UIGEA hearing opens criticism floodgates

Hands tied

April 2's U.S. House of Representatives Financial Services Committee hearing, "Proposed UIGEA Regulations: Burden Without Benefit?", was by almost any measure a resounding blow to the 2006 act that shook up the online gaming industry.

The hearing was unique in that voices of parties with a direct interest in online gambling were joined by a chorus of protests from those who would become UIGEA's collateral damage.

Representatives from various industries who would be affected by the proposed regulations told Congress that implementation of UIGEA is impractical and intrusive, both for everyday citizens and for the institutions with whom they conduct business.

Wayne Abernathy, American Bankers Association vice president for financial institutions policy and regulatory affairs, summed up the situation when he described the government's proposed UIGEA regulations as "an unprecedented delegation of governmental responsibility with no prospect of practical success in exchange for the burden it imposes."

In a press release following the hearing, Safe and Secure Internet Gambling Initiative spokesman Jeffrey Sandman noted that "U.S. banks and credit card companies, along with every other type of U.S. company involved in payment systems, would be forced to spend substantial resources to force compliance with a ban on Internet gambling that can be easily circumvented by anyone in the U.S. that wants to continue to gamble online."

A more philosophical underpinning to UIGEA protest was added by Edward Leyden of iMEGA, the Interactive Media Entertainment and Gaming Association, in the opening of his testimony. He described the Internet as "an indispensable engine for economic prosperity and social justice," and proposed that "the inalienable rights that each of us holds under the Constitution to freedom of privacy, speech, expression, and conduct are not lessened in any way when we are using the Internet."

In a recent interview with PokerListings.com, Poker Players Alliance Executive Director John Pappas was enthusiastic about what the hearing had accomplished.

"It continued to expose the folly of UIGEA and why it's a completely unworkable statute," said Pappas. "This is not coming from the gaming community. This is the banks, the regulated community, saying 'We don't want to be the policemen for the federal government, nor do we believe the payment system is adequately set up for us to do that."

Stopping the burden in its tracks

More than a few of those who gave testimony during last week's congressional hearing suggested that rather than try to prohibit online gambling, a better solution to handling its potential problems would be to license and regulate the industry through a bill such as the Internet Gambling Regulation and Enforcement Act (IGREA) sponsored by Rep. Barney Frank (D-Mass.).

That sort of legislation, says Pappas, is at the very least 12 to 18 months away from becoming a reality.

"In full candor, I think it's going to be very difficult to pass a bill. We're going to try at every level to do something, but given presidential politics and congressional politics, it's going to be very difficult to move something through," said the PPA director. "Understand this is an election year not only for the presidency but for every member of Congress. Whether it's Internet gaming, immigration reform, or health care, I think we'll see very few bills of substance make their way through Congress this year."

Until then, the best poker players can hope for is to prevent UIGEA's regulations from becoming the law of the land. To that effect, Frank and Rep. Ron Paul (R-Tex.) introduced legislation to halt that burden until a more fitting solution can be found. Frank introduced the bipartisan bill, H.R. 5767, on April 10 on behalf of himself and his Republican co-sponsor.

By congressional standards, the bill is short and sweet: in less than 130 words it renders the UIGEA toothless. Perhaps more importantly, it sets the stage for true public debate over the best way to handle online gaming in America - debate that was missing in 2006 when UIGEA was initially passed.

Changing the debate

While stopping UIGEA is an important step toward legal, regulated online poker in America, it's only the first of many that need to be taken. Concerned citizens who enjoy the game online can influence the debate by making their views known to their representatives in the government. Pappas noted that letter-writing campaigns such as those conducted by the PPA's members have been particularly effective in motivating members of Congress to overturn UIGEA.

"I had a meeting with Rep. Rob Andrews (D-New Jersey), and he said, 'I hear from people on three issues more than any other. I hear from them about immigration, I hear from them about the war in Iraq, and I hear from them about online poker.'"

Such communications between representatives and constituents are, in effect, the anti-UIGEA: conducted out in the open, rather than in the back rooms of Congress, and encouraging debate rather than stifling it.

"We've had three congressional hearings in less than a year. These things don't just happen out of nowhere because one day a member of Congress wakes up and decides it's a good idea to hold a congressional hearing," said Pappas. "It's because he's hearing from his constituents."

In addition to encouraging its members to continue communications with their representatives, PPA also plans to register more voters for this November's elections. With a focus on swing states and key congressional districts, the organization hopes to mobilize as many as 100,000 new voters to make Washington aware that poker players are a "vocal political force."

Whatever the final outcome for online gambling in the US, Pappas thinks that the tone of the debate has definitely shifted.

"People are beginning to recognize that whether [you] like gambling or don't like gambling, UIGEA is not the right approach," he said. "The right approach is to license and regulate it. I think that is a message that is beginning to resonate on both sides of the aisle."

"That'll be our winning message," he concludes. "It's not a message that you need to be for poker or against poker, it's a message that you need to be for good government."

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