Gaming Lobby talkes Internet Betting

[Raji]

LAS VEGAS – Even though the Unlawful Internet Gambling Enforcement Act is coming under fire, don’t expect legalized online wagering in the United States anytime soon.

That’s the opinion of Frank Fahrenkopf, president and chief officer of the American Gaming Association (AGA), the top gaming lobbyist group in the country.

“I would say it’s at least six, seven, eight years away,” Fahrenkopf said during a phone interview from his office in Washington D.C. “There’s just so much opposition in Congress to it. It’s sort of a two-step forward, one-step back process to get it on.”

The Unlawful Internet Gambling Enforcement Act (UIGEA), which was passed in 2006, has succeeded in making it more difficult to transfer money to offshore accounts. Fewer recreational gamblers are betting online because of it. Internet sportsbooks also have been far less aggressive in their marketing since the law was passed.

The AGA serves and represents the gaming and commercial casino entertainment industry, including hotel operators in Las Vegas. Among its clientele are casino operators, service companies and suppliers of gaming. Fahrenkopf isn’t a fan of the UIGEA, but the AGA’s stance has been neutral.

“We’ve been neutral with it all the way through,” he said. “We haven’t filed anything. We don’t have a dog in that fight, but we are following it closely.”

So how is it that the nation’s top gaming lobbyist group has taken a stance of neutrality on online wagering?

“My own personal belief is that the capability is there,” Fahrenkopf said. “But we have to have some group that is independent look at it. … We always believe that when you have a controversial subject such as this - and gaming is controversial whether it’s Internet or not - that the more independent research and independent voices that can speak on behalf of where you want to go, the better off you are.”

The AGA and Fahrenkopf support the Internet Gambling Study Act introduced by Reps Shelley Berkley and Jon Porter of Nevada. This bill calls for an 18-month study conducted by The National Research Council of The National Academy of Sciences. They would look to see if the software and technology are in place that would keep underage bettors from gambling, prevent betting in illegal jurisdictions, track gamblers with addiction problems and ensure those who get licenses are legitimate with the necessary finances to operate.

The Study bill currently has 68 co-sponsor signatures compared to 48 Congressional co-sponsors of Frank’s bill.

“Of all the gaming bills, the only one that has a chance is the Berkley/Porter bill because it’s only a study bill,” Fahrenkopf said. “It’s not something specific that’s being authorized. If anything gets through, this has the best chance.”

Treasury and Federal Reserve officials have called the UIGEA vague, confusing and burdensome. The law has put enormous pressure on banks and financial institutions to police it.

A bipartisan group of House Financial Services Committee members recently warned government Treasury and Federal Reserve officials not to waste any more time trying to implement a ban on Internet gambling.

“The UIEGA fails as a statute because it doesn’t define what is legal and what isn’t legal,” Fahrenkopf said. “I think the first violation they try to impose will be challenged in court.”

So why isn’t the AGA anti-UIEGA?

Fahrenkopf has many friends on the Hill so he may not want to offend anyone until the climate is ripe, perhaps if a democrat is elected president. Also since the AGA represents land-based hotels, including many in Las Vegas, perhaps they don’t want their supporters hurt by the competition if Internet betting were allowed in this country.

“I don’t think it (online betting) would affect it (land-based casinos) very much,” Fahrenkopf said. “The dynamics of the brick-and-mortar industry have changed dramatically in the last 10 years. Ten years ago 65-70 percent of huge corporations’ revenue came from gaming.

“Today only 38 percent comes from gaming revenue. People are going to Las Vegas and other resort destinations not just to gamble.

“The guy who logs on to a computer to make a few bets isn’t a competitor of Vegas. MGM and Harrah’s are bullish on Internet gaming. But they view it as another profit center, not so much as being a competitor.”

In any event, don’t expect much to get done right now in the Internet gaming fight.

“This is a presidential year,” Fahrenkopf said. “They are so backed up on the Hill. They’ll go for a couple of more months and then they’ll be off for the summer. Then they’ll only come back for two or three weeks. They’re all going to be off running for re-election, so not a hell of a lot is going to get done in the remaining time.”


Raji