Will HR 6663 Clarify UIGEA, or Muddle the Issue?

by Lou on August 14, 2008

In case you haven’t noticed, there’s been a piece of federal legislation proposed that has split the poker community right down the middle. Congressman Robert Sessions (R-TX) bill, HR 6663, was written to clarify confusing aspects of the Unlawful Internet Gambling Enforcement Act (UIGEA) that was enacted in October of 2006. Sessions’ bill, however, does more than clarify UIGEA; it deals with “the legalities of online poker,” something UIGEA never mentioned.

The online poker industry and community is displeased with HR 6663—the “Unlawful Internet Gambling Enforcement Clarification and Implementation Act.” In fact, the Poker Players Alliance (PPA) refused to endorse this bill.
Here’s the problem. HR 6663 states, “No provision of this Act, or any amendment made by this Act, shall be construed as clarifying or implying that Internet bets or wagers, other than sports bets or wagers, which were accepted subsequent to October 13, 2006, are in violation of Federal law.”
By this statement, HR 6663 defines “online sports betting” as illegal.
But another area of the bill states, “Federal Internet gambling prosecutions have involved sports betting, creating a lack of authoritative court decisions on the applicability of other federal criminal statutes to Internet poker and casino-style gambling.”
This statement could lead a reader to believe that UIGEA deemed online poker and online casino gambling to be illegal, but the reality of UIGEA is that it never specifically mentioned online poker or casino gambling.
Although HR 6663 clarifies online sportsbooks and sports betting to be illegal, it also brings up online poker and casino gambling and discusses them as though they were illegal under UIGEA—even though UIGEA never mentions them. In other words, without any input from HR 6663, UIGEA does not define any Internet gambling activity as illegal except that of sports betting.
D’Amato claims that the PPA is “puzzled by the introduction of H.R. 6663 and by the purpose of this legislation. While we agree with several findings in the bill that correctly identify the illegality of sports wagering, the PPA remains concerned with the implication H.R. 6663 asserts in that the [UIGEA] has made Internet poker an unlawful activity that needs special protection from prosecution.
“Previous federal case law (re: Mastercard 2002) made it clear that existing federal criminal law (WIRE Act of 1961) applies only to sports wagering, and not to internet poker. Further, the UIGEA itself states, ‘No provision of this law shall be construed as altering, limiting or extending any Federal or State law.’ Thus, H.R. 6663 only confuses a clear judicial standing on this matter.”
But Jay Lakin, vice president of Poker Source Online, supports the measure, pointing out that since Nevada is the only state that allows sports betting, the impact of the ban under the new bill would be minimal.
“The Poker Players Alliance has argued the ban does not apply to Internet poker because poker is a legal activity,” Lakin said. “So if the alliance supports the new bill and accepts the exemption, it would be like admitting that poker is illegal.
“They’re between a rock and a hard place,” Lakin added.
Sessions’ bill would narrow prosecution under the Internet gambling ban to persons who:
• Offer Internet sports betting in the United States.
• Process payments for illegal Internet sports betting in the United States.
Sessions has four co-sponsors: Reps. Marion Berry (D-AR), William Delahunt (D-MA), Gene Green (D-TX) and Jesse Jackson Jr. (D-IL).
Rep. Shelley Berkley, (D-NV), who authored a bill calling for a study of Internet gambling, opposes Sessions’ bill.
“People in Congress are still trying to eliminate sports betting on the Internet when it is very clear that millions wish to exercise their rights as Americans and bet online,” Berkley said.
Frank Fahrenkopf, president of the American Gaming Association, which lobbies for Nevada casinos, said his group is neutral on Sessions’ bill.
But Fahrenkopf added that AGA would oppose any effort to add Sessions’ bill to Berkley’s legislation.
“We don’t want to do anything to hurt the chances of the Internet gambling study bill,” Fahrenkopf said.
At this point, Sessions’ bill has a cloudy future. Congress is on its summer break, and though it will return to session in September, there is traditionally very little legislative output in the run up to a national election, which is this November.
While UIGEA clearly needs some clarification—if not outright dismantling and overturning—Sessions bill doesn’t look like it has the support to succeed. Its flaws notwithstanding, one thing it would do is forgive online gambling sites for any pre-UIGEA activities, and in so doing, would give a pass to firms such as PartyGaming, which ceased US-facing operations upon UIGEA’s passage.
UIGEA is still a long way from being overturned, my best guest is that we’re looking at 2009 or 2010 before this law can be thrown under the bus.

{ 1 comment }

DanM August 19, 2008 at 3:51 am

Just my opinion here … but I think the real reason the PPA opposes HR 6663 is because it would potentially cut out Full Tilt, PokerStars, and Ultimate Bet from a legal American online poker environ … and they’re pretty much the ones paying for the PPA’s endeavors these days. (Indirectly and legally … but still, the connection is there.)

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