Senate bill proposes licensing Internet poker

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In a bold move, the Senate will be the new battleground for the debate over the future of Internet poker in the United States. Sen. Robert Menendez (D-N.J.) has introduced S.B. 3616, the Internet Skill Games Licensing and Control Act of 2008, which seeks to license Internet poker sites and other gaming Web sites featuring skill-based games.

If passed, this bill would provide what the poker community has been seeking ever since the passage in 2006 of the Unlawful Internet Gambling Enforcement Act - clear language that Internet poker is permitted in the United States and that U.S. financial institutions may conduct business with those sites.

The focus of the bill is to clarify what poker players have believed all along - that poker is a game of skill, and that the government may license and regulate it over the Internet, but not try to ban it.

This bill was immediately applauded by the Poker Player's Alliance, the one-million-plus grassroots poker advocacy group, which said in a statement released today, "The legislation establishes the needed licensing and regulatory framework for the United States to exercise appropriate control and oversight over Internet poker and other games of skill."

PPA chairman and former Senator Alfonse D'Amato supports the consumer protections in the bill.

"The PPA has long advocated for thoughtful and effective licensing and regulation of online poker as a means to protect vulnerable communities, such as children and compulsive gamblers, and provide appropriate controls to thwart consumer fraud and abuse," D'Amato said. "Senator Menendez' legislation is the right vehicle to achieve those goals."

What is unique about S.B. 3616 is that this is the first time that legislative action on Internet gambling has originated from the Senate. Previously, the bills directly taking aim at the UIGEA have been introduced in the U.S. House of Representatives.

Rep. Barney Frank, (D-Mass.), Chairman of the House Financial Services Committee, and Rep. Robert Wexler (D-Fla.) have each led the charge against the UIGEA.

Just last month, Frank introduced H.R. 6870, which takes aim at the vague language of the UIGEA, and saw it pass - with bipartisan support - through committee.

Wexler's bill, H.R. 2610, like the Senate bill, addresses the issue of the special nature of "skill-based games" such as poker and how they should be exempt from any Internet gambling bans.

Menendez' bill specifically defines "Internet skill game" as an Internet-based game, including poker, bridge and mahjong, that uses simulated cards, dice or tiles in which success is predominantly determined by the skill of the players.

The bill further provides that it applies to such skill games which are "non-house-banked games," that is, games in which players play against each other and payouts are drawn from the players' pool.

Rather than a blanket approval of Internet gaming sites, the bill sets up specific licensing requirements to be directed and managed by the Secretary of the Treasury. The gaming Web site would apply to the Secretary for a license to operate.

The application would include information on the company operating the site and other information which the Secretary would need in order to determine such factors as the honesty and integrity of the applicant, the business reputation and experience of the applicant, their financial condition, and their record of compliance with laws and requirements related to Internet skill gaming in foreign jurisdictions.

Some of the safeguards included in the bill are background checks on the Web site's chief executives and monitoring of the site to ensure that various safeguards are in place to guarantee the safety, privacy and security of the users as well as to ensure that taxes are paid and collected and that fraud or other criminal activity is not taking place.

The bill would free financial institutions from the burden of the UIGEA's vague prohibitions on engaging in any financial activities with "illegal internet gambling." Instead, under this bill, financial institutions are free to transfer and process funds from the licensed skill-based gaming sites.

Ultimately, both the House and the Senate will have to agree to this legislation before the end of this legislative session on Jan. 3, 2009, for it to become law. The PPA clearly intends to provide its support to see that this happens.

"On behalf of the members of the PPA and online poker players nation-wide, I would like to thank Senator Menendez on his leadership on this important issue. We look forward to working with him and his Senate colleagues to enact this sound public policy," D'Amato said.

The full text of the bill can be found at

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