Poker Legislation Post

From Roll Call, at www.rollcall.com/issues/53_129/news/23337-1.html

from Roll Call:

“They say they got a carve-out, but they really didn’t,” Cabot said of the horse-betting industry.

“Now, the reason I think it’s concerning, from a legal perspective, is that if and when they ever adopt the Unlawful Internet Gambling Enforcement Act, banks, in my opinion, will always tend to take the more conservative position, and assume it’s an unlawful transaction.”

Cabot said that if that were to happen it would mean a potential disaster for the industry. “You would have a situation where the horse-racing industry is going to have a hard time surviving,” he said.

Peggy Hendershot of the Lexington, Ky.-based National Thoroughbred Racing Association said her group has urged the Fed and Treasury to adopt regulations that set out a merchant category unique to horse racing, so that credit card companies would be free of confusion.

“There would be a number of steps that would have to be taken, and still at some level it would be up to the banks and credit card issuers,” said Hendershot, the senior vice president of legislative affairs at the association. “I can’t speculate because the regulations are still in an open process. Certainly, the overblocking provision is of some concern to us.”

The horse-racing industry has thrown considerable effort behind its exception to the Internet gambling ban.

The group spent about $400,000 on lobbying in both 2006 and 2007 and tapped such firms as the Alpine Group, Sidley Austin, Angus & Nickerson and Davis & Harman. In the 2006 election cycle, the association’s political action committee handed out $316,000 in federal contributions. So far this cycle, the PAC has given $174,000.

That money, though, is dwarfed by the political muscle of the Poker Players Alliance, which in the first quarter of this year reported spending $346,750 on lobbying. Unlike horse racing, online poker received no carve-out in the gambling bill and is working to overturn it by supporting Frank’s measures.

The group’s in-house lobbyist, John Pappas, said that the Poker Players believe they have a similar problem to the horse racing industry.

“All UIGEA does is say that banks have to stop transfers of money for illegal Internet gambling,” Pappas said. “They do not define what unlawful Internet gambling is. You need to rely on existing state laws. No one knows what all the different state laws are. It really throws things into a muck.”