New Bill For Online Poker on Horizon in U.S. Senate?

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There’s been a lot of speculation recently that Senate majority leader Harry Reid (D-Nevada) will be introducing legislation that would legalize and regulate online poker in the United States, separate from the current bills that exist in the House of Representatives.

The rumors have been circulating for a while that Reid, who represents Nevada (Las Vegas) casinos’ interests in the Senate, may be moving in this direction. But the chatter has been picking up in recent days.

A story at proactiveinvestors.co.uk had this to say, after interviewing London-based stockbroker Daniel Stewart: “The stockbroker noted speculation that US Senator Harry Reid and his pro-legislation cohorts are preparing a Bill that could be introduced into the Senate within the next three months and ready for approval by the President during H2 2010. Daniel Stewart believes that the proposed Federal legislation will encompass just online poker and exclude casino and sports betting services, which should ensure that it is easier to implement.”

In the wake of that bit of news/speculation, a couple of respected online poker blogs have been trying to put together the pieces to figure out why this makes sense. For most of the existence of online poker and gambling, the U.S.-based casino industry has opposed online gaming and resisted its legalization and acceptance.

But Frank Fahrenkopf, president of the American Gaming Association, gave an interview in March in which the AGA changed its stance. Here’s what he said at the time: “We are open to the concept of legalized internet gambling, so long as there is a regulatory regime that is put in place that protects the consumer and protects the integrity of the game. We’re at this point in time open to the question of whether it’s a federal or state regulatory regime, although I must tell you I think a majority of the board would favor the states. But until we have something that we’re really going to look at, we can’t get to that question.”

So why the change of heart? A Reid-sponsored bill, which would only deal with online poker and no other forms coming up would make sense, as it would could be a boon to the brick and mortar casinos in the U.S. Here’s a take from Pokerati.com, which independently, and unofficially confirmed that Reid legislation could be on the way:

Considering that [the AGA is] the representative voice for B/M casinos, you can see a plausible plan taking shape:

1. Let the UIGEA go into full effect June 1.
2. Eliminate the most powerful online poker operators currently in the industry (i.e. Tilt and Stars).
3. Pass a new law.
4. Let Harrah’s, the Sands, and MGM/Mirage set up shop.
5. Then let the European poker sites join the party.

Certainly that’s just speculation at this point, but it makes sense. Then, industry insider Bill Rini had this to say in the wake of pokerati’s post on the matter:

As [Pokerati] points out, letting the UIGEA go into effect and give the Feds a reason to go after companies like Stars and Tilt clears the playing field for brick and mortar casinos to set up and get a head start while these companies fight multi-year lawsuits trying to get back in the US market. Even “clean” operators who never offered gaming in the US will probably need to establish a US based presence and have all sorts of hurdles to clear before they can offer gaming in the US. This slows everyone down.

Currently there are several bills in the House of Representatives that would affect online poker, but these would not have the same aim of creating a more favorable market for U.S. casinos:
– The Reasonable Prudence in Regulation Act (H.R 2266), which would delay implementation of the Unlawful Internet Gambling Enforcement Act for one year.
– Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2009 (H.R. 2267), which would legalize and regulate online poker and gambling
– The Internet Gambling Regulation and Tax Enforcement Act (HR 4976), which would tax online poker and gambling, a companion bill to H.R. 2267.

This is all still speculation and unconfirmed rumor at this point. No Senate bill exists right now, and what exactly it would encompass if it did exist is purely conjecture. But it seems like that this new front on the battle over online poker in the United States may get opened up soon.

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