HomePublicationsNewsletter ArchiveVolume 19Issue 34House Committee on Energy and Commerce Discusses Federal Role in Online Gaming

On Tuesday, December 10, 2013, The United States House Committee on Energy & Commerce (“Committee”) held a meeting entitled, “The State of Online Gaming,” which discussed the possibility for federal involvement in online gaming and reviewed House Resolution 2666, the Internet Poker Freedom Act of 2013 (H.R. 2666). H.R. 2666 was introduced by Congressman Joe Barton (R-Texas) in July and seeks to implement federal oversight of online gambling.

Several industry proponents and opponents of internet-based gaming testified as witnesses during the hearing, including Geoff Freeman, President and CEO of the American Gaming Association; John Pappas, Executive Director of Poker Players Alliance; Andrew Abboud, Vice President of Government Relations and Community Development for the Las Vegas Sands Corporation; Les Bernal, National Director of Stop Predatory Gambling; Kurt Eggert, Professor of Law at Dale E. Fowler School of Law; and Rachel Volberg, Ph.D. and associate professor of the University of Massachusetts Amherst.

Two online gaming expansion bills, including H.R. 2666, were introduced in the House of Representatives earlier this year. House Resolution 2282, introduced by Rep. Peter King (R-NY), would legalize and regulate all forms of internet wagering, except sports betting, while HR 2666, introduced by Rep. Joe Barton (R-TX), seeks to legalize and regulate only online poker.  HR 2666 and HR 2282 were referred to Committee in July and June, respectively.

Committee Chairman Lee Terry (R- Nebraska) opened the meeting by noting the issue of online gaming is a topic of considerable interest in the United States and expressed that this issue is ripe for Congress to conduct oversight of the matter. “Several different factors have led to an environment in the U.S. where the status of online gaming is murky, at best,” stated Chairman Terry. Specifically, he noted:

· A recent DOJ opinion that reinterpreted the Wire Act opened the door for online gaming (except sports betting) to be hosted on an intrastate basis. This has led to a patchwork of state laws—with seven states moving to outlaw online gaming while others have authorized it in different forms—the most expansive so far being New Jersey, which has authorized multiple forms of Internet gaming.

· In addition to a patchwork of state laws, a multi-national patchwork exists as well. According to a white paper by the American Gaming Association, over 85 countries have chosen to legalize Internet gaming to some extent. While the U.S. has not explicitly legalized it, our citizens still accounted for around 15 percent of the global revenues to the roughly 2,700 websites which host online gaming. This means that Americans are patronizing these offshore websites to the tune of over a billion dollars every year, and in many ways putting themselves at grave risk.

· The American gaming industry also does not seem to be in agreement on a clear path forward for the future of online gaming domestically.

American Gaming Association (“AGA) President and CEO, Geoff Freeman testified before the Committee and voiced the Association’s stance on encouraging federal involvement with internet gaming and “the important need for consistent and effective regulatory standards that protect consumers, ensures integrity of online games, gives law enforcement agencies the tools they need to combat illegal operators and provides Americans with access to an online gaming marketplace they unquestionably desire.”

According to the AGA “[l]ast year, before a single state authorized legal online gaming, Americans spent nearly $3 billion on illegal, unregulated offshore gaming sites.” In summation, “the American Gaming Association supports strong regulation and oversight of online gaming that respects states’ rights to pursue what is in the best interest of their residents.”

For the full text of any other witness testimony, and to view the hearing in its entirety, please visit: http://energycommerce.house.gov/hearing/state-online-gaming

Although the Committee hearing gave Congressmen and Congresswomen in the House a chance to review pending legislation and hear from several industry professionals and educators, it is unclear whether the hearing will result in any immediate action by legislators as current online gaming states, New Jersey, Nevada, and Delaware, continue to test the waters.



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