some hope on internet gambling bill?

[chezlaw]

fom the BBC:

US bill doubts lift gaming stocks

The US is an important source of players for many gaming sites
Shares in online gambling groups have soared at the prospect that a planned US crackdown on internet gaming could fall apart.
Fears that the US Congress was to strengthen laws banning Americans from using overseas-based gambling sites have hurt UK firms such as Partygaming.

But amid strong lobbying from US gaming groups, planned bills have run into opposition.

By 1040 GMT, shares in Partygaming were up 12%, with 888.com shares up 4%.

Partygaming, like many of its peers, relies on the US for much of its customer base.

Opposition

Online gaming shares have had a rough ride in recent months thanks to two bills currently before the US House of Representatives.

PARTYGAMING FACTS & FIGURES
Founded in 1997
Based in Gibraltar
Listed on the London Stock Exchange on 30 June 2005
Joined the FTSE 100 in September 2005
2005 revenues: $980m
2005 pre-tax profit: $324.9m.


See Partygaming's shares

One is intended to ban credit card and other electronic payments to overseas gambling sites - their main source of revenue.

A second aims to make explicit the legal underpinning for US claims that it is illegal for Americans to use overseas gaming sites.

It is this bill which came under fire in the House Judiciary Committee - unusually from a witness representing the Justice Department, which usually abhors cross-border gambling.

Currently, the situation remains unclear.

The US government argues that 1960s legislation originally designed to stamp out inter-state gambling over the telegraph system covers the internet as well.

But the World Trade Organization has said the ban has to be scrapped, after the Caribbean island of Antigua - where many offshore gambling sites base themselves - complained that the US was restricting its trade.

[Mr.K]

I'll see if I can get a hearing transcript. Berge20 might have better access than me, though. I am unaware of any DOJ objections to the House bills, so this comes as a surprise.

On the investment side of the ledger, I'd suggest that any optimism in the markets on this news is unfounded, and that a short-sale on Party Gaming is still an attractive position.

[Mr.K]

This page has a full webcast of the hearing:
http://judiciary.house.gov/hearings.aspx?ID=137

And here's the testimony of Bruce Ohr, Chief of the Organized Crime and Racketeering Section, United States Department of Justice:http://judiciary.house.gov/media/pdfs/ohr040506.pdf

I haven't read the testimony or seen the webcast yet. Rep. Goodlatte's testimony (here: http://judiciary.house.gov/HearingTestimony.aspx?ID=382) probably contains some unintentionally funny one-liners.

[Hock_]

In a nutshell, the DOJ testimony basically says that internet gambling is really, really evil, and the proposed legislation doesn't go far enough.

[theta]

As indicated above, Justice's comments were along the lines that the Goodlatte bill needs to be stronger. Specifically, here's what Justice says with respect to poker:
"Finally, the Department of Justice also has some drafting concerns with the
legislation, including several of the definitions slated to be added to Section 1081.
For example, since the definition of the term "bet or wager" requires that the
activity be "predominately subject to chance," we are concerned whether this
definition is sufficient to cover card games, such as poker."

Since Justice is concerned, one can infer that Justice believes the bill should be clarified to ensure that internet poker will become, in fact, illegal.

[Uglyowl]

Best article I could find so far....

Internet Gaming Bill Receives Resistance in House Subcommittee Hearing
6 April 2006

By Aaron Todd

Rep. Bob Goodlatte (R-Va.) brought legislation proposing restrictive measures on Internet gambling before the U.S. House of Representatives Judiciary Committee's Subcommittee on Crime, Terrorism, and Homeland Security on Wednesday afternoon.

H.R. 4777 would amend the Wire Act, modifying the wording in the law to include provisions for Internet gambling. It also prohibits gambling businesses from accepting credit card and electronic transfer deposits, and would require banks to deny customer payments to Internet gaming sites.

The bill received some support from the committee, but several members had tough questions for the congressman, who has brought the legislation up for the fourth time after failed attempts in 1997, 1999 and 2002.

"This bill will create a nightmare for financial institutions and enforcement efforts will easily be thwarted," said Rep. Robert C. Scott (D-Va.).

Since no Internet gambling sites are based in the United States, Scott wondered how this legislation would be effective. Instead, Scott suggested regulating the industry, allowing companies to base their operations in the U.S. so that customers who made the decision to gamble online would be assured that they would be paid if they won.

"These companies would be subject to U.S. law and could be taxed," said Congressman Scott, who suggested that a committee be formed to look into legalizing and regulating online casinos in the U.S. "I believe we should regulate Internet gambling, but we should do so effectively."

Rep. John Conyers, Jr. (D-Mich.), who is a member of the full Judiciary Committee but not the subcommittee, joined Scott in calling for regulation of the industry. He asked Goodlatte and Bruce Ohr, the Chief of the Organized Crime and Racketeering Section of the U.S. Department of Justice, tough questions about the bill, particularly regarding carve outs for the horse racing and state lottery industries.

"We're picking and choosing which gambling act to sanction and which won't be sanctioned," Congressman Conyers said. "Let's be real my friends. If we really want to control gambling, we must regulate it."

Ohr addressed the issue of carve out provisions in his opening statement, saying that the Justice Department generally supported the bill, but was concerned that those sections might weaken current law.

"The Department questions why, under the provisions of H.R. 4777, one industry will be able to accept interstate wagers while other industries that are also regulated by the states cannot," said Ohr.

But while being questioned by Conyers, Ohr changed his opinion, saying he believed that the bill did not create carve outs for the horse racing industry. Instead, he repeated Goodlatte's assertion that the bill does nothing to change the current legislation regarding interstate wagers on horse racing, though he was still concerned that the legislation might be construed as weakening the Justice Department's stance on the issue.

"We've got the Department of Justice representative telling us that what he's submitted is not accurate because he's talked to Representative Goodlatte and they've worked out the problem," Congressman Conyers said. "The Reno Justice Department believed that this bill had carve outs. The Ashcroft Justice Department believed that this bill had carve outs. The Gonzales Justice Department believed this bill had carve outs. And now the Ohr Justice Department does not?"

The question was never clearly answered, though it was clear that the Justice Department would prefer that the sections regarding horse racing and e-lotteries be eliminated from the language of the bill.

The record will be held open for seven days, as members of the subcommittee will have the opportunity to request additional information from the witnesses. After weighing the merits of the legislation, they may decide to vote on whether to recommend the bill to the entire Judiciary Committee, or they may choose not to act on the legislation. No second hearing on the legislation has been scheduled.

While the bill received resistance during the hearing, only three of the 15 members of the subcommittee were in attendance. Nine of the 10 republicans on the subcommittee, including Chairman Howard Coble (R-N.C.), have cosponsored the bill, while none of the six democrats appear as cosponsors.

[Jeffage]

Good article - what publication was this?

Thanks,
Jeff

[Uglyowl]

http://www.casinocitytimes.com/news/...ntentID=157669