Gambling Legislation Article

[Berge20]

This may give you a broader view of the situation with these efforts from here on the Hill. Might be inside baseball stuff, but worth a look.
Gambling Article

Abramoff gets payback in gaming bill
By Patrick O’Connor

A handful of gambling lobbyists have already called it Jack Abramoff’s payback. Others are less direct.

But the central irony remains: The same Internet gambling legislation Abramoff fought so hard to defeat on behalf of a client that helped states conduct lotteries over the Internet now includes an exemption to protect those lotteries.

Now Abramoff’s infamy and legal woes are driving anti-gambling legislation across Capitol Hill, even though one of the most prominent bills includes language that would protect his former client.

Two House bills, introduced separately by Reps. Bob Goodlatte (R-Va.) and Jim Leach (R-Iowa), seek to reinforce existing anti-gambling rules by respectively updating telecommunications and financial-services laws to give enforcement agents more power to prosecute gamblers who place bets on websites based outside the United States.

A previous version of Goodlatte’s bill was defeated on the suspension calendar in July 2000 after a last-minute push by Abramoff and his team to spread misinformation about the bill on behalf of his client at the time, eLottery, a Connecticut-based firm.

Abramoff is now out of the picture, but gambling interests remain powerful on Capitol Hill and the current crop of anti-gambling legislation reflects that sway. Versions of this legislation have passed the House twice and the Senate twice, but never in the same year. Both chambers now appear intent on bringing bills to the floor this year.

The Goodlatte and Leach bills, along with legislation introduced in previous years by Sen. Jon Kyl (R-Ariz.), attempt to crack down on the estimated $12 billion annual overseas gambling business, but none of those bills would regulate some closely related industries, in an attempt to avoid potential roadblocks.

In addition to the lottery exemption in Goodlatte’s bill, both pieces of legislation include language to protect fantasy sports from current anti-gambling laws, and the two bills also avoid a decades-long dispute between Congress and the Justice Department over the legality of interstate pari-mutuel betting on horse races.

“The underlying principle of this legislation is not to change the legality but to change the enforcement mechanisms,” said Martin Gold, a lobbyist with Covington & Burling who represents the National Football League, an ardent supporter of anti-gambling legislation. “It doesn’t make anything illegal that was legal, and it doesn’t make anything that was legal illegal.”

JUNE 2000
Goodlatte is staunchly opposed to gambling and first introduced a bill to improve the federal enforcement mechanisms for Internet gambling in 1997.

In June 2000, Abramoff and his team defeated the Goodlatte bill after a companion had already passed the Senate and his legislation appeared on its way to swift passage, according to a story in The Washington Post last fall.

Abramoff reportedly convinced a former aide to Rep. Tom DeLay (R-Texas) to help get the bill on the suspension calendar, which would increase the number of votes necessary to approve it, and directed funds to various religious groups to help him pressure conservative members to oppose the bill on the grounds that it would actually expand Internet gambling — a false charge, Goodlatte maintains.

The bill eventually fell short by 25 votes.

“It’s now clear to a great many members of Congress that they were hoodwinked by Mr. Abramoff,” Goodlatte said. “He effectively killed it in [the] Judiciary [Committee] by getting some amendments offered.”

In the intervening years, Goodlatte added language giving states the right to conduct lotteries over the Internet. The change was part of an ongoing effort by the lawmaker and his staff to craft the legislation around a specific task: to update the 1961 Wire Act to prohibit anyone from placing bets over the Internet so that the 45-year-old law would apply to current technology.

Goodlatte reintroduced the bill in February of this year, and the legislation now has 130 co-sponsors. The Judiciary Committee is expected to address it in the coming months.

“It is a bill we intend to consider,” committee spokesman Jeff Lungren said.

HORSE RACING
In addition to updating the Wire Act, Goodlatte’s bill also gives Treasury officials more oversight of financial institutions to track illegal bets. This latter provision is the entire thrust of Leach’s bill, which parallels legislation Kyl is expected to introduce in the Senate sometime this year.

The Leach and Kyl bills would require the Departments of the Treasury and Justice to establish “policies and procedures reasonably designed to identify and prevent restricted transactions” relative to Internet gambling. That would include monitoring of credit cards, electronic fund transfers and any checks or bank withdrawals.

Leach said his initial version of the legislation avoided any mention of horse racing, but the current version has a clause explicitly exempting any bet that adheres to the Interstate Horseracing Act.

Passed in 1978, the Interstate Horseracing Act governs all interstate betting on horses. The law creates a specific carve-out in the Wire Act to protect state-to-state betting on horse races provided it is legal in both the state where the bet is cast and the state where the race is run and provided all wagers are placed with a regulated pari-mutuel service.

Despite those protections, federal law-enforcement officials have argued that the law does not pertain to online betting.

In December 2000, despite strong protests from the Justice Department, Congress amended the Interstate Horseracing Act to include wagers placed “via telephone or other electronic media” provided both the sender and the receiver are licensed pari-mutuel providers.

Initially unaware of this dispute, Leach said, he was told early in the process to leave horse racing out of his legislation because it was a separate issue governed by previously established laws.

“It wasn’t in the initial bill,” Leach said of the horse racing exemption. The congressman said he wanted to limit his own legislation to betting that is already illegal under current law, adding, “Don’t ever underestimate the power of the gambling lobby.”

Goodlatte said he did not explicitly address the horse racing issue for the same reasons. “We don’t address it, nor do we try to repeal it,” he said.

The National Thoroughbred Racing Association (NTRA), which is both the trade association and governance body for breeders, owners and racing officials in the United States, sent out a release March 15 announcing that the organization “has secured language … to protect Internet and account wagering on horse racing” after Leach’s bill passed through the House Financial Services Committee earlier this month.

The same release said that NTRA officials had worked with Goodlatte to “ensure that [his bill] also contained language that protects online and account pari-mutuel wagering.”

The organization’s political action committee had already contributed $79,000 to members of Congress this cycle as of Jan. 23 of this year, according to the Center for Responsive Politics. Neither Goodlatte nor Leach was a direct recipient of those funds, but Goodlatte’s PAC, the Good Fund, did receive a $5,000 donation in July.

In addition, Federal Election Commission records show that Kyl refunded a $5,000 donation from the group late last year, according to politicalmoneyline.com. His office did not return repeated phone calls for comment.

FANTASY SPORTS
Almost 15 million people participate in fantasy sports leagues annually, according to the Fantasy Sports Trade Association (FSTA), which represents most of the online fantasy sport providers like CBS SportsLine and ESPN.com.

The average player participates in six separate leagues in two different sports each year, according to a recently completed survey by Prof. Kim Beason of the University of Mississippi. Participants are overwhelmingly male and spend an average of $493.60 on league fees every year.

The professional sports leagues, particularly the NFL and Major League Baseball, draw some revenue from fantasy sports participants, but much of that is tied up as part of larger broadcast or marketing deals.

The leagues now appear to be repositioning themselves after a recent boom in fantasy sports participation.

In 2005, big-league baseball paid its players union $50 million for the fantasy rights to its players for five years. Last year, St. Louis-based CBC Distribution and Marketing, Inc. sued the league for requiring companies to secure a license to operate fantasy baseball leagues online, arguing that statistics are part of the public record. That suit is pending.

In addition, the NFL has a deal with CBS SportsLine to operate its website, but the fantasy rights are up next month and the NFL can now renegotiate its deal.

Fantasy sports are protected in each piece of Internet gambling legislation because the results are an aggregation of individual statistics in multiple games over an entire season; therefore, backers argue, winning and losing is contingent on skill in picking players and the financial rewards are almost always determined before the season.

The results of fantasy sports contests are nearly impossible to influence because the standings are determined by too many players over too many games for outsiders to influence those results, a number of lobbyists said on background.

Goodlatte said it is unfair to criticize the entire bill on the basis of the single exemptions.

“It all goes back to Abramoff,” Goodlatte said. “We were never trying to expand gambling. Clearly, it would contract Internet gambling. … [The legislation is] tighter now that it has ever been.”

[Nuschler]

[ QUOTE ]
Fantasy sports are protected in each piece of Internet gambling legislation because the results are an aggregation of individual statistics in multiple games over an entire season; therefore, backers argue, winning and losing is contingent on skill

[/ QUOTE ]

now, if only somebody can get poker to fit this reasoning.

[Easy E]

[ QUOTE ]
[ QUOTE ]
Fantasy sports are protected in each piece of Internet gambling legislation because the results are an aggregation of individual statistics in multiple games over an entire season; therefore, backers argue, winning and losing is contingent on skill

[/ QUOTE ]

now, if only somebody can get poker to fit this reasoning.

[/ QUOTE ]

Poker games are protected in each piece of Internet gambling legislation because the results are an aggregation of individual statistics in multiple games over an entire long-term stretch of time; therefore, backers argue, winning and losing is contingent on skill in beating players and making money long-term

That was easy enough. [img]/images/graemlins/grin.gif[/img]