Abboud called hypocritical in House hearing

The potential for federal online gambling legislation was the topic of an in-depth discussion in a House subcommittee meeting on Tuesday, but no clear vote or determination was made on the issue.

The House Energy & Commerce Committee's Subcommittee on Commerce, Manufacturing and Trade held a hearing on the state of online gaming to examine the status of Internet gambling in the United States and to review H.R. 2666, the "Internet Poker Freedom Act of 2013."

Rep. Lee Terry (R-Neb.), chairman of the subcommittee, moderated the hearing, which included testimonies from six witnesses and other Congressmen on the subcommittee.

In his opening testimony, American Gaming Association CEO Geoff Freeman cited the black market for online gambling in the U.S. as a need for federal regulation. Freeman noted that the demand for online gambling has caused millions of Americans to gamble with operators not currently regulated by the U.S., and that demand will only continue to grow.

John Pappas, executive director of the Poker Players Alliance, stood with Freeman on the pro-online gambling side of the line but lent most of his support to Rep. Joe Barton's (R-TX) H.R. 2666, a "poker-only" bill. Barton's plan creates federally regulated online poker, but allows individual states to "opt out" if they choose to do so.

On the other side of the debate were Andrew Abboud, vice president of government relations at Las Vegas Sands, and Les Bernal, national director of Stop Predatory Gambling, a non-profit organization whose mission is to stop government from sponsoring and promoting gambling.

Abboud represented Sands chairman Sheldon Adelson, whose anti-online gambling stance has been the subject of major controversy lately. In his opening testimony, Abboud claimed that Internet gambling is a threat to the most vulnerable people in society, namely children with access to smart phones and their parents' credit cards.

"The thought of every single one of these becoming a casino should concern you," Abboud said while holding up a cell phone in his opening testimony.

Bernal complemented Abboud's stance by arguing that government's partnership with gambling has failed. He pointed to states' lotteries inability to fund other social initiatives, like education, as evidence that government is cheating its citizens by sponsoring gambling operations.

The other two witnesses were Rachel Volberg, Ph.D., a professor at the University of Massachusetts Amherst, and Kurt Eggert, an attorney and law professor at Chapman University. Volberg contended that there would likely be an increase in problem gambling if online gambling were regulated, citing "substantial international research" showing that problem gambling is 3-4 times more prevalent online than in brick-and-mortar casinos.

Eggert, meanwhile, was concerned with consumer protection akin to that of a shopper. He claimed that gamblers should have access to information, such as a slot machine's hold percentage, and that it is especially important for online casinos. Eggert also alluded to the need to protect online poker players from bots, proposing a ratings system for online poker players.

The first shot fired came during the question-and-answer portion of the hearing, when Rep. Jan Schakowsky (D-Ill.) mentioned that Abboud's stance "feels a little hypocritical," pointing out that the Sands-owned The Venetian Resort-Hotel-Casino in Las Vegas promotes its own brand of mobile casino gambling on its property. Rep. Barton later grilled Abboud on the same topic, to which Abboud responded by claiming the Venetian's product is not subject to the same concerns as Internet gaming because it takes place in a safe and regulated environment.

Consumer protection, specifically age verification and dealing with problem gamblers, was once again at the forefront of the debate. Freeman and Pappas stood firm with their stance that a priority in a regulated market would be ensuring player security. Freeman pointed to Nevada, New Jersey and Delaware, along with other countries, which have all been successful in regulation so far.

"As an industry, we are completely aligned on the need to protect vulnerable populations," Freeman said, "though we may disagree on how best to do so."

It remains to be seen what will come out of the hearing, but the fight for federal online gambling regulation will continue. As Freeman noted, the demand -- as demonstrated by the 50,000 people who opened accounts with online casinos in New Jersey during the state's first week of regulated online gambling, in addition to those who gamble with offshore sites -- will continue to grow.

"This committee is not deciding whether Americans gamble on the Internet," Pappas said in his opening testimony. "Millions already do so today."