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Steve Tetreault

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Gaming industry renews push for legal online poker

11 May 2011

By Steve Tetreault
WASHINGTON, D.C. -- Top gaming industry executives launched a lobbying push Tuesday to persuade Congress to legalize Internet poker, arguing that is the only realistic response to the boom in online play that has defied crackdown efforts.

"Millions of Americans bet billions of dollars a year at foreign websites and they will continue to do so even if their government tells them it is illegal," said Frank Fahrenkopf, chief executive of the American Gaming Association.

Indictments of online poker operators announced April 15 have caused a drop in the volume, but that's only temporary, Fahrenkopf predicted in a meeting with reporters.

When Congress in 2006 enacted tough financial restrictions on Internet gambling, online play also dropped, he said. "However, within a short time the vacuum was filled and the volume of U.S. play went back to prior levels."

Now, even with the well-publicized indictments of the founders of the three largest Internet poker companies, "we know that more than 1,000 real money websites operated by nearly 300 offshore operators are still today targeting the U.S. market," Fahrenkopf said. "There is no question the volume of betting will increase again."

If that's the case, the United States should allow for regulation that would let domestic gaming companies run online poker games aimed at U.S. customers, industry officials argue.

Fahrenkopf, along with Keith Smith, president of Boyd Gaming; Gordon Kanofsky, CEO of Ameristar Casinos; and Virginia McDowell, president of Isle of Capri Casinos; said at a news conference that regulation at the federal level would provide certainty to the industry and stronger safeguards for consumers.

Since the industry came to believe a few years ago that technology had advanced to where accounting and consumer protections could be put in place, it has grown increasingly vocal for a share of the multi-billion dollar market.

The executives provided a preview of meetings scheduled for to day with top political leaders to discuss online poker, as well as health care, patent law, off-reservation Indian gaming, travel and tourism promotions and research tax credits.

Board members of the American Gaming Association were flying in from around the country for meetings with House and Senate leaders and with White House chief of staff William Daley.

The lobbyists will be armed with a new industry report that says U.S. policy on Internet gambling has been "schizophrenic" while 85 nations including France, Italy, Canada and the United Kingdom have created structures to legalize and regulate the practice.

Despite U.S. government opposition, "Americans continue to spend $4 billion every year to gamble online," according to the report.

Sen. Harry Reid, D-Nev., is holding a lunch to day where the gaming executives can meet Senate Democrats. Reid lead efforts in the congressional lame duck session last December to pass an online poker bill that failed, and has said he plans to renew negotiations.

Reps. Barney Frank, D-Mass., and John Campbell, R-Calif., have introduced another version of a gaming bill that received hearings and committee votes last year.

Fahrenkopf said the gaming industry is working on its own online poker bill.

While he declined to say which members of Congress are involved, Fahrenkopf described the potential legislation as a hybrid with elements of federal oversight and state-level regulation.

He said it envisions the federal Department of Commerce or another agency delegating licensing responsibilities to states that can demonstrate capability.

"At this point in time we are just in the preliminaries to determine what might and what might not be in it," he said.

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