Congressman seeks delay in online gaming regulations

One of Congress’ leading supporters of online gaming urged Bush administration officials today to hold off on instituting regulations to outlaw the games in the final days of the presidency.

Democratic Rep. Barney Frank, chairman of the House Financial Services Committee, asked Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke to postpone the “flawed” regulations until President-elect Barack Obama’s administration can review the rules.

Congress passed a bill in late 2006 essentially banning the online games, and the administration has drafted regulations needed to put the legislation in place. Frank’s committee passed a bill this fall that would stop the rules in favor of a new process.

“I am deeply disappointed to hear that your agency is proceeding with what I consider to be unseemly haste in issuing regulations implementing the Unlawful Internet Gambling Enforcement Act,” Frank wrote.

“This midnight rulemaking will tie the hands of the new Administration, burden the financial services industry at a time of economic crisis, and contradict the stated intent of the Financial Services Committee.”

Microgaming Online Gambling Software Website To Block All US Traffic

We have learned that effective Monday, Microgaming – a leading software provider for online casinos and poker sites based in South Africa and the Isle of Man – will begin blocking all US-based traffic.  The commonwealth of Kentucky has listed Microgaming among its web domain names to forfeit later this month.

Microgaming Software Systems Ltd has been a leading software providers to the online gambling industry, with just under 100 casinos listed on its website. Online casino operators such as the Carmen Media Group, Fortune Lounge Group, Ladbrokes, 32Red, Fairground Gaming, Vegas Partner Lounge and Golden Star Lounge are among those who use Microgaming’s software.

Microgaming also has an online poker subsidiary called Microgaming Poker, which is the network used by Doyles Room.   Doyles Room’s domain registrant, GoDaddy.com, already announced it had turned over the website’s operating certificate to the commonwealth of Kentucky.

The state of Kentucky claims that several dozen online gambling websites have cut into their economic well being and will hold a forfeiture hearing in two weeks.  Original reports suggested that Microgaming would only block Kentucky residents, however, the degree of difficulty in blocking a single state within a country appears too overwhelming for the firm.

There were no immediate indications that Microgaming would require its actual licensees to block US traffic as of press time.

Many Microgaming licensed companies restrict individuals from playing for real cash originating from certain states, however, the actual websites are not blocked.

China, Singapore and some Arab countries engage in similar blocking efforts and Australia is looking to follow suit.

Bush Treasury Seeks UIGEA Implementation On Online Gambling

Despite testimony from a rainbow cross-section of society, including leaders of financial institutions, government departments,Congressional members, Internet experts, and foreign policy observers, the Department of the Treasury is intent on implementing the UIGEA before the coming change of administrations.

Treasury officials finalized regulations which would define which online gambling activities were illegal to transact payments through banks and credit card companies. On October 21st, the new rules were forwarded to the Office of Management and Budget for review before implementation.

Representatives from various gambling industries, along with Treasury officials, are meeting all week with OMB personnel to voice opinions about the regulations before they are enacted. Letters signed by a group of Congressmen have asked that the implementation process be stopped.

Horse and dog racing industry reps have already had meetings to attempt to retain exemptions in the new definitions that were provided in the UIGEA. Members of the Interactive Gaming Council have also attended at least one discussion, and Executive Director John Pappas of the Poker Players Alliance is scheduled to have a say on Friday.

Pappas said, “It’s really remarkable that this administration would try to push this out given the burden it would place on financial institutions at this time of financial crisis.”

If the Treasury succeeds in placing definitions on what constitutes online gambling and improper payments, the transaction process for online casinos will become even more awkward and muddied for American players.

The Bush administration is following a tradition of imposing controversial regulations before the end of term, a process which allows the incoming administration a clear desk and no pressure to immediately deal with the liability of handling a hot potato. But there is also the belief that the Obama Executive Branch will be friendlier to Internet gaming, thus leading hardcore religious Republicans to push this agenda now.

Obama Should Support Overturning the UIEGA and Use Online Gaming as a New Revenue Stream

When Barack Obama was campaigning for the presidency, he listed three main areas of domestic policy he planned to focus on: health care, education and tax cuts for the middle class. Asked how he planned to pay for it, Obama stated that he would go through the budget line by line and stop funding for any programs or initiatives that were ineffective or impractical and implied he would find new revenue sources that were feasible. In light of those statements, Obama must readdress the USTR’s decision to withdraw its WTO commitments regarding gambling services.

For anyone who isn’t familiar with the case, Antigua has fought with the United States for almost a decade, arguing that the U.S. attempts to block online gambling to Americans from operators in Antigua violates a GATS commitment the U.S. made previously. The U.S. government stated that the commitment was made in error and wasn’t bound by it, but the WTO courts ruled that the U.S. indeed was in violation of the agreement and the decision was upheld by an appellate body. Instead of living up to its commitments, the U.S. government instead chose to rewrite its commitments and in doing so had to compensate all countries that could have been affected by that decision. Antigua, Canada, India, Macao, Costa Rica and Japan asked for compensation, along with the EU. To date the government has come to agreements with Canada, Japan and the European Union, while the other governments are still in negotiations. No details were given on the agreements, although it has been reported that the European Union agreed to concessions in the areas of shipping and storage in exchange for allowing the U.S. to rewrite the commitments. The amount that it will cost the States in potential lost duty is unknown, although a representative from the EU did tell me it was “substantial” and that shipping and storage were areas the EU has been trying to get the United States to budge on for years. At the same time, it was far less than the $100 billion in compensation many experts believed the EU would demand. As well, because the country of Antigua was directly affected by the U.S. reneging on its commitments, and because they brought the case to the WTO, Antigua was granted $21 million in sanctions against the United States which it could apply by ignoring U.S. copyrights and trademarks (Antigua had asked for $3.4 billion in annual compensation). The WTO’s compensation amount was based on what it felt Antigua could have made if horse racing was allowed to be offered by Antigua to the United States. Thus far, Antigua hasn’t attempted to impose those sanctions.

While the U.S. came to this agreement, it’s clear that the countries that asked for compensation weren’t happy about it. Antigua and Costa Rica still clearly want the United States to open its borders to offshore wagering, and Peter Mandelsson, the EU trade commissioner, has been taking heat for the agreement ever since he signed it. Many in the United Kingdom feel that he let the U.S. off too easy and that he should have forced the United States to live up to its agreements, as the U.S. has demanded of other countries on numerous occasions under similar circumstances; plus, they feel he should have demanded that all lawsuits against European operators be dropped as a condition of the agreement. Furthermore, UK gambling companies still want access to the lucrative U.S. market, and now Bermuda is looking at online gambling as a possible revenue generator (so the U.S. will have another friend it will probably antagonize). According to a source at the WTO, the U.S. still has the opportunity to change its mind about rewriting its commitments without any repercussions. If they agree to simply abide by the old agreement, then the agreed to compensation would be withdrawn—Obama’s new government should seriously look at that option. Don’t forget, Obama has stated that he is going to look for any programs that are impractical and this is indeed an initiative that makes no sense. Aside from the fact that it will cost the U.S. several billion each year in lost duty, the decision could also have long term effects on trade, as countries could deem the U.S. as a country that doesn’t take its commitments seriously (as Barney Frank and others pointed out last year when they asked the USTR not to follow through with their plans to rewrite the commitments). Many countries like Canada, Mexico and the EU are already worried that Obama may be protectionist, given his comments about scrapping the North American Free Trade Agreement, so stating they won’t renege on this WTO agreement could actually show those who are concerned that his government isn’t protectionist.

More importantly, this is a frivolous expenditure that makes no sense. Granted, it isn’t “a program” per se, and it isn’t money coming directly out of U.S. coffers, but obviously the amount lost to the government must be significant or shipping and storage wouldn’t be on the WTO exclusion list now. Many accounts I have read indicate its worth is in excess of $3 billion to the industry. But what is the point anyway? The agreement, if passed, is only meaningful if the UIGEA remains in tact, and it seems clear that the UIGEA as it stands is coming under fire. The banks and the House financial committee have deemed the bill ineffective and impractical and have argued that trying to implement it would be virtually impossible, and very costly, even if it could be implemented. Barney Frank, Robert Wexler et. al., (who now have a much larger Democratic presence in the House and Senate) have passed a motion demanding that the UIGEA spell out exactly what is deemed an illegal transaction to make things easier for the banks, and they want exclusions for all forms of online gambling except sports. Frank, Wexler and other’s arguments are that if horse racing, lotteries and fantasy sports are excluded from the UIGEA, then poker needs an exemption too—anything other than that is discriminatory. The DOJ has thus far dismissed the notion and claims it will continue to go after all online gambling, but shortly the DOJ will have a vastly different look, and indications are that those being considered for the new jobs don’t think chasing offshore gambling companies is a good expenditure of time or money. So if the UIGEA is amended to allow poker, and possibly casinos, then the U.S. will essentially be throwing away many concessions they obviously deem important to protect for the ability to block online sports betting, which is a tiny percentage of the total online betting handle (not to mention it has already been found to be illegal by U.S. courts under the Wire Act back in 2000). As well, even finding the few sports gambling transactions will be very costly to the banks since checks aren’t written under the sportsbook’s name, and that expense is certainly one banks can’t afford, not to mention that many of these banks are going to be bought out by the U.S. government anyway, so it will become a direct taxpayer expense.

Furthermore, California is going to legalize online poker sometime in 2009, whether the DOJ likes it or not. California feels this will provide the state needed revenue, and it is confident that it is not in violation of any federal laws. Other states will certainly follow suit, and before you know it you’ll have an interstate poker network in the U.S. All gambling lawyers and pundits agree that it isn’t a matter of whether it will happen next year, but when. Furthermore, Nevada, which is getting killed in the current financial climate, is seriously looking at offering online gambling and taking their chances with the courts. In fact the Palms Group is on the verge of bankruptcy, and Hilton and MGM aren’t in great shape either. Online gambling may not be an option, but rather a necessity. That, of course, brings Antigua back into the equation. Antigua hasn’t started with the trademark sanctions for two reasons. First, it is hoping the U.S. will change its mind; and second, it knows that the small damages given to it by the WTO courts were based on a hypothetical situation whereby horse racing could be offered stateside by Antiguan gambling operators. If, and when, interstate poker is offered in the U.S., Antigua will surely go back to the WTO and demand the settlement be revisited because the situation changed. At that point, given the enormity of poker, the WTO may indeed award Antigua something closer to the $3.4 billion per year Antigua originally sought. That is a lot of money that could be used for healthcare and education, not to mention it could affect many companies like Microsoft and Apple that are already struggling in this economy.

Without question, therefore, the pursuit of rewriting the WTO gambling commitments and the implementation of the UIGEA are faulty policies—not to mention that prohibition doesn’t work. Obama said where he sees a bad policy that costs money he’ll change it, and he should start here. He certainly has the mandate for it, and the overwhelming wins in Congress by the Democrats should give them the votes to overturn the UIGEA if they see fit to do so. Aside from the fact that the UIGEA can’t work, it also puts a stranglehold on the country if the U.S. ever decides it wants to delve into the area of online gambling in the future. In the UK, Germany and many other countries the United States would consider close allies, online gambling is allowed and actually encouraged. And in all countries, including the United States, a large percentage of land based gambling revenue almost always is used for health care, education and amateur sports. Before the UIGEA was passed, it was estimated the online gambling revenues from the U.S. would approach $20 billion by 2012. If that is indeed the case, then a legal, regulated and taxed online gambling industry could be a huge windfall for the country. The U.S. could follow Austria’s lead, whereby Americans betting at all sites would pay a tax on all wagers equal to a percentage of the stake if they lose. Half the stake could go to the State and half could go to the federal government to be used for health care and education.

Also, don’t forget that the UIGEA was a Republican initiative that couldn’t pass Congress under normal voting procedures and was only rammed through by Bill Frist by attaching it to an unrelated bill, with the full knowledge of other Republicans like Jon Kyl, Robert Goodlatte and George Bush who were upset they weren’t getting their way. Overturning this ridiculous law and stopping a very dangerous decision to purposely renege on a WTO commitment will show the Republicans that Obama and his party won’t be pushed around and will get things done the right way. Obama made a commitment to find additional revenue and stop funding on bad initiatives. Here are a couple that are staring him right in the face.

Treasury Regulations For Online Gambling Due By End of November

The Internet gambling world is asking why the Treasury Department of the United States government is pushing to enact regulations enforcing the UIGEA now, after two years of debate.

Online Casino Advisory has contacted an inside source with the Bush administration. From the administration point of view, he said, it is not a rush to suddenly and hastily promote rules, but a culmination of two years’ work at defining illegal online gambling, and illegal payment procedures.

The insider said his office was not responsible for writing law, but for attempting to “faithfully execute the law” as written by Congress. This did seem to ignore that the UIGEA could not be enforced as written, due to the vague and confusing use of undefined terms. By defining those terms, the Executive Branch is ignoring previously established and existing definitions, which only the Congress can change.

The source continued by saying he expected the review by the Office of Management and Budget to be finished and the regulations to be published and therefore effective by the end of November. He did caution that that estimate may be off by a week or two, but probably not more than that.

While the insider insisted that the timing of the finalization of regulations against Internet casinos was purely coincidental with the end of the Bush administration, others thought it represented one last chance for radical Republicans to attempt to leave in place long-lasting public policy.

Certainly, rules already in effect are much harder to change than merely proposed rules. Meanwhile testimony before OMB officials continues by Treasury representatives, as well as animal racing leaders, members of the Interactive Gaming Council, and members of the Poker Players’ Alliance. What is being said in those meetings will be available in the final, published report.

Jenny Woo Talks To Barney Frank: Online Gambling Not Bad for Economy

As one of the key allies for the online gambling industry, Democratic Congressman Barney Frank has been working diligently to have the Unlawful Internet Gaming Enforcement Act (UIGEA) repealed.  As  chairman of the House Financial Services Committee, Barney Frank oversees housing and banking industries.  He has been especially vocal in recent weeks working hard to help those who are facing foreclosure on their homes and voting on behalf of a $700 billion bailout for the banking sector.

Gambling911.com’s own Senior correspondent Jenny Woo sat down with Barney Frank to discuss his stance on Internet gambling and what he believes will be the future for the industry.

JENNY:  What was it like teaming up with one of the most conservative Republicans, Ron Paul (Texas Congressman) to co-sponsor an online gambling bill?

CONGRESSMAN FRANK:  He’s a libertarian and he’s actually one of the honest ones who really want to help low income people and when it comes to interfering with peoples freedoms.  Ron and I worked together on legalizing marijuana and on opposing some restrictions on free speech.  I refer to him as being a very good ally; he’s a very non-hypercritical conservative.

JENNY:  Why are you so adamant about ensuring that online gambling becomes legalized?

CONGRESSMAN FRANK:  I think it was a terrible mistake that the war of human activity should be divided into two groups, things that the government allows because it approves of them and things that the government prohibits.  The point is that it’s not up to the government to find whether something is a good thing or a bad thing, it’s up to the government to decide whether it would hurt somebody.  It’s a gratuitous interference with adults.  The House responds, according to the bill, it doesn’t add into the gross domestic product, that’s a terribly authoritarian idea that we shouldn’t allow people to do things if it doesn’t go with the gross domestic product.

People would say to me, “do you want to encourage people to gamble”, again that’s a terrible notion.  The idea that the world should be divided in things the government prohibits and things that the government encourages.  The world ought to be filled with a government that let’s people do on their own.

JENNY:  On that same note, why is it that there are those who are so adamant about ensuring the activity remains illegal?

CONGRESSMAN FRANK:  Well some have a religious view about it, which puzzled me because the problem is – there’s something in the Bible that  says gambling is a terrible thing except Bingo? I just don’t understand some of my liberal friends, who should know better, (but) are opposed to it (online gambling).  And I don’t understand why.  Generally my liberal friends have been able to read what they want and there’s something cultural that leads them to be defensive.  I can’t understand what rational arguments that they make against it, but that’s where they are.

JENNY:  You got H.R. 2046 passed through House Committee.  Obviously the year is about to end and we have a new administration coming in, what is the process to get your bill passed?

Fast Facts: What is H.R. 2046? To amend title 31, United States Code, to provide for the licensing of Internet gambling facilities by the Director of the Financial Crimes Enforcement Network, and for other purposes.

CONGRESSMAN FRANK:  The problem that we have now is that after the House Committee passed the bill this administration sort of panders.  The Treasury Department tries to rush through these regulations.  I’m very concerned by that.  We got word that they’re trying to get this approved in this administration.  So prospects for doing this all depends on whether or not they sneak this one through.

JENNY:  Do the odds increase with an Obama administration?

CONGRESSMAN FRANK:  Yes, that would be much better with more Democrats.  Much more support.  I also think with the Obama administration you wouldn’t see these bad regulations.  But what the Bush people try to do is to get this one done very hastily and with little preparation so it’s in place when the Obama administration takes over.  But clearly we have more support opposing (these attempts to stop regulation) with more Democrats in Congress.  I wish it weren’t an issue but the Republicans have made it one.

Did You Know? Just days before the Republican Convention, that party dropped online gambling prohibition from its platform.  But the elation among online gambling enthusiasts was short lived.  The Republican party ensured an amendment was added to make online gambling prohibition part of that platform once again.  But to be certain, Ron Paul is not the only Republican Congressman opposed to Internet gaming prohibition.  It is after all a former Republican Senator who is now chairperson of the powerful Poker Players Alliance.

JENNY:  We know that Senator Jon Kyl was one of the co-authors of the UIGEA; do you see him railroading any attempt to get the bill passed through the Senate?

CONGRESSMAN FRANK:  They don’t have to pass the bill; the bill has already been signed into law.  What I’m worried about is that the bill calls for regulations by the Treasury Department.  That’s what we tried to stop.

JENNY:  We’ve often said you are one of the hardest working Congressman between this and taking center stage with the economy.  With the economic situation deteriorating do you think the online gambling initiative may have to take a back seat for a year?  Or, on the other side of the spectrum, can your bill be passed based on the premise that this is a multi-billion dollar industry that can actually help to fuel the US economy?

CONGRESSMAN FRANK:  No, I think it helps.  I think if we do this right we should make online gaming legal and subject it to a reasonable taxation like anything else.  This does not conflict to our effort to stimulate the economy.  This isn’t bad for the economy.

JENNY:  France and Italy both have taken a complete about face on the subject of Internet gambling.  Last year they were arresting executives of gaming firms, this year both countries have begun to embrace the industry.  What do you think has to happen before these opposing groups can be convinced online gambling can be a good thing here in America?

CONGRESSMAN FRANK:  I wish I knew.  If I had an easy answer I would have put it into effect.  The ones who are notably opposed will not change their minds.  The problem now is that the people who are losing out because of this ban need to get much better organized and each one of them needs to talk to his or her representative and senators.  Especially from the voters who say, “will you please mind your own business and stop interfering with my choices.”

JENNY:  What are your plans for the future?  Barney Frank for President in 2016?

CONGRESSMAN FRANK:  Haha Oh no no.  I’ll be older in 2016 then John McCain is today.  I am very happy with the chairmanship that I have with this committee, it gives me the chance to get a lot accomplished that I want to accomplish.  I expect to serve a few more years as chairman of this committee.

JENNY:  Thank you Congressman.

CONGRESSMAN FRANK:  Thank you.

Can Kentucky kill online gambling?

The online poker industry may once again be fundamentally changing in the United States. First came enactment of the Unlawful Internet Gambling Enforcement Act on the national level back in 2006.

Now Kentucky Gov. Steve Beshear has taken it upon himself to try to eradicate internet gambling altogether by seizing 141 of the world’s largest domain names. The reason: In part to protect the state’s horse racing industry and state lottery.

It doesn’t seem plausible that a Governor could single-handedly order the forfeiture of domain names belonging to sites like Bodog, Absolute Poker, Ultimate Bet, PokerStars, Cake Poker, Full Tilt Poker, and Doyle’s Room. But that is exactly what has happened. If this were to happen outside the United States many would label it as “censorship” and lambaste it.

The epicenter of the activity in Kentucky is in its capital city, Frankfort, where groups representing the state and the internet gambling industry recently argued in front of Judge Thomas Wingate whether internet gambling domain names can actually be seized under Kentucky law, whether the State has jurisdiction in the case, and whether violations of First Amendment rights have occurred.

Groups such as the Interactive Media Entertainment and Gaming Association (iMEGA), one of the parties involved in the case, have argued that interfering with the internet in Kentucky will set a dangerous precedent throughout the rest of the world. After all, what would stop another city, county, state, or country from doing the same thing? Judge Wingate ruled to uphold the seizure order and has scheduled a hearing for the potential forfeiture of the domain names targeted in the case.

Wingate’s decision said in part: “We note that opposing groups and lawyers argue any judicial interference of the Court will create havoc. This doomsday argument does not ruffle the Court. The internet, with all its benefits and advantages to modern day commerce and life, is still not above the law, whether on an international or municipal level.”

The lack of an order to overturn Beshear’s actions led iMEGA to file a petition asking the Kentucky Court of Appeals to step in rather than wait for the forfeiture hearing. iMEGA President Ed Leyden recently told us, “We’re all on the same side and have the same common enemies. This is an invalid order. The court lacked jurisdiction. The best course of action now is to fight with every fiber in our being.”

If the forfeitures are successful, the 141 internet gambling domain names at stake would become property of the Commonwealth of Kentucky and be inaccessible from anywhere in the world. Those internet gambling sites could elect to purchase new domain names (such as PokerStarsKentucky.com, for example) and e-mail all customers notifying them of the change. Each site would have to work tirelessly to market its new name. However, what would stop the Governor from then seizing those latest domains as well?

Finally, it is worth mentioning TwinSpires.com, a website owned by the same company that owns and operates the Churchill Downs horse racing track — and is not among the 141 domain names in the case.

This favoritism has prompted outcry from the industry, which claims that all internet gambling should be treated equally. After all, why should online wagering on horse racing be any different than playing online poker? If the argument here is protecting children, don’t we also want to protect them from wagering on Seabiscuit?

Election 2008: McCain hard to pin down

Is McCain enough of a maverick to go against his party and allow online gambling?

Because neither of the two major party candidates, Sen. McCain and Sen. Obama, has come out either in favor of or against online gambling, we are looking at their past record, their comments and their party’s position for guidance as to how pro-online gambling legislation might fare under either presidency. This article focuses on Senator John McCain.

Before we examine McCain’s record, we have to look at his party’s record with respect to online gambling. It is well-known that the congressmen who led the fight to push anti-gambling legislation through Congress, and who spearheaded the drive to slip the UIGEA into the SAFE Port Act to guarantee its passage, were Republicans.

There is also no dispute that it is the Republican Party platform which contains the following anti-Internet gambling language: “Millions of Americans suffer from problem or pathological gambling that can destroy families. We support the law prohibiting gambling over the Internet.”

But as the recent Congressional Ratings released by the Poker Players Alliance (PPA) show, it would be wrong to think of online gambling as a Republican-versus-Democrat issue.

Although Republican Jon Kyl, John McCain’s fellow Arizona senator and the father of the anti-Internet gambling initiative, received a well-earned F-minus rating, so too does Democrat Sen. Dianne Feinstein of neighboring California. In Arizona, Republican congressman Jeff Flake earned an A, while his Democratic counterpart one district over received an F.

Unfortunately, like his opponent, McCain has not stated his opinion on Internet gambling for the record in any speech or on any campaign site. So what can we glean from John McCain’s record and his associations to determine how receptive his administration would be to pro-Internet gambling legislation?

Many of McCain’s top advisers and donors have ties to the gambling industry, from tribal and Las Vegas land-based casinos to online gaming. PPA Chairman Alphonse D’Amato is a McCain supporter, as are PPA lobbyists Wayne Berman and John Green.

Leading McCain’s campaign is Rick Davis, former lobbyist for GTech, an Internet gambling company. Also on McCain’s team are Charlie Black and Brian Ballard, both former lobbyists for Internet gambling companies.

While D’Amato’s endorsement is as an individual, and not on behalf of the PPA, John Pappas, executive director of the PPA, appears pleased with the opportunity D’Amato’s relationship provides the association to enlighten McCain on its issues.

Pappas has been quoted as saying about D’Amato’s endorsement, “He knew McCain; they served together in the Senate. He believes McCain has qualities to be a strong leader for America. I can only hope that, should McCain be elected, we’d have some insight into his thought process. If you have someone that’s on the fence on your issue, then what better way to educate him than to surround him with people that understand the benefits of regulation, like D’Amato? We have a great open door to be able to engage him on the issue.”

As a two-time chairman of the Indian Affairs Committee, McCain has been instrumental in the shaping of laws to spur the growth of the Indian gaming industry. “One of the founding fathers of Indian gaming” is what Steven Light, a University of North Dakota professor and a leading Indian gambling expert, was quoted as calling McCain in a recent New York Times article.

And his relationship with other sectors of the gambling industry seems strong; thus far in the presidential race, McCain has raised twice as much money from the gambling industry as Obama.

But there is no clear evidence of McCain’s opinion today with respect to Internet gambling. While he voted for the SAFE Port Act which contained the UIGEA, so too did Obama and his running mate Sen. Joe Biden. The bill was included in a must-pass piece of legislation, and it is unclear how aware any of the senators who voted for the bill were of the anti-Internet gambling language buried inside.

Ten years ago, McCain voted in favor of the 1998 Internet Gambling Amendment which, if passed, would have banned placing, receiving or otherwise making a bet or wager on the Internet. His opponent’s running mate, Sen. Biden, was one of just 10 senators to vote against the amendment, which ultimately failed to become law.

As a strong supporter of Indian gaming, and with the tribes’ anti-online gambling stance, it is assumed McCain would not support online gambling. A 2004 article for ESPN by Peter Keating said that McCain would ban Internet gambling – “not because it’s addictive, but because players typically have no way of knowing whether they are in fair games.” But it is not clear if this is the writer’s opinion, as the statement is not attributed to McCain.

In a July interview with Erin Neff of the Las Vegas Review-Journal, McCain gave what the writer viewed as evasive responses to her questions about his opinion on online gambling. According to her article, “First he tried to back away from his position because he hasn’t been involved in it lately. Then he said it was really fellow Arizona Sen. Jon Kyl’s deal.”

One bright spot in his analysis of the issue, according to Neff, was that he was quoted as not blaming the economic woes of the gaming industry on Internet gambling: “The economy is what’s hurting the gaming industry in Las Vegas today. It isn’t sports betting or Internet gaming.”

However, when pushed for his position, according to the writer, McCain punted. “Let me get back to you on it,” he said. “I haven’t thought about the issue.”

One person who is not vague or undecided is Las Vegas lawyer Anthony Cabot, who is on record as concerned for the future of online gambling under a McCain presidency. In an interview with the Las Vegas Business Press he said bluntly, “If [Arizona Sen. John] McCain is elected, the Internet gaming ban would never be repealed.” Unfortunately, the interview provides little to back up this opinion, so the voter is left wondering what effect McCain really would have.

There is no issue about McCain’s general opinion on gambling – he’s quoted as saying, “I am a gambling man.” His penchant for craps is well documented and there is little fear of him being ideologically opposed to gambling in general.

Also, McCain has spent almost his entire political life running as a “maverick” and is known to have distanced himself from the Republican party on a number of issues, so it’s hard to say whether he would go out of his way to veto a pro-online gambling bill that was sent to his desk for signature from a Democrat Congress.

The only other hint that McCain may be amendable to legislation to license and regulate online poker comes from his opinion on regulation of Indian Gaming. He has supported Congress clarifying and toughening the National Indian Gaming Commission’s enforcement ability at land-based casinos, saying, “If there is not sufficient regulation, corruption seeps in.”

It is probably fitting to say that voting for McCain because you believe he will support online gambling is a crapshoot. At best, his record shows someone who has not led the fight against online gambling, who does not view gambling as inherently immoral, and who is supported by many who are pro-Internet gambling.

The third and final installment of the Election 2008 series will focus on which of the third-party candidates running for U.S. President would be best for online poker and gambling. It will publish on Wednesday.

Online Gambling Summit to Take Place in Kentucky Next Week

The Internet Commerce Association (ICA), a non-profit trade organization representing domain-name investors and developers and the direct search industry, is responding to Kentucky’s attempt to seize 141 domain names of online gambling companies by holding what it’s calling an emergency summit.

Hosted by the Bluegrass Institute, which calls itself “an independent research and educational institution offering free-market solutions to Kentucky’s most pressing problems,” the summit takes place 1 p.m. Oct. 6 at the Capital Plaza Hotel-Frankfort in Kentucky’s capital.

Scheduled to appear on the panel are representatives from the Poker Players Alliance, Interactive Media Entertainment & Gaming Association, and the Americans for Tax Reform organization, as well as ICA executive director Michael Collins.

The summit takes place a day before a Kentucky judge is set to decide if the Commonwealth has the right to seize the domain names used to gamble and play poker by using a law that allows Kentucky to seize gambling devices. The Commonwealth is arguing that URLs should be considered gambling devices in this case.

The summit will focus on why the ICA believes the seizure is wrong and how it violates the commerce clause of the U.S. Constitution. People interested in attending the summit should visit www.internetcommerce.org.

KENTUCKY EXPECTATIONS

Next Tuesday’s resumption of debate on the legality of the attempt by the state of Kentucky to seize control of 141 international online gambling domains (see previous Online-Casinos.com/InfoPowa reports) continues to generate significant interest both within and outside of the industry.

Judge Thomas Wingate of the Franklin Circuit Court, who had earlier signed off on a temporary seizure of domains through registrars at the behest of outsourced lawyers working for the state, faced a platoon of legal representatives from online gambling companies, trade associations and public interest groups supporting freedom of speech and the Internet at the initial hearing last week.

Lawyers for both sides argued legal technicalities centered on the legal standing and identification of domain owners and claims that the action against 141 domain names took place “under cover” and with no notice to their clients. They sought a continuation to brief Judge Wingate on matters of law which they contended will demonstrate the court has no jurisdiction and should dismiss the action.

Judge Wingate gave all involved until October 7 to submit detailed legal briefs on their positions and qualifications for legal standing. The judge pointed out that the case was a complex matter in law where decisions reached could set precedents and have far reaching consequences outside the online gambling industry . It was therefore appropriate that those with the right to be heard submitted their arguments for debate and examination.

However, the judge sounded an ominous note when he told lawyers representing the domain names at issue: “You are going to have to eventually pony up and say who these people are.”

In the meantime the judge’s temporary seizure of the domains remains in place.

The October 7 hearing looks likely to be even more crowded as opponents to the Kentucky state’s action, which officials have admitted is aimed at forcing operators to bar Kentucky online gamblers and pay unspecified compensation to state coffers, present their arguments in a case that is already attracting wide mainstream publicity.

The state’s lawyers, employed on a contingency “no win no pay” deal, have claimed that online gambling falls within existing legislation which prohibits ‘gambling devices’ because domain names can be classified as such devices, a point that will no doubt be hotly contested. Online gambling is not specifically declared illegal in Kentucky, where Governor Steve Beshear has proved to be a staunch supporter of land-based casino and horseracing activity.

Among those who will have legal representatives present are the Internet Gaming Counsel, The Poker Players Alliance, iMEGA, the Internet Commerce Association and the Americans for Tax Reform, and it is understood that an open press conference is planned for the day before the October 7 hearing where a diverse range of representative bodies will make relevant statements.

The executive director of the Poker Players Alliance, John Pappas is driving the press conference and urges all interested parties to discuss participation with him by using the PPA website.