A House Energy and Commerce Committee panel on Tuesday held a showdown over a legislative effort to license and regulate online poker.
{mosads}States have tended to take the lead on regulation of online gambling in recent years, but many lawmakers say that federal action is necessary to prevent money laundering and consumer abuse.
“While unfettered online gaming here in the U.S. is surely not the ideal, absent a clear mandate from Congress, we risk exposing our constituents to an environment of a ‘race to the bottom’ which could present itself,” Rep. Lee Terry (R-Neb.) said.
Rep. Joe Barton (R-Texas), who has introduced the Internet Poker Freedom Act, said that times have evolved to require the new regulations.
“Now we have the Internet and iPhones and iPads and apps and all these things,” he said. “Just about the only thing you can’t do [online] anymore is play poker. And that is changing.”
“I think the time has come to recognize that, in the Internet age, we need to regulate and set a level playing field for those of us who would like to play poker online.”
Legislative efforts to legalize and regulate online gambling have been heavily contested by some in the casino industry, including magnate Sheldon Adelson. The billionaire and GOP donor has led one of the most prominent campaigns against online gambling and plans to launch a major advocacy coalition to stop online gambling in January.
Andrew Abboud, vice president of government relations and community development at the Las Vegas Sands Corporation, which Adelson runs, told lawmakers on Tuesday that the Internet is “more dangerous than ever.”
“Internet gambling takes gambling too far,” he told the House panel. Abboud equated online gambling to unregulated online pharmacies, which federal officials have attempted to shut down.
He wants Congress to reinstate a ban on online gambling that existed before a 2011 Justice Department decision opened the doors to legal gaming.
Draft legislation to ban online gambling and require the FBI to study its dangers, which has been obtained by The Hill, has been circulating among lobbyists in recent weeks.
Consumer advocates have also worried that allowing online gambling could make it easier for companies to target children and people with gambling addictions or leave Americans’ private data exposed to identity theft.
“The government should not be in the business of increasing the number of people struggling with gambling addiction,” said Rep. Jan Schakowsky (D-Ill.).
Any bill that would have to win her support, she added, would need to have “consumer protections as a top priority.”
Other lawmakers contended that the federal government might not be in the best position to secure the safety on online gambling sites.
“We’ve got a prime example with HealthCare.gov,” Rep. Bill Johnson (R-Ohio) said. “Regulated does not necessarily equal secure.”
There have been a handful of bills in the House and Senate to legalize and regulate online gambling in various forms in recent years, though none have been able to attract substantial support.
Barton’s bill would establish a system to license and regulate online poker. States would be able to opt out of the system. A similar effort last year died in committee.
Unlike other measures, such as a recent bill from Reps. Pete King (R-N.Y.) and Michael Capuano (D-Mass.), the bill would only tackle online poker games, not other contests.
“Poker is a game of skill, and all my bill does is allow free will at the state level, if a governor allows it, for people who want to play poker online,” Barton said.
Federal oversight of online gambling is currently “murky at best,” according to Terry.
In 2011, the Justice Department issued an interpretation ruling that existing federal laws against interstate telecommunications betting only applied to sports bets, not games like poker and lotteries.
New Jersey, Delaware and Nevada have since decided to legalize online gambling within their borders, and a handful of other states are considering legislation to follow suit. State officials say that legal Internet gambling can bring in a wealth of new revenue to cushion state budgets.
Dozens of foreign countries allow online gambling, however, and Americans have spent billions at foreign websites with varying levels of oversight.
That’s led to concerns that children could easily access the sites, or that disreputable organizations are using online gambling to swindle consumer or launder money.
“While I understand and agree that Congress should not trample on the rights of the states, I believe it is critical that we gain an understanding of the integrity of the different state standards; how this affects the citizens of other states; and what the role of the federal government should be in the future of domestic online gaming,” Terry said.