thursday in Roll Call. The ad reminds readers that the Washington Post newspaper printed a piece about the debate between prohibition and regulation of the industry last week, which was written in conjunction with a feature story that aired on CBS News program 60 Minutes. It reads, “Sensible federal regulation is the only way to protect the millions of Americans who play internet poker every day.” 60 Minutes made it a point to say that companies which offer online poker are located off-shore, outside of the boundaries of U.S. law enforcement.
John Pappas, the Executive Director of the PPA, told Poker News Daily, “Given the recent news stories on the online poker scandals, the PPA felt it was vital to reassure its members and its allies on Capitol Hill that the actions by these two websites are the exception, not the rule.” The PPA held meetings with its partners on Capitol Hill in advance of the news feature, which highlighted the cheating scandals on Absolute Poker and sister site Ultimate Bet. Over $20 million was taken off the tables by the cheaters. In the case of Ultimate Bet, 1994 World Series of Poker Main Event champion Russ Hamilton was identified as its mastermind.
Pappas continued, “The stories in 60 Minutes and the Washington Post serve as a wake up call to Congress that they need to implement thoughtful regulation of this growing industry in order to protect consumers and at the same time collect billions in tax revenue. That’s a win-win situation.” The ad states that billions of dollars could be generated from regulation and taxation of the industry and points out that in a struggling economy, “every nickel counts.”
A 2007 study by PricewaterhouseCoopers (PWC) attempted to estimate the amount of revenue that could be raised by taxing the industry. The study is based on HR 2046 (the Internet Gambling Regulation and Enforcement Act) and HR 2607, which taxes the industry 2% of deposits. PWC found that if sports leagues opted out, as did a high percentage of states, then about $8.7 billion could be raised from the internet gambling industry. Assuming a low number of states opt out, the number was more than doubled. If sports leagues elected to have regulated online wagering on events and only a few states bowed out, then as much as $42.8 billion could be raised over 10 years from the internet gambling industry.
The PPA ad also includes language noting that Congress has begun to address regulation of the industry. It reads, “Congress is working to pass legislation that will punish bad actors, guard against player fraud, protect children, and help problem gamblers.” Besides HR 2046 and HR 2607, which were introduced by Congressmen Barney Frank (D-MA) and Jim McDermott (D-WA), respectively, a host of other pro-internet gambling legislation has been introduced. Frank’s HR 6870, the second installment of the Payments System Protection Act, was passed out of Committee by a 30-19 vote in September. The bill calls for a laundry list of activities to be developed that are legal under the Unlawful Internet Gambling Enforcement Act.
Other bills that may be re-introduced in 2009 include Congressman Robert Wexler’s Skill Game Protection Act (HR 2610) as well as Robert Menendez’s Internet Skill Game Licensing and Control Act (S 3616). In the words of the PPA’s ad, “No matter how you cut the deck, regulation is the answer.”
