AG nominee intends to enforce UIGEA

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Hopes that the incoming Obama administration would change federal attitudes toward Internet gambling were dealt a severe setback last week.

Attorney general nominee Eric Holder was questioned by the Senate Judiciary Committee as it considers his appointment to head the Department of Justice. His answers to questions concerning the future of Internet gambling in the United States suggested that change may not be in the cards.

During questioning by Internet-gambling foe John Kyl (R-Ariz.), Holder was asked his opinion and plans with respect to Internet gambling. As most in the poker community know, Kyl, who earns a well-deserved F- rating from the Poker Players Alliance, was a cosponsor and leading proponent of the UIGEA, and is the Senate's most vocal critic of Internet gambling.

Although the troubled economy is foremost in most people's minds, Kyl has not set aside his preoccupation with what he referred to as "the pernicious nature of Internet gambling."

In his questioning of Holder, Kyl took the opportunity to confirm that the new attorney general shares his anti-Internet-gambling views. In fact, it was apparent from the question-and-answer that they have had previous conversations on this specific topic.

Their brief exchange on the subject went as follows:

KYL: But the question that I'd ask and wanted just to get confirmed for the record is that you indicated that under your leadership the Department of Justice would continue to aggressively enforce the law against the forms of Internet gambling that DOJ considers illegal.

HOLDER: That's correct, Senator.

KYL: And then we discussed the regulations that were issued recently, actually, jointly by the Federal Reserve Board and the Treasury Department in consultation with the attorney-general.

The regulations primarily try to go at the problem by thwarting the payments for unlawful Internet gambling - in other words, to shut off the cash flow.

And I mentioned the fact that they were already beginning to spend millions of dollars in an effort to try to undo these regulations somehow and hope that you would - and you indicated you would - oppose efforts to modify or to stop those regulations, and, of course, continue to be vigilant in enforcing those regulations to shut off the flow of cash from this illegal activity. Is that your intention?

HOLDER: Yes, that is my position. That's what I will do.

KYL: Yes, thank you, and I appreciate that very much. And we could talk a lot more about the pernicious nature of Internet gambling, but in view of the time here, let me move on.

A look into Holder's past ties to opponents of online gaming may shed some light on his pro-UIGEA position.

Holder has worked for the National Football League, one of the most active opponents of online gaming. According to ESPN.com, Holder's financial disclosure statement showed that he is owed some $2.5 million in deferred compensation and separation payments from the NFL which is due to be paid in 2009.

Holder's law firm, Covington & Burling, not only lobbies for the NFL, but has lobbied against legislation aimed at blocking enforcement of the UIGEA, notably HR 5767, the legislation proposed by Congressmen Barney Frank (D-Mass.) and Ron Paul (R-Texas) last year.

This is not the only time this law firm has found itself in the middle of the Internet gambling issue.

One of Covington & Burling's lobbyists, Robert Wichterman, became an advisor to the Bush administration late last year, just in time to work on getting the final rules enforcing the UIGEA passed. Congressman Steve Cohen raised the issue of Wichterman's apparent conflict of interest at the time of his appointment, but he remained in his position.

With the nomination of one of its partners to helm the Justice Department, overseeing the enforcement of the UIGEA, the issue of potential conflict of interest may again be raised. Regardless of whether Holder is confirmed as the next attorney general, it is clear that the fight against the UIGEA will have to continue in Congress.

As the head of the Justice Department, Holder would have to enforce the existing laws regarding Internet gambling, even if he disagreed with them. So it falls to supporters of Internet gambling in the House and the Senate to pass laws to overturn the UIGEA.

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