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Online poker advocates upped the legislative ante Aug. 6 with the introduction of a bill in the U.S. Senate that would legalize online poker and other games of skill. Virtually all forms of online gambling are illegal under the 2006 Unlawful Internet Gambling Enforcement Act, which prohibits financial institutions from accepting payments from credit cards, checks or electronic fund transfers to settle online wagers.
Despite the ban, Americans continue to gamble online with estimates showing that at least half the $16 billion Internet overseas gambling industry is driven by U.S. bettors. Since the 2006 law was approved, Internet poker players have contended that poker is a game of skill and should not be lumped in with other forms of online gambling such as sports wagering.
The Internet Poker and Games of Skill Regulation, Protection and Enforcement Act would provide a U.S. licensing, regulatory and taxation framework to establish a legitimate American online skill game industry. The legislation would impose further enforcement against individuals and financial entities that accept illegal Internet gambling proceeds.
Bill sponsor Sen. Robert Menendez (D-NJ) estimates that more than $3 billion in annual revenue can be raised by licensing and regulating Internet poker.
“Pulling Internet poker out of the shadows and into the light of the law, we have the opportunity to help our economy while protecting our families. By bringing these games of skill into the mainstream, we can generate billions in revenue for businesses and the Treasury during these tough times,” Menendez said in a statement.
Menendez’ bill would create five-year, renewable licenses to operate online gambling sites. The Treasury Department would be given wide latitude to deny licenses to persons Treasury believes do not meet the criteria for honesty, integrity, business probity, experience, and financial capability. Persons previously convicted anywhere in the world of gambling, financial or information security law would be automatically denied a license.
The bill would also require gambling sites to impose and enforce age and residence verifications and safeguards to combat fraud and money laundering. Any state or Indian tribe can opt out of the regulations and it would be illegal to accept bets from individuals residing in these jurisdictions.
“The safety benefits of the bill are particularly crucial. Parents are worried about their children falling prey to illegitimate gaming sites and thousands of Americans have been fleeced of millions of dollars by these sites,” Menendez said. “With proper regulation, we can prevent minors from playing poker online, crack down on predatory operations and sanction the legitimate ones.”
In the House, Rep. Barney Franks (D-MA) has introduced a much wider ranging bill to establish a complete licensing and regulatory framework for Internet gambling firms to solicit U.S. customers.