Thoughts on Interstate Gambling

Legalization of online gambling has taken twists and turns and makes headlines on gambling news. An article was published called “Top-10 ways the industry could screw up online gaming in the U.S.” on CasinoCityTimes.com. Here’s one portion to ponder.

10. A federal or bust strategy

There are all sorts of logical reasons to want the federal government to regulate online gaming. At it's heart, online gaming is and should be interstate e-commerce. And as a result, it makes sense to create a national framework for online gaming. But there are significant obstacles facing federal legislation -- and the creation of good online gaming policy at the federal level (more on that later). And as a result, going federal or bust doesn't make sense.

In the House of Representatives, the Barton bill (named after chief sponsor, Rep. Joe Barton (R-Tex.)) faces an uncertain future. The bill, which would legalize online poker and criminalize other forms of online gambling, including lotteries, hasn't reached the mark-up stage. If the bill gets through the Subcommittee on Commerce, Manufacturing and Trade, and if the bill gets through the House Energy and Commerce Committee, it still faces a full floor vote. Barton has not been promised a floor vote by House Speaker John Boehner. And even though Barton told the Digital Gaming and Lottery Policy Summit he believes he has the votes in the House, it's hard to envision a scenario where Boehner will make his caucus take a pro-gambling vote in an election year. So a bill out of the House is unlikely.

In the Senate, the DOJ reversal on the Wire Act has given Senate Majority Leader Harry Reid more leverage. The Nevada Democrat can convince Republicans, including Unlawful Internet Gambling Enforcement Act (UIGEA) architect Sen. Jon Kyl (R-Ariz.), that in order to ensure most forms of online gambling are prohibited, they should legalize online poker and ban everything else. The problem in the Senate is senators who receive money from politically connected Indian tribes will not back Reid's approach, which confers a significant advantage to the Vegas casino companies Reid represents. In fact, it is in the best interest of many Native American casino operators to scuttle federal legislation -- especially with local casinos in position to enjoy the fruits of the DOJ Wire Act reversal.

Combine that with the fact that the best way for Reid to pass online gaming legislation is attaching a bill to must-pass legislation -- which is tricky enough in the best of circumstances, let alone an election year -- and the outlook for a federal bill is murky at best.

So if the outlook is murky at best, why insist on a federal or bust strategy when there are opportunities at the state level? I'm not sure. I would take what I could get, and use it as leverage to force Congress to act.

I absolutely agree with what was said in this article. Why go all the way when there is an opportunity for a beginning. This mess has to start somewhere and taking what you can get is certainly a smart strategy. Would you agree?