By
Dan |
Published
Jun 26 2008, 07:29 PM
On Wednesday, the House Financial Services Committee defeated HR 5767, a bill proposed by Barney Frank and Ron Paul that would have likely opened the door for the return of legalized and regulated online poker in the United States. Instead, it’s back to square one for the internet gambling industry, which must continue to navigate turbulent waters. The question of what is and what is not legal under the Unlawful Internet Gambling Enforcement Act remains. Just one day removed from this historic mark-up hearing, PocketFives.com spoke with Barney Frank to discuss what happened in the Rayburn House Office Building.
An amendment to HR 5767 was offered up in the mark-up session by Republican Congressman Peter King. To many, the measure seemed to address the shortcomings of the Unlawful Internet Gambling Enforcement Act. The amendment would have required that the U.S. Treasury and Federal Reserve work with the U.S. Justice Department to decide what the UIGEA interprets as legal and illegal. Questions such as, “Is [online betting on] horse racing legal?” and “Is online poker legal?” would finally be answered. The amendment would have also required that a list identifying legal and illegal online gambling companies be kept. It was even introduced by a high-profile Republican Congressman, which seemed to indicate that it would be passed with flying colors.
When it came up for a vote, King’s amendment was defeated as a result of a 32-32 tie, with only three Republicans voting for the bill. Frank explains, “King's moderate amendment brought some sense to the UIGEA. We have a real problem where people who want to ban gambling also want to hijack the banks. They can’t figure out if horse racing is illegal or legal. If you’re a bank, how do you decide whether or not to process a transaction? How can you tell whether the check is written out to a legal or illegal company? The King amendment said that we shouldn’t regulate until we know what we’re talking about. What we’re talking about is disrupting the banks. There were no drawbacks to the amendment. It would just annoy the religious conservatives.”
Headed into the hearing on Wednesday, Frank recruited King to help gain bi-partisan support for an amended HR 5767. He explains why: “I know Peter King well. He’s a friend of [Poker Players Alliance Chairman] Alfonse D’Amato. Peter was good for another reason. One of the phony arguments that people gave to ban internet gambling is saying that these sites are being used for terrorism. King has as good of a record at opposing terrorism as anyone else. Having Peter on the amendment took away any questions anyone would have had regarding terrorism.”
Only three Republicans voted for the amendment: Peter King (NY), Ron Paul (TX), and Dean Heller (NV). In contrast, four Democrats voted against it: Maxine Waters (CA), Gregory Meeks (NY), Brad Miller (NC), and David Scott (GA). Frank talks about his expectations before the vote occurred: “I talked to the people who were doing the lobbying on the Republican side. They were expecting to get six Republicans and we got three. Some of those who voted against us were even Republicans who we tried to recruit to sponsor the amendment.”
On the future of the financial services industry’s enforcement of the UIGEA, Frank claims that banks will have to “overreact” to each transaction to make sure that they aren’t processing “illegal” transactions. The fact remains, however, that formulating the definition of illegal and legal, along with the actual enforcement of the UIGEA, still rests wholly with the U.S. financial services industry. To Frank, this is unacceptable: “This is what happens when you try and tell people not to do what they want to do voluntarily. There’s nobody to complain. We don’t need a regulatory scheme to make it illegal to murder or rob people; someone will complain if a crime is committed. Internet gambling is a case where no one is complaining and so you have to tell people what they can and cannot do.”
On the future of any legislation in Congress that may be amenable to online poker, Frank offers up the following words of advice: “What I’m hoping that is that people understand that they have to mobilize. I know that a lot of people watch poker on television. Maybe they need to watch poker and a little bit of C-SPAN. If you look at the vote (32-32), it was better than it was before [when we passed the UIGEA]. I think that there will be reaction, but the Republicans are being squeezed between the economics of the situation and social conservatives. I’ll wait and see what happens.”